<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 25, 1998.
1933 ACT FILE NO.
1940 ACT FILE NO.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM N-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. [ ]
POST-EFFECTIVE AMENDMENT NO. [ ]
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. [ ]
(CHECK APPROPRIATE BOX OR BOXES)
EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
-----------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
---------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (617) 482-8260
------------------------------------------------------------------
ALAN R. DYNNER
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
----------------------------------------------
(NAME AND ADDRESS OF AGENT FOR SERVICE)
If any of the securities being registered on this Form will be offered on
a delayed or continuous basis in reliance on Rule 415 under the Securities Act
of 1933, other than securities offered in connection with a dividend
reinvestment plan, check the following box. [X]
It is proposed that this filing will become effective (check appropriate box):
[X] when declared effective pursuant to section 8(c)
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
- ---------------------------------------------------------------------------------------------------------
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING OFFERING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of Beneficial Interest 20,000,000 $10.00 $200,000,000 $59,000.00
- ---------------------------------------------------------------------------------------------------------
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
Senior Debt Portfolio has also executed this Registration Statement.
- --------------------------------------------------------------------------------
<PAGE>
EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
CROSS REFERENCE SHEET
ITEMS REQUIRED BY FORM N-2
PART A
ITEM NO. ITEM CAPTION PROSPECTUS CAPTION
- -------- ------------ ------------------
1. ........... Outside Front Cover Cover Page
2. ........... Inside Front and Outside Back Cover Pages
Cover Page
3. ........... Fee Table and Synopsis Shareholder and Fund Expenses
4. ........... Financial Highlights Not Applicable
5. ........... Plan of Distribution How to Buy Shares; The
Lifetime Investing Account/
Distribution Options
6. ........... Selling Shareholders Not Applicable
7. ........... Use of Proceeds Valuing Shares; Investment
Policies and Risks
8. ........... General Description of the Organization of the Fund and
Registrant the Portfolio
9. ........... Management Management of the Fund and
the Portfolio
10. ........... Capital Stock, Long-Term Debt, Organization of the Fund and
and Other Securities the Portfolio; Valuing
Shares; Management of the
Fund and the Portfolio
11. ........... Defaults and Arrears on Senior Not Applicable
Securities
12. ........... Legal Proceedings Investment Policies and Risks
13. ........... Table of Contents of the Table of Contents of the
Statement of Additional Statement of Additional
Information Information
PART B STATEMENT OF
ITEM NO. ITEM CAPTION ADDITIONAL INFORMATION CAPTION
- -------- ------------ ------------------------------
14. ........... Cover Page Cover Page
15. ........... Table of Contents Table of Contents
16. ........... General Information and General Information and
History History; Other Information
17. ........... Investment Objective and Additional Information about
Policies Investment Policies;
Investment Restrictions
18. ........... Management Trustees and Officers;
Investment Advisory and
Other Services
19. ........... Control Persons and Principal Control Persons and Principal
Holders of Securities Holders of Shares
20. ........... Investment Advisory and Other Investment Advisory and Other
Services Services
21. ........... Brokerage Allocation and Other Portfolio Trading
Practices
22. ........... Tax Status Taxes; Rescission Offer
23. ........... Financial Statements Financial Statements
<PAGE>
[logo] Investing
for the
EATON VANCE 21st
- ------------ Century
MUTUAL FUNDS Eaton Vance Advisers
Senior Floating-Rate Fund
The investment objective of Eaton Vance Advisers Senior Floating-Rate Fund (The
"Fund") is to provide as high a level of current income as is consistent with
the preservation of capital, by investing in a portfolio primarily of senior
secured floating rate loans. The Fund currently seeks to achieve its objective
by investing its assets in Senior Debt Portfolio (the "Portfolio"), which has
the same investment objective as the Fund, rather than by investing directly in
and managing its own portfolio of loans and securities. The Fund and the
Portfolio are each a continuously offered, closed-end, non-diversified
investment company.
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED
BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND ARE NOT FEDERALLY
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER GOVERNMENT AGENCY. SHARES OF THE FUND INVOLVE INVESTMENT RISKS,
INCLUDING FLUCTUATIONS IN VALUE AND THE POSSIBLE LOSS OF SOME OR ALL OF THE
PRINCIPAL INVESTMENT.
This Prospectus is designed to provide you with information you should know
before investing. Please retain this document for future reference. A Statement
of Additional Information dated , 1998 for the Fund, as supplemented from time
to time, has been filed with the Securities and Exchange Commission (the
"Commission") and is incorporated herein by reference. The Table of Contents of
the Statement of Additional Information appears at the end of this Prospectus.
The Statement of Additional Information is available without charge from the
Fund's principal underwriter, Eaton Vance Distributors, Inc. (the "Principal
Underwriter"), 24 Federal Street, Boston, MA 02110 (telephone (800) 225-6265).
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
Proceeds to
Price to Public Sales Load Fund
- --------------------------------------------------------------------------------
Per Share(1) $10.00 None $10.00
Total $200,000,000 None $200,000,000
- ----------
(1) The shares are offered on a best efforts basis at a price equal to the net
asset value, which initially is $10.00 per share. See "How to Buy Shares".
- --------------------------------------------------------------------------------
NO MARKET PRESENTLY EXISTS FOR THE FUND'S SHARES AND IT IS NOT CURRENTLY
ANTICIPATED THAT A SECONDARY MARKET WILL DEVELOP FOR THE FUND'S SHARES. Fund
shares are not readily marketable. To provide investor liquidity, the Fund
ordinarily will make each January, April, July and October a repurchase offer to
purchase between 5% and 25% of the Fund's outstanding shares at net asset value.
See "Fund Repurchase Offers".
CONTENTS
<TABLE>
<CAPTION>
Page Page
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Shareholder and Fund Expenses 2 How to Buy Shares 11
The Fund's Investment Objective 3 Fund Repurchase Offers 12
Investment Policies and Risks 3 Reports to Shareholders 13
Yield and Performance Information 7 The Lifetime Investing Account/Distribution Options 13
Organization of the Fund and the Portfolio 8 Eaton Vance Shareholder Services 13
Management of the Fund and the Portfolio 9 Distributions and Taxes 14
Valuing Shares 10 Table of Contents of the Statement of Additional
Information 14
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus dated , 1998
<PAGE>
SHAREHOLDER AND FUND EXPENSES
SHAREHOLDER TRANSACTION EXPENSES
- -----------------------------------------------------------------------------
Sales Load (as a percentage of offering price) None
Dividend Reinvestment Fees None
Contingent Deferred Sales Charge None
ANNUAL FUND AND ALLOCATED PORTFOLIO OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET ASSETS ATTRIBUTABLE TO SHARES OF
BENEFICIAL INTEREST)
- -----------------------------------------------------------------------------
Investment Advisory Fee 0.89%
Interest Payments on Borrowed Funds 0.01
Other Expenses (including administration fees of .15%) 0.37
Total Annual Expenses 1.27
EXAMPLE
1 year 3 years
- -----------------------------------------------------------------------------
An investor would pay the following expenses on a
$1,000 investment, assuming (a) 5% annual return
and (b) repurchase at the end of each period: $13 $40
NOTES: The table and Example summarize the aggregate expenses of the Fund and
the Portfolio and are designed to help investors understand the costs and
expenses they will bear, directly or indirectly, by investing in the Fund.
Information for the Fund is based on its estimated expenses for the current
fiscal year because the Fund has only recently been organized, and is derived in
part from actual operations of the Portfolio.
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES
SINCE FUTURE EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. Federal
regulations require the Example to assume a 5% annual return, but actual return
will vary. For further information regarding the expenses of the Fund and the
Portfolio, see "Management of the Fund and the Portfolio", "How to Buy Shares",
and "Fund Repurchase Offers".
The Investment Advisory and Administration Fees are based upon a percentage of
the Portfolio's average daily gross assets, which were approximately the same as
its average daily net assets for the fiscal year ended December 31, 1997.
The Fund invests exclusively in the Portfolio. Other investment companies and
investors with different distribution arrangements and fees are investing in the
Portfolio. See "Organization of the Fund and the Portfolio".
<PAGE>
THE FUND'S INVESTMENT OBJECTIVE
Eaton Vance Advisers Senior Floating-Rate Fund's investment objective is to
provide as high a level of current income as is consistent with the preservation
of capital, by investing in a portfolio primarily of senior secured floating
rate loans. The Fund currently seeks to achieve its objective by investing its
assets in the Senior Debt Portfolio (the "Portfolio"), a separate closed-end,
non-diversified investment company with the same investment objective as the
Fund. There is no assurance that the Fund's objective will be achieved. An
investment in shares of the Fund is not a complete investment program.
The Portfolio's investment adviser is Boston Management and Research (the
"Investment Adviser" or "BMR"), a wholly-owned subsidiary of Eaton Vance
Management ("Eaton Vance"), and Eaton Vance is the administrator (the
"Administrator") of the Fund. The offices of the Investment Adviser and the
Administrator are located at 24 Federal Street, Boston, MA 02110.
INVESTMENT POLICIES AND RISKS
The Portfolio will invest primarily in senior secured floating rate loans, and
also in other institutionally traded senior secured floating rate debt
obligations (collectively, "Loans"). Under normal market conditions, the
Portfolio will invest at least 80% of its total assets in interests in Loans
("Loan Interests"). These Loans are made primarily to U.S. companies or their
affiliates or issuers of asset-backed interests (collectively, "Borrowers") and
have floating interest rates. Up to 20% of the Portfolio's total assets may be
held in cash, invested in investment grade short-term debt obligations, and
invested in interests in Loans that are unsecured ("Unsecured Loans"). See
"Other Investment Policies" below.
The Loans in which the Portfolio acquires Loan Interests will, in the judgment
of Boston Management and Research (the "Investment Adviser" or "BMR"), be in the
category of senior debt of the Borrower and will generally hold the most senior
position in the capitalization structure of the Borrower. Loans will consist
primarily of direct obligations of U.S. companies or their affiliates undertaken
to finance a capital restructuring or in connection with recapitalizations,
acquisitions, leveraged buy-outs, refinancings or other financially leveraged
transactions. Such Loans may include those made to a Borrower for the purpose of
acquiring ownership or control of a company, whether as a purchase of equity or
of assets, or for a leveraged recapitalization with no change in ownership.
Except for Unsecured Loans, each Loan will be secured by collateral which BMR
believes to have a market value, at the time of acquiring the Loan Interest,
which equals or exceeds the principal amount of the Loan. The Loans will
typically have a stated term of five to eight years. However, since the Loans
typically amortize principal over their stated life and are frequently prepaid,
their effective maturity is expected to be two to three years. The Portfolio
will attempt to maintain a portfolio of Loan Interests that will have a dollar
weighted average period to next interest rate adjustment of approximately 90
days or less. As of December 31, 1997, the Portfolio had a dollar weighted
average period to adjustment of approximately 24 days.
The Portfolio will purchase Loan Interests only if, in BMR's judgment, the
Borrower can meet debt service on the Loan. In addition, a Borrower must meet
other criteria established by BMR and deemed by it to be appropriate to the
analysis of the Borrower, the Loan and the Loan Interest. Most Loan Interests in
which the Portfolio invests are not currently rated by any nationally recognized
rating service. The primary consideration in selecting such Loan Interests for
investment by the Portfolio is the creditworthiness of the Borrower. The quality
ratings assigned to other debt obligations of a Borrower are generally not a
material factor in evaluating Loans in which the Portfolio may acquire a Loan
Interest, since such obligations will typically be subordinated to the Loans and
be unsecured. Instead, BMR will perform its own independent credit analysis of
the Borrower in addition to utilizing information prepared and supplied by the
Agent (as defined below) or other participants in the Loans. Such analysis will
include an evaluation of the industry and business of the Borrower, the
management and financial statements of the Borrower, and the particular terms of
the Loan and the Loan Interest which the Portfolio may acquire. BMR's analysis
will continue on an ongoing basis for any Loan Interest purchased and held by
the Portfolio. No assurance can be given regarding the availability at
acceptable prices of Loan Interests that satisfy the Portfolio's investment
criteria.
A Loan in which the Portfolio may acquire a Loan Interest is typically
originated, negotiated and structured by a U.S. or foreign commercial bank,
insurance company, finance company or other financial institution (the "Agent")
for a lending syndicate of financial institutions. The Agent typically
administers and enforces the loan on behalf of the other lenders in the
syndicate. In addition, an institution, typically but not always the Agent (the
"Collateral Bank"), holds any collateral on behalf of the lenders. The
Collateral Bank must be a qualified custodian under the Investment Company Act
of 1940, as amended (the "1940 Act"). These Loan Interests generally take the
form of direct interests acquired during a primary distribution and may also
take the form of participation interests in, assignments of, or novations of a
Loan acquired in secondary markets. Such Loan Interests may be acquired from
U.S. or foreign commercial banks, insurance companies, finance companies or
other financial institutions who have made loans or are members of a lending
syndicate or from other holders of Loan Interests. The Portfolio may also
acquire Loan Interests under which the Portfolio derives its rights directly
from the Borrower. Such Loan Interests are separately enforceable by the
Portfolio against the Borrower and all payments of interest and principal are
typically made directly to the Portfolio from the Borrower. In the event that
the Portfolio and other lenders become entitled to take possession of shared
collateral, it is anticipated that such collateral would be held in the custody
of a Collateral Bank for their mutual benefit. The Portfolio may not act as an
Agent, a Collateral Bank, a guarantor or sole negotiator or structurer with
respect to a Loan.
BMR also analyzes and evaluates the financial condition of the Agent and, in the
case of Loan Interests in which the Portfolio does not have privity with the
Borrower, those institutions from or through whom the Portfolio derives its
rights in a Loan (the "Intermediate Participants"). The Portfolio will invest in
Loan Interests only if the outstanding debt obligations of the Agent and
Intermediate Participants, if any, are, at the time of investment, investment
grade, i.e., (a) rated BBB or better by Standard and Poor's Ratings Group
("S&P") or Baa or better by Moody's Investors Service, Inc. ("Moody's"); or (b)
rated A-2 by S&P or P-2 by Moody's; or (c) determined to be of comparable
quality by BMR.
The Portfolio may from time to time acquire Loan Interests in transactions in
which the current yield to the Portfolio exceeds the stated interest rate on the
Loan. These Loan Interests are referred to herein as "Discount Loan Interests"
because they are usually acquired at a discount from their nominal value or with
a facility fee that exceeds the fee traditionally received in connection with
the acquisition of Loan Interests. The Borrowers with respect to such Loans may
have experienced, or may be perceived to be likely to experience, credit
problems, including involvement in or recent emergence from bankruptcy
reorganization proceedings or other forms of credit restructuring. The Portfolio
may acquire Discount Loan Interests in order to realize an enhanced yield or
potential capital appreciation when BMR believes that such Loan Interests are
undervalued by the market due to an excessively negative assessment of a
Borrower's creditworthiness or an imbalance between supply and demand.
From time to time BMR and its affiliates may borrow money from various banks in
connection with their business activities. Such banks may also sell interests in
Loans to or acquire such interests from the Portfolio or may be Intermediate
Participants with respect to Loans in which the Portfolio owns interests. Such
banks may also act as Agents for Loans in which the Portfolio owns interests.
RISK FACTORS
BMR expects the Fund's net asset value to be relatively stable during normal
market conditions because the Portfolio's assets will consist primarily of
interests in floating rate Loans and of short-term instruments. Accordingly, the
value of the Portfolio's assets may fluctuate significantly less as a result of
interest rate changes than would a portfolio of fixed-rate obligations.
Nevertheless, a default in a Loan in which the Portfolio owns a Loan Interest, a
material deterioration of a Borrower's perceived or actual creditworthiness or a
sudden and extreme increase in prevailing interest rates may cause a decline in
the Fund's net asset value. Conversely, a sudden and extreme decline in interest
rates could result in an increase in the Fund's net asset value. The Fund is not
a money market fund and its net asset value will fluctuate, reflecting any
fluctuations in the Portfolio's net asset value.
Investments in Loan Interests by the Portfolio bear certain risks common to
investing in many secured debt instruments of nongovernmental issuers, including
the risk of nonpayment of principal and interest by the Borrower, that Loan
collateral may become impaired, that any losses will be proportionate to the
degree of Loan Interest diversification and Borrower industry concentration, and
that the Portfolio may obtain less than full value for Loan Interests sold
because they are illiquid.
CREDIT RISK. Loan Interests are primarily dependent upon the creditworthiness of
the Borrower for payment of interest and principal. The nonreceipt of scheduled
interest or principal on a Loan Interest may adversely affect the income of the
Portfolio or the value of its investments, which may in turn reduce the amount
of dividends or the net asset value of the shares of the Fund. The Portfolio's
ability to receive payment of principal of and interest on a Loan Interest also
depends upon the creditworthiness of any institution interposed between the
Portfolio and the Borrower. To reduce credit risk, BMR actively manages the
Portfolio as described above. For information regarding the status of the
holdings of the Portfolio, see its financial statements.
Loan Interests in Loans made in connection with leveraged buy-outs,
recapitalizations and other highly leveraged transactions are subject to greater
credit risks than many of the other Loan Interests in which the Portfolio may
invest. As of the date of this Prospectus, such Loan Interests constituted
substantially all of the Portfolio's Loan Interests. These credit risks include
the possibility of a default on the Loan or bankruptcy of the Borrower. The
value of such Loan Interests are subject to a greater degree of volatility in
response to interest rate fluctuations and may be less liquid than other Loan
Interests.
The Portfolio may acquire interests in Loans which are designed to provide
temporary or "bridge" financing to a Borrower pending the sale of identified
assets or the arrangement of longer-term loans or the issuance and sale of debt
obligations. The Portfolio may also invest in Loan Interests of Borrowers who
have obtained bridge loans from other parties. A Borrower's use of bridge loans
involves a risk that the Borrower may be unable to locate permanent financing to
replace the bridge loan, which may impair the Borrower's perceived
creditworthiness.
Although Loans in which the Portfolio invests will generally hold the most
senior position in the capitalization structure of the Borrowers, the
capitalization of many Borrowers will include non-investment grade subordinated
debt. During periods of deteriorating economic conditions, a Borrower may
experience difficulty in meeting its payment obligations under such bonds and
other subordinated debt obligations. Such difficulties may detract from the
Borrower's perceived or actual creditworthiness or its ability to obtain
financing to cover short-term cash flow needs and may force the Borrower into
bankruptcy or other forms of credit restructuring.
COLLATERAL IMPAIRMENT. Loans (excluding Unsecured Loans) will be secured unless
(i) the value of the collateral declines below the amount of the Loans, (ii) the
Portfolio's security interest in the collateral is invalidated for any reason by
a court or (iii) the collateral is partially or fully released under the terms
of the Loan Agreement as the creditworthiness of the Borrower improves. There is
no assurance that the liquidation of collateral would satisfy the Borrower's
obligation in the event of nonpayment of scheduled interest or principal, or
that collateral could be readily liquidated. The value of collateral generally
will be determined by reference to financial statements of the Borrower, an
independent appraisal performed at the request of the Agent at the time the Loan
was initially made, the market value of such collateral (e.g., cash or
securities) if it is readily ascertainable and/or by other customary valuation
techniques considered appropriate in the judgment of BMR. Collateral is
generally valued on the basis of the Borrower's status as a going concern and
such valuation may exceed the immediate liquidation value of the collateral.
Collateral may include (i) working capital assets, such as accounts receivable
and inventory; (ii) tangible fixed assets, such as real property, buildings and
equipment; (iii) intangible assets, such as trademarks and patent rights (but
excluding goodwill); and (iv) security interests in shares of stock of
subsidiaries or affiliates. To the extent that collateral consists of the stock
of the Borrower's subsidiaries or other affiliates, the Portfolio will be
subject to the risk that this stock will decline in value. Such a decline,
whether as a result of bankruptcy proceedings or otherwise, could cause the Loan
to be undercollateralized or unsecured. In most credit agreements there is no
formal requirement to pledge additional collateral. In the case of Loans made to
non-public companies, the company's shareholders or owners may provide
collateral in the form of secured guarantees and/or security interests in assets
that they own. In addition, the Portfolio may invest in Loans guaranteed by, or
fully secured by assets of, such shareholders or owners, even if the Loans are
not otherwise collateralized by assets of the Borrower; provided, however, that
such guarantees are fully secured. There may be temporary periods when the
principal asset held by a Borrower is the stock of a related company, which may
not legally be pledged to secure a Loan. On occasions when such stock cannot be
pledged, the Loan will be temporarily unsecured until the stock can be pledged
or is exchanged for or replaced by other assets, which will be pledged as
security for the Loan. However, the Borrower's ability to dispose of such
securities, other than in connection with such pledge or replacement, will be
strictly limited for the protection of the holders of Loans and, indirectly,
Loan Interests.
If a Borrower becomes involved in bankruptcy proceedings, a court may invalidate
the Portfolio's security interest in the Loan collateral or subordinate the
Portfolio's rights under the Loan to the interests of the Borrower's unsecured
creditors. Such action by a court could be based, for example, on a "fraudulent
conveyance" claim to the effect that the Borrower did not receive fair
consideration for granting the security interest in the Loan collateral to the
Portfolio. For Loans made in connection with a highly leveraged transaction,
consideration for granting a security interest may be deemed inadequate if the
proceeds of the Loan were not received or retained by the Borrower, but were
instead paid to other persons (such as shareholders of the Borrower) in an
amount which left the Borrower insolvent or without sufficient working capital.
There are also other events, such as the failure to perfect a security interest
due to faulty documentation or faulty official filings, which could lead to the
invalidation of the Portfolio's security interest in Loan collateral. If the
Portfolio's security interest in Loan collateral is invalidated or the Loan is
subordinated to other debt of a Borrower in bankruptcy or other proceedings, it
is unlikely that the Portfolio would be able to recover the full amount of the
principal and interest due on the Loan.
DIVERSIFICATION. The Fund and the Portfolio have each registered with the
Commission as a "non-diversified" investment company. As a result, the Fund and
the Portfolio are required to comply only with the diversification requirements
of Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code").
Because the Portfolio may invest a relatively high percentage of its assets in
the obligations of a limited number of issuers, the value of the Portfolio's
investments will be more affected by any single adverse economic, political or
regulatory occurrence than will the value of the investments of a diversified
investment company. It is the Portfolio's current intention not to invest more
than 10% of its total assets in Loans of any single Borrower. The Portfolio may
invest more than 10% (but not more than 25%) of its total assets in Loan
Interests for which the same Intermediate Participant is interposed between the
Borrower and the Portfolio.
ILLIQUID INSTRUMENTS. Most Loan Interests are not readily marketable and may be
subject to legal and contractual restrictions on resale. The Portfolio's ability
to dispose of a Loan Interest may be reduced to the extent that there has been a
perceived or actual deterioration in the creditworthiness of an individual
Borrower or the creditworthiness of Borrowers in general, or by events that
reduce the level of confidence in the market for Loan Interests. The Portfolio
has no limitation on the amount of its investments which can be not readily
marketable or subject to restrictions on resale. Such investments may affect the
Portfolio's ability to realize its net asset value in the event of a voluntary
or involuntary liquidation of its assets. The Trustees of the Fund will consider
the liquidity of the Portfolio's investments in determining the amount of
quarterly repurchase offers.
BORROWINGS AND LEVERAGE
The Portfolio may from time to time (i) borrow money on a secured or unsecured
basis at variable or fixed rates, and (ii) issue indebtedness such as commercial
paper, bonds, debentures, notes or similar obligations or instruments. BMR
expects that the Portfolio will do so to remain fully invested, after accounting
for anticipated cash infusions from the prepayment of Loans and the sale of Fund
shares and cash outflows from the fulfillment of settlement obligations
(including the funding of revolving Loan Interests) and the repurchase of Fund
shares. The Portfolio may also borrow and issue debt for the purpose of
acquiring additional income-producing investments when it believes that the
interest payments and other costs with respect to such borrowings or
indebtedness will be exceeded by the anticipated total return (a combination of
income and appreciation) on such investments. Successful use of a leveraging
strategy depends on BMR's ability to predict correctly interest rates and market
movements. There is no assurance that a leveraging strategy will be successful.
As prescribed by the 1940 Act, the Portfolio will be required to maintain
specified asset coverages of at least 300% with respect to any bank borrowing or
issuance of indebtedness immediately following any such borrowing or issuance
and on an ongoing basis as a condition of declaring dividends. The Portfolio's
inability to make distributions as a result of these requirements could cause
the Fund to fail to qualify as a regulated investment company and/ or subject
the Fund to income or excise taxes. The Portfolio may be required to dispose of
portfolio investments on unfavorable terms if market fluctuations or other
factors reduce the required asset coverage to less than the prescribed amount.
The Portfolio may be required to maintain minimum average balances in connection
with borrowings or to pay a commitment or other fee to maintain a line of
credit; either of these requirements will increase the cost of borrowing over
the stated interest rate. The issuance of additional classes of debt involves
offering expenses and other costs and may limit the Portfolio's freedom to pay
dividends or to engage in other activities. Any such borrowing or debt issuance
is a speculative technique in that it will increase the Portfolio's exposure to
capital risk. The Portfolio may also borrow for temporary, extraordinary or
emergency purposes.
OTHER INVESTMENT POLICIES
As stated above, up to 20% of the Portfolio's total assets may be held in cash,
invested in short-term debt obligations, and invested in interests in Loans that
are unsecured. The Portfolio will invest in only those Unsecured Loans that have
been determined by BMR to have a credit quality at least equal to that of the
collateralized Loans in which the Portfolio primarily invests. Should the
Borrower of an Unsecured Loan default on its obligation there will be no
specific collateral on which the Portfolio can foreclose, although the Borrower
will typically have assets believed by BMR at the time of purchase of the
Unsecured Loans to exceed the amount of the Loan. The short-term debt
obligations in which the Portfolio may invest include, but are not limited to,
interests in senior Unsecured Loans with a remaining maturity of one year or
less ("Short-Term Loans"), certificates of deposit, commercial paper, short-term
and medium-term notes, bonds with remaining maturities of less than five years,
obligations issued by the U.S. Government or any of its agencies or
instrumentalities and repurchase agreements. The credit quality of Short-Term
Loans must be determined by BMR to be at least equal to that of the Portfolio's
investments in Loans. All of such other debt instruments will be investment
grade (i.e., rated Baa, P-3 or better by Moody's or BBB, A-3 or better by S&P
or, if unrated, determined by BMR to be of comparable quality). Securities rated
Baa, BBB, P-3 or A-3 are considered to have adequate capacity for payment of
principal and interest, but are more susceptible to adverse economic conditions.
Securities rated BBB or Baa (or comparable unrated securities) have speculative
characteristics. Also, the capacity of their issuers to make principal and
interest payments would be weakened by changes in economic conditions or other
circumstances to a greater extent than for issuers of higher grade bonds.
Pending investment of the proceeds of Fund sales by the Portfolio or when BMR
believes that investing for defensive purposes (such as during abnormal market
or economic conditions) is appropriate, more than 20% of the Portfolio's total
assets may be temporarily held in cash or in the short-term debt obligations
described above.
Although the Portfolio generally holds Loan Interests only in Loans for which
the Agent and Intermediate Participants, if any, are banks, it may acquire Loan
Interests from non-bank financial institutions and in Loans originated,
negotiated and structured by non-bank financial institutions, if such Loan
Interests conform to the credit requirements described above. As these other
types of Loan Interests are developed and offered to investors, BMR will,
consistent with the Portfolio's investment objective, policies and quality
standards, and in accordance with applicable custody and other requirements of
the 1940 Act, consider making investments in such Loan Interests. Also, the
Portfolio has acquired and may continue to acquire warrants and other equity
securities as part of a unit combining Loan Interests and equity securities of
the Borrower or its affiliates. The acquisition of such equity securities will
only be incidental to the Portfolio's purchase of a Loan Interest. The Portfolio
may also acquire equity securities issued in exchange for a Loan or issued in
connection with the debt restructuring or reorganization of a Borrower, or if
such acquisition, in the judgment of BMR, may enhance the value of a Loan or
would otherwise be consistent with the Portfolio's investment policies.
The Portfolio will limit its investments to those which are eligible for
purchase by national banks for their own portfolios. The conditions and
restrictions governing the purchase of Fund shares by national banks are set
forth in the U.S. Comptroller of the Currency's Banking Circular 220. Subject to
such conditions and restrictions, national banks may acquire Fund shares for
their own investment portfolio.
FOREIGN INVESTMENTS. The Portfolio may also acquire U.S. dollar denominated Loan
Interests in Loans which are made to non-U.S. Borrowers in developed countries;
provided, however, that any such Borrower meets the credit standards established
by BMR for U.S. Borrowers, and no more than 35% of its net assets are invested
in Loan Interests of such Borrowers. Investing in Loan Interests of non-U.S.
Borrowers involves certain special considerations, which are not typically
associated with investing in U.S. Borrowers. Since foreign companies are not
subject to uniform accounting, auditing and financial reporting standards,
practices and requirements comparable to those applicable to U.S. Borrowers,
there may be less publicly available information about a foreign company than
about a domestic company. There is generally less government supervision and
regulation of financial markets and listed companies than in the United States.
Mail service between the United States and foreign countries may be slower or
less reliable than within the United States, thus increasing the risk of delayed
settlements of portfolio transactions. As of the date of this Prospectus,
approximately 1% of the Portfolio's assets were invested in Loan Interests of
non-U.S. Borrowers. The Portfolio has no current intention to invest more than
10% of its net assets in such Loan Interests.
INTEREST RATE SWAPS. In order to attempt to protect the value of the Portfolio's
assets from interest rate fluctuations and to maintain a dollar weighted average
period to next interest rate adjustment of approximately 90 days or less, the
Portfolio may enter into interest rate swaps. The Portfolio intends to use
interest rate swaps as a hedge and not as a speculative investment and will
typically use interest rate swaps to shorten the average time to interest rate
reset of the Portfolio. Interest rate swaps involve the exchange by the
Portfolio with another party of their respective commitments to pay or receive
interest, e.g., an exchange of fixed rate payments for floating rate payments.
The use of interest rate swaps is a highly specialized activity which involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. BMR has not been involved in the use of
interest rate swaps but has utilized other types of hedging techniques. If BMR
is incorrect in its forecasts of market values, interest rates and other
applicable factors, the investment performance of the Fund would be less
favorable than what it would have been if this investment technique were never
used. The Portfolio has not engaged in such transactions and has no current
intention to invest more than 5% of its net assets in such transactions.
REPURCHASE AGREEMENTS. The Portfolio may enter into repurchase agreements with
respect to its permitted investments, but currently intends to do so only with
member banks of the Federal Reserve System or with primary dealers in U.S.
Government securities. Under a repurchase agreement the Portfolio buys a
security at one price and simultaneously promises to sell that same security
back to the seller at a higher price. The Portfolio's repurchase agreements will
provide that the value of the collateral underlying the repurchase agreement
will always be at least equal to the repurchase price, including any accrued
interest earned on the repurchase agreement, and will be marked to market daily.
The repurchase date is usually within seven days of the original purchase date.
In all cases, BMR must be satisfied with the creditworthiness of the other party
to the agreement before entering into a repurchase agreement. In the event of
the bankruptcy of the other party to a repurchase agreement, the Portfolio might
experience delays in recovering its cash. To the extent that, in the meantime,
the value of the securities the Portfolio purchased may have declined, the
Portfolio could experience a loss. To date, the Portfolio has not engaged in
repurchase agreements.
CERTAIN INVESTMENT RESTRICTIONS AND POLICIES. The Fund and the Portfolio have
adopted certain fundamental investment restrictions and policies which are
enumerated in detail in the Statement of Additional Information and which may
not be changed unless authorized by a shareholder and an investor vote,
respectively. Among these fundamental restrictions, the Portfolio may not
purchase any security if, as a result of such purchase, 25% or more of the
Portfolio's total assets (taken at current value) would be invested in the
securities of Borrowers and other issuers having their principal business
activities in the same industry; provided that there is no limitation with
respect to obligations issued or guaranteed by the U.S. Government or any of its
agencies or instrumentalities. Except for the fundamental restrictions and
policies enumerated in the Fund's Statement of Additional Information, the
investment objective and policies of the Fund and the Portfolio are not
fundamental policies and accordingly may be changed by the Trustees of the Fund
and the Portfolio without obtaining the approval of the Fund's shareholders or
the investors in the Portfolio, as the case may be.
YIELD AND PERFORMANCE INFORMATION
The rate of interest payable on Loans is established as the sum of a base
lending rate plus a specified spread. These base lending rates are generally the
London InterBank Offered Rate ("LIBOR"), the Prime Rate of a designated U.S.
bank, the Certificate of Deposit ("CD") rate of a designated U.S. bank or
another base lending rate used by commercial lenders. The Prime Rate is the rate
banks typically use as a base for a wide range of loans to individuals and
midsize and small businesses. LIBOR is the rate typically used by banks
worldwide as a base for loans to large commercial and industrial companies. A
Borrower usually has the right to select the base lending rate and to change the
base lending rate at specified intervals. The interest rate on Prime Rate- based
Loans floats daily as the Prime Rate changes, while the interest rate on
LIBOR-based and CD-based Loans is periodically reset with reset periods
typically ranging from 30 to 180 days. At the time of acquisition of a Loan
Interest, the Portfolio may also receive an upfront facility fee.
From time to time, the Fund may quote current yield based on a specific
one-month period. Current yield is calculated by annualizing the most recent
monthly distribution (i.e., multiplying by 365/31 for a 31 day month) and
dividing the product by the current maximum offering price. Yield will fluctuate
from time to time and are not necessarily representative of future results.
Advertisements and communications to present or prospective shareholders may
also cite a total return for any period. Total return will be calculated by
subtracting the net asset value of a single purchase of shares at a given date
from the net asset value of those shares (assuming reinvestment of
distributions) on a subsequent date. The difference divided by the original net
asset value is the total return. The calculation of the Fund's total return
reflects the effect of compounding inasmuch as all dividends and distributions
are assumed to be reinvested in additional shares of the Fund at net asset
value. The Fund may quote total return for the period prior to commencement of
operations which would reflect the Portfolio's total return (or that of its
predecessor). If the fees or expenses of the Fund or the Portfolio are waived or
reimbursed, the Fund's performance will be higher. Information about the
performance of the Fund or other investments should not be considered a
representation of future performance the Fund may earn or what an investor's
yield or total return may be in the future.
ORGANIZATION OF THE FUND AND THE PORTFOLIO
The Fund is organized as a business trust established under Massachusetts law
pursuant to a Declaration of Trust dated February, 19, 1998, as amended, and is
registered under the 1940 Act. The Trustees of the Fund are responsible for the
overall management and supervision of its affairs. The Fund currently has one
class of shares of beneficial interest which may be issued in an unlimited
number by the Trustees. Each share represents an equal proportionate beneficial
interest in the Fund and, when issued and outstanding, the shares are fully paid
and nonassessable by the Fund and may be repurchased only as described under
"Fund Repurchase Offers". There are no annual meetings of shareholders, but
special meetings may be held as required by law to elect Trustees and consider
certain other matters. Shareholders are entitled to one vote for each full share
held. Fractional shares may be voted proportionately. Shares have no preemptive
or conversion rights and are freely transferable. In the event of liquidation of
the Fund, shareholders are entitled to share pro rata in the net assets of the
Fund available for distribution to shareholders. Eaton Vance may be deemed a
control person of the Fund because as of the date of this Prospectus it was the
record owner of all outstanding Fund shares.
The Fund's Declaration of Trust may not be amended without the affirmative vote
of a majority of the outstanding shares of the Fund (or such greater vote as is
described below under "Anti-Takeover Provisions"), except that the Declaration
of Trust may be amended by the Trustees to change the name of the Fund, to make
such other changes as do not have a materially adverse effect on the rights or
interests of shareholders and to conform the Declaration of Trust to applicable
federal laws or regulations. The Fund may be terminated (i) upon the merger or
consolidation with or sale of the Fund's assets to another company, if approved
by the holders of two-thirds of the outstanding shares of the Fund, except that
if the Trustees recommend such transaction, the approval by vote of the holders
of a majority of the outstanding shares will be sufficient, or (ii) upon
liquidation and distribution of the assets of the Fund, if approved by the
holders of two-thirds of the Fund's outstanding shares, except that if the
Trustees recommend such transaction, the approval by vote of the holders of a
majority of the outstanding shares will be sufficient. If not so terminated, the
Fund may continue indefinitely.
ANTI-TAKEOVER PROVISIONS. The Fund presently has certain anti-takeover
provisions in its Declaration of Trust which are intended to limit, and could
have the effect of limiting, the ability of other entities or persons to acquire
control of the Fund, to cause it to engage in certain transactions or to modify
its structure. As indicated above, a two-thirds vote is required for certain
transactions. The affirmative vote or consent of the holders of two-thirds of
the shares of the Fund (a greater vote than that required by the 1940 Act and,
in some cases, greater than the required vote applicable to business
corporations under state law) is required to authorize the conversion of the
Fund from a closed-end to an open-end investment company (except that if the
Trustees recommend such conversion, the approval by vote of the holders of a
majority of the outstanding shares will be sufficient) and the affirmative vote
or consent of the holders of three-quarters of the shares of the Fund is
required to authorize any of the following transactions (the "Transactions"):
(i) merger or consolidation of the Fund with or into any corporation; (ii)
issuance of any securities of the Fund to any person or entity for cash; (iii)
sale, lease or exchange of all or any substantial part of the assets of the Fund
to any entity or person (except assets having an aggregate fair market value of
less than $1,000,000 or assets sold in the ordinary course of business); or (iv)
sale, lease or exchange to the Fund, in exchange for securities of the Fund, of
any assets of any entity or person (except assets having an aggregate fair
market value of less than $1,000,000) if such corporation, person or entity is
directly, or indirectly through affiliates, the beneficial owner of 5% or more
of the outstanding shares of the Fund. However, such vote or consent will not be
required with respect to the Transactions if the Board of Trustees under certain
conditions approves the Transaction. Further, the provisions of the Fund's
Declaration of Trust relating to conversion of the Fund to an open-end
investment company, the Transactions, the merger or consolidation with or sale
of the Fund's assets, and the liquidation and distribution of the Fund's assets
may not be amended without the affirmative vote or consent of two-thirds of the
outstanding shares of the Fund. Reference is made to the Declaration of Trust of
the Fund, on file with the Commission, for the full text of these provisions.
The foregoing provisions will make more difficult the conversion of the Fund to
an open-end investment company and the consummation of the Transactions without
the Trustees' approval, and could have the effect of depriving shareholders of
an opportunity to sell their shares at a premium over prevailing market prices,
in the event that a secondary market for the Fund shares does develop, by
discouraging a third party from seeking to obtain control of the Fund in a
tender offer or similar transaction. However, the Board of Trustees has
considered these anti-takeover provisions and believes that they are in the
shareholders' best interests and benefit shareholders by providing the advantage
of potentially requiring persons seeking control of the Fund to negotiate with
its management regarding the price to be paid.
MASTER-FEEDER STRUCTURE. The Trustees of the Fund have considered the advantages
and disadvantages of investing the assets of the Fund in the Portfolio, as well
as the advantages and disadvantages of the two-tier format. The Trustees believe
that the structure may offer opportunities for growth in the assets of the
Portfolio, and may afford the potential for economies of scale for the Fund. The
other investors in the Portfolio will effect its liquidity, and therefore, could
adversely affect the amount of the Fund's repurchase offers.
THE PORTFOLIO IS ORGANIZED AS A TRUST UNDER THE LAWS OF THE STATE OF NEW YORK
AND INTENDS TO BE TREATED AS A PARTNERSHIP FOR FEDERAL TAX PURPOSES. In addition
to selling an interest to the Fund, the Portfolio may sell interests to other
affiliated and non-affiliated investment companies or institutional investors.
Such investors will invest in the Portfolio on the same terms and conditions and
will pay a proportionate share of the Portfolio's expenses. However, the other
investors investing in the Portfolio are not required to sell their shares at
the same public offering price as the Fund due to variations in sales
commissions and other operating expenses. Therefore, these differences may
result in differences in returns experienced by investors in the various funds
that may invest in the Portfolio. Such differences in returns are also present
in other mutual fund structures, including funds that have multiple classes of
shares. Information regarding other pooled investment entities or funds which
invest in the Portfolio may be obtained by contacting the Principal Underwriter,
24 Federal Street, Boston, MA 02110 (617) 482-8260.
Whenever the Fund as an investor in the Portfolio is requested to vote on
matters pertaining to the Portfolio (other than the termination of the
Portfolio's business, which may be determined by the Trustees of the Portfolio
without investor approval), the Fund will hold a meeting of Fund shareholders
and will vote its interest in the Portfolio for or against such matters
proportionately to the instructions to vote for or against such matters received
from Fund shareholders. The Fund shall vote shares for which it receives no
voting instructions in the same proportion as the shares for which it receives
voting instructions. Other investors in the Portfolio may alone or collectively
acquire sufficient voting interests in the Portfolio to control matters relating
to the operation of the Portfolio, which may require the Fund to withdraw its
investment in the Portfolio or take other appropriate action. Any such
withdrawal could result in a distribution "in kind" of portfolio Loans and
noncash assets (as opposed to a cash distribution from the Portfolio). If Loans
and noncash assets are distributed, the Fund could incur brokerage, tax or other
charges in converting them to cash. In addition, the distribution in kind may
result in a less diversified portfolio of investments and will adversely affect
the liquidity of the Fund. Notwithstanding the above, there are other means for
meeting shareholder redemption requests, such as borrowing.
In the event the Fund withdraws all of its assets from the Portfolio, or the
Board of Trustees of the Fund determines that the investment objective of the
Portfolio is no longer consistent with the investment objective of the Fund, the
Trustees would consider what action might be taken, including investing the
assets of the Fund in another pooled investment entity or retaining an
investment adviser to manage the Fund's assets in accordance with its investment
objective. The Fund's investment performance may be affected by a withdrawal of
all of its assets (or the assets of another investor in the Portfolio) from the
Portfolio.
MANAGEMENT OF THE FUND AND THE PORTFOLIO
The Portfolio engages BMR, a wholly-owned subsidiary of Eaton Vance, to act as
its investment adviser under an Investment Advisory Agreement (the "Advisory
Agreement"). Under the general supervision of the Portfolio's Board of Trustees,
BMR will carry out the investment and reinvestment of the assets of the
Portfolio, will furnish continuously an investment program with respect to the
Portfolio, will determine which securities should be purchased, sold or
exchanged, and will implement such determinations. BMR will furnish to the
Portfolio investment advice and office facilities, equipment and personnel for
servicing the investments of the Portfolio. BMR will compensate all Trustees and
officers of the Portfolio who are members of the BMR organization and who render
investment services to the Portfolio, and will also compensate all other BMR
personnel who provide research and investment services to the Portfolio. In
return for these services, facilities and payments, the Portfolio has agreed to
pay BMR as compensation under the Advisory Agreement a monthly fee in the amount
of 19/240 of 1% (equivalent to 0.95% annually) of the average daily gross assets
of the Portfolio. Gross assets of the Portfolio shall be calculated by deducting
all liabilities of the Portfolio except the principal amount of any indebtedness
for money borrowed, including debt securities issued by the Portfolio.
The Trustees of the Portfolio have voted to accept a waiver of BMR's
compensation so that the aggregate advisory fees paid by the Portfolio under the
Advisory Agreement during any fiscal year or portion thereof after the Fund
begins to invest its assets in the Portfolio will not exceed on an annual basis:
(a) 0.95% of average daily gross assets of the Portfolio up to and including $1
billion; (b) 0.90% of average daily gross assets in excess of $1 billion up to
and including $2 billion; and (c) 0.85% of average daily gross assets in excess
of $2 billion. The Portfolio paid BMR advisory fees equivalent to 0.89% of the
Portfolio's average daily gross assets for the fiscal year ended December 31,
1997.
Eaton Vance, its affiliates and predecessor companies have been managing assets
of individuals and institutions since 1924 and managing investment companies
since 1931. BMR or Eaton Vance currently serves as the investment adviser to
investment companies and various individual and institutional clients with
combined assets under management of approximately $22 billion, of which
approximately $18 billion is in investment companies, including over $4 billion
in the Portfolio. Eaton Vance is a wholly-owned subsidiary of Eaton Vance Corp.,
a publicly-held holding company which through its subsidiaries and affiliates
engages primarily in investment management, administration and marketing
activities. The Principal Underwriter is a wholly-owned subsidiary of Eaton
Vance.
Scott H. Page and Payson F. Swaffield have acted as co-portfolio managers of
the Portfolio since August 1, 1996. Mr. Page has been a Vice President of
Eaton Vance and BMR since 1992 and an employee of Eaton Vance since 1989. Mr.
Swaffield has been a Vice President of Eaton Vance and BMR since 1992 and an
employee of Eaton Vance since 1990.
The Fund, the Portfolio and BMR have adopted Codes of Ethics relating to
personal securities transactions. The Codes permit Eaton Vance personnel to
invest in securities (including securities that may be purchased or held by the
Portfolio) for their own accounts, subject to certain pre-clearance, reporting
and other restrictions and procedures contained in such Codes.
The Fund has engaged Eaton Vance to act as its administrator under an
Administration Agreement (the "Administration Agreement"). Under the
Administration Agreement, Eaton Vance is responsible for managing the business
affairs of the Fund, subject to the supervision of the Fund's Board of Trustees.
Eaton Vance will furnish to the Fund all office facilities, equipment and
personnel for administering the affairs of the Fund. Eaton Vance will compensate
all Trustees and officers of the Fund who are members of the Eaton Vance
organization and who render executive and administrative services to the Fund,
and will also compensate all other Eaton Vance personnel who perform management
and administrative services for the Fund. Eaton Vance's administrative services
include recordkeeping, preparation and filing of documents required to comply
with federal and state securities laws, supervising the activities of the Fund's
custodian and transfer agent, providing assistance in connection with the
Trustees' and shareholders' meetings, providing services in connection with
quarterly repurchase offers and other administrative services necessary to
conduct the Fund's business. In return for these services, facilities and
payments, the Fund is authorized to pay Eaton Vance as compensation under the
Administration Agreement a monthly fee in the amount of 1/48 of 1% (equivalent
to 0.25% annually) of the average daily gross assets of the Portfolio
attributable to the Fund. The Trustees of the Fund have initially implemented
the Administration Agreement by authorizing the Fund to pay Eaton Vance a
monthly fee in the amount of 1/80 of 1% (equivalent to 0.15% annually) of the
average daily gross assets of the Portfolio attributable to the Fund. In
calculating the gross assets of the Portfolio, all liabilities of the Portfolio
shall be deducted except the principal amount of any indebtedness for money
borrowed, including debt securities issued by the Portfolio.
The Portfolio and the Fund, as the case may be, will each be responsible for all
of its respective costs and expenses not expressly stated to be payable by BMR
under the Advisory Agreement, by Eaton Vance under the Administration Agreement
or by the Principal Underwriter under its Distribution Agreement.
VALUING SHARES
THE FUND VALUES ITS SHARES ONCE ON EACH DAY THE NEW YORK STOCK EXCHANGE (THE
"EXCHANGE") IS OPEN FOR TRADING, as of the close of regular trading on the
Exchange (normally 4:00 p.m. New York time). The Fund's net asset value per
share is determined by IBT Fund Services (Canada) Inc. (as agent for the Fund)
in the manner authorized by the Trustees of the Fund. IBT Fund Services (Canada)
Inc. is a subsidiary of Investors Bank & Trust Company ("IBT"), the Fund's and
the Portfolio's custodian. The Fund will be closed for business and will not
price its shares on the following business holidays: New Year's Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day and Christmas Day. Net asset value is computed
by dividing the value of the Fund's total assets, less its liabilities by the
number of shares outstanding. Because the Fund invests its assets in an interest
in the Portfolio, the Fund's net asset value will reflect the value of its
interest in the Portfolio (which, in turn, reflects the underlying value of the
Portfolio's assets and liabilities).
The Portfolio's net asset value is also determined as of the close of regular
trading on the Exchange by IBT Fund Services (Canada) Inc. (as agent for the
Portfolio) in the manner authorized by the Trustees of the Portfolio. Net asset
value is computed by determining the value of the Portfolio's total assets (the
loans and securities it holds plus any cash or other assets, including interest
accrued but not yet received), and subtracting all of the Portfolio's
liabilities (including the outstanding principal amount of any indebtedness
issued and any unpaid interest thereon). For further information regarding the
valuation of the Portfolio's assets, see "Determination of Net Asset Value" in
the Statement of Additional Information.
Because Loan Interests are not actively traded in a public market, BMR,
following procedures established by the Portfolio's Trustees, will value the
Loan Interests held by the Portfolio at fair value. In valuing a Loan Interest,
BMR will consider relevant factors, data, and information, including: (i) the
characteristics of and fundamental analytical data relating to the Loan
Interest, including the cost, size, current interest rate, period until next
interest rate reset, maturity and base lending rate of the Loan Interest, the
terms and conditions of the Loan and any related agreements, and the position of
the Loan in the Borrower's debt structure; (ii) the nature, adequacy and value
of the collateral, including the Portfolio's rights, remedies and interests with
respect to the collateral; (iii) the creditworthiness of the Borrower, based on
an evaluation of its financial condition, financial statements and information
about the Borrower's business, cash flows, capital structure and future
prospects; (iv) information relating to the market for the Loan Interest,
including price quotations (if considered reliable) for and trading in the Loan
Interest and interests in similar Loans and the market environment and investor
attitudes towards the Loan Interest and interests in similar Loans; (v) the
reputation and financial condition of the Agent and any Intermediate
Participants in the Loan; and (vi) general economic and market conditions
affecting the fair value of the Loan Interest.
HOW TO BUY SHARES
The Fund is engaged in a continuous public offering of its shares at net asset
value without an initial sales charge. The Fund does not currently intend to
list its shares on any national securities exchange. Shares may be sold at net
asset value to current and retired Directors and Trustees of Eaton Vance funds,
including the Portfolio; to clients and current and retired officers and
employees of Eaton Vance, its affiliates and other investment advisers of Eaton
Vance sponsored funds; to registered representatives and employees of Authorized
Firms and bank employees who refer customers to registered representatives of
Authorized Firms; to officers and employees of IBT and the Transfer Agent; and
to such persons' spouses and children under the age of 21 and their beneficial
accounts. Shares may also be sold to investors making an investment as part of a
fixed fee program whereby an entity unaffiliated with BMR provides multiple
investment services, such as management, brokerage and custody; and to
investment advisors, financial planners or other intermediaries who place trades
for their own accounts or the accounts of their clients and who charge a
management, consulting or other fee for their services; and to clients of such
investment advisors, financial planners or other intermediaries who place trades
for their own accounts if the accounts are linked to the master account of such
investment advisor, financial planner or other intermediary on the books and
records of the broker or agent.
From time to time the Fund may suspend the continuous offering of its shares.
During any such suspension, shareholders who reinvest their distributions in
additional shares will be permitted to continue such reinvestments, and the Fund
may permit tax sheltered retirement plans which own shares to purchase
additional shares of the Fund.
HOW TO BUY SHARES FOR CASH. Investors may purchase shares of the Fund through
Authorized Firms at the net asset value per share of the Fund next determined
after an order is effective, which, as of the date of this Prospectus was $10.00
per share. Pursuant to its Distribution Agreement with the Principal
Underwriter, the Fund has authorized the Principal Underwriter to distribute its
shares on a "best efforts" basis through Authorized Firms. An Authorized Firm
may charge its customers a fee in connection with transactions executed by that
Firm.
The Principal Underwriter may also, from time to time, at its own expense,
provide additional cash incentives to Authorized Firms which employ registered
representatives who sell a minimum dollar amount of the Fund's shares and/or
shares of other funds distributed by the Principal Underwriter. Upon NASD
approval, the Principal Underwriter may provide non-cash incentives to
Authorized Firms.
An initial investment in the Fund must be at least $5,000 ($2,000 in the case of
Individual Retirement Accounts). Once an account has been established, the
investor may send investments of $50 or more at any time directly to the Fund's
Transfer Agent as follows: First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123. See "Eaton Vance Shareholder Services".
The Fund may suspend the offering of shares at any time and may refuse any order
for the purchase of shares.
USE OF PROCEEDS. Proceeds from the continuous offering of Fund shares will be
used to increase the Fund's interest in the Portfolio. Pending such investment,
the proceeds will be held by the Portfolio in cash or invested in investment
grade short-term debt obligations. The Fund reserves the right to suspend sales
of its shares to allow the Portfolio to invest more fully in Loan Interests.
FUND REPURCHASE OFFERS
As a matter of fundamental policy which cannot be changed without shareholder
approval, the Fund is required in the months of JANUARY, APRIL, JULY and OCTOBER
to repurchase at least 5% and up to 25% of its shares. Under normal market
conditions, the Trustees expect to authorize a 25% offer. (The Fund may also
make a discretionary repurchase offer once every two years but has no current
intention to do so.) The repurchase price will be the net asset value determined
not more than 14 days following the repurchase request deadline and payment for
all shares repurchased pursuant to these offers will be made not later than 7
days after the repurchase pricing date. Under normal circumstances, it is
expected that net asset value will be determined on the repurchase request
deadline and payment for shares tendered will be made within 3 business days
after a repurchase request deadline. During the period the offer to repurchase
is open shareholders may obtain the current net asset value by calling
1-800-225-6265, option 2 (fund #532).
At least 21 days prior to the repurchase request deadline the Fund will mail
written notice to each shareholder setting forth the number of shares the Fund
will repurchase, the repurchase request deadline and other terms of the offer to
repurchase, and the procedures for shareholders to follow to request a
repurchase. THE REPURCHASE REQUEST DEADLINE WILL BE STRICTLY OBSERVED.
Shareholders and financial intermediaries failing to submit repurchase requests
in good order by such deadline will be unable to liquidate shares until a
subsequent repurchase offer.
If more shares are tendered for repurchase than the Fund has offered to
repurchase, the Board may, but is not obligated, to increase the number of
shares to be repurchased by 2% of the Fund shares outstanding; if there are
still more shares tendered than are offered for repurchase, shares will be
repurchased on a pro-rata basis. Thus, shareholders may be unable to liquidate
all or a given percentage of their shares and some shareholders may tender more
shares than they wish to have repurchased in order to ensure repurchase of at
least a specific number of shares. Shareholders may withdraw shares tendered for
repurchase at any time prior to the repurchase request deadline.
Repurchase offers and the need to fund repurchase obligations may affect the
ability of the Portfolio to be fully invested, which may reduce returns.
Moreover, diminution in the size of the Portfolio through repurchases without
offsetting new sales may result in untimely sales of portfolio securities and a
higher expense ratio, and may limit the ability of the Portfolio to participate
in new investment opportunities. Repurchases resulting in portfolio turnover
will result in additional expenses being borne by the Portfolio. The Portfolio
may borrow to meet repurchase obligations which entails certain risks and costs.
See "Borrowings and Leverage". The Portfolio may also sell portfolio securities
to meet repurchase obligations which, in certain circumstances, may adversely
affect the market for senior secured floating-rate loans and reduce the Fund's
value.
The Fund may suspend or postpone a repurchase offer only: (A) if making or
effecting the repurchase offer would cause the Fund to lose its status as a
regulated investment company under the Internal Revenue Code; (B) for any period
during which the New York Stock Exchange or any market in which the securities
owned by the Portfolio are principally traded is closed, other than customary
weekend and holiday closings, or during which trading in such market is
restricted; (C) for any period during which an emergency exists as a result of
which disposal by the Portfolio of securities owned by it is not reasonably
practicable, or during which it is not reasonably practicable for the Portfolio
or Fund fairly to determine the value of its net assets; or (D) for such other
periods as the Commission may by order permit for the protection of shareholders
of the Fund.
EXCHANGES: The Fund makes available to shareholders who are repurchasing shares
the privilege of exchanging Fund shares for Class A shares of one or more
open-end investment companies in the Eaton Vance Group of Funds, Eaton Vance
Cash Management Fund, Eaton Vance Income Fund of Boston or Eaton Vance Tax Free
Reserves. Any such exchange will be made on the basis of the net asset value per
share of each fund at the time of exchange. Exchange offers are available only
in states where shares of the fund acquired may legally be sold. Shares of
certain other funds advised or administered by Eaton Vance may be exchanged for
shares of the Fund at net asset value per share, but subject to any restrictions
or qualifications set forth in the current prospectus of any such fund. For the
purposes of calculating the early withdrawal or contingent deferred sales charge
applicable to shares acquired in an exchange, the schedule of charges, if any,
applicable to the shares at the time of purchase will apply and the purchase of
shares is deemed to have occurred at the time of the original purchase of the
exchanged shares.
The prospectus for each fund describes its investment objectives and policies,
and shareholders should obtain a prospectus and consider these objectives and
policies carefully before requesting an exchange. Each exchange must involve
shares which have a net asset value of at least $1,000. The exchange privilege
may be changed or discontinued without penalty. Shareholders will be given sixty
(60) days' notice prior to any termination or material amendment of the exchange
privilege. An exchange may result in a taxable gain or loss.
REPORTS TO SHAREHOLDERS
THE FUND WILL ISSUE TO ITS SHAREHOLDERS SEMI-ANNUAL AND ANNUAL REPORTS
CONTAINING FINANCIAL STATEMENTS. Financial statements included in annual reports
are audited by the independent accountants. Shortly after the end of each
calendar year, shareholders will be furnished with information necessary for
preparing federal and state tax returns.
THE LIFETIME INVESTING ACCOUNT/DISTRIBUTION OPTIONS
AFTER AN INVESTOR MAKES AN INITIAL PURCHASE OF SHARES, THE TRANSFER AGENT WILL
SET UP A LIFETIME INVESTING ACCOUNT FOR THE INVESTOR ON THE FUND'S RECORDS. This
account is a complete record of all transactions which at all times shows the
balance of shares owned. Shares are held in non-certificated form by the Fund's
Transfer Agent for the account of the shareholder. The Fund will not issue share
certificates except upon request.
At least quarterly, shareholders will receive a statement showing complete
details of any transaction and the current share balance in the account. THE
LIFETIME INVESTING ACCOUNT ALSO PERMITS A SHAREHOLDER TO MAKE ADDITIONAL
INVESTMENTS IN SHARES BY SENDING A CHECK FOR $50 OR MORE TO the Transfer Agent.
Any questions concerning a shareholder's account or services available may be
directed by telephone to EATON VANCE SHAREHOLDER SERVICES at 800-225-6265,
extension 2, or in writing to the Transfer Agent, First Data Investor Services
Group, P.O. Box 5123, Westborough, MA 01581-5123 (please provide the name of the
shareholder, the Fund and the account number).
THE FOLLOWING DISTRIBUTION OPTIONS WILL BE AVAILABLE TO ALL LIFETIME INVESTING
ACCOUNTS and may be changed as often as desired by written notice to the Fund's
dividend disbursing agent, First Data Investor Services Group, P.O. Box 5123,
Westborough, MA 01581-5123. The currently effective option will appear on each
account statement.
SHARE OPTION -- Dividends and capital gains will be reinvested in additional
shares.
INCOME OPTION -- Dividends will be paid in cash and capital gains will be
reinvested in additional shares.
CASH OPTION -- Dividends and capital gains will be paid in cash.
The SHARE OPTION will be assigned if no other option is specified.
Distributions, including those reinvested, will be reduced by any withholding
required under federal income tax laws.
If shareholder communications are returned by the United States Postal Service
or other delivery service as not deliverable, the distribution option on the
account will be automatically changed to the SHARE OPTION until such time as the
shareholder selects a different option. No interest will accrue on amounts
represented by uncashed distribution or redemption checks.
DISTRIBUTION INVESTMENT OPTION. In addition to the distribution options set
forth above, dividends and/or capital gains may be invested in additional shares
of another Eaton Vance fund. Before selecting this option, a shareholder should
obtain a prospectus of the other Eaton Vance fund and consider its objectives
and policies carefully.
EATON VANCE SHAREHOLDER SERVICES
THE FUND OFFERS THE FOLLOWING SERVICES, WHICH ARE VOLUNTARY, INVOLVE NO EXTRA
CHARGE, AND MAY BE CHANGED OR DISCONTINUED WITHOUT PENALTY AT ANY TIME. Full
information on each of the services described below and an application, where
required, are available from Authorized Firms or the Principal Underwriter. The
cost of administering such services for the benefit of shareholders who
participate in them is borne by the Fund as an expense to all shareholders.
INVEST-BY-MAIL -- FOR PERIODIC SHARE ACCUMULATION: Once the $5,000 minimum
investment has been made, checks of $50 or more payable to the order of Eaton
Vance Advisers Senior Floating-Rate Fund may be mailed directly to the Transfer
Agent, First Data Investor Services Group, P.O. Box 5123, Westborough, MA
01581-5123 at any time -- whether or not distributions are reinvested. The name
of the shareholder, the Fund and the account number should accompany each
investment.
BANK AUTOMATED INVESTING -- FOR REGULAR SHARE ACCUMULATION: Once the $5,000
minimum investment has been made, cash investments of $50 or more may be made
automatically each month or quarter from the shareholder's bank account.
TAX-SHELTERED RETIREMENT PLANS: Shares of the Fund are available for purchase in
connection with certain tax-sheltered retirement plans. Detailed information
concerning these plans, including certain exceptions to minimum investment
requirements, and copies of the plans are available from the Principal
Underwriter. This information should be read carefully and consultation with an
attorney or tax adviser may be advisable. The information sets forth the service
fee charged for retirement plans and describes the federal income tax
consequences of establishing a plan. Participant accounting services (including
trust fund reconciliation services) will be offered only through third party
recordkeepers and not by the Principal Underwriter. Under all plans,
distributions will be automatically reinvested in additional shares.
DISTRIBUTIONS AND TAXES
The Fund declares daily and distributes monthly substantially all of its
investment company taxable income (consisting generally of taxable net
investment income and net short-term capital gain, if any) and distributes
annually net capital gain, if any (usually in December). Daily distribution
crediting will commence on the business day after collected funds for the
purchase of Fund shares are available at the Transfer Agent, even if orders to
purchase shares had been placed with Authorized Firms. Investors who purchase
shares shortly before the record date of a capital gain distribution will pay
the full price for the shares and then receive some portion of the price back as
a taxable distribution. The Fund's distributions will not qualify for the
dividends-received deduction for corporations. The Fund expects distributions to
consist primarily of investment company taxable income which is taxable to
shareholders as ordinary income, whether paid in cash or additional shares of
the Fund. Certain distributions paid in January will be taxable to shareholders
as if received on December 31 of the prior year.
The repurchase of Fund shares may result in a taxable gain or loss to the
redeeming shareholder, depending on whether the amount received is greater or
less than such shareholder's adjusted tax basis in the shares. An exchange of
shares of the Fund for shares of another Eaton Vance fund generally will have
similar tax consequences. Different tax consequences may apply for tendering and
nontendering shareholders in connection with a repurchase offer, and these
consequences will be disclosed in the related offering documents. For example,
it is possible that repurchases not treated as an exchange for federal income
tax purposes might result in different tax characterizations of the
distributions to tendering shareholders and in deemed distributions to non-
tendering shareholders.
Taxable distributions to certain shareholders, including those who have not
provided the Fund with their correct taxpayer identification number and other
required certifications, may be subject to "backup" federal tax withholding of
31%.
The foregoing only summarizes some of the federal tax consequences to
shareholders of investing in shares of the Fund, and does not address special
tax rules applicable to certain types of investors, such as corporate and
foreign investors, individual retirement accounts and other retirement plans.
Investors should consult their tax advisers.
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
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<S> <C> <C> <C>
Additional Information about Investment Policies 2 Taxes 11
Investment Restrictions 4 Custodian 13
Trustees and Officers 5 Transfer and Dividend Paying Agent and Registrar 13
Control Persons and Principal Holders of Shares 7 Performance Information 13
Investment Advisory and Other Services 8 Other Information 16
Determination of Net Asset Value 9 Auditors 17
Portfolio Trading 10 Financial Statements 17
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</TABLE>
<PAGE>
[logo] Investing
for the
EATON VANCE 21st
- ------------ Century
MUTUAL FUNDS
- --------------------------------------------------------------------------------
Eaton Vance
Advisers Senior
Floating-Rate
Fund
PROSPECTUS
, 1998
- --------------------------------------------------------------------------------
Investment Adviser of Senior Debt Portfolio
Boston Managment and Reseasrch, 24 Federal Street, Boston, MA 02110
Administrator of Eaton Vance Advisers Senior Floating-Rate Fund
Eaton Vance Management, 24 Federal Street, Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
Custodian
Investors Bank & Trust Company, 200 clarendon Street, Boston, MA 02116
Transfer Agent
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123
(800) 262-1122
Auditors
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110 I-SFRP
<PAGE>
STATEMENT OF
ADDITIONAL INFORMATION
, 1998
EATON VANCE ADVISERS SENIOR
FLOATING-RATE FUND
24 Federal Street
Boston, Massachusetts 02110
(800) 225-6265
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TABLE OF CONTENTS
Page
Additional Information about Investment Policies ...................... 2
Investment Restrictions ............................................... 3
Trustees and Officers ................................................. 5
Control Persons and Principal Holders of Shares ....................... 7
Investment Advisory and Other Services ................................ 7
Determination of Net Asset Value ...................................... 9
Portfolio Trading ..................................................... 9
Taxes ................................................................. 10
Custodian ............................................................. 11
Transfer and Dividend Paying Agent and Registrar ...................... 11
Performance Information ............................................... 11
Other Information ..................................................... 12
Auditors .............................................................. 13
Financial Statements .................................................. 13
- ------------------------------------------------------------------------------
THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
(THE "FUND") DATED , 1998, AS SUPPLEMENTED FROM TIME TO TIME, WHICH IS
INCORPORATED HEREIN BY REFERENCE. THIS STATEMENT OF ADDITIONAL INFORMATION
SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE
OBTAINED WITHOUT CHARGE BY CONTACTING THE FUND'S PRINCIPAL UNDERWRITER, EATON
VANCE DISTRIBUTORS, INC. (SEE BACK COVER FOR ADDRESS AND PHONE NUMBER).
<PAGE>
Capitalized terms used in this Statement of Additional Information and not
otherwise defined have the meanings given them in the Fund's Prospectus.
ADDITIONAL INFORMATION ABOUT INVESTMENT POLICIES
The Fund is subject to the same investment policies as those of the
Portfolio.
Lending Fees. In the process of buying, selling and holding Loan Interests the
Portfolio may receive and/or pay certain fees. These fees are in addition to
interest payments received and may include facility fees, commitment fees,
commissions and prepayment penalty fees. When the Portfolio buys a Loan Interest
it may receive a facility fee and when it sells a Loan Interest it may pay a
facility fee. On an ongoing basis, the Portfolio may receive a commitment fee
based on the undrawn portion of the underlying line of credit portion of a Loan.
In certain circumstances, the Portfolio may receive a prepayment penalty fee
upon the prepayment of a Loan by a Borrower. Other fees received by the
Portfolio may include covenant waiver fees and covenant modification fees.
Borrower Covenants. A Borrower must comply with various restrictive covenants
contained in a loan agreement or note purchase agreement between the Borrower
and the lender or lending syndicate (the "Loan Agreement"). Such covenants, in
addition to requiring the scheduled payment of interest and principal, may
include restrictions on dividend payments and other distributions to
stockholders, provisions requiring the Borrower to maintain specific minimum
financial ratios, and limits on total debt. In addition, the Loan Agreement may
contain a covenant requiring the Borrower to prepay the Loan with any free cash
flow. Free cash flow is generally defined as net cash flow after scheduled debt
service payments and permitted capital expenditures, and includes the proceeds
from asset dispositions or sales of securities. A breach of a covenant which is
not waived by the Agent, or by the lenders directly, as the case may be, is
normally an event of acceleration; i.e., the Agent, or the lenders directly, as
the case may be, has the right to call the outstanding Loan. The typical
practice of an Agent or a lender in relying exclusively or primarily on reports
from the Borrower may involve a risk of fraud by the Borrower. In the case of a
Loan Interest in the form of a participation interest, the agreement between the
buyer and seller may limit the rights of the holder of the Loan Interest to vote
on certain changes which may be made to the Loan Agreement, such as waiving a
breach of a covenant. However, the holder of a Loan Interest will, in almost all
cases, have the right to vote on certain fundamental issues such as changes in
principal amount, payment dates and interest rate.
Administration of Loans. In a typical Loan the Agent administers the terms of
the Loan Agreement. In such cases, the Agent is normally responsible for the
collection of principal and interest payments from the Borrower and the
apportionment of these payments to the credit of all institutions which are
parties to the Loan Agreement. The Portfolio will generally rely upon the Agent
or an Intermediate Participant to receive and forward to the Portfolio its
portion of the principal and interest payments on the Loan. Furthermore, unless
under the terms of a Participation Agreement the Portfolio has direct recourse
against the Borrower, the Portfolio will rely on the Agent and the other members
of the lending syndicate to use appropriate credit remedies against the
Borrower. The Agent is typically responsible for monitoring compliance with
covenants contained in the Loan Agreement based upon reports prepared by the
Borrower. The seller of the Loan Interest usually does, but is often not
obligated to, notify holders of Loan Interests of any failures of compliance.
The Agent may monitor the value of the collateral and, if the value of the
collateral declines, may accelerate the Loan, may give the Borrower an
opportunity to provide additional collateral or may seek other protection for
the benefit of the participants in the Loan. The Agent is compensated by the
Borrower for providing these services under a Loan Agreement, and such
compensation may include special fees paid upon structuring and funding the Loan
and other fees paid on a continuing basis. With respect to Loan Interests for
which the Agent does not perform such administrative and enforcement functions,
the Portfolio will perform such tasks on its own behalf, although a Collateral
Bank will typically hold any collateral on behalf of the Portfolio and the other
lenders pursuant to the applicable Loan Agreement.
A financial institution's appointment as Agent may usually be terminated in
the event that it fails to observe the requisite standard of care or becomes
insolvent, enters Federal Deposit Insurance Corporation ("FDIC") receivership,
or, if not FDIC insured, enters into bankruptcy proceedings. A successor Agent
would generally be appointed to replace the terminated Agent, and assets held by
the Agent under the Loan Agreement should remain available to holders of Loan
Interests. However, if assets held by the Agent for the benefit of the Portfolio
were determined to be subject to the claims of the Agent's general creditors,
the Portfolio might incur certain costs and delays in realizing payment on a
Loan Interest, or suffer a loss of principal and/or interest. In situations
involving Intermediate Participants similar risks may arise.
Prepayments. The Loans in which the Portfolio acquires Loan Interests will
usually require, in addition to scheduled payments of interest and principal,
the prepayment of the Loan from free cash flow, as defined above. The degree to
which Borrowers prepay Loans, whether as a contractual requirement or at their
election, may be affected by general business conditions, the financial
condition of the Borrower and competitive conditions among lenders, among
others. As such, prepayments cannot be predicted with accuracy. Upon a
prepayment, either in part or in full, the actual outstanding debt on which the
Portfolio derives interest income will be reduced. However, the Portfolio may
receive both a prepayment penalty fee from the prepaying Borrower and a facility
fee upon the purchase of a new Loan Interest with the proceeds from the
prepayment of the former. Prepayments generally will not materially affect the
Fund's performance because the Portfolio should be able to reinvest prepayments
in other Loan Interests in floating rate Loans that have similar or identical
yields and because receipt of such fees may mitigate any adverse impact on the
Fund's yield.
Interest Rate Swaps. The Portfolio may enter into interest rate swaps on either
an asset-based or liability-based basis, depending on whether it is hedging its
assets or its liabilities. For example, if the Portfolio holds a Loan Interest
with an interest rate that is reset only once each year, it may swap the right
to receive interest at this fixed rate for the right to receive interest at a
rate that is reset daily. Such a swap position would offset changes in the value
of the Loan Interest because of subsequent changes in interest rates. This would
protect the Portfolio from a decline in the value of the Loan Interest due to
rising interest rates, but would also limit its ability to benefit from falling
interest rates.
The Portfolio will enter into interest rate swaps only on a net basis, i.e.,
the two payment streams are netted out, with the Portfolio receiving or paying,
as the case may be, only the net amount of the two payments. Inasmuch as these
transactions are entered into for good faith hedging purposes and because a
segregated account will be used, the Portfolio will not treat them as being
subject to the Portfolio's borrowing restrictions. The net amount of the excess,
if any, of the Portfolio's obligations over its entitlements with respect to
each interest rate swap will be accrued on a daily basis and an amount of cash
or liquid securities having an aggregate net asset value at least equal to the
accrued excess will be maintained in a segregated account by the Portfolio's
custodian. The Portfolio will not enter into any interest rate swap unless the
credit quality of the unsecured senior debt or the claims-paying ability of the
other party thereto is considered to be investment grade by BMR. If there is a
default by the other party to such a transaction, the Portfolio will have
contractual remedies pursuant to the agreements related to the transaction. The
swap market has grown substantially in recent years with a large number of banks
and investment banking firms acting both as principals and as agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid in comparison with the markets for other similar instruments
which are traded in the interbank market.
The Portfolio may enter into interest rate swaps only with respect to
positions held in its portfolio. Interest rate swaps do not involve the delivery
of securities or other underlying assets or principal. Accordingly, the risk of
loss with respect to interest rate swaps is limited to the net amount of
interest payments that the Portfolio is contractually obligated to make or
receive. Since interest rate swaps are individually negotiated, the Portfolio
expects to achieve an acceptable degree of correlation between its rights to
receive interest on Loan Interests and its rights and obligations to receive and
pay interest pursuant to interest rate swaps.
In the last decade, the federal agencies that regulate banking institutions
subjected certain loans made in connection with highly leveraged transactions to
increased scrutiny during bank examinations. Such regulatory action resulted in
certain banks disposing of Loan Interests at low prices. If such regulatory
action became likely again, banks might decide to reduce the amount of Loans to
highly leveraged Borrowers, which might reduce the availability of Loans
suitable for the Portfolio's ownership.
INVESTMENT RESTRICTIONS
The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as used
in this Statement of Additional Information means the lesser of (a) 67% of the
shares of the Fund present or represented by proxy at a meeting if the holders
of more than 50% of the shares are present or represented at the meeting or (b)
more than 50% of the shares of the Fund. As a matter of fundamental policy the
Fund may not:
(1) Borrow money, except as permitted by the Investment Company Act of
1940;
(2) Issue senior securities, as defined in the Investment Company Act of
1940, other than (i) preferred shares which immediately after issuance will have
asset coverage of at least 200%, (ii) indebtedness which immediately after
issuance will have asset coverage of at least 300%, or (iii) the borrowings
permitted by investment restriction (1) above;
(3) Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of purchases and sales of
securities). The purchase of Loan Interests, securities or other investment
assets with the proceeds of a permitted borrowing or securities offering will
not be deemed to be the purchase of securities on margin;
(4) Underwrite securities issued by other persons, except insofar as it may
technically be deemed to be an underwriter under the Securities Act of 1933 in
selling or disposing of a portfolio investment;
(5) Make loans to other persons, except by (a) the acquisition of Loan
Interests, debt securities and other obligations in which the Fund is authorized
to invest in accordance with its investment objective and policies, (b) entering
into repurchase agreements, and (c) lending its portfolio securities;
(6) Purchase any security if, as a result of such purchase, more than 25% of
the Fund's total assets (taken at current value) would be invested in the
securities of Borrowers and other issuers having their principal business
activities in the same industry (the electric, gas, water and telephone utility
industries, commercial banks, thrift institutions and finance companies being
treated as separate industries for the purpose of this restriction); provided
that there is no limitation with respect to obligations issued or guaranteed by
the U.S. Government or any of its agencies or instrumentalities;
(7) Purchase or sell real estate, although it may purchase and sell
securities which are secured by interests in real estate and securities of
issuers which invest or deal in real estate. The Fund reserves the freedom of
action to hold and to sell real estate acquired as a result of the ownership of
securities; or
(8) Purchase or sell physical commodities or contracts for the purchase or
sale of physical commodities. Physical commodities do not include futures
contracts with respect to securities, securities indices or other financial
instruments.
The Fund has no present intention of engaging in options or futures
transactions or of issuing preferred shares.
For the purpose of investment restriction (6), the Fund will consider all
relevant factors in determining who is the issuer of the Loan Interest,
including: the credit quality of the Borrower, the amount and quality of the
collateral, the terms of the Loan Agreement and other relevant agreements
(including inter-creditor agreements), the degree to which the credit of such
interpositioned person was deemed material to the decision to purchase the Loan
Interest, the interest rate environment, and general economic conditions
applicable to the Borrower and such interpositioned person. In addition, with
respect to restriction (6) above, the Fund will construe the phrase "more than
25%" to be "25% or more".
The Fund, as a matter of fundamental policy which may not be changed without
a vote of a majority of its outstanding voting securities and in accord with the
provisions of Rule 23c-3 (as amended from time to time) under the 1940 Act,
shall make repurchase offers for its common shares of beneficial interest at
periodic intervals of three months between repurchase request deadlines, such
deadlines to be dates in the months of January, April, July and October
determined by the Board of Trustees with the repurchase pricing date and time
being not later than the close of business fourteen days after the repurchase
request deadline (or the next business day if the 14th day is not a business
day).
The Portfolio, as a matter of fundamental policy which may not be changed
without a vote of a majority of its outstanding voting securities and in accord
with the provisions of Rule 23c-3 (as amended from time to time) under the 1940
Act, shall make repurchase offers for its interests at periodic intervals of
three months to each holder of its interests between repurchase request
deadlines, such deadlines to be dates determined by the Board of Trustees in the
months when each such holder conducts its periodic repurchases with the
repurchase pricing date and time being not later than the close of business
fourteen days after the repurchase request deadline (or the next business day if
the 14th day is not a business day).
Notwithstanding the investment policies and restrictions of the Fund, the
Fund may invest its investable assets in another management investment company
(a Portfolio) with substantially the same investment objective, policies and
restrictions as the Fund.
The Portfolio has adopted substantially the same fundamental investment
restrictions as the foregoing investment restrictions adopted by the Fund; such
restrictions cannot be changed without the approval of a "majority of the
outstanding voting securities" of the Portfolio.
The Fund and the Portfolio have each adopted the following nonfundamental
investment policy which may be changed with respect to the Fund by the Trustees
of the Fund without approval by the Fund's shareholders or may be changed with
respect to the Portfolio by the Trustees of the Portfolio without the approval
of the Fund or the Portfolio's other investors. As a matter of nonfundamental
policy, neither the Fund nor the Portfolio may make short sales of securities or
maintain a short position, unless at all times when a short position is open it
either owns an equal amount of such securities or owns securities convertible
into or exchangeable, without payment of any further consideration, for
securities of the same issue as, and equal in amount to, the securities sold
short.
Whenever an investment policy or investment restriction set forth in the
Prospectus or this Statement of Additional Information states a maximum
percentage of assets that may be invested in any security or other asset or
describes a policy regarding quality standards, such percentage limitation or
standard shall be determined immediately after and as a result of the Fund's or
the Portfolio's acquisition of such security or asset. Accordingly, any later
increase or decrease resulting from a change in values, assets or other
circumstances will not compel the Fund or the Portfolio, as the case may be, to
dispose of such security or other asset. Notwithstanding the foregoing, under
normal market conditions the Fund and the Portfolio must take actions necessary
to comply with the policy of investing at least 80% of total assets in interests
in Loans. Moreover, the Fund and the Portfolio must always be in compliance with
the borrowing policies set forth above.
TRUSTEES AND OFFICERS
The Trustees and officers of the Fund and the Portfolio are listed below.
Except as indicated, each individual has held the office shown or other offices
in the same company for the last five years. Unless otherwise noted, the
business address of each Trustee and officer is 24 Federal Street, Boston,
Massachusetts 02110, which is also the address of the investment adviser, BMR, a
wholly-owned subsidiary of Eaton Vance; of Eaton Vance's parent, Eaton Vance
Corp. ("EVC"); and of BMR's and Eaton Vance's trustee, Eaton Vance, Inc. ("EV").
Eaton Vance and EV are both wholly-owned subsidiaries of EVC. Those Trustees who
are "interested persons" of the Fund or the Portfolio as defined in the 1940 Act
by virtue of their affiliation with BMR, Eaton Vance, EVC or EV, are indicated
by an asterisk(*).
TRUSTEES OF THE FUND AND THE PORTFOLIO
JAMES B. HAWKES (56), President and Trustee*
Chairman, President and Chief Executive Officer of BMR, Eaton Vance, EVC and EV,
and Director of EVC and EV. Director or Trustee and officer of various
investment companies managed by Eaton Vance or BMR.
DONALD R. DWIGHT (67), Trustee
President of Dwight Partners, Inc. (a corporate relations and communications
company). Director or Trustee of various investment companies managed by
Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
M. DOZIER GARDNER (64), Vice President and Trustee of the Portfolio*
Vice Chairman of BMR, Eaton Vance and EV, and Director of EVC and EV. Director
or Trustee and officer of various investment companies managed by Eaton
Vance or BMR.
SAMUEL L. HAYES, III (63), Trustee
Jacob H. Schiff Professor of Investment Banking, Harvard University, Graduate
School of Business Administration. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: Harvard University, Graduate School of Business Administration,
Soldiers Field Road, Boston, Massachusetts 02163
NORTON H. REAMER (62), Trustee
Chairman of the Board and Chief Executive Officer -- United Asset Management
Corporation (a holding company owning institutional investment management
firms); Chairman, President and Director of UAM Funds (mutual funds). Director
or Trustee of various investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (71), Trustee
Formerly Director of Fiduciary Company Incorporated. Director or Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (68), Trustee
Investment Adviser and Consultant. Director or Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
OFFICERS OF THE FUND AND THE PORTFOLIO
MICHEL NORMANDEAU (46), Vice President of the Portfolio
Assistant Manager -- Trust Services, IBT Trust Company (Cayman), Ltd. Officer
of various investment companies managed by Eaton Vance or BMR. Mr.
Normandeau was elected Vice President of the Portfolio on June 19, 1995.
Address: IBT Trust Company (Cayman) Ltd., The Bank of Nova Scotia Building,
P.O. Box 501, George Town, Grand Cayman, Cayman Islands, British West Indies
RAYMOND O'NEILL (35), Vice President of the Portfolio
Managing Director of IBT Trust and Custodian Services (Ireland) Limited since
January, 1995. Vice President, Atlantic Corporate Management Limited, Warwick,
Bermuda (1991-1994). Officer of various investment companies managed by Eaton
Vance or BMR.
Address: Earlsfort Terrace, Dublin 2, Ireland
SCOTT H. PAGE (38), Vice President of the Portfolio
Vice President of BMR, Eaton Vance and EV. Mr. Page was elected Vice President
of the Portfolio on October 18, 1996.
PAYSON F. SWAFFIELD (41), Vice President of the Portfolio
Vice President of BMR, Eaton Vance and EV. Mr. Swaffield was elected Vice
President of the Portfolio on October 18, 1996.
JAMES L. O'CONNOR (52), Treasurer
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
ALAN R. DYNNER (57), Secretary
Vice President and Chief Legal Officer of BMR, Eaton Vance, EVC and EV since
November 1, 1996. Previously, he was a Partner of the law firm of Kirkpatrick
& Lockhart LLP, New York and Washington, D.C., and was Executive Vice
President of Neuberger & Berman Management, Inc., a mutual fund management
company. Officer of various investment companies managed by Eaton Vance or
BMR. Mr. Dynner was elected Secretary of the Portfolio on June 23, 1997.
JANET E. SANDERS (62), Assistant Treasurer and Assistant Secretary
Vice President of BMR, Eaton Vance and EV. Officer of various investment
companies managed by Eaton Vance or BMR.
A. JOHN MURPHY (35), Assistant Secretary
Assistant Vice President of BMR, Eaton Vance and EV since March 1, 1994;
employee of Eaton Vance since March 1993. Officer of various investment
companies managed by Eaton Vance or BMR. Mr. Murphy was elected Assistant
Secretary of the Portfolio on June 19, 1995.
ERIC G. WOODBURY (40), Assistant Secretary
Vice President of BMR, Eaton Vance and EV since February 1993. Mr. Woodbury
was elected Assistant Secretary of the Portfolio on June 19, 1995.
Messrs. Hayes (Chairman), Reamer and Thorndike are members of the Special
Committee of the Board of Trustees of the Fund and of the Portfolio. The purpose
of the Special Committee is to consider, evaluate and make recommendations to
the full Board of Trustees concerning (i) all contractual arrangements with
service providers to the Fund and the Portfolio, including investment advisory
(Portfolio only), administrative, transfer agency, custodial and fund accounting
and distribution services, and (ii) all other matters in which Eaton Vance or
its affiliates has any actual or potential conflict of interest with the Fund,
the Portfolio or investors therein.
The Nominating Committee of the Board of Trustees of the Fund and the
Portfolio is comprised of four Trustees who are not "interested persons" as that
term is defined under the 1940 Act ("noninterested Trustees"). The Committee has
four-year staggered terms, with one member rotating off the Committee to be
replaced by another noninterested Trustee. The purpose of the Committee is to
recommend to the Board nominees for the position of noninterested Trustee and to
assure that at least a majority of the Board of Trustees is independent of Eaton
Vance and its affiliates.
Messrs. Treynor (Chairman) and Dwight are members of the Audit Committee of
the Board of Trustees of the Fund and of the Portfolio. The Audit Committee's
functions include making recommendations to the Trustees regarding the selection
of the independent certified public accountants, and reviewing matters relative
to trading and brokerage policies and practices, accounting and auditing
practices and procedures, accounting records, internal accounting controls, and
the functions performed by the custodian, transfer agent and dividend disbursing
agent of the Fund and of the Portfolio.
Trustees of the Portfolio who are not affiliated with the Investment Adviser
may elect to defer receipt of all or a percentage of their annual fees in
accordance with the terms of a Trustees Deferred Compensation Plan (the
"Trustees" Plan"). Under the Trustees' Plan, an eligible Trustee may elect to
have his deferred fees invested by the Portfolio in the shares of one or more
funds in the Eaton Vance Family of Funds, and the amount paid to the Trustees
under the Trustees' Plan will be determined based upon the performance of such
investments. Deferral of Trustees' fees in accordance with the Trustees' Plan
will have a negligible effect on the Portfolio's assets, liabilities, and net
income per share, and will not obligate the Portfolio to retain the services of
any Trustee or obligate the Portfolio to pay any particular level of
compensation to the Trustee. Neither the Portfolio nor the Fund has a retirement
plan for its Trustees.
Each interested Trustee and officer holds comparable positions with certain
affiliates of BMR or with certain other funds of which BMR or Eaton Vance is the
investment adviser or distributor.
Messrs. Normandeau and O'Neill are not U.S. residents. It may be difficult
to effect service of process within the U.S. or to realize judgments of U.S.
courts upon them. It is uncertain whether courts in other countries would
entertain original actions against them.
The fees and expenses of the noninterested Trustees of the Fund and of the
Portfolio are paid by the Fund and the Portfolio, respectively. (The Trustees of
the Fund and the Portfolio who are members of the Eaton Vance organization
receive no compensation from the Fund or the Portfolio). During the fiscal year
ended December 31, 1997, the noninterested Trustees of the Portfolio earned the
compensation set forth below in their capacities as Trustees from the Portfolio,
and the funds in the Eaton Vance fund complex(1). It is estimated that the
noninterested Trustees will receive from the Fund the amounts set forth below
for the fiscal year ending December 31, 1998.
ESTIMATED AGGREGATE TOTAL COMPENSATION
COMPENSATION COMPENSATION FROM FUND AND
NAME FROM FUND FROM PORTFOLIO FUND COMPLEX
- ---- ------------ -------------- ------------------
Donald R. Dwight ....... $2,466 $5,994(2) $145,000(5)
Samuel L. Hayes, III ... 2,466 5,963(3) 155,000(6)
Norton H. Reamer ....... 2,466 5,684 145,000
John L. Thorndike ...... 2,466 5,910(4) 145,000(7)
Jack L. Treynor ........ 2,466 6,277 150,000
- ------------
(1) As of January 1, 1998 the Eaton Vance fund complex consists of 159
registered investment companies or series thereof.
(2) Includes $2,651 of deferred compensation.
(3) Includes $2,051 of deferred compensation.
(4) Includes $5,914 of deferred compensation.
(5) Includes $45,000 of deferred compensation.
(6) Includes $38,750 of deferred compensation.
(7) Includes $107,925 of deferred compensation.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SHARES
As of February 20, 1998, Eaton Vance controlled the Fund by virtue of owning
directly and indirectly 100% of the outstanding voting shares of the Fund. Eaton
Vance is a Massachusetts business trust and a wholly-owned subsidiary of Eaton
Vance Corp.
INVESTMENT ADVISORY AND OTHER SERVICES
Eaton Vance, its affiliates and its predecessor companies have been managing
assets of individuals and institutions since 1924 and managing investment
companies since 1931. They maintain a large staff of experienced fixed-income
and equity investment professionals to service the needs of their clients. The
fixed-income division focuses on all kinds of taxable investment- grade and
high-yield securities, tax-exempt investment-grade and high-yield securities,
and U.S. Government securities. The equity division covers stocks ranging from
blue chip to emerging growth companies.
Eaton Vance and its affiliates act as adviser to a family of mutual funds,
and individual and various institutional accounts, including corporations,
hospitals, retirement plans, universities, foundations and trusts. Eaton Vance
mutual funds feature international equities, domestic equities, tax-free
municipal bonds, and U.S. government and corporate bonds. Lloyd George
Management has advised Eaton Vance's international equity funds since 1992.
Founded in 1991, Lloyd George is headquartered in Hong Kong with offices in
London and Mumbai, India. It has established itself as a leader in investment
management in Asian equities and other global markets. Lloyd George features an
experienced team of investment professionals that began working together in the
mid-1980s. Lloyd George analysts cover East Asia, the India subcontinent, Russia
and Eastern Europe, Latin America, Australia and New Zealand from offices in
Hong Kong, London and Mumbai. Together Eaton Vance and Lloyd George manage over
$22 billion in assets. Eaton Vance mutual funds are distributed by the Principal
Underwriter both within the United States and offshore.
The Principal Underwriter believes that an investment professional can
provide valuable services to you to help you reach your investment goals.
Meeting investment goals requires time, objectivity and investment savvy. Before
making an investment recommendation, a representative can help you carefully
consider your short- and long-term financial goals, your tolerance for
investment risk, your investment time frame, and other investments you may
already own. Your professional investment representatives are knowledgeable
about financial markets, as well as the wide range of investment opportunities
available. A representative can help you decide when to buy, sell or persevere
with your investments. A professional investment representative can provide you
with tailored financial advice.
For a description of the compensation that the Portfolio pays BMR under the
Investment Advisory Agreement, see the Prospectus. For the period from the start
of business, February 22, 1995, to the fiscal year ended December 31, 1995, the
Portfolio paid BMR advisory fees aggregating $8,544,646, which was equal to
0.94% (annualized) of the Portfolio's average daily gross assets for such
period. For the fiscal year ended December 31, 1996, the Portfolio paid BMR
advisory fees aggregating $21,643,760 which was equal to 0.91% of the
Portfolio's average daily gross assets. For the fiscal year ended December 31,
1997, the Portfolio paid BMR advisory fees aggregating $31,751,900 which was
equal to 0.89% of the Portfolio's average daily gross assets. As at December 31,
1997, the gross assets of the Portfolio were $4,035,071,925. BMR's fee waiver
described in the Prospectus is indefinite, but could be removed or changed upon
agreement of BMR and the Portfolio's Board of Trustees at any time.
IBT Trust Company (Cayman), Ltd. maintains the Portfolio's principal
office and certain of its records and provides administrative assistance in
connection with meetings of the Portfolio's Trustees and interestholders.
The Portfolio and the Fund, as the case may be, will each be responsible for
all of its respective costs and expenses not expressly stated to be payable by
BMR under the Advisory Agreement with the Portfolio, by Eaton Vance under the
Administration Agreement with the Fund or by the Principal Underwriter under its
Distribution Agreement with the Fund. Such costs and expenses to be borne by the
Portfolio and the Fund, as the case may be, include, without limitation: custody
and transfer agency fees and expenses, including those incurred for determining
net asset value and keeping accounting books and records; expenses of pricing
and valuation services; the cost of share certificates; membership dues in
investment company organizations; expenses of acquiring, holding and disposing
of securities and other investments; fees and expenses of registering under the
securities laws and governmental fees; expenses of reports to shareholders and
investors, proxy statements and other expenses of shareholders' or investors'
meetings; insurance premiums; printing and mailing expenses; interest, taxes and
corporate fees; legal and accounting expenses; compensation and expenses of
Trustees not affiliated with BMR or Eaton Vance; expenses of conducting
repurchase offers for the purpose of repurchasing Portfolio interests or Fund
shares; and investment advisory and administration fees. The Portfolio and the
Fund will also each bear expenses incurred in connection with any litigation in
which the Portfolio or the Fund, as the case may be, is a party and any legal
obligation to indemnify its respective officers and Trustees with respect
thereto, to the extent not covered by insurance.
The Portfolio's Advisory Agreement continues in effect from year to year so
long as such continuance is approved at least annually (i) by the vote of a
majority of the noninterested Trustees of the Portfolio cast in person at a
meeting specifically called for the purpose of voting on such approval and (ii)
by the Trustees of the Portfolio or by vote of a majority of the outstanding
interests of the Portfolio. The Fund's Administration Agreement continues in
effect from year to year so long as such continuance is approved at least
annually by the vote of a majority of the Fund's Trustees. Each agreement may be
terminated at any time without penalty on sixty (60) days' written notice by the
Trustees of the Fund or the Portfolio, as the case may be, BMR or Eaton Vance,
as applicable, or by vote of the majority of the outstanding shares of the Fund
or interests of the Portfolio, as the case may be. Each agreement will terminate
automatically in the event of its assignment. Each agreement provides that, in
the absence of willful misfeasance, bad faith, gross negligence or reckless
disregard of its obligations or duties to the Fund or the Portfolio under such
agreements on the part of Eaton Vance or BMR, as applicable, Eaton Vance or BMR
will not be liable to the Fund or the Portfolio, as applicable, for any loss
incurred, to the extent not covered by insurance.
BMR is a wholly-owned subsidiary of Eaton Vance. Eaton Vance and EV are
both wholly-owned subsidiaries of EVC. BMR and Eaton Vance are both
Massachusetts business trusts, and EV is the trustee of BMR and Eaton Vance.
The Directors of EV are M. Dozier Gardner, James B. Hawkes and Benjamin A.
Rowland, Jr. The Directors of EVC consist of the same persons and John G. L.
Cabot, John M. Nelson and Ralph Z. Sorenson. Mr. Hawkes is chairman, president
and chief executive officer and Mr. Gardner is vice chairman of EVC, BMR,
Eaton Vance and EV. All of the issued and outstanding shares of Eaton Vance
and EV are owned by EVC. All of the issued and outstanding shares of BMR are
owned by Eaton Vance. All shares of the outstanding Voting Common Stock of EVC
are deposited in a Voting Trust, the Voting Trustees of which are Messrs.
Gardner, Hawkes and Rowland and Alan R. Dynner, Thomas E. Faust, Jr., William
M. Steul and Wharton P. Whitaker. The Voting Trustees have unrestricted voting
rights for the election of Directors of EVC. All of the outstanding voting
trust receipts issued under said Voting Trust are owned by certain of the
officers of BMR and Eaton Vance who are also officers or officers and
Directors of EV and EVC. As of February 20, 1998, Messrs. Gardner and Hawkes
each owned 24% of such voting trust receipts, Messrs. Rowland and Faust owned
15% and 13%, respectively, and Messrs. Dynner, Steul and Whitaker owned 8% of
such voting trust receipts. Messrs. Hawkes and Dynner are officers or Trustees
of the Fund and the Portfolio and are members of the EVC, BMR, Eaton Vance and
EV organizations. Messrs. Murphy, O'Connor, Page, Swaffield and Woodbury and
Ms. Sanders are officers of the Fund and/or the Portfolio and are members of
the BMR, Eaton Vance and EV organizations.
Eaton Vance owns all of the stock of Northeast Properties, Inc., which is
engaged in real estate investment. EVC owns all of the stock of Fulcrum
Management, Inc. and MinVen Inc., which are engaged in precious metal mining
venture investment and management. EVC also owns approximately 21% of the Class
A shares of Lloyd George Management (B.V.I.) Limited, a registered investment
adviser. EVC, Eaton Vance, BMR and EV may also enter into other businesses.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund and
the Portfolio, IBT. It is Eaton Vance's opinion that the terms and conditions of
such transactions were not and will not be influenced by existing or potential
custodial or other relationships between the Fund or the Portfolio and such
banks.
DETERMINATION OF NET ASSET VALUE
Each investor in the Portfolio, including the Fund, may add to or reduce its
investment in the Portfolio on each day the Exchange is open for trading
("Portfolio Business Day") as of the close of regular trading on the Exchange
(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
represented that investor's share of the aggregate interests in the Portfolio on
such prior day. Any additions or withdrawals (which would be made pursuant to
Portfolio tender offers) for the current Portfolio Business Day will then be
recorded. Each investor's percentage of the aggregate interest in the Portfolio
will then be recomputed as a percentage equal to the 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.
Non-Loan Portfolio holdings (other than short term obligations, but
including listed issues) may be valued on the basis of prices furnished by one
or more pricing services which determine prices for normal, institutional-size
trading units of such securities using market information, transactions for
comparable securities and various relationships between securities which are
generally recognized by institutional traders. In certain circumstances,
portfolio securities will be valued at the last sale price on the exchange that
is the primary market for such securities, or the average of the last quoted bid
price and asked price for those securities for which the over-the-counter market
is the primary market or for listed securities in which there were no sales
during the day. The value of interest rate swaps will be determined in
accordance with a discounted present value formula and then confirmed by
obtaining a bank quotation.
Short-term obligations which mature in 60 days or less are valued at
amortized cost, if their original term to maturity when acquired by the
Portfolio was 60 days or less, or are valued at amortized cost using their value
on the 61st day prior to maturity, if their original term to maturity when
acquired by the Portfolio was more than 60 days, unless in each case this is
determined not to represent fair value. Repurchase agreements will be valued by
the Portfolio at cost plus accrued interest. Securities for which there exist no
price quotations or valuations and all other assets are valued at fair value as
determined in good faith by or on behalf of the Trustees of the Portfolio.
PORTFOLIO TRADING
Specific decisions to purchase or sell securities for the Portfolio are made
by employees of BMR who are appointed and supervised by its senior officers.
Such employees may serve other clients of BMR in a similar capacity. Changes in
the Portfolio's investments are reviewed by the Board.
The Portfolio will acquire Loan Interests from major international banks,
selected domestic regional banks, insurance companies, finance companies and
other financial institutions. In selecting financial institutions from which
Loan Interests may be acquired, BMR will consider, among other factors, the
financial strength, professional ability, level of service and research
capability of the institution. While these financial institutions are generally
not required to repurchase Loan Interests which they have sold, they may act as
principal or on an agency basis in connection with the Portfolio's disposition
of Loan Interests.
Other fixed-income obligations which may be purchased and sold by the
Portfolio are generally traded in the over-the-counter market on a net basis
(i.e., without commission) through broker-dealers or banks acting for their own
account rather than as brokers, or otherwise involve transactions directly with
the issuers of such obligations. Such firms attempt to profit from such
transactions by buying at the bid price and selling at the higher asked price of
the market for such obligations, and the difference between the bid and asked
price is customarily referred to as the spread. The Portfolio may also purchase
fixed-income and other securities from underwriters, the cost of which may
include undisclosed fees and concessions to the underwriters. While it is
anticipated that the Portfolio will not pay significant brokerage commissions,
on occasion it may be necessary or desirable to purchase or sell a security
through a broker on an agency basis, in which case the Portfolio will incur a
brokerage commission. Although spreads or commissions on portfolio transactions
will, in the judgment of BMR, be reasonable in relation to the value of the
services provided, spreads or commissions exceeding those which another firm
might charge may be paid to firms who were selected to execute transactions on
behalf of the Portfolio and BMR's other clients for providing brokerage and
research services to BMR. The Portfolio will not purchase securities from its
affiliates in principal transactions. The Portfolio paid no brokerage
commissions during its last three fiscal years.
The frequency of portfolio purchases and sales, known as the "turnover
rate," will vary from year to year. The Portfolio's turnover rate for the fiscal
years ended December 31, 1996 and 1997 were 75% and 81%, respectively.
Securities considered as investments for the Portfolio may also be
appropriate for other investment accounts managed by BMR or its affiliates.
Whenever decisions are made to buy or sell securities by the Portfolio and one
or more of such other accounts simultaneously, BMR will allocate the security
transactions (including "hot" issues) in a manner which it believes to be
equitable under the circumstances. As a result of such allocations, there may be
instances where the Portfolio will not participate in a transaction that is
allocated among other accounts. If an aggregated order cannot be filled
completely, allocations will generally be made on a pro rata basis. An order may
not be allocated on a pro rata basis where, for example: (i) consideration is
given to portfolio managers who have been instrumental in developing or
negotiating a particular investment; (ii) consideration is given to an account
with specialized investment policies that coincide with the particulars of a
specific investment; (iii) pro rata allocation would result in odd-lot or de
minimis amounts being allocated to a portfolio or other client; or (iv) where
BMR reasonably determines that departure from a pro rata allocation is
advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to the
Portfolio from time to time, it is the opinion of the Trustees of the Trust and
the Portfolio that the benefits from the BMR organization outweigh any
disadvantage that may arise from exposure to simultaneous transactions.
TAXES
The Fund is treated as a separate corporation, and intends to qualify each
year as a Regulated Investment Company ("RIC"), under the Code to avoid federal
income tax. Accordingly, the Fund intends to satisfy certain requirements
relating to sources of its income and diversification of its assets and to
distribute a sufficient amount of its investment company taxable income so as to
effect such qualification. The Fund may also distribute part or all of its net
investment income and net realized capital gains in accordance with the timing
requirements imposed by the Code, so as to reduce or avoid any federal income or
excise tax to the Fund.
Because the Fund invests its assets in the Portfolio, the Portfolio normally
must satisfy the applicable source of income and diversification requirements in
order for the Fund to satisfy them, and the Portfolio intends to do so. For
federal income tax purposes, the Portfolio intends to be treated as a
partnership that is not a "publicly traded partnership" and, as a result, will
not be subject to federal income tax. The Fund, as an investor in the Portfolio,
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, without regard to whether it has received any cash distributions from
the Portfolio.
The Portfolio will allocate at least annually among its investors, including
the Fund, each investor'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. For purposes of applying the requirements of the Code
regarding qualification as a RIC, the Fund (i) will be deemed to own its
proportionate share of each of the assets of the Portfolio and (ii) will be
entitled to the gross income of the Portfolio attributable to such share.
In order to avoid federal excise tax, the Code requires the Fund to
distribute by the end of each calendar year substantially all of its ordinary
income for such year and capital gain net income for the one-year period ending
on October 31 of such year, plus certain other amounts. Under current law,
provided that the Fund qualifies as a RIC and the Portfolio is treated as a
partnership for Massachusetts and federal tax purposes, neither the Fund nor the
Portfolio should be liable for any income, corporate excise or franchise tax in
the Commonwealth of Massachusetts.
The federal income tax rules governing the taxation of interest rate swaps
are not entirely clear and may require the Fund to treat payments received by
the Portfolio under such arrangements as ordinary income and to amortize such
payments under certain circumstances. The Portfolio will limit its activity in
this regard in order to enable the Fund to maintain its qualification as a RIC.
Certain investments of the Portfolio may bear original issue discount or
market discount for tax purposes. The Fund will be required to include in income
each year a portion of such original issue discount and may elect to include in
income each year a portion of such market discount. The Portfolio may have to
dispose of investments that it would otherwise have continued to hold to provide
cash to enable the Fund to satisfy its distribution requirements with respect to
such income.
Distributions of net capital gain are taxable to shareholders as long-term
capital gain, whether paid in cash or additional shares of the Fund and
regardless of the length of time Fund shares have been owned by the shareholder.
Long-term capital gain is separated into different tax rate groups depending on
the length of time the asset is held by the Fund prior to sale. Current IRS
rules permit the Fund to designate net capital gain distributions as "28% rate
gain distributions" or "20% rate gain distributions," and require shareholders
to treat such distributions accordingly.
CUSTODIAN
IBT acts as custodian for the Fund and the Portfolio. IBT has the custody of
all cash and securities representing the Fund's interest in the Portfolio, has
custody of all the Portfolio's assets, and its subsidiary, IBT Fund Services
(Canada) Inc., 1 First Canadian Place, King Street West, Toronto, Ontario,
Canada, maintains the general ledgers of the Portfolio and the Fund and computes
the daily net asset value of interests in the Portfolio and the net asset value
of shares of the Fund. In its capacity as custodian, IBT attends to details in
connection with the sale, exchange, substitution, transfer or other dealings
with the Portfolio's investments, receives and disburses all funds and performs
various other ministerial duties upon receipt of proper instructions from the
Fund and the Portfolio. IBT also provides services in connection with the
preparation of shareholder reports and the electronic filing of such reports
with the Commission.
TRANSFER AND DIVIDEND PAYING AGENT AND REGISTRAR
First Data Investor Services Group serves with respect to the shares as
transfer and dividend paying agent and as registrar. The principal business
address of First Data Investor Services Group, 4400 Computer Drive, Westborough,
MA 01581-5120.
PERFORMANCE INFORMATION
The table below indicates the cumulative and average annual total return on
a hypothetical investment in shares of $1,000. This total return reflects the
total return of another investor in the Portfolio and has not been adjusted to
reflect Fund operating expenses.
<TABLE>
<CAPTION>
VALUE OF A $1,000 INVESTMENT
VALUE OF
INVESTMENT INVESTMENT AMOUNT OF INVESTMENT TOTAL RETURN
PERIOD DATE INVESTMENT ON 12/31/97 CUMULATIVE ANNUALIZED
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Life of the Fund 8/4/89 $1,000 $1,792.77 79.28% 7.19%
5 Years Ended 12/31/97 12/31/92 $1,000 $1,380.19 38.02% 6.66%
1 Year Ended 12/31/97 12/31/96 $1,000 $1,069.81 6.98% 6.98%
</TABLE>
Past performance is not indicative of future results. Investment return and
principal value will fluctuate and shares, when redeemed, may be worth more or
less than their original cost.
Total return prior to the Fund's commencement of operations reflects the
Portfolio's total return (or that of its predecessor) and has not been adjusted
to reflect the Fund's internal fees and expenses. If such adjustments were made,
performance would have been higher. Information about the performance of the
Fund or other investments should not be considered a representation of future
performance the Fund may earn or what an investor's yield or total return may be
in the future.
Comparative information about the Fund's current yield, net asset value and
total return, about the Prime Rate, Federal Funds Rate and LIBOR may also be
included in advertisements and communications of the Fund.
Advertisements and communications about the Fund may include a comparison of
loan interests and other corporate debt instruments. These may describe the
credit agreements used in connection with loan interests. Moreover, the markets
for loan interests may be described. The comparison may also be made to relevant
indices.
Information in advertisements and materials furnished to present and
prospective investors may include profiles of different types of investors
(i.e., investors with different goals and assets) and different investment
strategies for meeting specific financial goals. Information in advertisements
and materials furnished to present and prospective investors may also include
quotations (including editorial comments) and statistics concerning investing in
securities, as well as investing in particular types of securities and the
performance of such securities.
BMR was one of the first investment management firms to manage a portfolio
of loan interests. BMR has former commercial bank lending officers and
investment bank corporate finance officers dedicated to this investment
discipline. The services of leading law and accounting firms are used in the
research, analysis and management process.
The Fund (or Principal Underwriter) may provide information about Eaton
Vance, its affiliates and other investment advisers to the funds in the Eaton
Vance Family of Funds in sales material or advertisements provided to investors
or prospective investors. Such material or advertisements may also provide
information on the use of investment professionals by such investors.
OTHER INFORMATION
The Fund is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the trust. The Fund's Declaration of Trust, as amended, contains
an express disclaimer of shareholder liability in connection with the Fund
property or the acts, obligations or affairs of the Fund. The Declaration of
Trust also provides for indemnification out of the Fund property of any
shareholder held personally liable for the claims and liabilities to which a
shareholder may become subject by reason of being or having been a shareholder.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund itself is
unable to meet its obligations. The Fund has been advised by its counsel that
the risk of any shareholder incurring any liability for the obligations of the
Fund is remote.
The Fund's Declaration of Trust provides that the Trustees will not be
liable for errors of judgment or mistakes of fact or law; but nothing in the
Declaration of Trust protects a Trustee against any liability to the Fund or its
shareholders 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. Voting rights are not cumulative, which
means that the holders of more than 50% of the shares voting for the election of
Trustees can elect 100% of the Trustees and, in such event, the holders of the
remaining less than 50% of the shares voting on the matter will not be able to
elect any Trustees. As permitted by Massachusetts law, there will normally be no
meetings of Fund shareholders for the purpose of electing Trustees unless and
until such time as less than a majority of the Trustees holding office have been
elected by shareholders. In such an event, the Trustees of the Fund then in
office will call a shareholders' meeting for the election of Trustees. Except
for the foregoing circumstances, the Trustees shall continue to hold office and
may appoint successor Trustees.
The Fund's by-laws provide that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Fund's custodian or
by votes cast at a meeting called for that purpose. The by-laws further provide
that the Trustees of the Fund shall promptly call a meeting of the shareholders
for the purpose of voting upon a question of removal of any such Trustee or
Trustees when requested in writing so to do by the record holders of not less
than 10 per centum of the outstanding shares.
In accordance with the Declaration of Trust of the Portfolio, there will
normally be no meetings of the investors for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by investors. In such an event, the Trustees of the
Portfolio then in office will call an investors' meeting for the election of
Trustees. Except for the foregoing circumstances and unless removed by action of
the investors in accordance with the Portfolio's Declaration of Trust, the
Trustees shall continue to hold office and may appoint successor Trustees.
The Declaration of Trust of the Portfolio provides that no person shall
serve as a Trustee if investors holding two-thirds of the outstanding interests
have removed him from that office either by a written declaration filed with the
Portfolio's custodian or by votes cast at a meeting called for that purpose. The
Declaration of Trust further provides that under certain circumstances the
investors may call a meeting to remove a Trustee and that the Portfolio is
required to provide assistance in communicating with investors about such a
meeting.
The Portfolio's Declaration of Trust, as amended, provides that the Fund and
other entities permitted to invest in the Portfolio (e.g., other U.S. and
foreign investment companies, and common and commingled trust funds) will each
be liable for all obligations of the Portfolio. However, the risk of the Fund
incurring financial loss on account of such liability is limited to
circumstances in which both inadequate insurance exists and the Portfolio itself
is unable to meet its obligations. Accordingly, the Trustees of the Fund believe
that neither the Fund nor its shareholders will be adversely affected by reason
of the Fund investing in the Portfolio.
The Portfolio's Declaration of Trust provides that the Portfolio will
terminate 120 days after the complete withdrawal of the Fund or any other
investor in the Portfolio, unless either the remaining investors, by unanimous
vote at a meeting of such investors, or a majority of the Trustees of the
Portfolio, by written instrument consented to by all investors, agree to
continue the business of the Portfolio. This provision is consistent with
treatment of the Portfolio as a partnership for federal income tax purposes.
The Fund's Prospectus and Statement of Additional Information do not contain
all of the information set forth in the Registration Statement that the Fund has
filed with the Commission. The complete Registration Statement may be obtained
from the Commission upon payment of the fee prescribed by its Rules and
Regulations.
AUDITORS
Deloitte & Touche LLP, 125 Summer Street, Boston, Massachusetts, are the
independent accountants for the Fund, providing audit services, tax return
preparation, and assistance and consultation with respect to the preparation of
filings with the Commission. Deloitte & Touche, Grand Cayman, Cayman Islands,
British West Indies, are the independent accountants for the Portfolio.
FINANCIAL STATEMENTS
The audited financial statements of, and the independent auditors' report
for, the Fund and the Portfolio appear herein.
<PAGE>
EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
STATEMENT OF ASSETS AND LIABILITIES
FEBRUARY 20, 1998
ASSETS:
Cash ......................................................... $100,000
Deferred organization and initial offering expenses .......... 150,000
--------
Total assets ............................................. $250,000
--------
LIABILITIES:
Organization expenses accrued ................................ $ 8,000
Initial offering expenses accrued ............................ 142,000
--------
Total Liabilities ........................................ $150,000
--------
NET ASSETS applicable to 10,000 common shares of
beneficial interest issued and outstanding ..................... $100,000
========
NET ASSET VALUE AND REPURCHASE PRICE PER SHARE..................... $10.00
======
NOTE TO FINANCIAL STATEMENT
Eaton Vance Advisers Senior Floating-Rate Fund was formed under a
Declaration of Trust dated February 19, 1998 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
10,000 shares of its beneficial interest to Eaton Vance Management, the Fund's
administrator. The deferred organization and initial offering expenses,
including federal and state registration and qualification fees, are estimated
to amount to $250,000. These expenses will be deferred and amortized over a
period not to exceed five years beginning on the date of the Fund's initial
public offering of its shares. The amount paid by the Fund on any repurchase
during the amortization period of any of the initial 10,000 common shares will
be reduced by a pro rata portion of any unamortized organization and initial
offering expenses. Such proration is to be calculated by dividing the number of
initial shares repurchased by the number of initial shares outstanding at the
time of purchase.
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Trustees and Shareholders of
Eaton Vance Advisers Senior Floating-Rate Fund:
We have audited the accompanying statement of assets and liabilities of
Eaton Vance Advisers Senior Floating-Rate Fund as of February 20, 1998. This
financial statement is the responsibility of the Fund's management. Our
responsibility is to express an opinion on the 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 statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of Eaton Vance
Advisers Senior Floating-Rate Fund as of February 20, 1998, in conformity with
generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Boston, Massachusetts
February 23, 1998
<PAGE>
<TABLE>
Senior Debt Portfolio as of December 31, 1997
PORTFOLIO OF INVESTMENTS
(Expressed in United States Dollars)
Senior, Secured, Floating-Rate
Interests -- 90.6%
<CAPTION>
Principal
Amount Borrower/Business Description Value
- --------------------------------------------------------------------------------------
Aerospace/Defense -- 2.1%
- --------------------------------------------------------------------------------------
<S> <C> <C>
Aerostructures Corporation
$ 888,889 Revolving loan, maturing March 29, 2002 $ 888,889
6,944,444 Term loan, maturing March 29, 2002 6,944,444
8,652,381 Term loan, maturing September 30, 2003 8,652,381
3,146,320 Term loan, maturing September 30, 2004 3,146,320
Designs, manufactures, and assembles structural
aircraft components
Fairchild Holdings Corporation
0 Revolving loan, maturing July 28, 2000 0
Manufactures fasteners for the aerospace industry
K & F Industries, Inc.
15,860,409 Term loan, maturing October 15, 2005 15,860,409
Manufacturers aircraft braking systems
Mag Aerospace Industries, Inc.
4,743,234 Term loan, maturing December 6, 2003 4,743,234
Manufactures toilet systems for the aerospace
industry
Shared Technologies Fairchild Communications Corp.
3,400,000 Term loan, maturing March 30, 2001 3,400,000
Aerospace and specialty fasteners, and plastics
industry tooling systems
SWM Holdings, Inc.
5,000,000 Term loan, maturing May 27, 2005 5,000,000
Operator of ship yards
TransTechnology Corporation
0 Revolving loan, maturing December 31, 2000 0
1,163,105 Term loan, maturing December 31, 2000 1,163,105
7,200,000 Term loan, maturing June 30, 2002 7,200,000
Aerospace and specialty fasteners, rescue winches,
and hoists
Tri-Star Inc.
9,900,000 Term loan, maturing September 30, 2003 9,900,000
Distributor of aerospace fasteners
United Defense Industries, Inc.
9,197,101 Term loan, maturing October 6, 2005 9,197,101
8,924,493 Term loan, maturing October 6, 2005 8,924,493
Supplier of armored combat vehicles and weapons
systems
- --------------------------------------------------------------------------------------
$ 85,020,376
- --------------------------------------------------------------------------------------
Airlines -- 0.5%
- --------------------------------------------------------------------------------------
Continental Airlines, Inc.
$20,219,786 Term loan, maturing December 31, 2006 $ 20,219,786
Air carrier
- --------------------------------------------------------------------------------------
$ 20,219,786
- --------------------------------------------------------------------------------------
Automotive -- 3.2%
- --------------------------------------------------------------------------------------
American Axle & Manufacturing, Inc.
$29,000,000 Term loan, maturing April 30, 2006 $ 29,000,000
Develops and manufactures automotive parts
Breed Technologies, Inc.
53,000,000 Term loan, maturing October 30, 1998 53,000,000
Develops, assembles and markets motor vehicle safety
restraint components
Cambridge Industries, Inc.
26,000,000 Term loan, maturing June 30, 2005 26,000,000
Original equipment manufacturer of plastic auto parts
Hayes Wheels International, Inc.
3,650,937 Term loan, maturing July 31, 2004 3,650,937
2,957,389 Term loan, maturing July 31, 2005 2,957,389
Producer of automotive brakes and wheels
Plas-Tech (Engineered) Products, Inc.
6,058,824 Term loan, maturing April 1, 2002 6,058,824
3,941,176 Term loan, maturing April 1, 2004 3,941,176
Manufactures thermoplastic parts for automobiles
Stanadyne Automotive Corp.
5,000,000 Term loan, maturing December 10, 2004 5,000,000
Auto and light truck fuel injection equipment
- --------------------------------------------------------------------------------------
$ 129,608,326
- --------------------------------------------------------------------------------------
Auto Parts -- 0.9%
- --------------------------------------------------------------------------------------
AAS Holdings, LLC
$ 4,061,535 Term loan, maturing October 30, 2004 $ 4,061,535
Designs and manufactures automotive rack systems &
accessories
Exide Corporation
8,400,000 Term loan, maturing March 18, 2005 8,400,000
Manufactures batteries for automobiles
Safelite Glass Corporation
9,250,000 Term loan, maturing December 17, 2004 9,250,000
9,250,000 Term loan, maturing December 17, 2005 9,250,000
Auto glass replacement and repair service provider
Schrader, Inc.
6,734,271 Term loan, maturing February 28, 2001 6,734,271
Produces tire valves, accessories, and pneumatic
connectors
- --------------------------------------------------------------------------------------
$ 37,695,806
- --------------------------------------------------------------------------------------
Beverages -- Soft Drink -- 0.6%
- --------------------------------------------------------------------------------------
Dr. Pepper Bottling Holdings, Inc.
$15,000,000 Term loan, maturing December 31, 2005 $ 15,000,000
Soft drink bottler
Select Beverages, Inc.
3,880,234 Term loan, maturing June 30, 2001 3,880,234
5,820,351 Term loan, maturing June 30, 2002 5,820,351
Soft drink bottler
- --------------------------------------------------------------------------------------
$ 24,700,585
- --------------------------------------------------------------------------------------
Broadcast Media -- 10.7%
- --------------------------------------------------------------------------------------
Benedek Broadcasting Corporation
$15,057,209 Term loan, maturing May 1, 2001 $ 15,057,209
7,051,479 Term loan, maturing November 1, 2002 7,051,479
1,702,635 Term loan, maturing December 31, 2004 1,702,635
797,365 Term loan, maturing December 31, 2004 797,365
Broadcast television operator
Chancellor Radio Broadcasting Company
144,420 Revolving loan, maturing June 26, 2004 144,420
4,000,000 Term loan, maturing June 26, 2004 4,000,000
10,341,160 Revolving loan, maturing June 30, 2005 10,341,160
53,571,429 Term loan, maturing June 30, 2005 53,571,429
Radio broadcasting
Charter Communications Enterprises I, L.P.
1,669,391 Revolving loan, maturing December 31, 2003 1,669,391
15,032,855 Term loan, maturing December 31, 2003 15,032,855
Cable television provider
Charter Communications Enterprises II, L.P.
14,000,000 Term loan, maturing March 31, 2005 14,000,000
4,000,000 Term loan, maturing March 31, 2006 4,000,000
Cable television provider
Chelsea Communications, Inc.
10,000,000 Term loan, maturing December 31, 2004 10,000,000
Cable television provider
Classic Cable, Inc.
4,258,519 Revolving loan, June 30, 2004 4,258,519
3,706,501 Term loan, maturing June 30, 2004 3,706,501
9,796,225 Term loan, maturing June 30, 2005 9,796,225
Cable television provider
Comcorp Broadcasting, Inc.
6,097,561 Term loan, maturing September 30, 2005 6,097,561
Radio broadcasting
Falcon Cable Media
21,824,000 Term loan, maturing July 12, 2005 21,824,000
Cable television provider
Frontiervision Operating Partners, L.P.
15,000,000 Term loan, maturing March 31, 2006 15,000,000
Cable television provider
Intermedia Partners IV, L.P.
26,000,000 Term loan, maturing January 1, 2005 26,000,000
Cable television provider
Jacor Communications Company
17,000,000 Term loan, maturing December 31, 2004 17,000,000
Radio broadcasting
Marcus Cable Operating Company, L.P.
12,005,561 Term loan, maturing December 31, 2002 12,005,561
34,562,500 Term loan, maturing April 30, 2004 34,562,500
Cable television provider
Optel, Inc.
5,000,000 Term loan, maturing May 31, 2004 5,000,000
Cable television provider
Sinclair Broadcasting Group, Inc.
40,068,000 Term loan, maturing December 31, 2004 40,068,000
Broadcast television operator
Sullivan Broadcasting Company, Inc.
8,362,456 Term loan, maturing December 31, 2000 8,362,456
2,000,000 Acquisition revolving loan, maturing December 31, 2003 2,000,000
643,617 Revolving loan, maturing December 31, 2003 643,617
23,910,167 Term loan, maturing December 31, 2003 23,910,167
Broadcast television operator
TCI Pacific, Inc.
11,428,571 Revolving loan, maturing September 30, 2004 11,428,571
47,500,000 Term loan, maturing December 31, 2004 47,500,000
Cable television provider
White Knight Broadcasting, Inc.
3,902,439 Term loan, maturing September 30, 2005 3,902,439
Radio broadcasting
- --------------------------------------------------------------------------------------
$ 430,434,060
- --------------------------------------------------------------------------------------
Building Materials -- 1.7%
- --------------------------------------------------------------------------------------
Dayton Superior Corporation
$10,000,000 Term loan, maturing September 29, 2005 $ 10,000,000
Manufacturer of concrete, masonry and paving
accessories
Falcon Building Products, Inc.
10,719,286 Term loan, maturing June 30, 2005 10,719,286
Manufactures and distributes air distribution
equipment, plumbing fixtures and air compressors.
National Gypsum Company
49,707,847 Term loan, maturing September 20, 2003 49,707,847
Produces gypsum wallboard
- --------------------------------------------------------------------------------------
$ 70,427,133
- --------------------------------------------------------------------------------------
Chemicals -- 3.1%
- --------------------------------------------------------------------------------------
DT Acquisition Inc.
$ 8,814,842 Term loan, maturing December 16, 1998 $ 8,814,842
Diversified chemical producer
GEO Specialty Chemicals, Inc.
4,975,000 Term loan, maturing March 25, 2004 4,975,000
Diversified chemical producer
Huntsman Corporation
9,900,000 Term loan, maturing September 30, 2003 9,900,000
21,037,500 Term loan, maturing December 31, 2004 21,037,500
7,500,000 Term loan, maturing December 31, 2005 7,500,000
Diversified chemical producer
Huntsman Specialty Chemicals Corporation
0 Revolving loan, maturing March 15, 2002 0
7,240,491 Term loan, maturing March 15, 2002 7,240,491
9,900,000 Term loan, maturing March 15, 2004 9,900,000
9,900,000 Term loan, maturing March 15, 2005 9,900,000
Diversified chemical producer
Rheox, Inc.
0 Revolver loan, maturing January 30, 2004 0
18,016,667 Term loan, maturing January 30, 2004 18,016,667
Diversified chemical producer
Sterling Pulp Chemicals (Sask) Ltd.
7,230,323 Term loan, maturing June 30, 2005 7,230,323
Diversified chemical producer
STX Chemicals Corp.
21,839,993 Term loan, maturing September 30, 2004 21,839,993
Petrochemicals and pulp chemicals
- --------------------------------------------------------------------------------------
$ 126,354,816
- --------------------------------------------------------------------------------------
Chemicals Specialty -- 0.3%
- --------------------------------------------------------------------------------------
Harris Specialty Chemicals, Inc.
$ 253,792 Term loan, maturing December 31, 1999 $ 253,792
1,952,719 Term loan, maturing December 31, 2001 1,952,719
3,554,093 Term loan, maturing December 31, 2002 3,554,093
Construction chemicals
NEN Life Sciences Products, Inc.
5,265,306 Term loan, maturing December 31, 2004 5,265,306
Manufactures and distributes biochemical and related
products
- --------------------------------------------------------------------------------------
$ 11,025,910
- --------------------------------------------------------------------------------------
Coal -- 0.3%
- --------------------------------------------------------------------------------------
Alliance Coal Corporation
$ 4,143,663 Term loan, maturing December 31, 2001 $ 4,143,663
6,588,538 Term loan, maturing December 31, 2002 6,588,538
Diversified producer and supplier of steam and
metallurgical coal
- --------------------------------------------------------------------------------------
$ 10,732,201
- --------------------------------------------------------------------------------------
Commercial Services -- 5.7%
- --------------------------------------------------------------------------------------
Advanstar Communications, Inc.
$ 88,456 Revolving loan, maturing June 30, 2001 $ 88,456
3,188,855 Term loan, maturing December 21, 2003 3,188,855
9,712,644 Term loan, maturing December 31, 2002 9,712,644
Trade publication and exposition management company
American Floral Services, Inc.
5,000,000 Term loan, maturing June 30, 2004 5,000,000
Flowers-by-wire service
Brand Scaffold Services, Inc.
2,962,500 Term loan, September 30, 2003 2,962,500
1,975,000 Term loan, September 30, 2004 1,975,000
Industrial scaffolding rental, erection and
dismantlement services
Caterair International Corporation
37,027,200 Term loan, maturing March 1, 2007 37,027,200
Food service to airlines
Erickson Air-Crane Co.
8,932,500 Term loan, maturing December 31, 2004 8,932,500
Provider of heavy-lift helicopter services
NBC Merger Sub, Inc.
7,400,000 Term loan, maturing August 31, 2003 7,400,000
Used college textbook wholesaler
Outsourcing Solutions, Corp.
24,275,209 Term loan, maturing October 15, 2003 24,275,209
Accounts receivable management services
Outdoor Systems, Inc.
15,000,000 Term loan, maturing June 30, 2004 15,000,000
Outdoor advertising company
Omni Services, Inc.
22,910,000 Term loan, maturing October 30, 2005 22,910,000
Workwear rental, laundry and washroom servicing
PSI Acquisition Corporation
17,000,000 Term loan, maturing September 30, 2003 17,000,000
Diversified consulting services
SC International Services, Inc.
20,827,800 Term loan, maturing March 1, 2007 20,827,800
Food service to airlines
Volume Services, Inc.
960,000 Revolving loan, maturing December 31, 2000 960,000
4,957,200 Term loan, maturing December 31, 2002 4,957,200
2,478,500 Term loan, maturing December 31, 2003 2,478,500
Provides food services for civic centers and sports
facilities
Young & Rubicam L.P.
43,728,750 Term loan, maturing March 31, 2003 43,728,750
Advertising, public relations, direct marketing,
sales development and design and health care
communications
- --------------------------------------------------------------------------------------
$ 228,424,614
- --------------------------------------------------------------------------------------
Communication Equipment -- 0.3%
- --------------------------------------------------------------------------------------
Communications & Power Industries, Inc.
$ 1,500,000 Term loan, maturing August 11, 2000 $ 1,500,000
5,533,333 Term loan, maturing August 12, 2002 5,533,333
Microwave, electronic, and radio frequency components
Telex Communications, Inc.
5,000,000 Term loan, maturing November 6, 2004 5,000,000
Supplier of brand name communications products
- --------------------------------------------------------------------------------------
$ 12,033,333
- --------------------------------------------------------------------------------------
Computer Software -- 1.3%
- --------------------------------------------------------------------------------------
Decisionone Corporation
$ 2,175,332 Revolving loan, maturing August 7, 2003 $ 2,175,332
16,900,000 Term loan, maturing August 7, 2003 16,900,000
35,411,250 Term loan, maturing August 7, 2005 35,411,250
Provider of multi-vendor computer maintenance and
technology support
- --------------------------------------------------------------------------------------
$ 54,486,582
- --------------------------------------------------------------------------------------
Computer Systems -- 0.6%
- --------------------------------------------------------------------------------------
Anacomp, Inc.
$ 9,305,682 Term loan, maturing February 28, 2001 $ 9,305,682
Produces micrographics systems
Genicom Corporation
13,415,625 Term loan, maturing December 5, 2004 13,415,625
Produces computer printers and supplies and provides
multi-vendor servicing
- --------------------------------------------------------------------------------------
$ 22,721,307
- --------------------------------------------------------------------------------------
Conglomerates -- 1.0%
- --------------------------------------------------------------------------------------
American Marketing Industries, Inc.
$ 1,305,000 Term loan, maturing August 31, 2001 $ 1,305,000
3,430,000 Term loan, maturing November 30, 2002 3,430,000
6,550,500 Term loan, maturing November 30, 2003 6,550,500
2,250,000 Term loan, maturing November 30, 2004 2,250,000
Manufacturer and distributor of corporate promotional
and incentive products
E & S Holdings
4,277,778 Term loan, maturing September 30, 2004 4,277,778
4,277,778 Term loan, maturing September 30, 2005 4,277,778
2,444,444 Term loan, maturing March 30, 2006 2,444,444
Sporting goods and infant products
Fenway Holdings, L.L.C.
4,742,465 Term loan, maturing September 15, 2002 4,742,465
Manufactures and distributes billiard tables, dart
machines, wood moldings, windows, doors, artificial
flowers, archery bows, and plastics.
Phase Metrics, Inc.
4,950,000 Term loan, maturing December 4, 2001 4,950,000
Designs and manufactures production test equipment
for the computer data storage industry
Smarte Carte Corporation
483,871 Term loan, maturing December 31, 2001 483,871
2,914,286 Term loan, maturing June 30, 2003 2,914,286
4,410,000 Term loan, maturing June 30, 2004 4,410,000
Airport baggage cart management and self storage
locker service
- --------------------------------------------------------------------------------------
$ 42,036,122
- --------------------------------------------------------------------------------------
Containers -- Metal & Glass -- 1.9%
- --------------------------------------------------------------------------------------
Calmar, Inc.
$ 5,868,750 Term loan, maturing September 15, 2003 $ 5,868,750
4,395,000 Term loan, maturing June 15, 2004 4,395,000
Plastic sprayers and dispensers
Reid Plastics, Inc.
9,971,683 Term loan, maturing November 12, 2003 9,971,683
7,500,000 Term loan, maturing November 12, 2004 7,500,000
Bottle manufacturer
Russell-Stanley Holdings, Inc.
14,000,000 Term loan, maturing September 30, 2005 14,000,000
Manufactures and markets steel and plastic drums
Silgan Corporation
27,362,500 Term loan, maturing June 30, 2005 27,362,500
Metal and plastic packaging products
Truseal Technologies, Inc.
7,477,500 Term loan, maturing July 1, 2004 7,477,500
Manufactures and distributes patented sealant
products
- --------------------------------------------------------------------------------------
$ 76,575,433
- --------------------------------------------------------------------------------------
Containers -- Paper -- 5.9%
- --------------------------------------------------------------------------------------
IPC, Inc.
$40,386,250 Term loan, maturing September 30, 2004 $ 40,386,250
Plastic and paper packaging products
Jefferson Smurfit Corporation
37,366,827 Term loan, maturing April 30, 2001 37,366,827
22,190,481 Term loan, maturing April 30, 2002 22,190,481
10,741,040 Term loan, maturing October 31, 2002 10,741,040
Liner board and other paper board products
RIC Holding, Inc.
7,092,309 Revolving loan, maturing February 28, 2003 7,092,309
15,038,657 Term loan, maturing February 28, 2003 15,038,657
10,483,390 Term loan, maturing February 28, 2004 10,483,390
4,154,270 Term loan, maturing August 28, 2004 4,154,270
Liner board, lumber and paper packaging products
St. Laurent Paper Products
3,876,289 Term loan, maturing May 31, 2003 3,876,289
4,123,711 Term loan, maturing May 31, 2004 4,123,711
Major U.S. producer of pulp and paper
Stone Container Corporation
32,645,498 Term loan, maturing April 1, 2000 32,645,498
38,414,645 Term loan, maturing October 1, 2003 38,414,645
Commodity pulp, paper and packaging products
Stronghaven, Inc.
9,401,724 Term loan, maturing May 31, 2004 9,401,724
1,830,657 Term loan, maturing May 15, 2004 1,830,657
Manufacturer of corrugated boxes
- --------------------------------------------------------------------------------------
$ 237,745,748
- --------------------------------------------------------------------------------------
Cosmetics -- 2.3%
- --------------------------------------------------------------------------------------
AM Cosmetics, Inc.
$ 974,359 Term loan, maturing June 30, 2003 $ 974,359
12,937,494 Term loan, maturing December 31, 2004 12,937,494
Cosmetics, skin and hair care, and perfume products
Mary Kay Cosmetics, Inc.
15,310,680 Term loan, maturing March 6, 2004 15,310,680
Cosmetics, skin and hair care, and perfume products
Revlon Consumer Products Corporation
62,000,000 Term loan, maturing May 29, 2002 62,000,000
Cosmetics, skin and hair care, and perfume products
- --------------------------------------------------------------------------------------
$ 91,222,533
- --------------------------------------------------------------------------------------
Electrical Equipment -- 0.5%
- --------------------------------------------------------------------------------------
Celestica International, Inc.
$ 8,415,000 Term loan, maturing June 30, 2003 $ 8,415,000
Produces memory and power systems
Chatham Enterprises Inc.
1,865,000 Term loan, maturing August 18, 2003 1,865,000
3,497,308 Term loan, maturing August 18, 2005 3,497,308
Producer of electronic enclosures
Viasystems, Inc.
3,963,636 Term loan, maturing April 30, 2003 3,963,636
2,400,000 Term loan, maturing April 30, 2003 2,400,000
Supplier of interconnection products
- --------------------------------------------------------------------------------------
$ 20,140,944
- --------------------------------------------------------------------------------------
Electronics -- Defense -- 0.4%
- --------------------------------------------------------------------------------------
L-3 Communications Corporation
$ 1,342,000 Term loan, maturing March 31, 2003 $ 1,342,000
2,483,333 Term loan, maturing March 31, 2005 2,483,333
1,633,500 Term loan, maturing March 31, 2006 1,633,500
Designs and manufactures secure communication systems
and instrumentation products
SPD Holdings, Inc.
911,650 Revolving loan, maturing June 30, 2002 911,650
1,095,209 Term loan, maturing June 30, 2002 1,095,209
7,487,972 Term loan, maturing June 30, 2004 7,487,972
Manufactures circuit breakers, switchgear and control
panels for warships
- --------------------------------------------------------------------------------------
$ 14,953,664
- --------------------------------------------------------------------------------------
Electronics -Instrumentation -- 1.1%
- --------------------------------------------------------------------------------------
Amphenol Corporation
$15,967,500 Term loan, maturing May 19, 2005 $ 15,967,500
15,673,125 Term loan, maturing May 19, 2006 15,673,125
Designs, manufactures and markets interconnect
systems and coaxial cable
Details, Inc.
5,000,000 Term loan, maturing October 27, 2003 5,000,000
1,000,000 Term loan, maturing October 27, 2004 1,000,000
Manufactures prototype printed circuit boards
Packard Bioscience Company
4,975,000 Term loan, maturing March 31, 2003 4,975,000
Manufacturer and distributor of bioanalytical
equipment
- --------------------------------------------------------------------------------------
$ 42,615,625
- --------------------------------------------------------------------------------------
Foods -- 2.7%
- --------------------------------------------------------------------------------------
Del Monte Corporation
$ 6,181,818 Term loan, maturing March 31, 2003 $ 6,181,818
12,750,000 Term loan, maturing March 31, 2005 12,750,000
Manufactures and markets canned vegetables and canned
fruit
Favorite Brands International, Inc.
2,587,780 Revolving loan, maturing August 30, 2001 2,587,780
7,359,389 Term loan, maturing August 30, 2003 7,359,389
12,418,131 Term loan, maturing August 30, 2004 12,418,131
3,396,664 Term loan, maturing February 28, 2005 3,396,664
Manufactures and markets marshmallows and caramels
International Home Foods, Inc.
146,667 Revolving loan, maturing March 31, 2003 146,667
2,016,542 Term loan, maturing March 31, 2003 2,016,542
18,000,000 Term loan, maturing September 30, 2005 18,000,000
Manufactures and markets food products with popular
brand names
Southern Foods Group, L.P.
3,922,240 Term loan, maturing February 28, 2006 3,922,240
Processes and sells dairy products
Specialty Foods Corporation
27,271,521 Term loan, maturing April 30, 2001 27,271,521
Bread and cheese products
Van De Kamp's, Inc.
7,029,687 Term loan, maturing April 30, 2003 7,029,687
4,410,601 Term loan, maturing September 30, 2003 4,410,601
Distributor of frozen convenience foods
- --------------------------------------------------------------------------------------
$ 107,491,040
- --------------------------------------------------------------------------------------
Food Wholesalers -- 0.7%
- --------------------------------------------------------------------------------------
Fleming Companies, Inc.
$28,980,042 Term loan, maturing July 25, 2004 $ 28,980,042
Wholesale food distributor
- --------------------------------------------------------------------------------------
$ 28,980,042
- --------------------------------------------------------------------------------------
Hardware & Tools -- 0.2%
- --------------------------------------------------------------------------------------
Werner Holding Company, Inc.
$ 4,050,000 Term loan, maturing November 30, 2004 $ 4,050,000
4,950,000 Term loan, maturing November 30, 2005 4,950,000
Manufactures and markets ladders and other climbing
products
- --------------------------------------------------------------------------------------
$ 9,000,000
- --------------------------------------------------------------------------------------
Health Care -- Miscellaneous -- 6.9%
- --------------------------------------------------------------------------------------
Ameripath, Inc.
$10,000,000 Term loan, maturing June 27, 2004 $ 10,000,000
Anatomical pathology services
Extendicare Health Services, Inc.
25,500,000 Term loan, maturing December 31, 2004 25,500,000
Operator of long-term care facilities
Genesis Health Ventures, Inc.
10,640,012 Term loan, maturing September 30, 2004 10,640,012
10,620,000 Term loan, maturing June 1, 2005 10,620,000
Operator of long-term care facilities, outpatient
clinics and home health care services
Imed Corporation
9,000,000 Term loan, maturing November 30, 2002 9,000,000
4,544,100 Term loan, maturing November 30, 2003 4,544,100
4,544,100 Term loan, maturing November 30, 2004 4,544,100
4,276,800 Term loan, maturing May 31, 2005 4,276,800
Provider of infusion systems and related technologies
Integrated Health Services, Inc.
33,000,000 Term loan, maturing September 15, 2003 33,000,000
Provider of post-acute health care services
Kinetic Concepts, Inc.
5,250,000 Term loan, maturing December 31, 2004 5,250,000
5,250,000 Term loan, maturing December 31, 2005 5,250,000
Designs, manufactures and markets therapeutic systems
Leiner Health Products Inc.
5,970,000 Term loan, maturing December 30, 2004 5,970,000
4,477,500 Term loan, maturing December 31, 2005 4,477,500
Manufactures and markets vitamins, minerals and
nutritional supplements
Mediq / Prn Life Support Service
9,854,628 Term loan, maturing September 30, 2004 9,854,628
Medical equipment and rental services
Merit Behavioral Care Corporation
11,669,746 Term loan, maturing March 31, 2007 11,669,746
Mental health care provider
National Medical Care, Inc.
60,000,000 Term loan, maturing September 30, 2003 60,000,000
Kidney dialysis service provider
Paragon Health Network, Inc.
12,500,000 Term loan, maturing March 31, 2005 12,500,000
12,500,000 Term loan, maturing March 31, 2006 12,500,000
Operator of long-term care facilities
SMT Health Services
9,975,000 Term loan, maturing August 31, 2003 9,975,000
Provider of mobile magnetic resonance imaging
services
Sun Healthcare Group, Inc.
8,250,000 Term loan, maturing October 9, 2004 8,250,000
8,250,000 Term loan, maturing October 9, 2005 8,250,000
Operator of long-term care facilities, rehabilitation
facilities and home health care services
The Multicare Companies Inc. (Genesis Eldercare)
7,980,009 Term loan, maturing September 30, 2004 7,980,009
2,655,000 Term loan, maturing June 1, 2005 2,655,000
Operator of long-term care facilities, outpatient
clinics and home health care services
Total Renal Care Holdings, Inc.
0 Term loan, maturing September 30, 2007 0
Kidney dialysis service provider
WGL Acquisition Corp.
3,940,000 Term loan, maturing July 10, 2004 3,940,000
Manufactures medical devices and batteries for
medical and commercial applications
- --------------------------------------------------------------------------------------
$ 280,646,895
- --------------------------------------------------------------------------------------
Hospital Management -- 0.9%
- --------------------------------------------------------------------------------------
Community Health Systems, Inc.
$12,561,644 Term loan, maturing December 31, 2003 $ 12,561,644
12,561,644 Term loan, maturing December 31, 2004 12,561,644
9,445,205 Term loan, maturing December 31, 2005 9,445,205
Hospital and healthcare management
- --------------------------------------------------------------------------------------
$ 34,568,493
- --------------------------------------------------------------------------------------
Hotels -- 1.1%
- --------------------------------------------------------------------------------------
Capstar Hotel Company
$11,250,000 Term loan, maturing June 30, 2004 $ 11,250,000
Hotel management
Hard Rock Hotel, Inc.
2,000,000 Term loan, maturing October 24, 2003 2,000,000
3,000,000 Term loan, maturing October 24, 2004 3,000,000
3,000,000 Term loan, maturing October 24, 2005 3,000,000
Hotel management
HMC Capital Resources Corp.
532,800 Term loan, maturing June 17, 2004 532,800
Hotel management
Interstate Hotels Corporation
4,743,590 Term loan, maturing June 25, 2003 4,743,590
19,688,034 Term loan, maturing June 25, 2004 19,688,034
Hotel management
- --------------------------------------------------------------------------------------
$ 44,214,424
- --------------------------------------------------------------------------------------
Household Furnishings -- 2.7%
- --------------------------------------------------------------------------------------
Furniture Brands International, Inc.
$ 9,000,000 Term loan, maturing June 27, 2004 $ 9,000,000
31,000,000 Term loan, maturing June 27, 2007 31,000,000
Manufacturer of residential furniture
Goodman Manufacturing Company, L.P.
9,095,541 Term loan, maturing September 30, 2003 9,095,541
17,750,000 Term loan, maturing September 30, 2004 17,750,000
17,750,000 Term loan, maturing September 30, 2005 17,750,000
Manufacturer of heating/air conditioning equipment
Sealy Mattress Company
6,060,606 Term loan, maturing December 15, 2004 6,060,606
4,363,636 Term loan, maturing December 15, 2005 4,363,636
5,575,758 Term loan, maturing December 15, 2006 5,575,758
Manufactures bedding
Simmons Company
6,940,000 Term loan, maturing March 31, 2003 6,940,000
Manufactures bedding
- --------------------------------------------------------------------------------------
$ 107,535,541
- --------------------------------------------------------------------------------------
Household Products -- 0.5%
- --------------------------------------------------------------------------------------
Playtex Products, Inc.
$21,890,000 Term loan, maturing June 15, 2003 $ 21,890,000
Manufactures and markets a diversified line of
consumer products
- --------------------------------------------------------------------------------------
$ 21,890,000
- --------------------------------------------------------------------------------------
Housewares -- 0.2%
- --------------------------------------------------------------------------------------
Pillowtex Corporation
$ 6,500,000 Term loan, maturing December 31, 2004 $ 6,500,000
Producer of textile products
- --------------------------------------------------------------------------------------
$ 6,500,000
- --------------------------------------------------------------------------------------
Insurance Brokers -- 0.5%
- --------------------------------------------------------------------------------------
Acordia, Inc.
$ 5,900,000 Term loan, maturing December 31, 2004 $ 5,900,000
Provider of retail based brokerage services
TRG Holding Corporation
15,000,000 Term loan, maturing January 7, 2003 15,000,000
Provider of insurance services
- --------------------------------------------------------------------------------------
$ 20,900,000
- --------------------------------------------------------------------------------------
Leisure -- 3.9%
- --------------------------------------------------------------------------------------
24 Hour Fitness, Inc.
$10,000,000 Term loan, maturing December 31, 2004 $ 10,000,000
Fitness center chain
AMF Bowling Worldwide, Inc.
219,595 Revolving loan, maturing March 31, 2002 219,595
13,336,620 Term loan, maturing March 31, 2002 13,336,620
Manufactures and operates bowling equipment and
supplies
AMF Group, Inc.
14,799,106 Term loan, maturing March 31, 2003 14,799,106
13,007,981 Term loan, maturing March 31, 2004 13,007,981
Manufactures and operates bowling equipment and
supplies
ASC East, Inc.
3,857,143 Term loan, maturing May 31, 2006 3,857,143
Operator of alpine resorts
ASC West, Inc.
9,642,857 Term loan, maturing May 31, 2006 9,642,857
Operator of alpine resorts
Alliance Gaming Corporation
7,129,464 Term loan, maturing January 31, 2005 7,129,464
2,850,000 Term loan, maturing July 31, 2005 2,850,000
Designs and manufacturing gaming machines
Interval International Corporation
6,625,000 Term loan, maturing December 16, 2005 6,625,000
6,625,000 Term loan, maturing December 15, 2006 6,625,000
Timeshare exchange operator
KSL Recreation Group, Inc.
6,653,572 Revolving loan, maturing April 30, 2005 6,653,572
7,028,846 Term loan, maturing April 30, 2005 7,028,846
7,028,846 Term loan, maturing April 30, 2006 7,028,846
Operates properties in the leisure, recreation,
resort and travel fields
Metro-Goldwyn-Mayer, Inc.
25,000,000 Term loan, maturing December 31, 2006 25,000,000
Film and television production and distribution
Mikohn Gaming Corporation
5,000,000 Term loan, maturing April 1, 2004 5,000,000
Developer, manufacturer and distributor of gaming
equipment
Six Flags Theme Parks, Inc.
6,649,355 Term loan, maturing June 23, 2001 6,649,355
10,137,000 Term loan, maturing June 23, 2003 10,137,000
Amusement parks
- --------------------------------------------------------------------------------------
$ 155,590,385
- --------------------------------------------------------------------------------------
Machinery -- 0.3%
- --------------------------------------------------------------------------------------
Numatics, Incorporated
$ 4,222,732 Term loan, maturing January 3, 2002 $ 4,222,732
7,626,312 Term loan, maturing January 3, 2004 7,626,312
Manufactures air valves, cylinders, and air
filtration and drying devices
- --------------------------------------------------------------------------------------
$ 11,849,044
- --------------------------------------------------------------------------------------
Manufacturing -- Diversified -- 4.7%
- --------------------------------------------------------------------------------------
AMSCAN Holdings, Inc.
$ 8,454,545 Term loan, maturing December 31, 2004 $ 8,454,545
Designs, manufactures and distributes decorative
party goods
CFS Holding N.V.
9,398,729 Term loan, maturing June 30, 2005 9,398,729
Supplier of integrated production lines for food
processing and packaging
Columbus McKinnon Corporation
5,644,000 Revolving loan, maturing September 30, 2001 5,644,000
6,878,036 Term loan, maturing September 30, 2001 6,878,036
12,469,349 Term loan, maturing September 30, 2003 12,469,349
Manufacturer of hoists and lifting equipment
Desa International, Inc.
7,500,000 Term loan, maturing November 30, 2004 7,500,000
Manufactures indoor and outdoor heaters and specialty
tools
Foamex L.P.
3,879,630 Revolving loan, maturing June 30, 2003 3,879,630
5,559,174 Term loan, maturing June 30, 2003 5,559,174
8,339,048 Term loan, maturing June 30, 2005 8,339,048
7,580,952 Term loan, maturing June 30, 2006 7,580,952
7,000,000 Term loan, maturing December 31, 2006 7,000,000
Manufactures flexible polyurethane and polymer foam
products
International Wire Group, Inc.
23,962,617 Term loan, maturing September 30, 2002 23,962,617
Manufactures and markets copper wire and harnesses
InteSys Technologies, Inc.
4,390,244 Term loan, maturing December 31, 2001 4,390,244
Designs and manufactures plastic components for
original equipment manufacturers
Jackson Products, Inc.
1,975,000 Term loan, maturing September 1, 2001 1,975,000
7,323,912 Term loan, maturing September 1, 2002 7,323,912
7,331,250 Term loan, maturing September 1, 2003 7,331,250
Manufactures and distributes safety equipment and
reflective beads
Joan Fabrics Corporation
$ 5,622,678 Revolving loan, maturing June 30, 2003 $ 5,622,678
10,882,604 Term loan, maturing June 30, 2003 10,882,604
14,473,684 Term loan, maturing June 30, 2005 14,473,684
7,526,316 Term loan, maturing June 30, 2006 7,526,316
Manufacturer of velour fabrics for automotive and
furniture systems
Matthew Warren, Inc.
6,922,328 Term loan, maturing February 28, 2004 6,922,328
Manufactures and distributes industrial spring
products
Panavision International, L.P.
2,163,333 Revolving loan, maturing June 30, 2004 2,163,333
4,400,000 Term loan, maturing June 30, 2004 4,400,000
Manufactures lens and camera equipment
Panolam Industries, Inc.
828,000 Term loan, maturing November 1, 2002 828,000
4,564,000 Term loan, maturing November 1, 2004 4,564,000
2,608,000 Term loan, maturing November 1, 2005 2,608,000
2,000,000 Term loan, maturing May 1, 2006 2,000,000
Designs, manufactures and markets decorative
thermally- fused melamine panels
- --------------------------------------------------------------------------------------
$ 189,677,429
- --------------------------------------------------------------------------------------
Medical Products -- 1.0%
- --------------------------------------------------------------------------------------
Graphic Controls Corporation
$10,786,925 Term loan, maturing August 28, 2003 $ 10,786,925
4,890,890 Term loan, maturing September 28, 2003 4,890,890
Recording and monitoring devices
Nutramax Products, Inc.
3,936,944 Term loan, maturing December 31, 2003 3,936,944
6,000,000 Term loan, maturing September 30, 2004 6,000,000
Manufactures and markets private label health and
personal care products
Sterling Diagnostic Imaging, Inc.
15,000,000 Term loan, maturing December 30, 2005 15,000,000
Manufacturer and marketer of medical x-ray imaging
films and related products
- --------------------------------------------------------------------------------------
$ 40,614,759
- --------------------------------------------------------------------------------------
Metals -- 0.2%
- --------------------------------------------------------------------------------------
U.S. Silica Company
$ 4,145,337 Term loan, maturing December 31, 2001 $ 4,145,337
3,893,333 Term loan, maturing December 31, 2003 3,893,333
Producer of industrial silica
- --------------------------------------------------------------------------------------
$ 8,038,670
- --------------------------------------------------------------------------------------
Miscellaneous -- 1.5%
- --------------------------------------------------------------------------------
Allied Waste North America
$ 7,200,000 Term loan, maturing October 17, 2003 $ 7,200,000
7,644,000 Term loan, maturing December 31, 2003 7,644,000
Non-hazardous solid waste management
LESI, Inc.
7,462,500 Term loan, maturing May 15, 2004 7,462,500
7,462,500 Term loan, maturing May 15, 2005 7,462,500
Hazardous solid waste management
Prime Succession, Inc.
15,822,222 Term loan, maturing August 1, 2003 15,822,222
Operator of funeral homes and cemeteries
Rose Hills Company
9,800,447 Term loan, maturing December 1, 2003 9,800,447
Operator of funeral homes and cemeteries
Walco International, Inc.
4,966,667 Term loan, maturing March 31, 2004 4,966,667
Distributes food animal health products
- --------------------------------------------------------------------------------------
$ 60,358,336
- --------------------------------------------------------------------------------------
Office Equipment and Supplies -- 0.6%
- --------------------------------------------------------------------------------------
F.M.E. Corporation (Neopost, S.A.)
$12,314,749 Term loan, maturing June 24, 2006 $ 12,314,749
Producer of mailroom products
Identity Group, Inc.
9,949,749 Term loan, maturing November 22, 2003 9,949,749
Manufactures and distributes ink delivery products
- --------------------------------------------------------------------------------------
$ 22,264,498
- --------------------------------------------------------------------------------------
Paper and Forest Products -- 0.7%
- --------------------------------------------------------------------------------------
Bear Island Paper Company, LLC
$ 9,000,000 Term loan, maturing December 31, 2005 $ 9,000,000
Producer of news print
S.D. Warren Company
19,578,400 Term loan, maturing December 20, 2002 19,578,400
Major U.S. producer of coated free paper
- --------------------------------------------------------------------------------------
$ 28,578,400
- --------------------------------------------------------------------------------------
Publishing -- 2.4%
- --------------------------------------------------------------------------------------
Cullman Ventures, Inc.
$15,000,000 Term loan, maturing January 31, 2004 $ 15,000,000
Producer of calendars, organizers, diaries and
related products
Cygnus Publishing, Inc.
13,500,000 Term loan, maturing June 5, 2005 13,500,000
Leader in the education, media and information
businesses
Primedia, Inc.
8,770,000 Revolving loan, maturing June 30, 2004 8,770,000
31,500,000 Term loan, maturing June 30, 2004 31,500,000
Leader in the education, media and information
businesses
Rand McNally & Company
1,000,000 Term loan, maturing April 30, 2005 1,000,000
4,500,000 Term loan, maturing April 30, 2006 4,500,000
Provider of geographic information
Von Hoffman Press, Inc.
5,768,143 Term loan, maturing May 30, 2004 5,768,143
5,768,143 Term loan, maturing May 30, 2005 5,768,143
Manufactures textbooks for educational purposes
Yellow Book USA, L.P.
5,000,000 Term loan, maturing September 30, 2005 5,000,000
3,692,308 Term loan, maturing December 31, 2005 3,692,308
2,307,692 Term loan, maturing December 31, 2006 2,307,692
Publisher of yellow pages directories
- --------------------------------------------------------------------------------------
$ 96,806,286
- --------------------------------------------------------------------------------------
Publishing -- Newspapers -- 2.0%
- --------------------------------------------------------------------------------------
21st Century Newspapers, Inc.
$ 9,500,000 Term loan, maturing February 15, 2005 $ 9,500,000
Community newspaper
American Media Operations, Inc.
774,471 Revolving loan, maturing September 30, 2002 774,471
15,939,857 Term loan, maturing September 30, 2002 15,939,857
Weekly periodical publisher
Garden State Newspapers, Inc.
505,263 Revolving loan, maturing June 30, 2003 505,263
0 Revolving loan, maturing March 31, 2004 0
1,473,684 Term loan, maturing March 31, 2004 1,473,684
Suburban newspaper
Journal Register Company
8,168,237 Term loan, maturing June 30, 2000 8,168,237
22,462,955 Term loan, maturing December 31, 2002 22,462,955
4,084,118 Term loan, maturing May 5, 2003 4,084,118
Suburban newspaper
Morris Communications Corporation
20,000,000 Term loan, maturing June 30, 2005 20,000,000
Daily and non-daily publisher
- --------------------------------------------------------------------------------------
$ 82,908,585
- --------------------------------------------------------------------------------------
Railroads -- 0.2%
- --------------------------------------------------------------------------------------
I & M Rail Link, LLC
$ 2,800,000 Revolving loan, maturing March 31, 2004 $ 2,800,000
6,880,000 Term loan, maturing March 31, 2004 6,880,000
Railway operating firm
- --------------------------------------------------------------------------------------
$ 9,680,000
- --------------------------------------------------------------------------------------
Restaurants -- 2.4%
- --------------------------------------------------------------------------------------
Friendly Ice Cream Corporation
$ 1,285,714 Term loan, maturing November 15, 2004 $ 1,285,714
6,428,572 Term loan, maturing November 15, 2005 6,428,572
Operates full service casual dining restaurants
Houlihan's Restaurants, Inc.
4,975,000 Term loan, maturing April 15, 2004 4,975,000
Operates full service casual dining restaurants
Long John Silver's Restaurants, Inc.
7,031,065 Term loan, maturing September 30, 2002 7,031,065
Seafood restaurants
Shoney's Inc.
4,750,000 Term loan, maturing April 30, 2002 4,750,000
9,975,000 Term loan, maturing April 30, 2002 9,975,000
Operates full service casual dining restaurants
Tricon Global Restaurants, Inc.
63,960,000 Term loan, maturing October 2, 2002 63,960,000
Quick service restaurant provider
- --------------------------------------------------------------------------------------
$ 98,405,351
- --------------------------------------------------------------------------------------
Retail Stores -- Drug Stores -- 0.3%
- --------------------------------------------------------------------------------------
Duane Reade, Inc.
$12,468,499 Term loan, maturing June 15, 2002 $ 12,468,499
Retail drug stores
- --------------------------------------------------------------------------------------
$ 12,468,499
- --------------------------------------------------------------------------------------
Retail Stores -- Food Chains -- 2.9%
- --------------------------------------------------------------------------------------
Pathmark Stores, Inc.
$32,963,333 Term loan, maturing December 15, 2001 $ 32,963,333
Supermarket chain in New York Metro Area
Ralphs Grocery Company
26,601,905 Term loan, maturing February 15, 2003 26,601,905
37,715,000 Term loan, maturing February 15, 2004 37,715,000
Third largest supermarket chain in Southern
California
Star Market Company, Inc.
10,042,105 Term loan, maturing December 31, 2001 10,042,105
7,884,211 Term loan, maturing December 31, 2002 7,884,211
Supermarket chain in Massachusetts
- --------------------------------------------------------------------------------------
$ 115,206,554
- --------------------------------------------------------------------------------------
Retail -- Specialty -- 1.3%
- --------------------------------------------------------------------------------------
CSK Auto, Inc.
$15,000,000 Term loan, maturing October 31, 2003 $ 15,000,000
Retailer of automotive parts and accessories
Griffith Consumers Company
5,559,874 Term loan, maturing December 31, 2000 5,559,874
10,001,068 Term loan, maturing December 31, 2002 10,001,068
7,717,437 Term loan, maturing December 31, 2003 7,717,437
Retail petroleum distributor
Petro Stopping Centers
6,555,556 Term loan, maturing December 31, 2003 6,555,556
Operator of full-service truck stops
Travelcenters of America, Inc.
7,975,000 Term loan, maturing March 27, 2005 7,975,000
Operator of truck stops
- --------------------------------------------------------------------------------------
$ 52,808,935
- --------------------------------------------------------------------------------------
Steel -- 0.2%
- --------------------------------------------------------------------------------------
UCAR Global Enterprises, Inc.
$ 8,000,000 Term loan, maturing December 31, 2002 $ 8,000,000
Processing materials for steel industry
- --------------------------------------------------------------------------------------
$ 8,000,000
- --------------------------------------------------------------------------------------
Telecommunications -- 1.0%
- --------------------------------------------------------------------------------------
Access Communications, Inc.
$10,000,000 Term loan, maturing December 31, 2004 $ 10,000,000
Provider of long distance and other
telecommunications services
Arch Communications Enterprises, Inc.
10,500,000 Term loan, maturing December 31, 2003 10,500,000
Paging service provider
Price Communications Wireless, Inc.
1,883,333 Revolving loan, maturing September 30, 2005 1,883,333
1,666,667 Term loan, maturing September 30, 2005 1,666,667
18,000,000 Term loan, maturing September 30, 2006 18,000,000
Cellular systems provider
- --------------------------------------------------------------------------------------
$ 42,050,000
- --------------------------------------------------------------------------------------
Telephone -- 0.2%
- --------------------------------------------------------------------------------------
NSC Communications Corporation
$ 4,563,045 Revolving loan, maturing April 1, 2003 $ 4,563,045
4,378,846 Term loan, maturing October 1, 2003 4,378,846
Independent payphone provider
- --------------------------------------------------------------------------------------
$ 8,941,891
- --------------------------------------------------------------------------------------
Textiles -- 1.8%
- --------------------------------------------------------------------------------------
CAF Holdings, Inc.
$ 4,694,118 Term loan, maturing June 30, 2002 $ 4,694,118
Manufactures and markets commercial floorcovering
Collins & Aikman Products Company
31,685,196 Term loan, maturing December 31, 2002 31,685,196
Automotive products, residential upholstery fabrics,
and wallcoverings
GFSI, Inc. (Gear for Sports)
13,930,000 Term loan, maturing March 31, 2004 13,930,000
Designs, manufactures and markets custom design
sportswear and activewear
Renfro Corporation
5,000,000 Term loan, maturing November 15, 2003 5,000,000
Manufactures socks
The William Carter Company
6,174,000 Term loan, maturing October 31, 2003 6,174,000
Manufacturer and distributor of children's apparel
Walls Industries, Inc.
5,042,552 Term loan, maturing February 28, 2005 5,042,552
6,861,703 Term loan, maturing February 28, 2006 6,861,703
Manufactures and markets workwear, hunting and
outdoor apparel and outerwear
- --------------------------------------------------------------------------------------
$ 73,387,569
- --------------------------------------------------------------------------------------
Toys -- 0.2%
- --------------------------------------------------------------------------------------
Hedstrom Corporation
$ 1,973,333 Term loan, maturing June 30, 2003 $ 1,973,333
7,224,107 Term loan, maturing June 30, 2005 7,224,107
Manufactures swingsets and other children's toys
- --------------------------------------------------------------------------------------
$ 9,197,440
- --------------------------------------------------------------------------------------
Transportation -- 0.8%
- --------------------------------------------------------------------------------------
Atlas Freighter Leasing, Inc.
$ 5,500,000 Term loan, maturing May 29, 2004 $ 5,500,000
Aircraft leasing
Evergreen International Aviation, Inc.
19,836,002 Term loan, maturing April 30, 2002 19,836,002
Air cargo carrier
Gemini Leasing, Inc.
7,500,000 Term loan, maturing December 31, 2002 7,500,000
Air cargo carrier
- --------------------------------------------------------------------------------------
$ 32,836,002
- --------------------------------------------------------------------------------------
Utilities -- 1.2%
- --------------------------------------------------------------------------------------
AES CEMIG Funding Corporation
$25,575,000 Term loan, maturing August 28, 1998 $ 25,575,000
Global power company
AESEBA Funding Corporation
20,925,000 Term loan, maturing August 28, 1998 20,925,000
Global power company
- --------------------------------------------------------------------------------------
$ 46,500,000
- --------------------------------------------------------------------------------------
Total Senior, Secured, Floating-Rate Interests
(identified cost, $3,657,069,972) $3,657,069,972
- --------------------------------------------------------------------------------------
Common Stocks -- 0.1%
Shares/Rights Security Value
- --------------------------------------------------------------------------------------
806,708 America's Favorite Chicken Company,
Common Stock* $ 2,675,850
608 Classic Cable Common Stock Warrants * 0
34,364 PSI Acquisition Corporation, Warrants * 0
- --------------------------------------------------------------------------------------
Total Common Stocks
(identified cost, $0) $ 2,675,850
- --------------------------------------------------------------------------------------
Short-Term Investments -- 6.4%
Principal Maturity
Amount Date Borrower Rate Amount
- --------------------------------------------------------------------------------------
$35,193,644 01/02/98 American General Finance Company 6.50% $ 35,193,644
46,891,532 01/02/98 American General Company 6.50% 46,891,532
41,244,016 01/09/98 American Express Credit Corporation 6.10% 41,244,016
85,876,014 01/02/98 Associate Corporation of N.A. 6.70% 85,876,014
49,990,764 01/02/98 CXC Incorporated 6.65% 49,990,764
- --------------------------------------------------------------------------------------
Total Short-Term Investments,
at amortized cost $ 259,195,970
- --------------------------------------------------------------------------------------
Total Investments -- 97.1%
(identified cost, $3,916,265,942) $3,918,941,792
- --------------------------------------------------------------------------------------
Other Assets, Less Liabilities -- 2.9% $ 116,130,133
- --------------------------------------------------------------------------------------
Total Net Assets -- 100% $4,035,071,925
- --------------------------------------------------------------------------------------
*Non-income producing security.
Note: The description of the principal business for each security set forth
above is unaudited.
</TABLE>
<PAGE>
Senior Debt Portfolio as of December 31, 1997
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
(Expressed in United States Dollars)
As of December 31, 1997
Assets
- -------------------------------------------------------------------------------
Investments, at value (Note 1A)
(identified cost, $3,916,265,942) $3,918,941,792
Cash 93,405,242
Receivable for investments sold 448,058
Interest receivable 25,786,574
Miscellaneous receivable 101,715
Prepaid expenses 979,673
Deferred organization expenses (Note 1D) 31,613
- -------------------------------------------------------------------------------
Total assets $4,039,694,667
- -------------------------------------------------------------------------------
Liabilities
- -------------------------------------------------------------------------------
Deferred facility fee income (Note 1B) $ 4,370,655
Payable to affiliate for Trustees' fees (Note 2) 7,463
Accrued expenses 244,624
- -------------------------------------------------------------------------------
Total liabilities $ 4,622,742
- -------------------------------------------------------------------------------
Net Assets applicable to investors' interest in Portfolio $4,035,071,925
- -------------------------------------------------------------------------------
Sources of Net Assets
- -------------------------------------------------------------------------------
Net proceeds from capital contributions and withdrawals $4,032,396,075
Net unrealized appreciation of investments
(computed on the basis of identified cost) 2,675,850
- -------------------------------------------------------------------------------
Total $4,035,071,925
- -------------------------------------------------------------------------------
Statement of Operations
(Expressed in United States Dollars)
For the Year Ended
December 31, 1997
Investment Income (Note 1B)
- -------------------------------------------------------------------------------
Interest income $ 283,456,988
Facility fees earned 4,774,292
- -------------------------------------------------------------------------------
Total income $ 288,231,280
- -------------------------------------------------------------------------------
Expenses
- -------------------------------------------------------------------------------
Investment adviser fee (Note 2) $ 31,751,900
Compensation of Trustees not members of the Investment Adviser's
organization (Note 2) 29,283
Custodian fee 1,008,778
Legal and accounting services 608,361
Amortization of organization expenses (Note 1D) 6,205
Interest expense (Note 4) 610,023
Miscellaneous 202,512
- -------------------------------------------------------------------------------
Total expenses $ 34,217,062
- -------------------------------------------------------------------------------
Net investment income $ 254,014,218
- -------------------------------------------------------------------------------
Realized and Unrealized
Gain (Loss) on Investments
- -------------------------------------------------------------------------------
Net realized gain (loss) --
Investment transactions (identified cost basis) $ (9,000,530)
- -------------------------------------------------------------------------------
Net realized loss on investments $ (9,000,530)
- -------------------------------------------------------------------------------
Change in unrealized appreciation (depreciation) --
Investments (identified cost basis) $ 8,549,067
- -------------------------------------------------------------------------------
Net change in unrealized appreciation (depreciation)
of investments $ 8,549,067
- -------------------------------------------------------------------------------
Net realized and unrealized loss on investments $ (451,463)
- -------------------------------------------------------------------------------
Net increase in net assets from operations $ 253,562,755
- -------------------------------------------------------------------------------
<PAGE>
Senior Debt Portfolio as of December 31, 1997
FINANCIAL STATEMENTS CONT'D
Statements of Changes in Net Assets
(Expressed in United States Dollars)
Increase (Decrease) Year Ended Year Ended
in Net Assets December 31, 1997 December 31, 1996
- --------------------------------------------------------------------------------
From operations --
Net investment income $ 254,014,218 $ 171,247,196
Net realized loss on investments (9,000,530) (2,509,974)
Net change in unrealized appreciation
(depreciation) of investments 8,549,067 (1,387,860)
- --------------------------------------------------------------------------------
Net increase in net assets from operations $ 253,562,755 $ 167,349,362
- --------------------------------------------------------------------------------
Capital transactions --
Contributions $1,646,867,281 $1,604,853,413
Withdrawals (875,432,567) (383,467,171)
- --------------------------------------------------------------------------------
Net increase in net assets from capital
transactions $ 771,434,714 $1,221,386,242
- --------------------------------------------------------------------------------
Net increase in net assets $1,024,997,469 $1,388,735,604
- --------------------------------------------------------------------------------
Net Assets
- --------------------------------------------------------------------------------
At beginning of year $3,010,074,456 $1,621,338,852
- --------------------------------------------------------------------------------
At end of year $4,035,071,925 $3,010,074,456
- --------------------------------------------------------------------------------
<PAGE>
Statement of Cash Flows
(Expressed in United States Dollars)
Year Ended
Increase (Decrease) in Cash December 31, 1997
- --------------------------------------------------------------------------------
Cash Flows From (Used For) Operating Activities --
Purchases of loan interests $(3,700,509,536)
Proceeds from sales and principal repayments 2,500,784,081
Interest received 275,103,446
Facility fees received 2,015,430
Interest paid (612,171)
Operating expenses paid (33,707,774)
Net decrease in short-term investments 170,130,743
- --------------------------------------------------------------------------------
Net cash used for operating activities $ (786,795,781)
- --------------------------------------------------------------------------------
Cash Flows From (For) Financing Activities --
Proceeds from capital contributions $ 1,646,867,281
Payments for capital withdrawals (875,432,567)
- --------------------------------------------------------------------------------
Net cash provided from financing activities $ 771,434,714
- --------------------------------------------------------------------------------
Net decrease in cash $ (15,361,067)
- --------------------------------------------------------------------------------
Cash at Beginning of Year $ 108,766,309
- --------------------------------------------------------------------------------
Cash at End of Year $ 93,405,242
- -------------------------------------------------------------------------------
Reconciliation of Net Increase in Net Assets
From Operations to Net Cash Used For
Operating Activities
- -------------------------------------------------------------------------------
Net increase in net assets from operations $ 253,562,755
Decrease in receivable for investments sold 388,141
Increase in interest receivable (8,354,627)
Decrease in miscellaneous receivable 1,085
Increase in prepaid expenses (55,524)
Decrease in deferred organization expense 6,205
Decrease in deferred facility fee income (4,768,902)
Decrease in payable to affiliate (420)
Decrease in accrued expenses (53,144)
Net increase in investments (1,027,521,350)
- -------------------------------------------------------------------------------
Net cash used for operating activities $ (786,795,781)
- -------------------------------------------------------------------------------
<PAGE>
Supplementary Data (Expressed in United States Dollars)
Year Ended December 31,
------------------------------------------
1997 1996 1995*
- --------------------------------------------------------------------------------
Ratios to average daily net assets
- --------------------------------------------------------------------------------
Operating expenses 0.94% 0.98% 1.01%+
Interest expense 0.02% 0.04% 0.13%+
Net investment income 7.12% 7.17% 7.95%+
Portfolio Turnover 81% 75% 39%
- ------------------------------------------------------------------------------
Net assets, end of period
(000s omitted) $4,035,072 $3,010,074 $1,621,339
- ------------------------------------------------------------------------------
+Annualized.
*For the period from the start of business, February 22, 1995 to
December 31, 1995.
<PAGE>
Senior Debt Portfolio as of December 31, 1997
NOTES TO FINANCIAL STATEMENTS
(Expressed in United States Dollars)
1 Significant Accounting Policies
- --------------------------------------------------------------------------------
Senior Debt Portfolio (the Portfolio) is registered under the Investment
Company Act of 1940 as a non-diversified closed-end investment company which
was organized as a trust under the laws of the State of New York on May 1,
1992. The Declaration of Trust permits the Trustees to issue interests in
the Portfolio. The following is a summary of significant accounting policies
of the Portfolio. The Policies are in conformity with accounting principles
generally accepted in the United States of America.
A Investment Valuation -- The Portfolio's investments in interests in loans
(Loan Interests) are valued at fair value by the Portfolio's investment
adviser, Boston Management and Research, under procedures established by the
Trustees as permitted by Section 2(a)(41) of the Investment Company Act of
1940. Such procedures include the consideration of relevant factors, data
and information relating to fair value, including (i) the characteristics of
and fundamental analytical data relating to the Loan Interest, including the
cost, size, current interest rate, period until next interest rate reset,
maturity and base lending rate of the Loan Interest, the terms and
conditions of the loan and any related agreements and the position of the
loan in the borrower's debt structure; (ii) the nature, adequacy and value
of the collateral, including the Portfolio's rights, remedies and interests
with respect to the collateral; (iii) the creditworthiness of the borrower,
based on evaluations of its financial condition, financial statements and
information about the borrower's business, cash flows, capital structure and
future prospects; (iv) information relating to the market for the Loan
Interest including price quotations for and trading in the Loan Interest and
interests in similar loans and the market environment and investor attitudes
towards the Loan Interest and interests in similar loans; (v) the reputation
and financial condition of the agent bank and any intermediate participant
in the loan; and (vi) general economic and market conditions affecting the
fair value of the Loan Interest. Other portfolio securities (other than
short-term obligations, but including listed issues) may be valued on the
basis of prices furnished by one or more pricing services which determine
prices for normal, institutional-size trading units of such securities using
market information, transactions for comparable securities and various
relationships between securities which are generally recognized by
institutional traders. In certain circumstances, portfolio securities will
be valued at the last sales price on the exchange that is the primary market
for such securities, or the last quoted bid price for those securities for
which the over-the-counter market is the primary market or for listed
securities in which there were no sales during the day. The value of
interest rate swaps will be determined in accordance with a discounted
present value formula and then confirmed by obtaining a bank quotation.
Short-term obligations which mature in sixty days or less are valued at
amortized cost, if their original term to maturity when acquired by the
Portfolio was 60 days or less or are valued at amortized cost using their
value on the 61st day prior to maturity, if their original term to maturity
when acquired by the Portfolio was more then 60 days, unless in each case
this is determined not to represent fair value. Repurchase agreements are
valued at cost plus accrued interest. Other portfolio securities for which
there are no quotations or valuations are valued at fair value as determined
in good faith by or on behalf of the Trustees.
B Income -- Interest income from Loan Interests is recorded on the accrual
basis at the then-current interest rate, while all other interest income is
determined on the basis of interest accrued, adjusted for amortization of
premium or discount when required for federal income tax purposes. Facility
fees received are recognized as income over the expected term of the loan.
C Income Taxes -- The Portfolio is treated as a partnership for federal tax
purposes. No provision is made by the Portfolio for federal or state taxes
on any taxable income of the Portfolio because each investor in the
Portfolio is ultimately responsible for the payment of any taxes. Since some
of the Portfolio's investors are regulated investment companies that invest
all or substantially all of their assets in the Portfolio, the Portfolio
normally must satisfy the applicable source of income and diversification
requirements (under the Internal Revenue Code) in order for its investors to
satisfy them. The Portfolio will allocate at least annually among its
investors each investor'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.
D Deferred Organization Expenses -- Costs incurred by the Portfolio in
connection with its organization are being amortized on the straight-line
basis over five years.
E Other -- Investment transactions are accounted for on a trade date basis.
F Expense Reduction -- Investors Bank & Trust Company (IBT) serves as
custodian of the Portfolio. Pursuant to the custodian agreement, IBT
receives a fee reduced by the credits which are determined based on the
average daily cash balances the Portfolio maintains with IBT. All
significant credit balances used to reduce the Portfolio's custodian fees
are reported as a reduction of expenses on the statement of operations.
G Use of Estimates -- The preparation of the financial statements in
conformity with accounting principles generally accepted in the United
States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expense during
the reporting period. Actual results could differ from those estimates.
2 Investment Adviser Fee and Other Transactions with Affiliates
- --------------------------------------------------------------------------------
An investment advisory fee is paid to Boston Management and Research (BMR)
as compensation for investment advisory services rendered to the Portfolio.
The fee is computed at a monthly rate of 19/240 of 1% (0.95% annually) of
the Portfolio's average daily gross assets up to and including $1 billion
and at reduced rates as daily gross assets exceed that level. For the year
ended December 31, 1997, the effective annual rate, based on average daily
gross assets, was 0.89% and amounted to $31,751,900. Except as to Trustees
of the Portfolio who are not members of BMR's organization, officers and
Trustees receive remuneration for their services to the Portfolio out of
such investment adviser fee.
Certain of the officers and Trustees of the Portfolio are officers and
directors/trustees of BMR. Trustees of the Portfolio that are not affiliated
with the Investment Adviser may elect to defer receipt of all or a
percentage of their annual fees in accordance with the terms of the Trustees
Deferred Compensation Plan. For the year ended December 31, 1997, no
significant amounts have been deferred.
3 Investments
- --------------------------------------------------------------------------------
The Portfolio invests primarily in Loan Interests. The ability of the
issuers of the Loan Interests to meet their obligations may be affected by
economic developments in a specific industry. The cost of purchases and the
proceeds from principal repayments and sales of Loan Interests and other
securities for the year ended December 31, 1997 aggregated $3,700,509,536
and $2,502,405,980, respectively.
4 Short-Term Debt and Credit Agreements
- --------------------------------------------------------------------------------
The Portfolio has entered into a revolving credit agreement that will allow
the Portfolio to borrow an additional $250 million to support the issuance
of commercial paper and to permit the Portfolio to invest in accordance with
its investment practices. Interest is charged under the revolving credit
agreement at the bank's base rate or at an amount above either the bank's
adjusted certificate of deposit rate or federal funds effective rate.
Interest expense includes a commitment fee of approximately $452,100 which
is computed at the annual rate of 0.20% of the revolving credit agreement.
There were no significant borrowings under this agreement during the year
ended December 31, 1997. As of December 31, 1997, the Portfolio had no
commercial paper outstanding.
5 Federal Income Tax Basis of Investment Securities
- --------------------------------------------------------------------------------
The cost and unrealized appreciation/depreciation in the value of the
investments owned at December 31, 1997, as computed on a federal income tax
basis, were as follows:
Aggregate cost $3,916,265,942
--------------------------------------------------------------------
Gross unrealized appreciation $ 2,675,850
Gross unrealized depreciation --
--------------------------------------------------------------------
Net unrealized appreciation $ 2,675,850
--------------------------------------------------------------------
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Trustees and Investors
of Senior Debt Portfolio
- --------------------------------------------------------------------------------
We have audited the accompanying statement of assets and liabilities,
including the portfolio of investments, of Senior Debt Portfolio (the
Portfolio) as of December 31, 1997, the related statements of operations and
cash flows for the year then ended, the statements of changes in net assets
for the two years then ended and the supplementary data for each of the two
years then ended and for the period from the start of business, February 22,
1995, to December 31, 1995 (all expressed in United States dollars). These
financial statements and supplementary data are the responsibility of the
Portfolio's management. Our responsibility is to express an opinion on these
financial statements and supplementary data based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements and supplementary data are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. Our procedures included
confirmation of securities and Loan Interests owned at December 31, 1997 by
correspondence with the custodian and selling or agent banks; where replies
were not received from selling or agent banks, we performed other auditing
procedures. 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 audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements and supplementary data present
fairly, in all material respects, the financial position of Senior Debt
Portfolio as of December 31, 1997, the results of its operations and its cash
flows, the changes in net assets and its supplemental data for the respective
stated periods, in conformity with accounting principles generally accepted in
the United States of America.
As discussed in Note 1A, the financial statements include Loan Interests and
certain other securities held by the Portfolio valued at $3,657,069,972 (90.6%
of net assets of the Portfolio), which values are fair values determined by
the Portfolio's investment adviser in the absence of actual market values.
Determination of fair value involves subjective judgment, as the actual market
value of a particular Loan Interest or security can be established only by
negotiations between the parties in a sale transaction. We have reviewed the
procedures established by the Trustees and used by the Portfolio's investment
adviser in determining the fair value of such Loan Interests and securities
and have inspected underlying documentation, and in the circumstances, we
believe that the procedures are reasonable and the documentation appropriate.
DELOITTE & TOUCHE
Grand Cayman, Cayman Islands
British West Indies
February 13, 1998
<PAGE>
[logo] Investing
for the
EATON VANCE 21st
- ------------ Century
MUTUAL FUNDS
- --------------------------------------------------------------------------------
Eaton Vance Advisers Senior
Floating-Rate Fund
STATEMENT OF ADDITIONAL INFORMATION
, 1998
- --------------------------------------------------------------------------------
Investment Adviser of Senior Debt Portfolio
Boston Management and Research, 24 Federal Street, Boston, MA 02110
Administrator of Eaton Vance Advisers Senior Floating-Rate Fund
Eaton Vance Management, 24 Federal Street, Boston, MA 02110
Principal Underwriter
Eaton Vance Distributors, Inc., 24 Federal Street, Boston, MA 02110
(800) 225-6265
Custodian
Investors Bank & Trust Company, 200 Clarendon Street, Boston, MA 02116
Transfer Agent
First Data Investor Services Group, P.O. Box 5123, Westborough, MA 01581-5123
(800) 262-1122
Independent Accountants
Deloitte & Touche LLP, 125 Summer Street, Boston, MA 02110
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(1) FINANCIAL STATEMENTS:
INCLUDED IN PART A:
Not Applicable
INCLUDED IN PART B:
Financial Statements for EATON VANCE ADVISERS SENIOR FLOATING-RATE
FUND:
Statement of Assets and Liabilities as of February 20, 1998
Independent Auditors' Report
Financial Statements for SENIOR DEBT PORTFOLIO:
Portfolio of Investments as of December 31, 1997
Statement of Assets and Liabilities as of December 31, 1997
Statement of Operations for the year ended December 31, 1997
Statements of Changes in Net Assets for the two years ended
December 31, 1997
Statement of Cash Flows for the year ended December 31, 1997
Supplementary Data for the years ended December 31, 1997 and
December 31, 1996
Notes to Financial Statements
Independent Auditors' Report
(2) EXHIBITS:
(a) Agreement and Declaration of Trust dated February 19, 1998
filed herewith.
(b) By-Laws filed herewith.
(c) Not applicable
(d) Not applicable
(e) Not applicable
(f) Not applicable
(g) Not applicable
(h) (a) Distribution Agreement dated February 20, 1998 filed
herewith.
(b) Selling Group Agreement between Eaton Vance Distributors,
Inc. and Authorized Dealers filed as Exhibit (6)(b) to
Post-Effective Amendment No. 61 to the Registration
Statement of Eaton Vance Growth Trust (File Nos. 2-22019
and 811-1241) and incorporated herein by reference.
(c) Schedule of Dealer Discounts and Sales Charges filed as
Exhibit (6)(c) to Post- Effective Amendment No. 59 to the
Registration Statement of Eaton Vance Growth Trust (File
Nos. 2-22019 and 811-1241) and incorporated herein by
reference.
(i) The Securities and Exchange Commission has granted the
Registrant an exemptive order that permits the Registrant to
enter into deferred compensation arrangements with its
independent Trustees. See in the Matter of Capital Exchange
Fund, Inc., Release No. IC-20671 (November 1, 1994).
(j) Custodian Agreement dated February 20, 1998 filed herewith.
(k (a) Administration Agreement dated February 20, 1998 filed
herewith.
(b) Transfer Agency Agreement as of January 1, 1998 filed
herewith.
(l) Opinion and Consent of Counsel dated February 25, 1998 filed
herewith.
(m) Not applicable.
(n) (a) Consent of Independent Auditors for Eaton Vance Advisers
Senior Floating-Rate Fund filed herewith.
(n) (b) Consent of Independent Auditors for Senior Debt Portfolio
filed herewith.
(o) Not applicable
(p) Letter Agreement with Eaton Vance Management dated February
20, 1998 filed herewith.
(q) Not applicable
(r) Power of Attorney for Eaton Vance Advisers Senior
Floating-Rate Fund dated February 20, 1998 filed herewith.
(s) Power of Attorney for Senior Debt Portfolio dated February 20,
1998 filed herewith.
ITEM 25. MARKETING ARRANGEMENTS
Not Applicable.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the approximate expenses incurred in
connection with the offerings of Registrant:
Registration fees ............................... $ 59,000
National Association of Securities
Dealers, Inc. Fees ........................... $ 20,500
Printing (other than stock certificates) ........ $ 12,500
Engraving and printing stock certificates ....... $ 1,000
Fees and expenses of qualification under state
securities laws(excluding fees of counsel) .... $ 50,000
Accounting fees and expenses .................... $ 5,000
Legal fees and expenses ......................... $ 2,000
--------
Total ........................................... $150,000
========
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
None.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
TITLE OF CLASS NUMBER OF RECORD HOLDERS
Shares of beneficial interest 1
as of
February 20, 1998
ITEM 29. INDEMNIFICATION
The Registrant's By-Laws filed herewith contain provisions limiting the
liability, and providing for indemnification, of the Trustees and officers
under certain circumstances.
Registrant's Trustees and officers are insured under a standard investment
company errors and omissions insurance policy covering loss incurred by reason
of negligent errors and omissions committed in their capacities as such.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Reference is made to the information set forth under the captions
"Management of the Fund and the Portfolio" in the Prospectus and "Investment
Advisory and Other Services" in the Statement of Additional Information
constituting Parts A and B, respectively, of this Registration Statement,
which summary is incorporated herein by reference.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the Investment Company Act of 1940 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, and its transfer agent, First Data Investor Services Group,
4400 Computer Drive, Westborough, MA 01581-5120, with the exception of certain
corporate documents and portfolio trading documents which are in the
possession and custody of Eaton Vance Management, 24 Federal Street, Boston,
MA 02110. Certain corporate documents of Senior Debt Portfolio (the
"Portfolio") are also maintained by IBT Trust Company (Cayman), Ltd., The Bank
of Nova Scotia Building, P.O. Box 501, George Town, Grand Cayman, Cayman
Islands, British West Indies, and certain investor account, Portfolio and the
Registrant's accounting records are held by IBT Fund Services (Canada) Inc., 1
First Canadian Place, King Street West, Suite 2800, P.O. Box 231, Toronto,
Ontario, Canada M5X 1C8. 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 Eaton Vance Management and
Boston Management and Research.
ITEM 32. MANAGEMENT SERVICES
None.
ITEM 33. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the continuous offering of the shares; and.
(4) To send by first class mail or other means designed to ensure
equally prompt delivery, within two business days of receipt of a written
or oral request, any Statement of Additional Information.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Boston and Commonwealth of
Massachusetts, on the 24th day of February, 1998.
EATON VANCE ADVISERS SENIOR
FLOATING-RATE FUND
By /s/ JAMES B. HAWKES
----------------------------
JAMES B. HAWKES, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Trustee, President and
/s/ JAMES B. HAWKES Principal Executive Officer February 24, 1998
- ------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR Officer February 24, 1998
- ------------------------
JAMES L. O'CONNOR
DONALD R. DWIGHT* Trustee February 24, 1998
- ------------------------
DONALD R. DWIGHT
SAMUEL L. HAYES, III Trustee February 24, 1998
- ------------------------
SAMUEL L. HAYES, III
NORTON H. REAMER* Trustee February 24, 1998
- ------------------------
NORTON H. REAMER
JOHN L. THORNDIKE* Trustee February 24, 1998
- ------------------------
JOHN L. THORNDIKE
JACK L. TREYNOR* Trustee February 24, 1998
- ------------------------
JACK L. TREYNOR
*By: /s/ JAMES B. HAWKES
- ------------------------
JAMES B. HAWKES
Attorney-in-fact
<PAGE>
SIGNATURES
Senior Debt Portfolio has duly caused the Registration Statement on Form
N-2 of Eaton Vance Advisers Senior Floating-Rate Fund to be signed on its
behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda on
the 20th day of February, 1998.
SENIOR DEBT PORTFOLIO
By /s/ JAMES B. HAWKES
---------------------------
JAMES B. HAWKES, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Trustee, President and
/s/ JAMES B. HAWKES Principal Executive Officer February 20, 1998
- -------------------------
JAMES B. HAWKES
Treasurer and Principal
Financial and Accounting
/s/ JAMES L. O'CONNOR* Officer February 20, 1998
- -------------------------
JAMES L. O'CONNOR
/s/ DONALD R. DWIGHT Trustee February 20, 1998
- -------------------------
DONALD R. DWIGHT
/s/ M. DOZIER GARDNER Trustee February 20, 1998
- -------------------------
M. DOZIER GARDNER
/s/ SAMUEL L. HAYES, III Trustee February 20, 1998
- -------------------------
SAMUEL L. HAYES, III
/s/ NORTON H. REAMER Trustee February 20, 1998
- -------------------------
NORTON H. REAMER
/s/ JOHN L. THORNDIKE Trustee February 20, 1998
- -------------------------
JOHN L. THORNDIKE
/s/ JACK L. TREYNOR Trustee February 20, 1998
- -------------------------
JACK L. TREYNOR
By: /s/ JAMES B. HAWKES
- -------------------------
JAMES B. HAWKES
As attorney-in-fact
*Signed in Boston, Massachusetts
<PAGE>
EXHIBIT INDEX
EXHIBITS DESCRIPTION PAGE
- -------- -----------
(a) Agreement and Declaration of Trust dated February 19, 1998
(b) By-Laws
(h)(a) Distribution Agreement dated February 20, 1998
(j) Custodian Agreement dated February 20, 1998
(k)(a) Administration Agreement dated February 20, 1998
(k)(b) Transfer Agency Agreement as of January 1, 1998
(l) Opinion and Consent of Counsel dated February 25, 1998
(n)(a) Consent of Independent Auditors for Eaton Vance Advisers
Senior Floating-Rate Fund
(n)(b) Consent of Independent Auditors for Senior Debt Portfolio
(p) Letter Agreement with Eaton Vance Management dated
February 20, 1998
(r) Power of Attorney for Eaton Vance Advisers Senior
Floating-Rate Fund dated February 20, 1998
(s) Power of Attorney for Senior Debt Portfolio dated
February 20, 1998
<PAGE>
EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
-------------------
AGREEMENT AND DECLARATION OF TRUST
Dated February 19, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I - NAME AND DEFINITIONS............................................ 4
Section 1.1. Name............................................... 4
Section 1.2. Definitions........................................ 4
ARTICLE II - TRUSTEES....................................................... 6
Section 2.1. Management of the Trust............................ 6
Section 2.2. General Powers..................................... 6
Section 2.3. Investments........................................ 6
Section 2.4. Legal Title........................................ 8
Section 2.5. By-Laws............................................. 9
Section 2.6. Distribution and Repurchase of Shares.............. 9
Section 2.7. Delegation......................................... 9
Section 2.8. Collection and Payment............................. 9
Section 2.9. Expenses........................................... 9
Section 2.10. Committees......................................... 10
Section 2.11. Miscellaneous Powers............................... 10
Section 2.12. Litigation......................................... 10
ARTICLE III - CONTRACTS..................................................... 11
Section 3.1. Principal Underwriter.............................. 11
Section 3.2. Investment Adviser................................. 11
Section 3.3. Administrator...................................... 11
Section 3.4. Other Service Providers............................ 11
Section 3.5. Transfer Agents.................................... 11
Section 3.6. Custodian.......................................... 12
Section 3.7. Affiliations....................................... 12
ARTICLE IV - LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS.. 12
Section 4.1. No Personal Liability of Shareholders, Trustees,
Officers and Employees...........................12
Section 4.2. Trustee's Good Faith Action; Advice to Others;
No Bond or Surety............................... 12
Section 4.3. Indemnification.................................... 13
Section 4.4. No Duty of Investigation........................... 13
Section 4.5. Reliance on Records and Experts.................... 13
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ARTICLE V - SHARES OF BENEFICIAL INTEREST................................... 14
Section 5.1. Shares of Beneficial Interest...................... 14
Section 5.2. Voting Powers...................................... 14
Section 5.3. Rights of Shareholders............................. 14
Section 5.4. Trust Only......................................... 15
Section 5.5. Issuance of Shares................................. 15
ARTICLE VI - REDEMPTIONS AND REPURCHASES.................................... 16
Section 6.1. Redemptions and Repurchases of Shares.............. 16
Section 6.2. Manner of Payment.................................. 16
Section 6.3. Involuntary Redemption............................. 16
ARTICLE VII - DETERMINATION OF NET ASSET VALUE, NET INCOME
AND DISTRIBUTIONS.....------............................... 16
Section 7.1. Net Asset Value.................................... 16
Section 7.2. Dividends and Distributions........................ 17
Section 7.3. Power to Modify Foregoing Procedures............... 18
ARTICLE VIII - DURATION; TERMINATION OF TRUST OR A CLASS OR SERIES;
MERGERS; AMENDMENTS....................................... 18
Section 8.1. Duration........................................... 18
Section 8.2. Merger or Termination of the Trust or a
Series or a Class............................... 18
Section 8.3. Amendments......................................... 19
Section 8.4. Certain Transactions............................... 19
Section 8.5. Conversion......................................... 21
ARTICLE IX - MISCELLANEOUS.................................................. 21
Section 9.1. Use of the Words "Eaton Vance"..................... 21
Section 9.2. Notices............................................ 21
Section 9.3. Filing of Copies, References, Headings and
Counterparts.................................... 22
Section 9.4. Applicable Law..................................... 22
Section 9.5. Provisions in Conflict with Law or Regulations..... 22
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AGREEMENT AND DECLARATION OF TRUST, made February 19, 1998 by the Trustees
hereunder and by the holders of beneficial interest to be issued hereunder as
hereinafter provided and
WITNESSETH:
WHEREAS, the Trust has been formed to carry on the business of an
investment company; and
WHEREAS, the Trustees have agreed to manage all property coming into their
hands as trustees of a Massachusetts voluntary association with transferable
shares in accordance with the provisions hereinafter set forth;
NOW, THEREFORE, the Trustees declare that all money and property
contributed to the trust established hereunder shall be held and managed under
this Agreement and Declaration of Trust for the benefit of the holders, from
time to time, of the shares of beneficial interest to be issued hereunder and
subject to the provisions set forth below.
ARTICLE I
NAME AND DEFINITIONS
SECTION 1.1. NAME. The name of the trust created hereby is Eaton Vance
Advisers Senior Floating-Rate Fund.
SECTION 1.2. DEFINITIONS. Wherever they are used herein, the following
terms have the following respective meanings:
(a) "Administrator" means the party, other than the Trust, to a contract
described in Section 3.3 hereof.
(b) "By-Laws" means the By-Laws referred to in Section 2.5 hereof, as from
time to time amended.
(c) "Class" means any class of Shares designated by the Trustees as such
following any division of Shares of the Trust into two or more Classes as
provided in Section 5.1 hereof.
(d) The term "Commission" has the meaning given the term in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time to
time.
(g) "His" shall include the feminine and neuter, as well as the masculine,
genders.
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(h) The term "Interested Person" has the meaning specified in the 1940 Act
subject, however, to such exceptions and exemptions as may be granted by the
Commission in any rule, regulation or order.
(i) "Investment Adviser" means the party, other than the Trust, to an
agreement described in Section 3.2 hereof.
(j) The "1940 Act" means the Investment Company Act of 1940 and the Rules
and Regulations thereunder, as amended from time to time.
(k) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, firms, joint ventures and other entities, whether or not
legal entities, as well as governments, instrumentalities, and agencies and
political subdivisions thereof, and quasi-governmental agencies and
instrumentalities.
(l) "Principal Underwriter" means a party, other than the Trust, to a
contract described in Section 3.1 hereof.
(m) "Prospectus" means the Prospectus and Statement of Additional
Information, if any, included in the Registration Statement of the Trust under
the Securities Act of 1933 as such Prospectus and Statement of Additional
Information, if any, may be amended or supplemented and filed with the
Commission from time to time.
(n) "Series" means any series of Shares designated by the Trustees as such
following the division of Shares of any Class into two or more Series as
provided in Section 5.1 hereof.
(o) "Shareholder" means a record owner of Outstanding Shares.
(p) "Shares" means the equal proportionate transferable units of interest
into which the beneficial interest in the Trust shall be divided from time to
time, or, if more than one Class or Series is authorized by the Trustees, the
equal proportionate transferable units into which each Class or Series shall be
divided from time to time. "Outstanding Shares" means those Shares shown from
time to time on the books of the Trust or its Transfer Agent as then issued and
outstanding.
(q) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders, the
number of Shares credited to each account, and the like.
(r) "Trust" means the Trust named in Section 1.1.
(s) The "Trustees" means the persons who have signed this Declaration, so
long as they shall continue in office in accordance with the terms hereof, and
all other persons who now serve or may from time to time be duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof and the By-Laws of the Trust, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in his capacity or their
capacities as trustees hereunder.
(t) "Trust Property" means any and all property, real or personal, tangible
or intangible, which is owned or held by or for the account of the Trust or the
Trustees, including any and all assets of or allocated to any Class or Series,
as the context may require.
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(u) Except as such term may be otherwise defined by the Trustees in
connection with any meeting or other action of Shareholders or in conjunction
with the establishment of any Class or Series, the term "vote" when used in
connection with an action of Shareholders shall include a vote taken at a
meeting of Shareholders or the consent or consents of Shareholders taken without
such a meeting.
ARTICLE II
TRUSTEES
SECTION 2.1. MANAGEMENT OF THE TRUST. The business and affairs of the Trust
shall be managed by the Trustees and they shall have all powers and authority
necessary, appropriate or desirable to perform that function. The number, term
of office, manner of election, resignation, filling of vacancies and procedures
with respect to meetings and actions of the Trustees shall be as prescribed in
the By-Laws of the Trust.
SECTION 2.2. GENERAL POWERS. The Trustees in all instances shall act as
principals for and on behalf of the Trust and their acts shall bind the Trust.
The business and affairs of the Trust shall be managed by the Trustees and they
shall have full power and authority to do any and all acts and to make and
execute any and all contracts and instruments that they may consider necessary,
appropriate or desirable in connection with the management of the Trust. The
Trustees shall not be bound or limited in any way by present or future laws,
practices or customs in regard to trust investments or to other investments
which may be made by fiduciaries, but shall have full authority and power to
make any and all investments which they, in their uncontrolled discretion, shall
deem proper to promote, implement or accomplish the various objectives and
interests of the Trust and of its Classes and Series. The Trustees shall have
full power and authority to adopt such accounting and tax accounting practices
as they consider appropriate for the Trust and for any Class or Series. 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 business in their own right, and with such
full powers of delegation as the Trustees may exercise from time to time. 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 both within and
without The Commonwealth of Massachusetts, 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, and
instrumentalities of the United States of America and of foreign governments,
and to do all such other things as they deem necessary, appropriate or desirable
in order to promote or implement the interests of the Trust or of any Class or
Series although such things are not herein specifically mentioned. Any
determination as to what is in the interests of the Trust or of any Class or
Series made by the Trustees in good faith shall be conclusive and binding upon
all Shareholders. In construing the provisions of this Declaration, the
presumption shall be in favor of a grant of plenary power and authority to the
Trustees.
The enumeration of any specific power in this Declaration shall not be
construed as limiting the aforesaid general and plenary powers.
SECTION 2.3. INVESTMENTS. The Trustees shall have full power and authority:
(a) To operate as and carry on the business of an investment company,
and exercise all the powers necessary and appropriate to the conduct of
such operations.
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(b) To acquire or buy, and invest Trust Property in, own, hold for
investment or otherwise, and to sell or otherwise dispose of, all types and
kinds of securities and investments of any kind including, but not limited
to, stocks, profit-sharing interests or participations and all other
contracts for or evidences of equity interests, bonds, debentures, warrants
and rights to purchase securities, and interests in loans, certificates of
beneficial interest, bills, notes and all other contracts for or evidences
of indebtedness, money market instruments including bank certificates of
deposit, finance paper, commercial paper, bankers' acceptances and other
obligations, and all other negotiable and non-negotiable securities and
instruments, however named or described, issued by corporations, trusts,
associations or any other Persons, domestic or foreign, or issued or
guaranteed by the United States of America or any agency or instrumentality
thereof, by the government of any foreign country, by any State, territory
or possession of the United States, by any political subdivision or agency
or instrumentality of any state or foreign country, or by any other
government or other governmental or quasi-governmental agency or
instrumentality, domestic or foreign; to acquire and dispose of interests
in domestic or foreign loans made by banks and other financial
institutions; to deposit any assets of the Trust in any bank, trust company
or banking institution or retain any such assets in domestic or foreign
cash or currency; to purchase and sell gold and silver bullion, precious or
strategic metals, and coins and currency of all countries; to engage in
"when issued" and delayed delivery transactions; to enter into repurchase
agreements, reverse repurchase agreements and firm commitment agreements;
to employ all types and kinds of hedging techniques and investment
management strategies; and to change the investments of the Trust and of
each Class or Series.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell,
to sell or otherwise dispose of, to lend and to pledge any Trust Property
or any of the foregoing securities, instruments or investments; to purchase
and sell options on securities, currency, precious metals and other
commodities, indices, futures contracts and other financial instruments and
assets and enter into closing and other transactions in connection
therewith; to enter into all types of commodities contracts, including
without limitation the purchase and sale of futures contracts on
securities, currency, precious metals and other commodities, indices and
other financial instruments and assets; to enter into forward foreign
currency exchange contracts and other foreign exchange and currency
transactions of all types and kinds; to enter into interest rate, currency
and other swap transactions; and to engage in all types and kinds of
hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and other assets included in the Trust Property,
including without limitation the right to vote thereon and otherwise act
with respect thereto; and to do all acts and things for the preservation,
protection, improvement and enhancement in value of all such securities and
assets.
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, lease, develop and dispose of (by sale or otherwise) any type or
kind of property, real or personal, including domestic or foreign currency,
and any right or interest therein.
(f) To borrow money and in this connection issue notes, commercial
paper or other evidence of indebtedness; to secure borrowings by
mortgaging, pledging or otherwise subjecting as security all or any part of
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the Trust Property; to endorse, guarantee, or undertake the performance of
any obligation or engagement of any other Person; to lend all or any part
of the Trust Property to other Persons; and to issue general unsecured or
other obligations of the Trust, and enter into indentures or agreements
relating thereto.
(g) To aid, support or assist by further investment or other action
any Person, any obligation of or interest in which is included in the Trust
Property or in the affairs of which the Trust or any Class or Series has
any direct or indirect interest; to do all acts and things designed to
protect, preserve, improve or enhance the value of such obligation or
interest; and to guarantee or become surety on any or all of the contracts,
securities and other obligations of any such Person.
(h) To join other security holders in acting through a committee,
depositary, voting trustee or otherwise, and in that connection to deposit
any security with, or transfer any security to, any such committee,
depositary or trustee, and to delegate to them such power and authority
with relation to any security (whether or not so deposited or transferred)
as the Trustees shall deem proper, and to agree to pay, and to pay, such
portion of the expenses and compensation of such committee, depositary or
trustee as the Trustees shall deem proper.
(i) To carry on any other business in connection with or incidental to
any of the foregoing powers referred to in this Declaration, to do
everything necessary, appropriate or desirable for the accomplishment of
any purpose or the attainment of any object or the furtherance of any power
referred to in this Declaration, either alone or in association with
others, and to do every other act or thing incidental or appurtenant to or
arising out of or connected with such business or purposes, objects or
powers.
(j) To the extent necessary or appropriate to give effect to the
preferences, special or relative rights and privileges of any Class or
Series, to allocate assets, liabilities, income and expenses of the Trust
to particular Classes or Series or to apportion the same among two or more
Classes or Series.
The foregoing clauses shall be construed both as objects and powers, and
shall not be held to limit or restrict in any manner the general and plenary
powers of the Trustees.
Notwithstanding any other provision herein, the Trustees shall have full
power in their discretion, without any requirement of approval by Shareholders,
to invest part or all of the Trust Property (or part or all of the assets of any
Class or Series), or to dispose of part or all of the Trust Property (or part or
all of the assets of any Class or Series) and invest the proceeds of such
disposition, in securities issued by one or more other investment companies
registered under the 1940 Act. Any such other investment company may (but need
not) be a trust (formed under the laws of the State of New York or of any other
state) which is classified as a partnership for federal income tax purposes.
SECTION 2.4. LEGAL TITLE. Legal title to all the Trust Property shall be
vested in the Trustees who from time to time shall be in office. The Trustees
may hold any security or other Trust Property in a form not indicating any
trust, whether in bearer, unregistered or other negotiable form, and may cause
legal title to any security or other 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 any Class or
Series, or in the name of a custodian, subcustodian, agent, securities
depository, clearing agency, system for the central handling of securities or
other book-entry system, or in the name of a nominee or nominees of the Trust or
a Class or Series, or in the name of a nominee or nominees of a custodian,
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subcustodian, agent, securities depository, clearing agent, system for the
central handling of securities or other book-entry system, or in the name of any
other Person as nominee. The right, title and interest of the Trustees in the
Trust Property shall vest automatically in each Person who may hereafter become
a Trustee. Upon the termination of the term of office, resignation, removal or
death of a Trustee he shall automatically cease to have any right, title or
interest in any of the Trust Property, and the right, title and interest of such
Trustee in the Trust Property shall vest automatically in the remaining
Trustees.
SECTION 2.5. BY-LAWS. The Trustees shall have full power and authority to
adopt By-Laws providing for the conduct of the business of the Trust and
containing such other provisions as they deem necessary, appropriate or
desirable, and, subject to the voting powers of one or more Classes or Series,
to amend and repeal such By-Laws. Unless the By-Laws specifically require that
Shareholders authorize or approve the amendment or repeal of a particular
provision of the By-Laws, any provision of the By-Laws may be amended or
repealed by the Trustees without Shareholder authorization or approval.
SECTION 2.6. DISTRIBUTION AND REPURCHASE OF SHARES. The Trustees shall have
full power and authority to issue, sell, repurchase, redeem, retire, cancel,
acquire, hold, resell, reissue, dispose of, transfer, and otherwise deal in
Shares. Shares may be sold for cash or property or other consideration whenever
and in such amounts and manner as the Trustees deem desirable. The Trustees
shall have full power to provide for the distribution of Shares either through
one or more principal underwriters or by the Trust itself, or both.
SECTION 2.7. DELEGATION. The Trustees shall have full power and authority
to delegate from time to time to such of their number or to officers, employees
or agents of the Trust or to other Persons the doing of such things and
execution of such agreements or other instruments either in the name of the
Trust or any Class or Series of the Trust or the names of the Trustees or
otherwise as the Trustees may deem desirable or expedient.
SECTION 2.8. COLLECTION AND PAYMENT. The Trustees shall have full power and
authority to collect all property due to the Trust; to pay all claims, including
taxes, against the Trust or Trust Property; to prosecute, defend, compromise,
settle or abandon any claims relating to the Trust or Trust Property; to
foreclose any security interest securing any obligations, by virtue of which any
property is owed to the Trust; and to enter into releases, agreements and other
instruments.
SECTION 2.9. EXPENSES. The Trustees shall have full power and authority to
incur on behalf of the Trust or any Class or Series and pay any costs or
expenses which the Trustees deem necessary, appropriate, desirable or incidental
to carry out, implement or enhance the business or operations of the Trust or
any Class or Series thereof, and to pay compensation from the funds of the Trust
to themselves as Trustees. The Trustees shall determine the compensation of all
officers, employees and Trustees of the Trust. The Trustees shall have full
power and authority to cause the Trust to charge all or any part of any cost,
expense or expenditure (including without limitation any expense of selling or
distributing Shares) or tax against the principal or capital of the Trust or any
Class or Series, and to credit all or any part of the profit, income or receipt
to the principal or capital of the Trust or any Class or Series.
SECTION 2.10. COMMITTEES. The Trustees may appoint from their own number,
and terminate, any one or more committees consisting of two or more Trustees,
including an executive committee which may, when the Trustees are not in
session, exercise some or all of the power and authority of the Trustees as the
Trustees may determine.
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SECTION 2.11. MISCELLANEOUS POWERS. The Trustees shall have full power and
authority to: (a) distribute to Shareholders all or any part of the earnings or
profits, surplus (including paid-in surplus), capital (including paid-in
capital) or assets of the Trust or of any Class or Series, the amount of such
distributions and the manner of payment thereof to be solely at the discretion
of the Trustees; (b) employ, engage or contract with such Persons as the
Trustees may deem desirable for the transaction of the business or operations of
the Trust or any Class or Series thereof; (c) enter into or cause the Trust or
any Class or Series thereof to enter into joint ventures, partnerships (whether
as general partner, limited partner or otherwise) and any other combinations or
associations; (d) purchase and pay for entirely out of Trust property such
insurance as they may deem necessary or appropriate for the conduct of the
business, including, without limitation, insurance policies insuring the assets
of the Trust and payment of distributions and principal on its portfolio
investments, and insurance policies insuring the Shareholders, Trustees,
officers, employees, agents, investment advisers or managers, principal
underwriters, or independent contractors of the Trust individually against all
claims and liabilities of every nature arising by reason of holding, being or
having held any such office or position, or by reason of any action alleged to
have been taken or omitted by any such person as Shareholder, Trustee, officer,
employee, agent, investment adviser or manager, principal underwriter, or
independent contractor, including any action taken or omitted that may be
determined to constitute negligence, whether or not the Trust would have the
power to indemnify such person against such liability; (e) establish pension,
profit-sharing, share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (f)
indemnify or reimburse any Person with whom the Trust or any Class or Series
thereof has dealings, including without limitation the Investment Adviser,
Administrator, Principal Underwriter, Transfer Agent, financial service firms
and other agents, to such extent as the Trustees shall determine; (g) guarantee
the indebtedness or contractual obligations of other Persons; (h) determine and
change the fiscal year of the Trust and the methods by which its books, accounts
and records shall be kept; and (i) adopt a seal for the Trust, but the absence
of such seal shall not impair the validity of any instrument executed on behalf
of the Trust.
SECTION 2.12. 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 or any Class or Series thereof 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 Shareholder in his own name or in the name of the Trust or any Class
or Series thereof, whether or not the Trust or any Class or Series thereof 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 or any Class or
Series thereof.
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ARTICLE III
CONTRACTS
SECTION 3.1. PRINCIPAL UNDERWRITER. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more contracts
providing for the sale of the Shares. Pursuant to any such contract the Trust
may either agree to sell the Shares to the other party to the contract or
appoint such other party its sales agent for such Shares. In either case, any
such contract shall be on such terms and conditions as the Trustees may in their
discretion determine; and any such contract may also provide for the sale of
Shares by such other party as principal or as agent of the Trust.
SECTION 3.2. INVESTMENT ADVISER. The Trustees may, subject to any approvals
by Shareholders required by applicable law, in their discretion from time to
time authorize the Trust to enter into one or more investment advisory
agreements whereby the other party or parties to any such agreements shall
undertake to furnish the Trust investment advisory and research facilities and
services and such other facilities and services, if any, as the Trustees shall
consider desirable and all upon such terms and conditions as the Trustees may in
their discretion determine. Notwithstanding any provisions of this Declaration,
the Trustees may authorize the Investment Adviser, in its discretion and without
any prior consultation with the Trust, to buy, sell, lend and otherwise trade
and deal in any and all securities, commodity contracts and other investments
and assets of the Trust and to engage in and employ all types of transactions
and strategies in connection therewith. Any such action taken pursuant to such
agreement shall be deemed to have been authorized by all of the Trustees.
The Trustees may also authorize the Trust to employ, or authorize the
Investment Adviser to employ, one or more sub-investment advisers from time to
time to perform such of the acts and services of the Investment Adviser and upon
such terms and conditions as may be agreed upon between the Investment Adviser
and such sub-investment adviser and approved by the Trustees.
SECTION 3.3. ADMINISTRATOR. The Trustees may in their discretion from time
to time authorize the Trust to enter into one or more administration agreements,
whereby the other party to such agreement shall undertake to furnish to the
Trust or a Series or a Class thereof such administrative facilities and services
and such other facilities and services, if any, as the Trustees consider
desirable and all upon such terms and conditions as the Trustees may in their
discretion determine.
The Trustees may also authorize the Trust to employ or authorize the
Administrator to employ one or more sub-administrators from time to time to
perform such of the acts and services of the Administrator and upon such terms
and conditions as may be agreed upon between the Administrator and such
sub-administrator and approved by the Trustees.
SECTION 3.4. OTHER SERVICE PROVIDERS. The Trustees may in their discretion
from time to time authorize the Trust to enter into one or more agreements
whereby the other party or parties to any such agreements will undertake to
provide to the Trust or any Class or Series or Shareholders or beneficial owners
of Shares such services as the Trustees consider desirable and all upon such
terms and conditions as the Trustees in their discretion may determine.
SECTION 3.5. TRANSFER AGENTS. The Trustees may in their discretion from
time to time appoint one or more transfer agents for the Trust or any Class or
Series thereof. Any contract with a transfer agent shall be on such terms and
conditions as the Trustees may in their discretion determine.
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SECTION 3.6. CUSTODIAN. The Trustees may appoint a bank or trust company
having an aggregate capital, surplus and undivided profits (as shown in its last
published report) of at least $2,000,000 as a custodian of the Trust or any
Class or Series with authority as its agent to hold cash and securities owned by
the Trust or the Class or Series and to release and deliver the same and
otherwise to perform such duties as the Trustees may specify, all upon such
terms and conditions as may be agreed upon between the Trust and the Custodian.
SECTION 3.7. AFFILIATIONS. The fact that:
(i) any of the Shareholders, Trustees or officers of the Trust is a
shareholder, creditor, director, officer, partner, trustee or employee of
or has any interest in any Person or any parent or affiliate of any such
Person, with which a contract or agreement of the character described in
this Article III has been or will be made, or that any such Person, or any
parent or affiliate thereof, is a Shareholder of or has an interest in the
Trust, or that
(ii) any such Person also has similar contracts, agreements or plans
with other investment companies (including, without limitation, the
investment companies referred to in the last paragraph of Section 2.3) or
Persons, or has other business activities or interests,
shall not affect in any way the validity of any such contract, agreement or plan
or disqualify any Shareholder, Trustee or officer of the Trust from authorizing,
voting upon or executing the same or create any liability or accountability to
the Trust or its Shareholders.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS
SECTION 4.1. NO PERSONAL LIABILITY OF SHAREHOLDERS, TRUSTEES, OFFICERS AND
EMPLOYEES. No Shareholder shall be subject to any personal liability whatsoever
to any Person in connection with Trust Property or the acts, obligations or
affairs of the Trust or any Class or Series thereof. All Persons dealing or
contracting with the Trustees as such or with the Trust or any Class or Series
thereof or having any claim against the Trust or any Class or Series thereof
shall have recourse only to the Trust or such Class or Series for the payment of
their claims or for the payment or satisfaction of claims, obligations or
liabilities arising out of such dealings or contracts. No Trustee, officer or
employee of the Trust, whether past, present or future, shall be subject to any
personal liability whatsoever to any such Person, and all such Persons shall
look solely to the Trust Property, or to the assets of one or more specific
Class or Series of the Trust if the claim arises from the act, omission or other
conduct of such Trustee, officer or employee with respect to only such Class or
Series, for satisfaction of claims of any nature arising in connection with the
affairs of the Trust or such Class or Series. If any Shareholder, Trustee,
officer or employee, as such, of the Trust is made a party to any suit or
proceeding to enforce any such liability of the Trust or any Class or Series
thereof, he shall not, on account thereof, be held to any personal liability.
SECTION 4.2. TRUSTEE'S GOOD FAITH ACTION; ADVICE TO OTHERS; NO BOND OR
SURETY. The exercise by the Trustees of their powers and discretions hereunder
shall be binding upon everyone interested. A Trustee shall not be liable for
errors of judgment or mistakes of fact or law. The Trustees shall not be
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responsible or liable in any event for any neglect or wrongdoing of them or of
any officer, agent, employee, consultant, investment adviser or other adviser,
administrator, distributor or principal underwriter, custodian or transfer,
dividend disbursing, shareholder servicing or accounting agent of the Trust, nor
shall any Trustee be responsible for the act or omission of any other Trustee.
The Trustees may take advice of counsel or other experts with respect to the
meaning and operation of this Declaration and their duties as Trustees, and
shall be under no liability for any act or omission in accordance with such
advice or for failing to follow such advice. In discharging their duties, the
Trustees, when acting in good faith, shall be entitled to rely upon the records,
books and accounts of the Trust and upon reports made to the Trustees by any
officer, employee, agent, consultant, accountant, attorney, investment adviser
or other adviser, principal underwriter, expert, professional firm or
independent contractor. The Trustees as such shall not be required to give any
bond or surety or any other security for the performance of their duties. No
provision of this Declaration shall protect any Trustee or officer of the Trust
against any liability to the Trust or its Shareholders to which he would
otherwise be subject by reason of his own willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
SECTION 4.3. INDEMNIFICATION. The Trustees may provide, whether in the
By-Laws or by contract, vote or other action, for the indemnification by the
Trust or by any Class or Series thereof of the Shareholders, Trustees, officers
and employees of the Trust and of such other Persons as the Trustees in the
exercise of their discretion may deem appropriate or desirable. Any such
indemnification may be mandatory or permissive, and may be insured against by
policies maintained by the Trust.
SECTION 4.4. NO DUTY OF INVESTIGATION. No purchaser, lender or other Person
dealing with the Trustees or any officer, employee or agent of the Trust or a
Class or Series thereof shall be bound to make any inquiry concerning the
validity of any transaction purporting to be made by the Trustees or by said
officer, employee or agent or be liable for the application of money or property
paid, loaned, or delivered to or on the order of the Trustees or of said
officer, employee or agent. Every obligation, contract, instrument, certificate,
Share, other security or undertaking of the Trust or a Class or Series, and
every other act or thing whatsoever executed in connection with the Trust shall
be conclusively presumed to have been executed or done by the executors thereof
only in their capacity as Trustees under this Declaration or in their capacity
as officers, employees or agents of the Trust. Every written obligation,
contract, instrument, certificate, Share, other security or undertaking of the
Trust or a Class or Series made or issued by the Trustees may recite that the
same is executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Class or Series thereof
under any such instrument are not binding upon any of the Trustees or
Shareholders individually, but bind only the Trust Property or the Trust
Property of the applicable Class or Series, and may contain any further recital
which they may deem appropriate, but the omission of any such recital shall not
operate to bind the Trustees or Shareholders individually.
SECTION 4.5. RELIANCE ON RECORDS AND EXPERTS. Each Trustee, officer or
employee of the Trust shall, in the performance of his 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 records, books and accounts of
the Trust or a Class or Series thereof, upon an opinion or other advice of legal
counsel, or upon reports made or advice given to the Trust or a Class or Series
thereof by any Trustee or any of the Trust's officers or employees or by the
Investment Adviser, the Administrator, the Custodian, a Principal Underwriter,
Transfer Agent, accountants, appraisers or other experts, advisers, consultants
or professionals selected with reasonable care by the Trustees or officers of
the Trust, regardless of whether the person rendering such report or advice may
also be a Trustee, officer or employee of the Trust.
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ARTICLE V
SHARES OF BENEFICIAL INTEREST
SECTION 5.1. SHARES OF BENEFICIAL INTEREST. The interest of the
beneficiaries of the Trust initially shall be divided into common shares of
beneficial interest without par value. The number of common shares authorized
hereunder is unlimited. All common shares issued, including, without limitation,
those issued in connection with a dividend or distribution or a share split,
shall be fully paid and nonassessable. The Trustees may, without Shareholder
approval, authorize one or more Classes of Shares (which Classes may without
Shareholder approval be divided by the Trustees into two or more Series), Shares
of each such Class or Series having such preferences, voting powers and special
or relative rights or privileges (including conversion rights, if any) as the
Trustees may determine and as shall be set forth in the By-Laws. The number of
Shares of each Class or Series authorized shall be unlimited except as the
By-Laws may otherwise provide. The Trustees may from time to time divide or
combine the Shares of any Class or Series into a greater or lesser number
without thereby changing the proportionate beneficial interest in the Class or
Series.
The ownership of Shares shall be recorded on the books of the Trust or a
transfer or similar agent. No certificates certifying the ownership of Shares
shall be issued except as the Trustees may otherwise determine from time to
time. The Trustees may make such rules as they consider appropriate for the
issuance of Share certificates, the transfer of Shares and similar matters. The
record books of the Trust as kept by the Trust or any transfer or similar agent,
as the case may be, shall be conclusive as to who are the Shareholders of each
Class or Series and as to the number of Shares of each Class or Series held from
time to time by each Shareholder. The Trustees may at any time discontinue the
issuance of Share certificates and may, by written notice to each Shareholder,
require the surrender of Share certificates to the Trust for cancellation. Such
surrender and cancellation shall not affect the ownership of Shares in the
Trust.
SECTION 5.2. VOTING POWERS. Subject to the voting powers of one or more
Classes or Series, the Shareholders shall have power to vote only (i) with
respect to any Investment Adviser as required by applicable law, (ii) with
respect to any termination or amendment of this Trust, or with respect to
certain transactions, to the extent and as provided in Article VIII, (iii) to
the same extent as the stockholders of a Massachusetts business corporation as
to whether or not a court action, proceeding or claim should or should not be
brought or maintained derivatively or as a class action on behalf of the Trust
or the Shareholders, and (iv) with respect to such additional matters relating
to the Trust as may be required by law, this Declaration, the By-Laws or any
registration of the Trust with the Securities and Exchange Commission (or any
successor agency) or any state, or as the Trustees may consider necessary or
desirable. Each whole Share shall be entitled to one vote as to any matter on
which it is entitled to vote and each fractional Share shall be entitled to a
proportionate fractional vote. Notwithstanding any other provision of this
Declaration, on any matter submitted to a vote of Shareholders, all Shares of
the Trust then entitled to vote shall, except as otherwise provided in the
By-Laws or required by applicable law, be voted in the aggregate as a single
Class without regard to Classes or Series. There shall be no cumulative voting
in the election of Trustees.
SECTION 5.3. RIGHTS OF SHAREHOLDERS. The ownership of the Trust Property of
every description and the right to conduct any business of the Trust are vested
exclusively in the Trustees, and the Shareholders shall have no interest therein
other than the beneficial interest conferred by their Shares, and they shall
have no right to call for any partition or division of any property, profits,
rights or interests of the Trust or of any Class or Series nor can they be
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called upon to share or assume any losses of the Trust or of any Class or Series
or suffer an assessment of any kind by virtue of their ownership of Shares. The
Shares shall be personal property giving only the rights specifically set forth
in this Declaration. The Shares shall not entitle the holder to preference,
preemptive, appraisal, conversion or exchange rights, except as the Trustees may
specifically determine with respect to any Class or Series.
Every Shareholder by virtue of having become a Shareholder shall be held to
have expressly assented and agreed to the terms of this Declaration and the
Bylaws and to have become a party hereto and thereto. The death of a Shareholder
during the continuance of the Trust shall not operate to terminate the same nor
entitle the representative of any deceased Shareholder to an accounting or to
take any action in court or elsewhere against the Trust or the Trustees, but
only to the rights of said decedent under this Trust.
SECTION 5.4. TRUST ONLY. It is the intention of the Trustees to create only
the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a
Massachusetts business trust. Nothing in this Declaration shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners or
members of a joint stock association.
SECTION 5.5. ISSUANCE OF SHARES . The Trustees in their discretion may,
from time to time and without any authorization or vote of the Shareholders,
issue Shares of any Class or Series, in addition to the then issued and
outstanding Shares, to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times and on such
terms as the Trustees may deem appropriate or desirable, 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. In connection
with any issuance of Shares, the Trustees may issue fractional Shares and
reissue and resell full and fractional Shares held in the treasury. The Trustees
may authorize the issuance of certificates of beneficial interest to evidence
the ownership of Shares. Shares held in the treasury shall not be voted nor
shall such Shares be entitled to any dividends or other distributions declared
with respect thereto. The Trustees in their discretion may also, from time to
time and without any authorization or vote of the Shareholders, issue to the
extent consistent with applicable law securities of the Trust convertible into
Shares of the Trust and warrants to purchase securities of the Trust, in each
case pursuant to such terms and under such conditions as the Trustees may
specify in their discretion. Shares of any Class or Series, in addition to the
then issued and outstanding Shares, and such warrants or convertible securities,
may be issued to such party or parties and for such amount and type of
consideration, including cash or property, at such time or times and on such
terms as the Trustees may deem appropriate or desirable, 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. The officers of
the Trust are severally authorized to take all such actions as may be necessary
or desirable to carry out this Section 5.5.
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ARTICLE VI
REDEMPTIONS AND REPURCHASES
SECTION 6.1. REDEMPTIONS AND REPURCHASES OF SHARES. From time to time the
Trust may redeem or repurchase its Shares, all upon such terms and conditions as
may be determined by the Trustees and subject to any applicable provisions of
the 1940 Act. The Trust may require Shareholders to pay a withdrawal charge, a
sales charge, or any other form of charge to the Trust, to the underwriter or to
any other person designated by the Trustees upon redemption or repurchase of
Trust Shares in such amount as shall be determined from time to time by the
Trustees. The Trust may also charge a redemption or repurchase fee in such
amount as may be determined from time to time by the Trustees.
SECTION 6.2 MANNER OF PAYMENT . Payment of Shares redeemed or repurchased
may at the option of the Trustees or such officer or officers as they may duly
authorize for the purpose, in their complete discretion, be made in cash, or in
kind, or partially in cash and partially in kind. In case of payment in kind the
Trustees, or their delegate, shall have absolute discretion as to what security
or securities shall be distributed in kind and the amount of the same, and the
securities shall be valued for purposes of distribution at the figure at which
they were appraised in computing the net asset value of the Common Shares,
provided that any Shareholder who cannot legally acquire securities so
distributed in kind by reason of the prohibitions of the 1940 Act shall receive
cash.
SECTION 6.3. INVOLUNTARY REDEMPTION . If the Trustees shall, at any time
and in good faith, be of the opinion that direct or indirect ownership of Shares
of any class or series or other securities of the Trust has or may become
concentrated in any person to an extent which would disqualify the Trust as a
regulated investment company under the Internal Revenue Code, then the Trustees
shall have the power by lot or other means deemed equitable by them (i) to call
for redemption by any such person a number, or principal amount, of Shares or
other securities of the Trust sufficient to maintain or bring the direct or
indirect ownership of Shares or other securities of the Trust into conformity
with the requirements for such qualification and (ii) to refuse to transfer or
issue Shares or other securities of the Trust to any person whose acquisition of
the Shares or other securities of the Trust in question would result in such
disqualification. The redemption shall be effected upon such terms and
conditions as shall be determined by the Trustees.
The holders of Shares or other securities of the Trust shall upon demand
disclose to the Trustees in writing such information with respect to direct and
indirect ownership of Shares or other securities of the Trust as the Trustees
deem necessary to comply with the provisions of the Internal Revenue Code, or to
comply with the requirements of any other taxing authority.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
SECTION 7.1. NET ASSET VALUE. The net asset value of each outstanding Share
of the Trust or of any Class or Series thereof shall be determined on such days
and at or as of such time or times as the Trustees may determine. Any reference
in this Declaration to the time at which a determination of net asset value is
made shall mean the time as of which the determination is made. The power and
duty to determine net asset value may be delegated by the Trustees from time to
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time to the Investment Adviser, the Administrator, the Custodian, the Transfer
Agent or such other Person or Persons as the Trustees may determine. The value
of the assets of the Trust or any Class or Series thereof shall be determined in
a manner authorized by the Trustees. From the total value of said assets, there
shall be deducted all indebtedness, interest, taxes, payable or accrued,
including estimated taxes on unrealized book profits, expenses and management
charges accrued to the appraisal date, and all other items in the nature of
liabilities which shall be deemed appropriate by the Trustees, as incurred by or
allocated to the Trust or any Class or Series thereof. The resulting amount,
which shall represent the total net assets of the Trust or Class or Series
thereof, shall be divided by the number of Shares of the Trust or Class or
Series thereof outstanding at the time and the quotient so obtained shall be
deemed to be the net asset value of the Shares of the Trust or Class or Series
thereof. The Trust may declare a suspension of the determination of net asset
value to the extent permitted by the 1940 Act. It shall not be a violation of
any provision of this Declaration if Shares are sold, redeemed or repurchased by
the Trust at a price other than one based on net asset value if the net asset
value is affected by one or more errors inadvertently made in the pricing of
portfolio securities or other investments or in accruing or allocating income,
expenses, reserves or liabilities. No provision of this Declaration shall be
construed to restrict or affect the right or ability of the Trust to employ or
authorize the use of pricing services, appraisers or any other means, methods,
procedures, or techniques in valuing the assets or calculating the liabilities
of the Trust or any Class or Series thereof.
SECTION 7.2. DIVIDENDS AND DISTRIBUTIONS. (a) The Trustees may from time to
time distribute ratably among the Shareholders of the Trust or of a Class or
Series thereof such portion of the net earnings or profits, surplus (including
paid-in surplus), capital (including paid-in capital), or assets of the Trust or
such Class or Series held by the Trustees as they may deem appropriate or
desirable. Such distributions may be made in cash, additional Shares or property
(including without limitation any type of obligations of the Trust or Class or
Series or any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Class or Series thereof additional Shares of the
Trust or Class or Series thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem appropriate or desirable. Such
distributions may be among the Shareholders of the Trust or Class or Series
thereof at the time of declaring a distribution or among the Shareholders of the
Trust or Class or Series thereof at such other date or time or dates or times as
the Trustees shall determine. The Trustees may always retain from the earnings
or profits such amounts as they may deem appropriate or desirable to pay the
expenses and liabilities of the Trust or a Class or Series thereof or to meet
obligations of the Trust or a Class or Series thereof, together with such
amounts as they may deem desirable to use in the conduct of its affairs or to
retain for future requirements or extensions of the business or operations of
the Trust or such Class or Series. The Trust may adopt and offer to Shareholders
such dividend reinvestment plans, cash dividend payout plans or other
distribution plans as the Trustees may deem appropriate or desirable. The
Trustees may in their discretion determine that an account administration fee or
other similar charge may be deducted directly from the income and other
distributions paid on Shares to a Shareholder's account in any Class or Series.
(b) The Trustees may prescribe, in their absolute discretion, such bases
and times for determining the amounts for the declaration and payment of
dividends and distributions as they may deem necessary, appropriate or
desirable.
(c) Inasmuch as the computation of net income and gains for federal income
tax purposes may vary from the computation thereof on the books of account, the
above provisions shall be interpreted to give the Trustees full power and
authority in their absolute discretion to distribute for any fiscal year as
dividends and as capital gains distributions, respectively, additional amounts
sufficient to enable the Trust or a Class or Series thereof to avoid or reduce
liability for taxes.
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SECTION 7.3. POWER TO MODIFY FOREGOING PROCEDURES. Notwithstanding any
provision contained in this Declaration, the Trustees may prescribe, in their
absolute discretion, such other means, methods, procedures or techniques for
determining the per Share net asset value of a Class or Series thereof or the
income of the Class or Series thereof, or for the declaration and payment of
dividends and distributions on any Class or Series.
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A
CLASS OR SERIES; MERGERS; AMENDMENTS
SECTION 8.1. DURATION. The Trust shall continue without limitation of time
but subject to the provisions of this Article VIII. The death, declination,
resignation, retirement, removal or incapacity of the Trustees, or any one of
them, shall not operate to terminate or annul the Trust or to revoke any
existing agency or delegation or authority pursuant to the terms of this
Declaration or of the By-Laws.
SECTION 8.2. MERGER OR TERMINATION OF THE TRUST OR A SERIES OR A CLASS. 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 its good will, upon such terms and conditions and
for such consideration when and as authorized at a meeting of Shareholders
called for the purpose by the affirmative vote of the holders of two-thirds of
each Class and Series of Shares outstanding and entitled to vote (with each such
class and series separately voting thereon as a separate Class or Series), or by
an instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of each Class and Series of Shares (with each such Class
and Series separately consenting thereto as a separate Class or Series);
provided, however, that if such merger, consolidation, sale, lease or exchange
is recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares outstanding and entitled to vote shall be sufficient
authorization; 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 Commonwealth of Massachusetts. Upon making provision for the
payment of all outstanding obligations, taxes and other liabilities, (whether
accrued or contingent) of the Trust, the Trustees shall distribute the remaining
assets of the Trust ratably among the holders of the outstanding Shares, except
as may be otherwise provided by the Trustees with respect to any Class or Series
of Shares thereof.
Subject to authorization by the Shareholders as indicated below in this
paragraph, the Trust may at any time sell and convert into money all of the
assets of the Trust, and, upon making provision for the payment of all
outstanding obligations, taxes and other liabilities (whether accrued or
contingent) of the Trust, the Trustees shall distribute the remaining assets of
the Trust ratably among the holders of the outstanding Shares, except as may be
otherwise provided by the Trustees with respect to any Class or Series of
Shares. Such action shall first have been authorized at a meeting of
Shareholders called for the purpose by the affirmative vote of the holders of
two-thirds of each Class and Series of Shares outstanding and entitled to vote
(with each such Class and Series separately voting thereon as a separate Class
or Series), or by an instrument or instruments in writing without a meeting,
consented to by the holders of two-thirds of each Class and Series of Shares
(with each such Class and Series separately consenting thereto as a separate
Class or Series); provided, however, that if such action is recommended by the
Trustees, the vote or written consent of the holders of a majority of the Shares
outstanding and entitled to vote shall be sufficient authorization.
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Upon completion of the distribution of the remaining proceeds or the
remaining assets as provided in this section, the Trust shall terminate and the
Trustees shall be discharged of any and all further liabilities and duties
hereunder and the right, title and interest of all parties shall be cancelled
and discharged.
SECTION 8.3. AMENDMENTS. The execution of an instrument setting forth the
establishment and designation and the relative rights of any Class or Series of
Shares in accordance with Section 5.1 hereof shall, without any authorization,
consent or vote of the Shareholders, effect an amendment of this Declaration.
Except as otherwise provided in this Section, if authorized by a majority of the
Trustees and by vote of a majority of the outstanding voting securities of the
Trust affected by the amendment (which voting securities shall, unless otherwise
provided by the Trustees, vote together on such amendment as a single class), or
by any larger vote which may be required by applicable law or this Declaration
of Trust in any particular case, the Trustees may amend or otherwise supplement
this Declaration. The Trustees may also amend this Declaration without the vote
or consent of Shareholders to change the name of the Trust or to make such other
changes as do not have a materially adverse effect on the rights or interests of
Shareholders hereunder or if they deem it necessary to conform this Declaration
to the requirements of applicable Federal laws or regulations or the
requirements of the regulated investment company provisions of the Internal
Revenue Code, but the Trustees shall not be liable for failing so to do.
No amendment may be made under this Section which shall amend, alter,
change or repeal any of the provisions of Article VIII unless the amendment
effecting such amendment, alteration, change or repeal shall receive the
affirmative vote or consent of the holders of two-thirds of each Class and
Series of Shares outstanding and entitled to vote (with each such Class and
Series separately voting thereon on consenting thereto as a separate Class or
Series). Such affirmative vote or consent shall be in addition to the vote or
consent of the holders of Shares otherwise required by law or by any agreement
between the Trust and any national securities exchange.
Nothing contained in this Declaration shall permit the amendment of this
Declaration to impair the exemption from personal liability of the Shareholders,
Trustees, officers, employees and agents of the Trust or to permit assessments
upon Shareholders.
Notwithstanding any other provision hereof, until such time as a
Registration Statement under the Securities Act of 1933, as amended, covering
the first public offering of securities of the Trust shall have become
effective, this Declaration may be terminated or amended in any respect by the
affirmative vote of a majority of the Trustees or by an instrument signed by a
majority of the Trustees.
SECTION 8.4. CERTAIN TRANSACTIONS. (a) Notwithstanding any other provision
of this Declaration and subject to the exceptions provided in sub-section (d) of
this Section 8.4, the types of transactions described in sub-section (c) of this
Section 8.4 shall require the affirmative vote or consent of the holders of
seventy-five percent (75%) of each Class of Shares outstanding (with each such
Class voting separately thereon), when a Principal Shareholder (as defined in
sub-section (b) of this Section 8.4) is determined by the Trustees to be a party
to the transaction. Such affirmative vote or consent shall be in addition to the
vote or consent of the holders of Shares otherwise required by law or by the
terms of any Class or Series, whether now or hereafter authorized, or by any
agreement between the Trust and any national securities exchange.
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(b) The term "Principal Shareholder" shall mean any Person which is the
beneficial owner, directly or indirectly, of more than five percent (5%) of the
outstanding Shares of the Trust or of any Class and shall include any
"affiliate" or "associate", as such terms are defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934. For the
purpose of this Section 8.4, in addition to the Shares which a Person
beneficially owns directly, (a) a Person shall be deemed to be the beneficial
owner of any Shares (i) which the Trustees determine it has the right to acquire
pursuant to any agreement or upon exercise of conversion rights or warrants, or
otherwise (but excluding Share options granted by the Trust) or (ii) which the
Trustees determine are beneficially owned, directly or indirectly (including
Shares deemed owned through application of clause (i) above), by any other
Person with which it or its "affiliate" or "associate" (as defined above) has
any agreement, arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of Shares, or which is its affiliate or associate,
and (b) the outstanding Shares shall include Shares deemed owned through
application of clauses (i) and (ii) above but shall not include any other Shares
which are not at the time issued and outstanding but may be issuable pursuant to
any agreement, or upon exercise of conversion rights or warrants, or otherwise.
(c) This Section 8.4 shall apply to the following transactions:
(i) The merger or consolidation of the Trust or any subsidiary of the
Trust with or into any Principal Shareholder.
(ii) The issuance of any securities of the Trust to any Principal
Shareholder for cash.
(iii) The sale, lease or exchange of all or any substantial part of
the assets of the Trust to any Principal Shareholder (except assets
determined by the Trustees to have an aggregate fair market value of less
than $1,000,000, aggregating for the purpose of such computation all assets
sold, leased or exchanged in any series of similar transactions within a
twelve-month period or assets sold in the ordinary course of business).
(iv) The sale, lease or exchange to or with the Trust or any
subsidiary thereof, in exchange for securities of the Trust, of any assets
of any Principal Shareholder (except assets determined by the Trustees to
have an aggregate fair market value of less than $1,000,000 aggregating for
the purpose of such computation all assets sold, leased or exchanged in any
series of similar transactions within a twelve-month period).
For purposes of this sub-section 8.4(c), the term "Principal Shareholder"
shall include all subsidiaries, affiliated, associates, or other persons acting
in concert with any Principal Shareholder.
(d) The provisions of this Section 8.4 shall not be applicable to (i) any
of the transactions described in sub-section (c) of this Section 8.4 if the
Trustees shall by resolution have approved a memorandum of understanding with
such Principal Shareholder with respect to and substantially consistent with
such transaction, or (ii) any such transaction with any Person of which a
majority of the outstanding shares of all classes of stock normally entitled to
vote in the election of directors is owned of record or beneficially by the
Trust and its subsidiaries.
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(e) The Trustees shall have the power to determine for the purposes of this
Section 8.4 on the basis of information known to the Trust, whether (i) a Person
beneficially owns more than five percent (5%) of the outstanding Shares or is
otherwise a Principal Shareholder, (ii) a Person is an "affiliate" or
"associate" (as defined above) of another, (iii) the assets being acquired or
leased to or by the Trust or any subsidiary thereof constitute a substantial
part or the assets of the Trust and have an aggregate fair market value of less
than $1,000,000, (iv) the memorandum of understanding referred to in sub-section
(d) hereof is substantially consistent with the transaction covered thereby, and
(v) the provisions of the Section 8.5 otherwise apply to any Person or
transaction. Any such determination shall be conclusive and binding for all
purposes of this Section 8.4.
SECTION 8.5. CONVERSION. Notwithstanding any other provisions of this
Declaration, the conversion of the Trust from a "closed-end company" to an
"open-end company," as those terms are defined in Section 5(a)(2) and 5(a)(1),
respectively, of the 1940 Act shall require the affirmative vote or consent of
the holders of two-thirds of each Class outstanding (with each Class separately
voting thereon or consenting thereto as a separate Class). Such affirmative vote
or consent shall be in addition to the vote or consent of the holders of the
Shares otherwise required by law or by the terms of any Class or Series, whether
now or hereafter authorized, or by any agreement between the Trust and any
national securities exchange. However, if such conversion is recommended by at
least 75% of the Trustees then in office, the vote or written consent of the
holders of a majority of the outstanding voting securities of the Trust (which
voting securities shall, unless otherwise provided by the Trustees, vote
together on the matter as a single class) shall be sufficient to authorize such
conversion.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1. USE OF THE WORDS "EATON VANCE". Eaton Vance Corp. (hereinafter
referred to as "EVC"), which owns (either directly or through subsidiaries) all
of the capital shares of the Investment Adviser of the Trust (or of the
investment adviser of each of the investment companies referred to in the last
paragraph of Section 2.3), has consented to the use by the Trust of the
identifying words "Eaton Vance" in the name of the Trust. Such consent is
conditioned upon the continued employment of EVC or a subsidiary or affiliate of
EVC as Investment Adviser of the Trust or as the investment adviser of each of
the investment companies referred to in the last paragraph of Section 2.3. As
between the Trust and itself, EVC shall control the use of the name of the Trust
insofar as such name contains the identifying words "Eaton Vance". EVC may from
time to time use the identifying words "Eaton Vance" in other connections and
for other purposes, including, without limitation, the names of other investment
companies, trusts, corporations or businesses which it may manage, advise,
sponsor or own or in which it may have a financial interest. EVC may require the
Trust to cease using the identifying words "Eaton Vance" in the name of the
Trust if EVC or a subsidiary or affiliate of EVC ceases to act as investment
adviser of the Trust or as the investment adviser of each of the investment
companies referred to in the last paragraph of Section 2.3.
SECTION 9.2. NOTICES. Notwithstanding any other provision of this
Declaration, any and all notices to which any Shareholder may be entitled and
any and all communications shall be deemed duly served or given if mailed,
postage prepaid, addressed to any Shareholder of record at his last known
address as recorded on the register of the Trust. If and to the extent
consistent with applicable law, a notice of a meeting, an annual report, and any
other communication to Shareholders need not be sent to a Shareholder (i) if an
annual report and a proxy statement for two consecutive shareholder meetings
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have been mailed to such Shareholder's address and have been returned as
undeliverable, (ii) if all, and at least two, checks (if sent by first class
mail) in payment of distributions on Shares during a twelve-month period have
been mailed to such Shareholder's address and have been returned as
undeliverable or (iii) in any other case in which a proxy statement concerning a
meeting of security holders is not required to be given pursuant to the
Commission's proxy rules as from time to time in effect under the Securities
Exchange Act of 1934, as amended. However, delivery of such proxy statements,
annual reports and other communications shall resume if and when such
Shareholder delivers or causes to be delivered to the Trust written notice
setting forth such Shareholder's then current address.
SECTION 9.3. FILING OF COPIES, REFERENCES, HEADINGS AND COUNTERPARTS. The
original or a copy of this instrument, of any amendment hereto and of each
declaration of trust supplemental hereto, shall be kept at the office of the
Trust. Anyone dealing with the Trust may rely on a certificate by a Trustee or
an officer of the Trust as to whether or not any such amendments or supplemental
declarations of trust have been made and as to any matters in connection with
the Trust hereunder, and, with the same effect as if it were the original, may
rely on a copy certified by a Trustee or an officer of the Trust to be a copy of
this instrument or of any such amendment hereto or supplemental declaration of
trust.
In this instrument or in any such amendment or supplemental declaration of
trust, references to this instrument, and all expressions such as "herein",
"hereof", and "hereunder", shall be deemed to refer to this instrument as
amended or affected by any such supplemental declaration of trust. Headings are
placed herein for convenience of reference only and in case of any conflict, the
text of this instrument, rather than the headings, shall control. This
instrument may be executed in any number of counterparts each of which shall be
deemed an original, but such counterparts shall constitute one instrument. A
restated Declaration, integrating into a single instrument all of the provisions
of the Declaration which are then in effect and operative, may be executed from
time to time by a majority of the Trustees then in office and filed with the
Massachusetts Secretary of State. A restated Declaration shall, upon execution,
be conclusive evidence of all amendments and supplemental declarations contained
therein and may thereafter be referred to in lieu of the original Declaration
and the various amendments and supplements thereto.
SECTION 9.4. APPLICABLE LAW. The Trust set forth in this instrument is made
in The Commonwealth of Massachusetts, and it is created under and is to be
governed by and construed and administered according to the laws of said
Commonwealth. The Trust shall be of the type commonly called a Massachusetts
business trust, and without limiting the provisions hereof, the Trust may
exercise all powers which are ordinarily exercised by such a trust.
SECTION 9.5. 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 legal counsel, that any of such provisions is in
conflict with the 1940 Act, the Internal Revenue Code of 1986 or with other
applicable laws and regulations, the conflicting provision shall be construed in
such a manner consistent with such law as may most closely reflect the intention
of the offending provision; 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.
(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.
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IN WITNESS WHEREOF, the undersigned, being all of the current Trustees of
the Trust, have executed this instrument this 19th day of February, 1998.
<PAGE>
/s/ Donald R. Dwight /s/ Norton H. Reamer
-------------------------- ----------------------------
Donald R. Dwight Norton H. Reamer
/s/ James B. Hawkes /s/ John L. Thorndike
-------------------------- ----------------------------
James B. Hawkes John L. Thorndike
/s/ Samuel L. Hayes, III
--------------------------
Samuel L. Hayes, III
<PAGE>
BY-LAWS
OF
EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
<PAGE>
ARTICLE I
The Trustees
SECTION 1. NUMBER OF TRUSTEES. The number of Trustees shall be fixed by the
Trustees, provided, however, that such number shall at no time exceed eighteen.
SECTION 2. RESIGNATION AND REMOVAL. Any Trustee may resign his trust by written
instrument signed by him and delivered to the other Trustees, which shall take
effect upon such delivery or upon such later date as is specified therein. Any
Trustee who requests in writing to be retired or who has become incapacitated by
illness or injury may be retired by written instruments signed by a majority of
the other Trustees, specifying the date of his retirement. Any Trustee may be
removed at any time by written instrument, signed by at least two-thirds of the
number of the Trustees prior to such removal, specifying the date when such
removal shall become effective.
No natural person shall serve as a Trustee of the Trust after the holders
of record of not less than two-thirds of the outstanding shares of beneficial
interest of the Trust (the "shares") have declared that he be removed from that
office by a declaration in writing signed by such holders and filed with the
Custodian of the assets of the Trust or by votes cast by such holders in person
or by proxy at a meeting called for the purpose. Solicitation of such a
declaration shall be deemed a solicitation of a proxy within the meaning of
Section 20(a) of the Investment Company Act of 1940, as amended. As used herein,
the term "Act" shall mean the Investment Company Act of 1940 and the rules and
regulations thereunder, as amended from time to time.
The Trustees of the Trust shall promptly call a meeting of the shareholders
for the purpose of voting upon a question of removal of any such Trustee or
Trustees when requested in writing so to do by the record holders of not less
than 10 per centum of the outstanding shares.
Whenever ten or more shareholders of record of the Trust who have been such
for at least six months preceding the date of application, and who hold in the
aggregate either shares having a net asset value of at least $25,000 or at least
1 per centum of the outstanding shares, whichever is less, shall apply to the
Trustees in writing, stating that they wish to communicate with other
shareholders with a view to obtaining signatures to a request for a meeting of
shareholders pursuant to this Section 3 and accompanied by a form of
communication and request which they wish to transmit, the Trustees shall within
five business days after receipt of such application either (1) afford to such
applicants access to a list of the names and addresses of all shareholders as
recorded on the books of the Trust; or (2) inform such applicants as to the
approximate number of shareholders of record, and the approximate cost of
mailing to them the proposed communication and form of request.
<PAGE>
If the Trustees elect to follow the course specified in subparagraph (2)
above of this Section 2, the Trustees, upon the written request of such
applicants, accompanied by a tender of the material to be mailed and of the
reasonable expenses of mailing, shall, with reasonable promptness, mail such
material to all shareholders of record at their addresses as recorded on the
books, unless within five business days after such tender the Trustees shall
mail to such applicants and file with the Securities and Exchange Commission
("the Commission"), together with a copy of the material to be mailed, a written
statement signed by at least a majority of the Trustees to the effect that in
their opinion either such material contains untrue statements of fact or omits
to state facts necessary to make the statements contained therein not
misleading, or would be violation of applicable law, and specifying the basis of
such opinion.
After the Commission has had an opportunity for hearing upon the objections
specified in the written statement so filed by the Trustees, the Trustees or
such applicants may demand that the Commission enter an order either sustaining
one or more of such objections or refusing to sustain any of such objections. If
the Commission shall enter an order refusing to sustain any of such objections,
or if, after the entry of an order sustaining one or more of such objections,
the Commission shall find, after notice and opportunity for hearing, that all
objections so sustained have been met, and shall enter an order so declaring,
the Trustees shall mail copies of such material to all shareholders with
reasonable promptness after the entry of such order and renewal of such tender.
Until such provisions become null, void, inoperative and removed from these
By-Laws pursuant to the next sentence, the provisions of all but the first
paragraph of this Section 2 may not be amended or repealed without the vote of a
majority of the Trustees and a majority of the outstanding shares of the Trust.
These same provisions shall be deemed null, void, inoperative and removed from
these By-Laws upon the effectiveness of any amendment to the Act which
eliminates them from Section 16 of the Act or the effectiveness of any successor
Federal law governing the operation of the Trust which does not contain such
provisions.
SECTION 3. VACANCIES. In case of the declination, death, resignation,
retirement, removal, or inability of any of the Trustees, or in case a vacancy
shall, by reason of an increase in number, or for any other reason, exist, the
remaining Trustees shall fill such vacancy by appointing such other person as
they in their discretion shall see fit. Such appointment shall be evidenced by a
written instrument signed by a majority of the Trustees in office whereupon the
appointment shall take effect. Within three months of such appointment the
Trustees shall cause notice of such appointment to be mailed to each shareholder
at his address as recorded on the books of the Trustees. An appointment of a
Trustee may be made by the Trustees then in office and notice thereof mailed to
shareholders as aforesaid in anticipation of a vacancy to occur by reason of
retirement, resignation of increase in number of Trustees effective at a later
date, provided that said appointment shall become effective only at or after the
effective date of said retirement, resignation or increase in number of
Trustees. As soon as any Trustee so appointed shall have accepted this trust,
the trust estate shall vest in the new Trustee or Trustees, together with the
continuing Trustees, without any further act or conveyance, and he shall be
deemed a Trustee hereunder and under the Declaration of Trust. The power of
appointment is subject to the provisions of Section 16(a) of the Act.
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<PAGE>
Whenever a vacancy among the Trustees shall occur, until such vacancy is
filled, or while any Trustee is absent from the Commonwealth of Massachusetts
or, if not a domiciliary of Massachusetts, is absent from his state of domicile,
or is physically or mentally incapacitated by reason of disease or otherwise,
the other Trustees shall have all the powers hereunder and the certificate of
the other Trustees of such vacancy, absence or incapacity shall be conclusive.
SECTION 4. TEMPORARY ABSENCE OF TRUSTEE. Any Trustee may, by power of attorney,
delegate his power for a period not exceeding six months at any one time to any
other Trustee or Trustees, provided that in no case shall less than two Trustees
personally exercise the other powers hereunder except as herein otherwise
expressly provided.
SECTION 5. EFFECT OF DEATH, RESIGNATION, REMOVAL, ETC. OF A TRUSTEE. The death,
declination, resignation, retirement, removal, or incapacity of the Trustees, or
any one of them, shall not operate to annul the Trust or to revoke any existing
agency created pursuant to the terms of the Declaration of Trust or these
By-Laws.
ARTICLE II
Officers and Their Election
SECTION 1. OFFICERS. The officers of the Trust shall be a President, a
Treasurer, a Secretary, and such other officers or agents as the Trustees may
from time to time elect. It shall not be necessary for any Trustee or other
officer to be a holder of shares in the Trust.
SECTION 2. ELECTION OF OFFICERS. The Treasurer and Secretary shall be chosen
annually by the Trustees. The President shall be chosen annually by and from the
Trustees. Except for the offices of the President and Secretary, two or more
offices may be held by a single person. The officers shall hold office until
their successors are chosen and qualified.
SECTION 3. RESIGNATIONS AND REMOVALS. Any officer of the Trust may resign by
filing a written resignation with the President or with the Trustees or with the
Secretary, which shall take effect on being so filed or at such time as may
otherwise be specified therein. The Trustees may at any meeting remove an
officer.
ARTICLE III
Powers and Duties of Trustees and Officers
SECTION 1. TRUSTEES. The business and affairs of the Trust shall be managed by
the Trustees, and they shall have all powers necessary and desirable to carry
out that responsibility, so far as such powers are not inconsistent with the
laws of the Commonwealth of Massachusetts, the Declaration of Trust, or these
By-Laws.
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<PAGE>
SECTION 2. EXECUTIVE AND OTHER COMMITTEES. The Trustees may elect from their own
number an executive committee to consist of not less than three nor more than
five members, which shall have the power and duty to conduct the current and
ordinary business of the Trust while the Trustees are not in session, and such
other powers and duties as the Trustees may from time to time delegate to such
committee. The Trustees may also elect from their own number other committees
from time to time, the number composing such committees and the powers conferred
upon the same to be determined by the Trustees. Without limiting the generality
of the foregoing, the Trustees may appoint a committee consisting of less than
the whole number of Trustees then in office, which committee may be empowered to
act for and bind the Trustees and the Trust, as if the acts of such committee
were the acts of all the Trustees then in office, with respect to the
institution, prosecution, dismissal, settlement, review, investigation or other
disposition of any dispute, claim, action, suit or proceeding which shall be
pending or threatened to be brought before any court, administrative agency or
other adjudicatory body.
SECTION 3. CHAIRMAN OF THE TRUSTEES. The Trustees may, but need not, appoint
from among their number a Chairman. When present he shall preside at the
meetings of the shareholders and of the Trustees. He may call meetings of the
Trustees and of any committee thereof whenever he deems it necessary. He shall
be an executive officer of this Trust and shall have, with the President,
general supervision over the business and policies of this Trust, subject to the
limitations imposed upon the President, as provided in Section 4 of this Article
III.
SECTION 4. PRESIDENT. In the absence of the Chairman of the Trustees, the
President shall preside at all meetings of the shareholders. Subject to the
Trustees and to any committees of the Trustees, within their respective spheres,
as provided by the Trustees, he shall at all times exercise a general
supervision and direction over the affairs of the Trust. He shall have the power
to employ attorneys and counsel for the Trust and to employ such subordinate
officers, agents, clerks and employees as he may find necessary to transact the
business of the Trust. He shall also have the power to grant, issue, execute or
sign such powers of attorney, proxies or other documents as may be deemed
advisable or necessary in furtherance of the interests of the Trust. The
President shall have such other powers and duties as, from time to time, may be
conferred upon or assigned to him by the Trustees.
SECTION 5. TREASURER. The Treasurer shall be the principal financial and
accounting officer of the Trust. He shall deliver all funds and securities of
the Trust which may come into his hands to such bank or trust company as the
Trustees shall employ as custodian in accordance with Article III of the
Declaration of Trust. He shall make annual reports in writing of the business
conditions of the Trust, which reports shall be preserved upon its records, and
he shall furnish such other reports regarding the business and condition as the
Trustees may from time to time require. The Treasurer shall perform such duties
additional to foregoing as the Trustees may from time to time designate.
SECTION 6. SECRETARY. The Secretary shall record in books kept for the purpose
all votes and proceedings of the Trustees and the shareholders at their
respective meetings. He shall have custody of the seal, if any, of the Trust and
shall perform such duties additional to the foregoing as the Trustees may from
time to time designate.
SECTION 7. OTHER OFFICERS. Other officers elected by the Trustees shall perform
such duties as the Trustees may from time to time designate.
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<PAGE>
SECTION 8. COMPENSATION. The Trustees and officers of the Trust may receive such
reasonable compensation from the Trust for the performance of their duties as
the Trustees may from time to time determine.
ARTICLE IV
Meetings of Shareholders
SECTION 1. MEETINGS. No annual or regular meetings of shareholders shall be
required and none shall be held. Meetings of the shareholders (or any class or
series) may be called at any time by the President, and shall be called by the
President or the Secretary at the request, in writing or by resolution, of a
majority of the Trustees, or at the written request of the holder or holders of
ten percent (10%) or more of the total number of the then issued and outstanding
shares of the Trust entitled to vote at such meeting. Any such request shall
state the purposes of the proposed meeting.
SECTION 2. PLACE OF MEETINGS. Meetings of the shareholders shall be held at the
principal place of business of the Trust in Boston, Massachusetts, unless a
different place within the United States is designated by the Trustees and
stated as specified in the respective notices or waivers of notice with respect
thereto.
SECTION 3. NOTICE OF MEETINGS. Notice of all meetings of the shareholders,
stating the time, place and the purposes for which the meetings are called,
shall be given by the Secretary to each shareholder entitled to vote thereat,
and to each shareholder who under the By-Laws is entitled to such notice, by
mailing the same postage paid, addressed to him at his address as it appears
upon the books of the Trust, at least seven (7) days before the time fixed for
the meeting, and the person given such notice shall make an affidavit with
respect thereto. If any shareholder shall have failed to inform the Trust of his
post office address, no notice need be sent to him. No notice need be given to
any shareholder if a written waiver of notice, executed before or after the
meeting by the shareholder or his attorney thereunto authorized, is filed with
the records of the meeting.
SECTION 4. QUORUM. Except as otherwise provided by law, to constitute a quorum
for the transaction of any business at any meeting of shareholders, there must
be present, in person or by proxy, holders of one-third (1/3) of the total
number of shares of the then issued and outstanding shares of the Trust entitled
to vote at such meeting; provided that if a class (or series) of shares is
entitled to vote as a separate class (or series) on any matter, then in the case
of that matter a quorum shall consist of the holders of one-third (1/3) of the
total number of shares of the then issued and outstanding shares of that class
(or series) entitled to vote at the meeting. Shared owned directly or indirectly
by the Trust, if any, shall not be deemed outstanding for this purpose.
If a quorum, as above defined, shall not be present for the purpose of
any vote that may properly come before any meeting of shareholders at the time
and place of any meeting, the shareholders present in person or by proxy and
entitled to vote at such meeting on such matter holding a majority of the shares
present and entitled to vote on such matter may by vote adjourn the meeting
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<PAGE>
from time to time to be held at the same place without further notice than by
announcement to be given at the meeting until a quorum, as above defined,
entitled to vote on such matter, shall be present, whereupon any such matter may
be voted upon at the meeting as though held when originally convened.
SECTION 5. VOTING. At each meeting of the shareholders every shareholder of the
Trust shall be entitled to one (1) vote in person or by proxy for each of the
then issued and outstanding shares of the Trust then having voting power in
respect of the matter upon which the vote is to be taken, standing in his name
on the books of the Trust at the time of the closing of the transfer books for
the meeting, or, if the books be not closed for any meeting, on the record date
fixed as provided in Section 4 of Article VI of these By-Laws for determining
the shareholders entitled to vote at such meeting, or if the books be not closed
and no record date be fixed, at the time of the meeting. The record holder of a
fraction of a share shall be entitled in like manner to corresponding fraction
of a vote. Notwithstanding the foregoing, the Trustees may, in connection with
the establishment of any class (or series) of shares or in proxy materials for
any meeting of shareholders or in other solicitation materials or by vote or
other action duly taken by them, establish conditions under which the several
classes (or series) shall have separate voting rights or no voting rights.
All elections of Trustees shall be conducted in any manner approved at the
meeting of the shareholders at which said election is held, and shall be by
ballot if so requested by any shareholder entitled to vote thereon. The persons
receiving the greatest number of votes shall be deemed and declared elected.
Except as otherwise required by law or by the Declaration of Trust or by these
By-Laws, all matters shall be decided by a majority of the votes cast, as
hereinabove provided, by persons entitled to vote thereon.
SECTION 6. PROXIES. Any shareholder entitled to vote upon any matter at any
meeting of the shareholders may so vote by proxy. A proxy may be in writing
subscribed by the shareholder or by his duly authorized representatives, agent
or attorney. A written proxy shall be dated; if an undated written proxy
solicited by the management of the Trust is delivered to the Trust or its agent
or representative, such proxy shall be deemed dated by the shareholder on the
date of its receipt by the Trust or its agent or representative. A written proxy
need not be sealed, witnessed or acknowledged. A written proxy may be delivered
to the Trust or its agent by facsimile machine, graphic communication equipment
or similar electronic transmission. The shareholder may also authorize and
empower the persons named as proxies, representatives, agents or attorneys (or
their duly appointed substitutes), or any one of them on any form of proxy
solicited by the management of the Trust to vote all shares of the Trust which
he is entitled to vote upon any matter at any meeting of the shareholders by
recording his voting instructions on any recording device maintained for the
purpose by the Trust or its agent or representative; such recorded instructions
shall be deemed to constitute a written proxy subscribed by the shareholder and
delivered by him to the Trust or its agent or representative and shall be deemed
to be dated as of the date such instructions were transmitted, and the
shareholder shall be deemed to have approved and ratified all actions taken by
such persons in accordance with the voting instructions so recorded. No proxy
which is dated (or deemed dated) more than six months before the initial session
of the meeting shall be accepted and no such proxy shall be valid after the
final adjournment of the meeting. A proxy solicited by the management of the
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<PAGE>
Trust purporting to be executed or transmitted by or on behalf of a shareholder
shall be valid unless challenged at or prior to exercise of the proxy, and the
burden of proving any invalidity shall be borne by the person asserting the
challenge. A proxy solicited by the management of the Trust with respect to
shares held in the name of two or more persons shall be valid if executed or
transmitted by one of them unless at or prior to its exercise the Trust receives
a specific written notice to the contrary from any one of them.
SECTION 7. CONSENTS. Any action which may be taken by shareholders may be taken
without a meeting if a majority of shareholders entitled to vote on the matter
(or such larger proportion thereof as shall be required by law, the Declaration
or these By-Laws for approval of such matter) consent to the action in writing
and the written consents are filed with the records of the meetings of
shareholders. Such consents shall be treated for all purposes as a vote taken at
a meeting of shareholders.
ARTICLE V
Trustees Meetings
SECTION 1. MEETINGS. The Trustees may in their discretion provide for regular or
stated meetings of the Trustees. Meetings of the Trustees other than regular or
stated meetings shall be held whenever called by the Chairman, President or by
any other Trustee at the time being in office. Any or all of the Trustees may
participate in a meeting by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at a meeting.
SECTION 2. NOTICES. Notice of regular or stated meetings need not be given.
Notice of the time and place of each meeting other than regular or stated
meeting shall be given by the Secretary or by the Trustee calling the meeting
and shall be mailed to each Trustee at least two (2) days before the meeting, or
shall be telegraphed, cabled, or wirelessed to each Trustee at his business
address or personally delivered to him at least one (1) day before the meeting.
Such notice may, however, be waived by all the Trustees. Notice of a meeting
need not be given to any Trustee if a written waiver of notice, executed by him
before or after the meeting, is filed with the records of the meeting, or to any
Trustee who attends the meeting without protesting prior thereto or at its
commencement the lack of notice to him. A notice or waiver of notice need not
specify the purpose of any special meeting.
SECTION 3. CONSENTS. Any action required or permitted to be taken at any meeting
of the Trustees may be taken by the Trustees without a meeting if a written
consent thereto is signed by all the Trustees and filed with the records of the
Trustees' meetings. A Trustee may deliver his consent to the Trust by facsimile
machine or other graphic communication equipment. Such consent shall be treated
as a vote at a meeting for all purposes.
SECTION 4. PLACE OF MEETINGS. The Trustees may hold their meetings within or
without the Commonwealth of Massachusetts.
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<PAGE>
SECTION 5. QUORUM AND MANNER OF ACTING. A majority of the Trustees in office
shall be present in person at any regular stated or special meeting of the
Trustees in order to constitute a quorum for the transaction of business at such
meeting and (except as otherwise required by the Declaration of Trust, by these
By-Laws or by statute) the act of a majority of the Trustees present at any such
meeting, at which a quorum is present, shall be the act of the Trustees. In the
absence of quorum, a majority of the Trustees present may adjourn the meeting
from time to time until a quorum shall be present. Notice of any adjourned
meeting need not be given.
ARTICLE VI
Shares of Beneficial Interest
SECTION 1. CERTIFICATES FOR SHARES OF BENEFICIAL INTEREST. Certificates for
shares of beneficial interest of any class of shares of the Trust, if issued,
shall be in such form as shall be approved by the Trustees. They shall be signed
by, or in the name of, the Trust by the President and by the Treasurer and may,
but need not be, sealed with seal of the Trust; provided, however, that where
such certificate is signed by a transfer agent or a transfer clerk acting on
behalf of the Trust or a registrar other than a Trustee, officer or employee of
the Trust, the signature of the President or Treasurer and the seal may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on any such certificate
or certificates, shall cease to be such officer or officers of the Trust whether
because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the Trust, such certificate or
certificates may nevertheless be adopted by the Trust and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signatures shall have been used thereon had not
ceased to be such officer or officers of the Trust.
SECTION 2. TRANSFER OF SHARES. Transfers of shares of beneficial interest of any
shares of the Trust shall be made only on the books of the Trust by the owner
thereof or by his attorney thereunto authorized by a power of attorney duly
executed and filed with the Secretary or a transfer agent, and only upon the
surrender of any certificate or certificates for such shares. The Trust shall
not impose any restrictions upon the transfer of the shares of the Trust, but
this requirement shall not prevent the charging of customary transfer agent
fees.
SECTION 3. TRANSFER AGENT AND REGISTRAR; REGULATIONS. The Trust shall, if and
whenever the Trustees shall so determine, maintain one or more transfer offices
or agencies, each in the charge of a transfer agent designated by the Trustees,
where the shares of beneficial interest of the Trust shall be directly
transferable. The Trust shall, if and whenever the Trustees shall so determine,
maintain one or more registry offices, each in the charge of a registrar
designated by the Trustees, where such shares shall be registered, and no
certificate for shares of the Trust in respect of which a transfer agent and/or
registrar shall have been designated shall be valid unless countersigned by such
transfer agent and/or registered by such registrar. The principal transfer agent
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<PAGE>
may be located within or without the Commonwealth of Massachusetts and shall
have charge of the stock transfer books, lists and records, which shall be kept
within or without Massachusetts in an office which shall be deemed to be the
stock transfer office of the Trust. The Trustees may also make such additional
rules and regulations as it may deem expedient concerning the issue, transfer
and registration of certificates for shares of the Trust.
SECTION 4. CLOSING OF TRANSFER BOOKS AND FIXING RECORD DATE. The Trustees may
fix in advance a time which shall be not more than seventy-five (75) days before
the date of any meeting of shareholders, or the date for the payment of any
dividend or the making or any distribution to shareholders or the last day on
which the consent or dissent of shareholders may be effectively expressed for
any purpose, as the record date for determining the shareholders having the
right to notice of and to vote at such meeting, and any adjournment thereof, or
the right to receive such dividend or distribution or the right to give such
consent or dissent, and in such case only shareholders of record on such record
date shall have such right, notwithstanding any transfer of shares on the books
of the Trust after the record date. The Trustees may, without fixing such record
date, close the transfer books for all or any part of such period for any of the
foregoing purposes.
SECTION 5. LOST, DESTROYED OR MUTILATED CERTIFICATES. The holder of any shares
of the Trust shall immediately notify the Trust of any loss, destruction or
mutilation of the certificate therefor, and the Trustees may, in their
discretion, cause a new certificate or certificates to be issued to him, in case
of mutilation of the certificate, upon the surrender of the mutilated
certificate, or, in case of loss or destruction of the certificate, upon
satisfactory proof of such loss or destruction and, in any case, if the Trustees
shall so determine, upon the delivery of a bond in such form and in such sum and
with such surety or sureties as the Trustees may direct, to indemnify the Trust
against any claim that may be made against it on account of the alleged loss or
destruction of any such certificate.
SECTION 6. RECORD OWNER OF SHARES. The Trust shall be entitled to treat the
person in whose name any share of the Trust is registered on the books of the
Trust as the owner thereof, and shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any other
person.
ARTICLE VII
Fiscal Year
The fiscal year of the Trust shall end on December 31 of each year,
provided, however, that the Trustees may from time to time change the fiscal
year.
ARTICLE VIII
Seal
The Trustees may adopt a seal of the Trust which shall be in such form and
shall have such inscription thereon as the Trustees may from time to time
prescribe.
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ARTICLE IX
Inspection of Books
The Trustees shall from time to time determine whether and to what extent,
and at what times and places, and under what conditions and regulations the
accounts and books of the Trust or any of them shall be open to the inspection
of the shareholders; and no shareholder shall have any right to inspect any
account or book or document of the Trust except as conferred by law or
authorized by the Trustees or by resolution of the shareholders.
ARTICLE X
Principal Custodian and Sub-custodians
The following provisions shall apply to the employment of the principal
Custodian pursuant to the Declaration of Trust:
(a) The Trust may employ the principal Custodian:
(1) To hold securities owned by the Trust and deliver the same
upon written order or oral order, if confirmed in writing,
or by such electro-mechanical or electronic devices as are
agreed to by the Trust and such Custodian;
(2) To receive and receipt for any moneys due to the Trust and
deposit the same in its own banking department or, as the
Trustees may direct, in any bank, trust company or banking
institution approved by such Custodian, provided that all
such deposits shall be subject only to the draft or order of
such Custodian; and
(3) To disburse such funds upon orders or vouchers.
(b) The Trust may also employ such Custodian as its agent:
(1) To keep the books and accounts of the Trust and furnish
clerical and accounting services; and
(2) To compute the net asset value per share in the manner
approved by the Trust.
(c) All of the foregoing services shall be performed upon such basis
of compensation as may be agreed upon between the Trust and the
principal Custodian. If so directed by vote of the holders of a
majority of the outstanding shares of Trust, the principal
Custodian shall deliver and pay over all property of the Trust
held by it as specified in such vote.
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(d) In case of the resignation, removal or inability to serve of any
such Custodian, the Trustees shall promptly appoint another bank
or trust company meeting the requirements of the Declaration of
Trust as successor principal Custodian. The agreement with the
principal Custodian shall provide that the retiring principal
Custodian shall, upon receipt of notice of such appointment,
deliver the funds and property of the Trust in its possession to
and only to such successor, and that pending appointment of a
successor principal Custodian, or a vote of the shareholders to
function without a principal Custodian, the principal Custodian
shall not deliver funds and property of the Trust to the
Trustees, but may deliver them to a bank or trust company doing
business in Boston, Massachusetts, of its own selection, having
an aggregate capital, surplus and undivided profits, as shown by
its last published report, of not less than $2,000,000, as the
property of the Trust to be held under terms similar to those on
which they were held by the retiring principal Custodian.
The Trust may also authorize the principal Custodian to employ one or more
sub-custodians from time to time to perform such of the acts and services of the
Custodian and upon such terms and conditions as may be agreed upon between the
Custodian and sub-custodian.
Subject to such rules, regulations and orders as the Commission may adopt,
the Trust may authorize or direct the principal Custodian or any sub-custodian
to deposit all or any part of the securities in or with one or more depositories
or clearing agencies or systems for the central handling of securities or other
book-entry systems approved by the Trust, or in or with such other persons or
systems as may be permitted by the Commission, or otherwise in accordance with
the Act, pursuant to which all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and may be
transferred or pledged by bookkeeping entry without physical delivery of such
securities, provided that all such deposits shall be subject to withdrawal only
upon the order of the Trust or the principal Custodian or the sub-custodian. The
Trust may also authorize the deposit in or with one or more eligible foreign
custodians (or in or with one or more foreign depositories, clearing agencies or
systems for the central handling of securities) of all or part of the Trust's
foreign assets, securities, cash and cash equivalents in amounts reasonably
necessary to effect the Trust's foreign investment transactions, in accordance
with such rules, regulations and orders as the Commission may adopt.
ARTICLE XI
Limitation of Liability and Indemnification
SECTION 1. LIMITATION OF LIABILITY. Provided they have exercised reasonable care
and have acted under the reasonable belief that their actions are in the best
interest of the Trust, the Trustees shall not be responsible for or liable in
any event for neglect or wrongdoing of them or any officer, agent, employee or
investment adviser of the Trust, but nothing contained in the Declaration of
Trust or herein shall protect any Trustee against any liability to which he
would otherwise be subject by reason of wilful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct of his
office.
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SECTION 2. INDEMNIFICATION OF TRUSTEES AND OFFICERS. The Trust shall indemnify
each person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he is or
has been a Trustee, officer, employee or agent of the Trust, or is or has been
serving at the request of the Trust as a Trustee, director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding, provided that:
(a) such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
Trust,
(b) with respect to any criminal action or proceeding, he had no
reasonable cause to believe his conduct was unlawful,
(c) unless ordered by a court, indemnification shall be made only as
authorized in the specific case upon a determination that
indemnification of the Trustee, officer, employee or agent is
proper in the circumstances because he has met the applicable
standard of conduct set forth in subparagraphs (a) and (b) above
and (e) below, such determination to be made based upon a review
of readily available facts (as opposed to a full trial-type
inquiry) by (i) vote of a majority of the Disinterested Trustees
acting on the matter (provided that a majority of the
Disinterested Trustees then in office act on the matter) or (ii)
by independent legal counsel in a written opinion,
(d) in the case of an action or suit by or in the right of the Trust
to procure a judgment in its favor, no indemnification shall be
made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Trust unless and
only to the extent that the court in which such action or suit is
brought, or a court of equity in the county in which the Trust
has its principal office, shall determine upon application that,
despite the adjudication of liability but in view of all the
circumstances of the case, he is fairly and reasonably entitled
to indemnify for such expenses which such court shall deem
proper, and
(e) no indemnification or other protection shall be made or given to
any Trustee or officer of the Trust against any liability to the
Trust or to its security holders 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.
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<PAGE>
Expenses (including attorneys' fees) incurred with respect to any claim,
action, suit or proceeding of the character described in the preceding paragraph
shall be paid by the Trust in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of such person to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the Trust as authorized by this Article, provided that either:
(1) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust
shall be insured against losses arising out of any such advances;
or
(2) a majority of the Disinterested Trustees acting on the matter
(provided that a majority of the Disinterested Trustees act on
the matter) or an independent legal counsel in a written opinion
shall determine, based upon a review of readily available facts
(as opposed to a full trial-type inquiry), that there is reason
to believe that the recipient ultimately will be found entitled
to indemnification.
As used in this Section 2, a "Disinterested Trustee" is one who is not (i)
an "Interested Person," as defined in the Act, of the Trust (including anyone
who has been exempted from being an "Interested Person" by any rule, regulation,
or order of the Securities and Exchange Commission), or (ii) involved in the
claim, action, suit or proceeding.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Trust, or with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
SECTION 3. INDEMNIFICATION OF SHAREHOLDERS. In case any shareholder or former
shareholder shall be held to be personally liable solely by reason of his being
or having been a shareholder and not because of his acts or omissions or for
some other reason, the shareholder or former shareholder (or his heirs,
executors, administrators or other legal representatives, or in the case of a
corporation or other entity, its corporate or other general successor) shall be
entitled out of the Trust estate to be held harmless from and indemnified
against all loss and expense arising from such liability. The Trust shall, upon
request by the shareholder, assume the defense of any claim made against any
shareholder for any act or obligation of the Trust and satisfy any judgment
thereon. A holder of shares of a series shall be entitled to indemnification
hereunder only out of assets allocated to that series.
ARTICLE XII
Report to Shareholders
The Trustees shall at least semi-annually submit to the shareholders a
written financial report of the transactions of the Trust including financial
statements which shall at least annually be certified by independent public
accountants.
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ARTICLE XIII
Amendments
Except as provided in Section 2 of Article I of these By-Laws for the
portions of such Section 2 referred to therein, these By-Laws may be amended at
any meeting of the Trustees by a vote of a majority of the Trustees then in
office; provided, however, that any provision of Article XI may be amended only
by a two-thirds vote.
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<PAGE>
EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
DISTRIBUTION AGREEMENT
AGREEMENT dated February 20, 1998 between EATON VANCE ADVISERS SENIOR
FLOATING-RATE FUND, a Massachusetts business trust having its principal place of
business in Boston in the Commonwealth of Massachusetts, hereinafter called the
"Fund," and EATON VANCE DISTRIBUTORS, INC., a Massachusetts corporation having
its principal place of business in said Boston, hereinafter sometimes called the
"Principal Underwriter."
IN CONSIDERATION of the mutual promises and undertakings herein contained,
the parties hereto agree:
1. The Fund grants to the Principal Underwriter the right to purchase
common shares of the Fund upon the terms hereinbelow set forth during the term
of this Agreement. While this Agreement is in force, the Principal Underwriter
agrees to use its best efforts to find purchasers for shares of the Fund.
The Principal Underwriter shall have the right to buy from the Fund the
shares needed, but not more than the shares needed (except for clerical errors
and errors of transmission) to fill unconditional orders for shares of the Fund
placed with the Principal Underwriter by financial service firms or investors as
set forth in the current Prospectus relating to shares of the Fund. The price
which the Principal Underwriter shall pay for the shares so purchased shall be
equal to the net asset value used in determining the public offering price to be
paid by investors upon purchasing such shares. The Principal Underwriter shall
notify Investors Bank & Trust Company, Custodian of the Fund, ("IBT"), and First
Data Investor Services Group, Transfer Agent of the Fund ("First Data"), or a
successor transfer agent, at the end of each business day, or as soon thereafter
as the orders placed with it have been compiled, of the number of shares and the
prices thereof which the Principal Underwriter is to purchase as principal for
resale. The Principal Underwriter shall take down and pay for shares ordered
from the Fund on or before the eleventh business day (excluding Saturdays) after
the shares have been so ordered.
The right granted to the Principal Underwriter to buy shares from the Fund
shall be exclusive, except that said exclusive right shall not apply to shares
issued in connection with the merger or consolidation of any other investment
company or personal holding company with the Fund or the acquisition by purchase
or otherwise of all (or substantially all) the assets or the outstanding shares
of any such company, by the Fund; nor shall it apply to shares, if any, issued
by the Fund in distribution of net investment income or realized capital gains
of the Fund payable in shares or in cash at the option of the shareholder.
2. The shares may be resold by the Principal Underwriter to or through
financial service firms having agreements with the Principal Underwriter, and to
investors, upon the following terms and conditions.
The public offering price, i.e., the price per share at which the Principal
Underwriter or financial service firm purchasing shares from the Principal
Underwriter may sell shares to the public, shall be equal to the net asset value
at which the Principal Underwriter is to purchase the shares.
The net asset value of shares of the Fund shall be determined by the Fund
or IBT, as the agent of the Fund, as of the close of regular trading on the New
York Stock Exchange (the "Exchange") on each business day on which said Exchange
is open, or as of such other time on each such business day as may be determined
by the Trustees of the Fund, in accordance with the methodology and procedures
for calculating such net asset value authorized by the Trustees. The Fund may
<PAGE>
also cause the net asset value to be determined in substantially the same manner
or estimated in such manner and as of such other time or times as may from time
to time be agreed upon by the Fund and Principal Underwriter. The Fund will
notify the Principal Underwriter each time the net asset value of shares is
determined and when such value is so determined it shall be applicable to
transactions as set forth in the current Prospectus and Statement of Additional
Information (hereinafter the "Prospectus") relating to the Fund's shares.
No shares of the Fund shall be sold by the Fund during any period when the
determination of net asset value is suspended pursuant to the Agreement and
Declaration of Trust, except to the Principal Underwriter, in the manner and
upon the terms above set forth to cover contracts of sale made by the Principal
Underwriter with its customers prior to any such suspension, and except as
provided in the last paragraph of paragraph 1 hereof. The Fund shall also have
the right to suspend the sale of its shares if in the judgment of the Fund
conditions obtaining at any time render such action advisable. The Principal
Underwriter shall have the right to suspend sales at any time, to refuse to
accept or confirm any order from an investor or financial service firm, or to
accept or confirm any such order in part only, if in the judgment of the
Principal Underwriter such action is in the best interests of the Fund.
3. The Fund agrees that it will, from time to time, but subject to the
necessary approval of the shareholders, take such steps as may be necessary to
register its shares under the federal Securities Act of 1933, as amended from
time to time (the "1933 Act"), to the end that there will be available for sale
such number of shares as the Principal Underwriter may reasonably be expected to
sell. The Fund agrees to indemnify and hold harmless the Principal Underwriter
and each person, if any, who controls the Principal Underwriter within the
meaning of Section 15 of the 1933 Act against any loss, liability, claim,
damages or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, claim, damages or expense and reasonable counsel
fees incurred in connection therewith), arising by reason of any person
acquiring any shares, which may be based upon the 1933 Act or on any other
statute or at common law, on the ground that the Registration Statement or
Prospectus, as from time to time amended and supplemented, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, unless such statement or omission was made in reliance upon, and in
conformity with, information furnished in writing to the Fund in connection
therewith by or on behalf of the Principal Underwriter; provided, however, that
in no case (i) is the indemnity of the Fund in favor of the Principal
Underwriter and any such controlling person to be deemed to protect such
Principal Underwriter or any such controlling person against any liability to
the Fund or its security holders to which such Principal Underwriter or any such
controlling 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
its reckless disregard of its obligations and duties under this Agreement, or
(ii) is the Fund to be liable under its indemnity agreement contained in this
paragraph with respect to any claim made against the Principal Underwriter or
any such controlling person unless the Principal Underwriter or such controlling
person, as the case may be, shall have notified the Fund in writing within a
reasonable time after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the Principal
Underwriter or upon such controlling person (or after such Principal Underwriter
or such controlling person shall have received notice of such service on any
designated agent), but failure to notify the Fund of any such claim shall not
relieve it from any liability which it may have to the person against whom such
action is brought otherwise than on account of its indemnity agreement contained
in this paragraph. The Fund shall be entitled to participate, at its own
expense, in the defense, or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but if the Fund elects to assume the
defense, such defense shall be conducted by counsel chosen by it and
satisfactory to the Principal Underwriter or controlling person or persons,
defendant or defendants in the suit. In the event the Fund elects to assume the
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<PAGE>
defense of any such suit and retains such counsel, the Principal Underwriter or
controlling person or persons, defendant or defendants in the suit, shall bear
the fees and expenses of any additional counsel retained by them, but, in case
the Fund does not elect to assume the defense of any such suit, it shall
reimburse the Principal Underwriter or controlling person or persons, defendant
or defendants in the suit, for the reasonable fees and expenses of any counsel
retained by them. The Fund agrees promptly to notify the Principal Underwriter
of the commencement of any litigation or proceedings against it or any of its
officers or Trustees in connection with the issuance or sale of any of the
shares.
4. The Principal Underwriter covenants and agrees that, in selling the
shares of the Fund, it will use its best efforts in all respects duly to conform
with the requirements of all state and federal laws relating to the sale of such
securities, and will indemnify and hold harmless the Fund and each of its
Trustees and officers and each person, if any, who controls the Fund within the
meaning of Section 15 of the 1933 Act against any loss, liability, damages,
claim or expense (including the reasonable cost of investigating or defending
any alleged loss, liability, damages, claim or expense and reasonable counsel
fees incurred in connection therewith), arising by reason of any person
acquiring any shares, which may be based upon the 1933 Act or any other statute
or at common law, on account of any wrongful act of the Principal Underwriter or
any of its employees (including any failure to conform with any requirement of
any state or federal law relating to the sale of such securities) or on the
ground that the Registration Statement or Prospectus, as from time to time
amended and supplemented, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading, insofar as any such
statement or omission was made in reliance upon, and in conformity with
information furnished in writing to the Fund in connection therewith by or on
behalf of the Principal Underwriter, provided, however, that in no case (i) is
the indemnity of the Principal Underwriter in favor of any person indemnified to
be deemed to protect the Fund or any such person against any liability to which
the Fund or any such person would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its or his
duties or by reason of its or his reckless disregard of its obligations and
duties under this Agreement, or (ii) is the Principal Underwriter to be liable
under its indemnity agreement contained in this paragraph with respect to any
claim made against the Fund or any person indemnified unless the Fund or such
person, as the case may be, shall have notified the Principal Underwriter in
writing within a reasonable time after the summons or other first legal process
giving information of the nature of the claim shall have been served upon the
Fund or upon such person (or after the Fund or such person shall have received
notice of such service on any designated agent), but failure to notify the
Principal Underwriter of any such claim shall not relieve it from any liability
which it may have to the Fund or any person against whom such action is brought
otherwise than on account of its indemnity agreement contained in this
paragraph. The Principal Underwriter shall be entitled to participate, at its
own expense, in the defense, or, if it so elects, to assume the defense of any
suit brought to enforce any such liability, but if the Principal Underwriter
elects to assume the defense, such defense shall be conducted by counsel chosen
by it and satisfactory to the Fund, or to its officers or Trustees, or to any
controlling person or persons, defendant or defendants in the suit. In the event
that the Principal Underwriter elects to assume the defense of any such suit and
retains such counsel, the Fund or such officers or Trustees or controlling
person or persons, defendant or defendants in the suit, shall bear the fees and
expenses of any additional counsel retained by them, but, in case the Principal
Underwriter does not elect to assume the defense of any such suit, it shall
reimburse the Fund, any such officers and Trustees or controlling person or
persons, defendant or defendants in such suit, for the reasonable fees and
expenses of any counsel retained by them. The Principal Underwriter agrees
promptly to notify the Fund of the commencement of any litigation or proceedings
against it in connection with the issue and sale of any of the shares.
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<PAGE>
Neither the Principal Underwriter nor any financial service firm nor any
other person is authorized by the Fund to give any information or to make any
representations, other than those contained in the Registration Statement or
Prospectus filed with the Securities and Exchange Commission (the "Commission")
under the 1933 Act, as amended (as said Registration Statement and Prospectus
may be amended or supplemented from time to time), covering the shares of the
Fund. Neither the Principal Underwriter nor any financial service firm nor any
other person is authorized to act as agent for the Fund in connection with the
offering or sale of shares of the Fund to the public or otherwise. All such
sales made by the Principal Underwriter shall be made by it as principal, for
its own account. The Principal Underwriter may, however, act as agent in
connection with "exchanges" between investment companies for which the Principal
Underwriter acts as Principal Underwriter or for which as affiliate of the
Principal Underwriter acts as investment adviser.
5(a). The Fund will pay, or cause to be paid -
(i) all the costs and expenses of the Fund, including fees and
disbursements of its counsel, in connection with the preparation and filing
of any required Registration Statement and/or Prospectus under the 1933
Act, or the Investment Company Act of 1940 (the "1940 Act") covering its
shares and all amendments and supplements thereto, and preparing and
mailing periodic reports and Prospectuses to shareholders (including the
expense of setting up in type any such Registration Statement, Prospectus
or periodic report);
(ii) the cost of preparing temporary and permanent share certificates
(if any) for shares of the Fund;
(iii) the cost and expenses of delivering to the Principal Underwriter
at its office in Boston, Massachusetts, all shares purchased by it as
principal hereunder;
(iv) all the federal and state (if any) issue and/or transfer taxes
payable upon the issue by or (in the case of treasury shares) transfer from
the Fund to the Principal Underwriter of any and all shares purchased by
the Principal Underwriter hereunder;
(v) all costs and expenses of conducting the Fund's periodic tender
offers for, or other repurchases or redemptions of, shares issued by the
Fund;
(vi) all payments to be made by the Fund pursuant to any written
service plan.
(b) The Principal Underwriter agrees that, after the Prospectus (other than
to existing shareholders of the Fund) and periodic reports have been set up in
type, it will bear the expense of printing and distributing any copies thereof
which are to be used in connection with the offering of shares of the Fund to
financial service firms or investors. The Principal Underwriter further agrees
that it will bear the expenses of preparing, printing and distributing any other
literature used by the Principal Underwriter or furnished by it for use by
financial service firms in connection with the offering of the shares of the
Fund for sale to the public and any expenses of advertising in connection with
such offering. The Fund agrees to pay the expenses of registration and
maintaining registration of its shares for sale under federal and state
securities laws, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a dealer or broker, in such states as shall be selected
by the Principal Underwriter and the fees payable to each such state for
continuing the qualification therein until the Principal Underwriter notifies
the Fund that it does not wish such qualification continued.
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<PAGE>
(c) The Principal Underwriter shall be entitled to receive any Early
Withdrawal Charges paid or payable on repurchases of shares by the Fund pursuant
to any repurchase or tender offer made by the Fund.
6. If, at any time during the existence of this Agreement, the Fund shall
deem it necessary or advisable in the best interests of the Fund that any
amendment of this Agreement be made in order to comply with the recommendations
or requirements of the Commission or other governmental authority or to obtain
any advantage under Massachusetts or federal tax laws, and shall notify the
Principal Underwriter of the form of amendment which it deems necessary or
advisable and the reasons therefor, and, if the Principal Underwriter declines
to assent to such amendment, the Fund may terminate this Agreement forthwith by
written notice to the Principal Underwriter. If, at any time during the
existence of its agreement upon request by the Principal Underwriter, the Fund
fails (after a reasonable time) to make any changes in its Declaration of Trust,
as amended, or in its methods of doing business which are necessary in order to
comply with any requirement of federal law or regulations of the Commission or
of a national securities association of which the Principal Underwriter is or
may be a member, relating to the sale of the shares of the Fund, the Principal
Underwriter may terminate this Agreement forthwith by written notice to the
Fund.
7(a). The Principal Underwriter is a corporation in the United States
organized under the laws of Massachusetts and holding membership in the National
Association of Securities Dealers, Inc., a securities association registered
under Section 15A of the Securities Exchange Act of 1934, as amended from time
to time, and during the life of this Agreement will continue to be so resident
in the United States, so organized and a member in good standing of said
Association. The Principal Underwriter will comply with the Fund's Agreement and
Declaration of Trust and By-Laws, and the 1940 Act, and the rules promulgated
thereunder, insofar as they are applicable to the Principal Underwriter.
(b) The Principal Underwriter shall maintain in the United States and
preserve therein for such period or periods as the Commission shall prescribe by
rules and regulations applicable to it as Principal Underwriter of a closed-end
investment company registered under the 1940 Act such accounts, books and other
documents as are necessary or appropriate to record its transactions with the
Fund. Such accounts, books and other documents shall be subject at any time and
from time to time to such reasonable periodic, special and other examinations by
the Commission or any member or representative thereof as the Commission may
prescribe. The Principal Underwriter shall furnish to the Commission within such
reasonable time as the Commission may prescribe copies of or extracts from such
records which may be prepared without effort, expense or delay as the Commission
may by order require.
8. This Agreement shall continue in force indefinitely until terminated as
in this Agreement above provided, except that:
(a) this Agreement shall continue in effect through and including April 28,
1999 and shall continue in full force and effect indefinitely thereafter, but
only so long as such continuance is specifically approved at least annually (i)
by the vote of a majority of the Trustees of the Fund who are not "interested
persons" of the Fund or of the Principal Underwriter cast in person at a meeting
called for the purchase of voting on such approval, and (ii) by the Board of
Trustees of the Fund or by vote of a majority of the outstanding voting
securities of the Fund; and
(b) either party shall have the right to terminate this Agreement on six
(6) months' written notice thereof given in writing to the other party.
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<PAGE>
9. In the event of the assignment of this Agreement by the Principal
Underwriter, this Agreement shall automatically terminate.
10. Any notice under this Agreement shall be in writing, addressed and
delivered, or mailed postage paid, to the other party, at such address as such
other party may designate for the receipt of such notices. Until further notice
to the other party, it is agreed that the record address of the Fund, and that
of the Principal Underwriter, shall be 24 Federal Street, Boston, Massachusetts
02110.
11. The services of the Principal Underwriter to the Fund hereunder are not
to be deemed to be exclusive, the Principal Underwriter being free to (a) render
similar services to, and to act as principal underwriter in connection with the
distribution of shares of, other investment companies, and (b) engage in other
businesses and activities from time to time.
12. The terms "vote of a majority of the outstanding voting securities,"
"assignment" and "interested persons," when used herein, shall have the
respective meanings specified in the 1940 Act, subject, however, to such
exemptions as may be granted by the Commission by any rule, regulation or order.
13. The Principal Underwriter expressly acknowledges the provision in the
Fund's Agreement and Declaration of Trust limiting the personal liability of the
shareholders of the Fund or the Trustees of the Fund. The Principal Underwriter
hereby agrees that it shall have recourse only to the assets of the Fund for
payment of claims or obligations as between the Fund, and the Principal
Underwriter arising out of this Agreement and shall not seek satisfaction from
any shareholders of the Fund or from the Trustees or any Trustee of the Fund.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement on
the 20th day of February, 1998.
EATON VANCE ADVISERS SENIOR
FLOATING-RATE FUND
By: /s/ James B. Hawkes
-------------------------------
President
EATON VANCE DISTRIBUTORS, INC.
By: /s/ Alan R. Dynner
------------------------------
Vice President
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<PAGE>
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions........................................................1-2
2. Employment of Custodian and Property to be held by it..............2-3
3. Duties of the Custodian with Respect to
Property of the Fund.................................................3
A. Safekeeping and Holding of Property..............................3
B. Delivery of Securities.........................................3-6
C. Registration of Securities.......................................6
D. Bank Accounts....................................................6
E. Payments for Shares of the Fund..................................6
F. Investment and Availability of Federal Funds.....................6
G. Collections......................................................7
H. Payment of Fund Moneys.........................................8-9
I. Liability for Payment in Advance of
Receipt of Securities Purchased..................................9
J. Payments for Repurchases of Redemptions
of Shares of the Fund.........................................9-10
K. Appointment of Agents by the Custodian..........................10
L. Deposit of Fund Portfolio Securities in Securities Systems...10-11
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper................................12-13
N. Segregated Account...........................................13-14
O. Ownership Certificates for Tax Purposes.........................14
P. Proxies.........................................................14
Q. Communications Relating to Fund Portfolio Securities............14
R. Exercise of Rights; Tender Offers...........................14-15
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S. Depository Receipts.............................................15
T. Interest Bearing Call or Time Deposits..........................15
U. Options, Futures Contracts and Foreign Currency Transactions.15-17
V. Actions Permitted Without Express Authority.....................17
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value.....................................17
5. Records and Miscellaneous Duties....................................18
6. Opinion of Fund`s Independent Public Accountants....................18
7. Compensation and Expenses of Bank...................................18
8. Responsibility of Bank...........................................18-19
9. Persons Having Access to Assets of the Fund.........................19
10. Effective Period, Termination and Amendment; Successor Custodian....20
11. Interpretive and Additional Provisions..............................20
12. Notices.............................................................21
13. Massachusetts Law to Apply..........................................21
14. Adoption of the Agreement by the Fund...............................21
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MASTER CUSTODIAN AGREEMENT
This Agreement is made between each investment company advised by Eaton
Vance Management 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) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(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 Fund 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 Fund 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 vote of the Board
approving such clearing agency as a securities depository for the Fund.
(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).
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(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 vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(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 vote of the Board approving the
participation by the Fund 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. Electronic instructions for the purchase and
sale of securities which are transmitted by Eaton Vance Management to the
Custodian through the Eaton Vance equity trading system and the Eaton Vance
fixed income trading system shall be deemed to be proper instructions; the Fund
shall cause all such instructions to be confirmed in writing. Different persons
may be authorized to give instructions for different purposes. A certified copy
of a vote 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 vote 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 Fund shall cause all oral instructions to be confirmed
in writing. The Fund 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 Fund as to the authorization by the
President and the Treasurer of the Fund accompanied by a detailed description of
the communication procedures approved by the President and the Treasurer of the
Fund, "proper instructions" may also include communications effected directly
between electromechanical or electronic devices provided that the President and
Treasurer of the Fund and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets. In performing its duties
generally, and more particularly in connection with the purchase, sale and
exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders 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 votes, resolutions or
proceedings of the shareholders or the Board.
2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Fund 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 Fund 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 Fund from time to time, and the cash
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consideration received by it for such new or treasury shares ("Shares") of
the Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund 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 of Directors. 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 Fund 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 of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep safely all
property of the Fund and on behalf of the Fund shall from time to time receive
delivery of Fund property for safekeeping. The Custodian shall hold, earmark and
segregate on its books and records for the account of the Fund all property of
the Fund, including all securities, participation interests and other assets of
the Fund (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 Fund 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 Fund, 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
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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 may be made in accordance with
procedures agreed to in writing from time to 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 Fund and
(ii) upon the failure by the Fund 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 Fund;
3) To the depository agent in connection with tender or other similar
offers for portfolio securities of the Fund;
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
Fund 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 Fund 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 Fund
(such loans to be made pursuant to the terms of the Fund's current registration
statement), BUT ONLY against receipt of adequate collateral as agreed upon from
time to time by the Custodian and the Fund, 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 Fund prior to
the receipt of such collateral;
10) For delivery as security in connection with any borrowings by the Fund
requiring a pledge or hypothecation of assets by the Fund (if then permitted
under circumstances described in the current registration statement of the
Fund), 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 redemption or
repurchase of Shares of the Fund 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 Fund, 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 Fund;
13) For delivery in accordance with the provisions of any agreement among
the Fund, 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
Fund;
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14) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to proper instructions, a certified copy of a vote 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 Fund shall be registered in the name
of the Fund or in the name of any nominee of the Fund 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 Fund 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 Fund 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 Fund, subject only to draft or order by
the Custodian acting in 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 Fund other than cash maintained by the Fund
in a bank account established and used in accordance with Rule 17f-3 under the
Investment Company Act of 1940. Funds held by the Custodian for the Fund 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 Fund. 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 SHARES OF THE FUND The Custodian shall make appropriate
arrangements with the Transfer Agent and the principal underwriter of the Fund
to enable the Custodian to make certain it promptly receives the cash or other
consideration due to the Fund for such new or treasury Shares as may be issued
or sold from time to time by the Fund, in accordance with the governing
documents and offering prospectus and statement of additional information of the
Fund. The Custodian will provide prompt notification to the Fund of any receipt
by it of payments for Shares of the Fund.
F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement between the
Fund and the Custodian, the Custodian shall, upon the receipt of proper
instructions, which may be continuing instructions when deemed appropriate by
the parties,
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1) 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 Fund; and
2) make federal funds available to the Fund as of specified times agreed
upon from time to time by the Fund and the Custodian in the amount of checks
received in payment for Shares of the Fund which are deposited into the Fund's
account.
G. COLLECTIONS The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which the Fund
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 Fund'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;
3) Endorse and deposit for collection, in the name of the Fund, 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 Fund 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 Fund 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 Fund 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 Fund; 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.
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H. PAYMENT OF FUND MONEYS Upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, the Custodian
shall pay out moneys of the Fund 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 Fund 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 Fund regarding the
participation interests to be purchased or
(iii) written confirmation of the purchase by the Fund of the options,
futures contracts, forward contracts or options on futures contracts
by the Custodian (or by a subcustodian employed 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 Fund 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 Fund; or (e) with respect
to securities purchased outside of the United States, in accordance with written
procedures agreed to from time to time in writing by the parties hereto;
2) When required in connection with the conversion, exchange or surrender
of securities owned by the Fund as set forth in Paragraph B hereof;
3) When required for the redemption or repurchase of Shares of the Fund in
accordance with the provisions of Paragraph J hereof;
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4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account of the Fund:
advisory fees, distribution plan payments, interest, taxes, management
compensation and expenses, accounting, transfer agent and legal fees, and other
operating expenses of the Fund whether or not such expenses are to be in whole
or part capitalized or treated as deferred expenses;
5) For the payment of any dividends or other distributions to holders of
Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, BUT ONLY upon receipt of, in
addition to proper instructions, a certified copy of a vote 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 Fund 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 Fund to so pay in advance, the Custodian shall be absolutely liable to
the Fund 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 Fund 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 transfered 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.
J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND From such
funds as may be available for the purpose, but subject to any applicable votes
of the Board and the current redemption and repurchase procedures of the Fund,
the Custodian shall, upon receipt of written instructions from the Fund or from
the Fund's transfer agent or from the principal underwriter, make funds and/or
portfolio securities available for payment to holders of Shares who have caused
their Shares to be redeemed or repurchased by the Fund or for the Fund`s account
by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon which special
checks may be drawn by shareholders of the Fund holding Shares for which
certificates have not been issued. Such checking account and such special checks
shall be subject to such rules and regulations as the Custodian and the Fund may
from time to time adopt. The Custodian or the Fund may suspend or terminate use
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of such checking account or such special checks (either generally or for one
or more shareholders) at any time. The Custodian and the Fund shall notify
the other immediately of any such suspension or termination.
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 Fund 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 Fund held by any such agent shall be deemed to be held by
the Custodian hereunder.
L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Fund
(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 Fund 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.
(b) The records of the Custodian with respect to securities of the Fund
which are maintained in a Securities System shall identify by book-entry those
securities belonging to the Fund, and the Custodian shall be fully and
completely responsible for maintaining a recordkeeping system capable of
accurately and currently stating the Fund's holdings maintained in each such
Securities System.
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(c) The Custodian shall pay for securities purchased in book-entry form for
the account of the Fund 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 any entry on the records of the Custodian to reflect such
payment and transfer for the account of the Fund. The Custodian shall transfer
securities sold for the account of the Fund 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 Fund.
Copies of all notices or advices from the Securities System of transfers of
securities for the account of the Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be promptly provided to the Fund at its
request. The Custodian shall promptly send to the Fund confirmation of each
transfer to or from the account of the Fund in the form of a written advice or
notice of each such transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the Securities System
for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund 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 Fund 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 Fund 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 Securities System. The Custodian's books and records
relating to the Fund's participation in each Securities System will at all times
during regular business hours be open to the inspection of the Fund'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 Fund that the Board has approved
the use of a particular Securities System; the Custodian shall also obtain
appropriate assurance from the officers of the Fund that the Board has annually
reviewed the continued use by the Fund of each Securities System, and the Fund
shall promptly notify the Custodian if the use of a Securities System is to be
discontinued; at the request of the Fund, 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 Fund for any loss or damage to the Fund
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 Fund,
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 Fund has not been made whole for any such loss or damage.
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M. DEPOSIT OF FUND 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 Fund, the Custodian may
deposit and/or maintain direct issue commercial paper owned by the Fund 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 Fund 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 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
Fund 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 Fund 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 Fund. The Custodian shall be fully and completely responsible
for maintaining a recordkeeping system capable of accurately and currently
stating the Fund'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 Fund 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 Fund. The
Custodian shall transfer such commercial paper which is sold or cancel such
commercial paper which is redeemed for the account of the Fund 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 Fund. Copies of all notices, advices and confirmations of
transfers of commercial paper for the account of the Fund shall identify the
Fund, be maintained for the Fund by the Custodian and be promptly provided to
the Fund at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the Fund in the form of
a written advice or notice of each such transaction, and shall furnish to the
Fund copies of daily transaction sheets reflecting each day's transactions in
the System for the account of the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund 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 Fund any report or other communication relating to the
Custodian's internal accounting controls and procedures for safeguarding
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commercial paper deposited 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 Fund 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 Fund 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 Fund
that the Board has annually reviewed the continued use by the Fund of each
Approved Book-Entry System for Commercial Paper, and the Fund 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 Fund, 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 Fund 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 Fund for any loss or damage to the Fund
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 Fund, 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 Fund 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 Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Paragraph L hereof, (i) in accordance with the provisions
of any agreement among the Fund, 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 Fund, (ii) for purposes of segregating cash or U.S.
Government securities in connection with options purchased, sold or written by
the Fund or futures contracts or options thereon purchased or sold by the Fund,
(iii) for the purposes of compliance by the Fund with the procedures required by
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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
Fund, 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 Fund 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 Fund 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 FUND PORTFOLIO SECURITIES The Custodian shall
deliver promptly to the Fund 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 Fund and the maturity of futures
contracts purchased or sold by the Fund) received by the Custodian from issuers
and other persons relating to the securities and participation interests being
held for the Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information received by the
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
Fund 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 Fund 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
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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 Fund 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. 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 Fund 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 Fund 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
applicable Fund 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 Custodians 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 Fund, 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 Fund; deposit and maintain in a segregated account for each Fund
separately, either physically or by book-entry in a Securities System,
securities subject to a covered call option written by the Fund; and release
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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 each Fund's segregated account in compliance with applicable
margin maintenance requirements.
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 Fund; deposit and maintain in a segregated account, for the
benefit of any futures commission merchant, assets designated by the Fund as
initial, maintenance or variation "margin" deposits (including mark-to-market
payments) intended to secure the Fund's performance of its obligations under any
futures contracts purchased or sold or any options on futures contracts written
by Fund, in accordance with the provisions of any agreement or agreements among
the Fund, 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 Fund. 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 Fund; 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 Fund. 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 Fund
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 Fund)
make free 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
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contact has been delivered or received. The Custodian shall not be
responsible for any costs and interest charges which may be incurred by the Fund
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 Fund 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 Fund:
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 Fund;
2) surrender securities in temporary form for securities in definitive
form;
3) endorse for collection, in the name of the Fund, 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 Fund except as otherwise directed by the Fund.
4. DUTIES OF BANK WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATIONS OF NET
ASSET VALUE
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 Fund'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
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund'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 Fund; 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 a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund 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 Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, 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.
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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 Fund 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 Fund. 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 Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in 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 Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
6. OPINION OF FUND'S INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall take all reasonable action, as the Fund may from time
to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund'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 Fund and the
Bank. The Bank shall be entitled to receive from the Fund 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.
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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 Fund) 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
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 Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from 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 Fund 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 Fund being liable for the payment of money or incurring
liability of some other form, the Fund, 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 FUND
(i) No trustee, director, general partner, officer, employee or agent of
the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.
(ii) Access to assets of the Fund 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 Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.
(iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund 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 Fund prohibited by paragraph
(i) of this Section 9.
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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 Fund 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 Funds, 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 Fund 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 Funds
determines that the performance of the Custodian has been unsatisfactory or
adverse to the interests of shareholders of any Fund or Funds or that the terms
of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds 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
Funds. If the conditions of the preceding sentence are not met then the Fund or
Funds may terminate this Agreement on sixty (60) days written notice.
The Board of the Fund 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 Fund
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 Fund to the Fund 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 Fund held by or deposited with the
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
Fund 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 Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.
-20-
<PAGE>
12. NOTICES
Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such other
address as the Fund may have designated to the Bank, in writing, or to Investors
Bank & Trust Company, 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.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
14. ADOPTION OF THE AGREEMENT BY THE FUND
The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement, such adoption to be evidenced by a
letter agreement between the Fund and the Bank reflecting such adoption, which
letter agreement shall be dated and signed by a duly authorized officer of the
Fund 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 Fund and the Bank relating to
the custody of the Fund's assets.
* * * * *
-21-
<PAGE>
February 20, 1998
Eaton Vance Advisers Senior Floating-Rate Fund hereby adopts and agrees to
become a party to the attached Master Custodian Agreement between the Eaton
Vance Group of Funds and Investors Bank & Trust Company.
EATON VANCE ADVISERS SENIOR
FLOATING-RATE FUND
By: /s/ James B. Hawkes
--------------------------------------
President
Accepted and agreed to:
Investors Bank & Trust Company
By: /s/ Michael F. Rogers
--------------------------------
Title: Executive Vice President
<PAGE>
EATON VANCE ADVISERS SENIOR FLOATING-RATE FUND
ADMINISTRATION AGREEMENT
AGREEMENT made this 20th day of February, 1998, between Eaton Vance
Advisers Senior Floating-Rate Fund, a Massachusetts business trust (the "Fund"),
and Eaton Vance Management, a Massachusetts business trust (the
"Administrator").
1. DUTIES OF THE ADMINISTRATOR. The Fund hereby employs the Administrator
to act as administrator for and to administer the affairs of the Fund, subject
to the supervision of the Trustees of the Fund for the period and on the terms
set forth in this Agreement. The shares of beneficial interest of the Fund are
of a single series and class; however, shares may be issued in additional
classes or divided into additional series of the Fund that may be established
from time to time by action of the Trustees.
The Administrator hereby accepts such employment, and agrees to administer
the Fund's business affairs and, in connection therewith, to furnish for the use
of the Fund office space and all necessary office facilities, equipment and
personnel for administering the affairs of the Fund. The Administrator shall
also pay the salaries and compensation of all officers and Trustees of the Fund
who are members of the Administrator's organization and who render executive and
administrative services to the Fund, and the salaries and compensation of all
other personnel of the Administrator performing management and administrative
services for the Fund. The Administrator 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 Fund in
any way or otherwise be deemed an agent of the Fund.
In connection with its responsibilities as Administrator of the Fund, the
Administrator (i) will prepare all annual, semi-annual and other reports
required to be sent to Fund shareholders, and arrange for the printing and
dissemination of such reports to shareholders; (ii) will prepare and assemble
all reports required to be filed by the Fund with the Securities and Exchange
Commission ("SEC") on Form N-SAR, or on such other form as the SEC may
substitute for Form N-SAR, and file such reports with the SEC; (iii) will review
the provision of services by the Fund's independent accountants, including but
not limited to the preparation by such accountants of audited financial
statements of the Fund and the Fund's federal, state and local tax returns; and
make such reports and recommendations to the Trustees of the Fund concerning the
performance of the independent accountants as the Trustees deem appropriate;
(iv) will arrange for the filing with the appropriate authorities all required
federal, state and local tax returns; (v) will arrange for the dissemination to
shareholders of the Fund's proxy materials, and will oversee the tabulation of
proxies by the Fund's transfer agent; (vi) will review and supervise the
provision of custodian services to the Fund; and make such reports and
recommendations to the Trustees concerning the provision of such services as the
Trustees deem appropriate; (vii) will value all such portfolio investments and
other assets of the Fund as may be designated by the Trustees (subject to any
guidelines, directions and instructions of the Trustees), and review and
supervise the calculation of the net asset value of the Fund's shares by the
custodian; (viii) will negotiate the terms and conditions under which transfer
agency and dividend disbursing services will be provided to the Fund, and the
fees to be paid by the Fund in connection therewith; review and supervise the
provision of transfer agency and dividend disbursing services to the Fund; and
make such reports and recommendations to the Trustees concerning the performance
of the Fund's transfer and dividend disbursing agent as the Trustees deem
appropriate; (ix) will establish the accounting policies of the Fund; reconcile
accounting issues which may arise with respect to the Fund's operations; and
<PAGE>
-2-
consult with the Fund's independent accountants, legal counsel, custodian,
accounting and bookkeeping agents and transfer and dividend disbursing agent as
necessary in connection therewith; (x) will determine the amount of all
distributions to be paid by the Fund to its shareholders; prepare and arrange
for the printing of notices to shareholders regarding such distributions and
provide the Fund's transfer and dividend disbursing agent and custodian with
such information as is required for such parties to effect the payment of
distributions and to implement the Fund's distribution reinvestment plan; (xi)
will review the Fund's bills and authorize payments of such bills by the Fund's
custodian; (xii) will make recommendations to the Trustees as to whether the
Fund should make repurchase or tender offers for its own shares; arrange for the
preparation and filing of all documents required to be filed by the Fund with
the SEC; arrange for the preparation and dissemination of all appropriate
repurchase or tender offer documents and papers on behalf of the Fund; and
supervise and conduct the Fund's periodic repurchase or tender offers for its
own shares; (xiii) will review and supervise the payment of any early withdrawal
charges (as described in the Fund's current offering prospectus); (xiv) will
review and supervise the continuous offering of the Fund's shares through the
principal underwriter, and arrange for the payment by the principal underwriter
of all compensation to Authorized Firms in accordance with the Fund's current
offering prospectus; (xv) will arrange for the preparation and filing of all
other reports, forms, registration statements and documents required to be filed
by the Fund with the SEC; (xvi) will arrange for the preparation and filing of
all reports, forms, registration statements and documents required to be filed
by the Fund with state securities administrators or blue sky authorities; (xvii)
will arrange for the preparation of all advertisements and promotional material
relating to the continuous offering of the Fund's shares, and all communications
by the Fund to its shareholders; and (xviii) will provide to the Fund such other
internal legal, auditing and accounting services and internal executive
management and administrative services as the Trustees deem appropriate to
conduct the Fund's business affairs.
Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares of the Fund, nor
shall the Administrator be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, custodian
or shareholder servicing agent of the Fund. It is intended that the assets of
the Fund will be invested in an interest in Senior Debt Portfolio (the
"Portfolio"), a registered closed-end investment company having substantially
the same investment objective, policies and restrictions as the Fund. Boston
Management and Research ("BMR"), an affiliate of the Administrator, will act as
investment adviser to the Portfolio under an Investment Advisory Agreement
between the Portfolio and BMR.
SUB-ADMINISTRATORS. The Administrator may employ one or more
sub-administrators from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators and approved by the
Trustees of the Fund.
2. COMPENSATION OF THE ADMINISTRATOR. For the services, payments and
facilities to be furnished hereunder by the Administrator, the Fund shall pay to
the Administrator on the last day of each month a fee not to exceed 1/48 of 1%
of the average daily gross assets of the Fund throughout the month. In
calculating the gross assets of the Fund for this purpose, there shall be
deducted therefrom all liabilities of the Fund except the principal amount of
any indebtedness for money borrowed including debt securities issued by the
Fund. Upon and after the investment by the Fund of substantially all of its
assets in another investment company with substantially the same investment
<PAGE>
-3-
objective, policies and restrictions as the Fund, the Fund shall pay to the
Administrator on the last day of each month a fee not to exceed 1/48 of 1% of
that portion of the average daily gross assets of such other investment company
throughout the month which is attributable to the Fund's interest in such other
investment company. In calculating the gross assets of such other investment
company, all liabilities of the other investment company shall be deducted
except the principal amount of any indebtedness for money borrowed including
debt securities issued by the other investment company.
In case of initiation or termination of the Agreement during any month, the
fee for that month shall be reduced proportionately on the basis of the number
of calendar days during which the Agreement is in effect and the fee shall be
computed upon the basis of the average gross assets for the business days the
Agreement 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 Fund will
pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Fund shall include,
without implied limitation: (i) expenses of maintaining the Fund and continuing
its existence; (ii) registration of the Fund 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, repurchase and redemption (if any) of shares,
including all expenses incurred in conducting repurchase and tender offers for
the purpose of repurchasing Fund shares; (viii) expenses of registering and
qualifying the Fund and its shares under federal and state securities laws and
of preparing and printing prospectuses for such purposes and for distributing
the same to shareholders and investors, and fees and expenses of registering and
maintaining registrations of the Fund and of the Fund's principal underwriter,
if any, as a broker-dealer or agent under state securities laws; (ix) expenses
of reports and notices to shareholders and of meetings of shareholders 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 Fund (including without limitation safekeeping of funds and
securities, keeping of books and accounts and determination of net asset value);
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents, shareholder servicing agents and registrars for all services to the
Fund; (xv) expenses for servicing shareholder accounts; (xvi) any direct charges
to shareholders approved by the Trustees of the Fund; (xvii) compensation of and
any expenses of Trustees of the Fund; (xviii) all payments to be made and
expenses to be assumed by the Fund in connection with the distribution of Fund
shares; (xix) any pricing and valuation services employed by the Fund; (xx) any
investment advisory fee payable to an investment adviser; and (xxi) such
non-recurring items as may arise, including expenses incurred in connection with
litigation, proceedings and claims and obligation of the Fund to indemnify its
Trustees, officers and with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees, officers and
shareholders of the Fund are or may be or become interested in the Administrator
as trustees, officers, employees, shareholders or otherwise and that trustees,
officers, employees and shareholders of the Administrator are or may be or
become similarly interested in the Fund, and that the Administrator may be or
become interested in the Fund as a shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
<PAGE>
-4-
employees, stockholders 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, management or administration agreements or other contracts or
relationship with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADMINISTRATOR. The services of the
Administrator to the Fund 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
Fund or to any shareholder of the Fund 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 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 Fund, and (ii) by
the vote of a majority of those Trustees of the Fund who are not interested
persons of the Administrator or the Fund.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement by action of the Trustees of the
Fund or the trustees of the Administrator, and the Fund may, at any time upon
such written notice to the Administrator, terminate the Agreement by vote of a
majority of the outstanding voting securities of the Fund. This Agreement shall
terminate automatically in the event of its assignment.
7. 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 Fund who are not interested persons of the Administrator or the
Fund, and (ii) by vote of the Board of Trustees of the Fund.
8. LIMITATION OF LIABILITY. The Administrator expressly acknowledges the
provision in the Agreement and Declaration of Trust of the Fund limiting the
personal liability of the shareholders of the Fund and of the officers and
Trustees of the Fund, and the Administrator hereby agrees that it shall have
recourse to the Fund for payment of claims or obligations as between the Fund
and the Administrator arising out of this Agreement and shall not seek
satisfaction from the Trustees, officers or shareholders of the Fund.
9. USE OF THE NAME "EATON VANCE." The Administrator hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Administrator or one of its affiliates as the administrator of the Fund. The
name "Eaton Vance" or any variation thereof may be used from time to time in
other connections and for other purposes by the Administrator and its affiliates
and other investment companies that have obtained consent to the use of the name
<PAGE>
-5-
"Eaton Vance." The Administrator shall have the right to require the Fund to
cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Administrator or one of its affiliates as
the Fund's administrator. Future names adopted by the Fund for itself, insofar
as such names include identifying words requiring the consent of the
Administrator, shall be the property of the Administrator and shall be subject
to the same terms and conditions.
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 of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.
EATON VANCE ADVISERS SENIOR EATON VANCE MANAGEMENT
FLOATING-RATE FUND
By: /s/ James B. Hawkes By: /s/ Alan R. Dynner
-------------------------- -------------------------------
President Vice President, and not individually
<PAGE>
TRANSFER AGENCY AGREEMENT
AGREEMENT dated as of January 1, 1998, between each registered investment
company listed on Schedule A hereof (as amended from time to time) (each a
"Fund") and FIRST DATA INVESTOR SERVICES GROUP, INC. (the "Transfer Agent"), a
Massachusetts corporation with principal offices at 4400 Computer Drive,
Westboro, Massachusetts 01581.
W I T N E S S E T H:
WHEREAS, each Fund may issue Shares to investors in separate series and in
separate classes within each series; and
WHEREAS, each Fund desires to retain FDISG as its transfer agent, dividend
disbursing agent and agent in connection with certain other activities, and
FDISG desires to provide such services on the terms herein.
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth, each Fund and FDISG 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) "Articles of Organization" shall mean the Articles of Organization,
Declaration of Trust or other charter document of the Fund, as the same may be
amended from time to time;
(b) "Authorized Person" shall be deemed to include any person duly
authorized to give Oral Instructions or Written Instructions on behalf of the
Fund as indicated in writing to FDISG from time to time;
(c) "Commission" shall mean the Securities and Exchange Commission;
(d) "Counsel" shall mean (i) outside legal counsel of the Fund in its
capacity as such and (ii) outside legal counsel of FDISG if such counsel has
been specifically authorized by an Authorized Person of the Fund to render its
opinion on the matter that has arisen;
(e) "Custodian" refers to the custodian and any sub-custodian of all
securities and other property which the Fund may from time to time deposit, or
cause to be deposited or held under the name or account of such custodian duly
engaged by the Fund;
<PAGE>
(f) "Trustees" or "Board of Trustees" refers to the duly elected Trustees
or Directors of the Fund;
(g) "Oral Instructions" shall mean instructions, other than Written
Instructions, actually received by FDISG from a person reasonably believed by
FDISG to be an Authorized Person;
(h) "Prospectus" shall mean the Fund's current prospectus and statement of
additional information, including any supplements thereto, relating to the
registration of the Fund's Shares under the Securities Act of 1933, as amended,
and the 1940 Act or, if not registered under the Securities Act of 1933, the
Fund's most recent amendment to its registration statement under the 1940 Act;
(i) "Shares" refers to the shares of beneficial interest or common stock of
the Fund (which may be divided into series, classes or both);
(j) "Shareholder" means a record owner of Shares;
(k) Written Instructions" means any written communication signed by an
Authorized Person and actually received by FDISG, and shall include manually
executed originals and authorized electronic transmissions of such originals
(including telefacsimile); and
(l) The "1940 Act" refers to the Investment Company Act of 1940 and the
rules and regulations promulgated thereunder, all as amended from time to time.
2. APPOINTMENT OF FDISG. The Fund hereby appoints FDISG as transfer agent
for its Shares and as shareholder servicing agent for the Fund, and FDISG
accepts such appointment and agrees to perform the duties hereinafter set forth.
3. DUTIES OF FDISG.
(a) FDISG shall be responsible for administering and/or performing transfer
agent functions; for acting as service agent in connection with dividend and
distribution functions; and for performing shareholder account and
administrative agent functions in connection with the issuance, transfer and
redemption or repurchase (including coordination with the Custodian) of Shares.
Such duties are described in the written Schedule of Duties of FDISG annexed
hereto as Schedule B. FDISG shall also act in accordance with the terms of the
Prospectus of the Fund, applicable law and the procedures established from time
to time between FDISG and the Fund.
(b) FDISG shall record the issuance of Shares and maintain pursuant to Rule
17Ad-10(e) under the Securities Act of 1934 a record of the total number of
Shares of the Fund which are authorized (with due authorization based upon data
provided by the Fund), issued and outstanding. FDISG shall provide the Fund on a
2
<PAGE>
regular basis with such information but shall have no obligation, when
recording the issuance of Shares, to monitor the legality of issuance of Shares
or to take cognizance of any laws relating to the proper issue or sale of such
Shares, which functions shall be the sole responsibility of the Fund (or its
principal underwriter or administrator).
(c) FDISG agrees to provide the services set forth herein in accordance
with the schedule of Performance Standards attached hereto as Exhibit 1.
(d) FDISG acknowledges that the Funds' administrator, Eaton Vance
Management ("EVM"), currently employs personnel to provide shareholders with,
among other things, information regarding their accounts and transaction
procedures of FDISG. FDISG acknowledges that EVM is not responsible for transfer
agency services to the Fund. In the event FDISG determines that a particular
transaction requested by a shareholder cannot be processed because it is not
permitted by law or procedures established hereby but EVM or Fund personnel
desire the transaction to be so processed, then FDISG shall nonetheless process
the transaction if EVM provides a standard form indemnification to FDISG. At the
request of EVM, FDISG shall provide a written explanation for its decision.
4. RECORDKEEPING, AND OTHER INFORMATION.
(a) FDISG shall create and maintain all records required of it pursuant to
its duties hereunder and as set forth in Schedule B in accordance with all
applicable laws, rules and regulations, including records required by Section
31(a) of the 1940 Act and the rules thereunder. Where applicable, such records
shall be maintained by FDISG for the periods and the places required by Rule
31a-2 under the 1940 Act.
(b) FDISG agrees that all such records prepared or maintained by FDISG
relating to the services to be performed by FDISG hereunder are the property of
the Fund, and will be surrendered promptly to the Fund on and in accordance with
the Fund's request.
(c) In case of any requests or demands for the inspection of Shareholder
records of the Fund by third parties, FDISG will endeavor to notify the Fund of
such request and secure Written Instructions as to the handling of such request.
FDISG reserves the right, however, to exhibit the Shareholder records to any
person whenever it is required to do so by law.
5. FUND INSTRUCTIONS - LIMITATIONS OF LIABILITY.
(a) FDISG will have no liability when acting in conformance with Written or
Oral Instructions reasonably believed to have been executed or orally
communicated by an Authorized Person and will not be held to have any notice of
any change of authority of any person until receipt of a Written Instruction
thereof from the Fund. FDISG will also have no liability when processing Share
certificates which it reasonably believes them to bear the proper manual or
facsimile signatures of the Officers of the Fund and the proper countersignature
of FDISG.
3
<PAGE>
(b) At any time, FDISG may apply to any Authorized Person of the Fund for
Written Instructions and may, after obtaining prior oral or written approval by
an Authorized Person, seek advise from Counsel with respect to any matter
arising in connection with this Agreement, and it shall not be liable for any
action taken or not taken or suffered by it in good faith in accordance with
such Written Instructions or in accordance with this opinion of Counsel. Written
Instructions requested by FDISG will be provided by the Fund within a reasonable
period of time. In addition, FDISG, its Officers, agents or employees, shall
accept Oral Instructions or Written Instructions given to them by any person
representing or acting on behalf of the Fund only if said representative is
known by FDISG, or its Officers, agents or employees, to be an Authorized
Person. FDISG shall have no duty or obligation to inquire into, nor shall FDISG
be responsible for, the legality of any act done by it upon the request or
direction of an Authorized Person.
(c) Notwithstanding any of the foregoing provisions of this Agreement,
FDISG shall be under no duty or obligation to inquire into, and shall not be
liable for: (i) the legality of the issuance or sale of any Shares or the
sufficiency of the amount to be received therefor; (ii) the propriety of the
amount per share to be paid on any redemption; (iii) the legality of the
declaration of any dividend by the Trustees, or the legality of the issuance of
any Shares in payment of any dividend; or (iv) the legality of any
recapitalization or readjustment of the Shares.
(d) FDISG will not be liable or responsible for delays or errors by reason
of circumstances beyond its control, including acts of civil or military
authority, national emergencies, fire, mechanical breakdown beyond its control,
flood, acts of God, insurrection, war, riots, and loss of communication or power
supply, provided, however, that FDISG shall have acted in accordance with its
Disaster Recovery Plan attached hereto as Exhibit 2, which Schedule may be
amended from time to time by agreement of the Fund and FDISG.
6. COMPENSATION.
(a) The Fund will compensate FDISG for the performance of its obligations
hereunder in accordance with the fees set forth in the written schedule of fees
annexed hereto as Schedule C and incorporated herein.
(b) Out-of-pocket disbursements shall mean the items specified in the
written schedule of out-of-pocket charges annexed hereto as Schedule D and
incorporated herein. Reimbursement by the Fund for such out-of-pocket
disbursements incurred by FDISG in any month shall be made as soon as
practicable after the receipt of an itemized bill from FDISG. Reimbursement by
the Fund for expenses other than those specified in Schedule D shall be upon
mutual agreement of the parties as provided in Schedule D.
(c) FDISG will bill the Fund as soon as practicable after the end of each
calendar month, and said billings will be detailed in accordance with Schedule
C. The Fund will promptly pay to FDISG the amount of such billing.
4
<PAGE>
(d) The parties agree to review at least annually at a Trustees' meeting of
the Fund the services provided, cost thereof, and fees and expenses charged,
including comparative information regarding the transfer agency industry. The
compensation agreed to hereunder may be adjusted from time to time by attaching
to this Agreement a revised Schedule, dated and executed by the parties hereto.
7. DOCUMENTS. In connection with the appointment of FDISG, the Fund shall
upon request, on or before the date this Agreement goes into effect, but in any
case within a reasonable period of time for FDISG to prepare to perform its
duties hereunder, furnish FDISG with the following documents:
(a) A certified copy of the Articles of Organization and By-Laws of the
Fund, as amended;
(b) A copy of the resolution of the Trustees authorizing the execution and
delivery of this Agreement;
(c) If applicable, a specimen of the certificate for Shares of the Fund in
the form approved by the Trustees, with a certificate of an Officer of the Fund
as to such approval;
(d) All account application forms and other documents relating to
Shareholder accounts or to any plan, program or service offered by the Fund; and
(e) With respect to any Fund previously serviced by another transfer agent,
to the extent practicable a certified list of Shareholders of the Fund with the
name, address and taxpayer identification number of each Shareholder, and the
number of shares of the Fund held by each, certificate numbers and denominations
(if any certificates have been issued), lists of any accounts against which stop
transfer orders have been placed, together with the reasons therefor, and the
number of Shares redeemed by the Fund.
8. TRANSFER AGENT SYSTEM.
(a) FDISG shall retain title to and ownership of any and all data bases,
computer programs, screen formats, report formats, interactive design
techniques, derivative works, inventions, discoveries, patentable or
copyrightable matters, concepts, expertise, patents, copyrights, trade secrets,
and other related legal rights utilized by FDISG in connection with the services
provided by FDISG to the Fund herein, including FDISG's IMPRESS technology (the
"FDISG System"), provided FDISG has valid legal title thereto. FDISG and the
Fund agree to the terms of the IMPRESS license attached hereto as Schedule E.
5
<PAGE>
(b) FDISG hereby grants to the Fund a limited license to the FDISG System
for the sole and limited purpose of having FDISG provide the services
contemplated hereunder and nothing contained in this Agreement shall be
construed or interpreted otherwise and such license shall immediately terminate
with the termination of this Agreement.
(c) In the event that the Fund, including any affiliate or agent of the
Fund or any third party acting on behalf of the Fund is provided with direct
access to the FDISG System for either account inquiry or to transmit transaction
information, including but not limited to maintenance, exchanges, purchases and
redemptions, such direct access capability shall be limited to direct entry to
the FDISG System by means of on-line mainframe terminal entry or PC emulation of
such mainframe terminal entry and any other non-conforming method of
transmission of information to the FDISG System is strictly prohibited without
the prior written consent of FDISG.
9. REPRESENTATIONS AND WARRANTIES.
(a) FDISG represents and warrants to the Fund that:
(i) it is a corporation duly organized, existing and in good standing under
the laws of the Commonwealth of Massachusetts;
(ii) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(iii) all requisite corporate proceedings have been taken to authorize it
to enter into this Agreement;
(iv) FDISG will maintain its registration as a transfer agent as provided
in Section 17A(c) of the Securities Act of 1934, as amended, (the "1934 Act")
and shall comply with all applicable provisions of Section 17A of the 1934 Act
and the rules promulgated thereunder, as may be amended from time to time,
including rules relating to record retention;
(v) it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement;
(vi) to the best of its knowledge, the various procedures and systems which
FDISG has implemented or will implement with regard to safeguarding from loss or
damage attributable to fire, theft or any other cause (including provision for
24 hours-a-day restricted access) of the Fund's records and other data and
FDISG's records, data, equipment, facilities and other property used in the
performance of its obligations hereunder are adequate and that it will make such
changes therein from time to time as in its judgement are required for the
secure performance of its obligations hereunder. The parties shall review such
systems and procedures on a periodic basis; and
6
<PAGE>
(vii) it maintains adequate insurance to enable it to continue its
operations as described herein, including coverage for Year 2000 system
failures. FDISG shall notify the Fund should any of its insurance coverage as
set forth in Schedule F attached hereto be changed for any reason. Such
notification shall include the date of change and reason or reasons therefor.
FDISG shall notify the Fund of any claims against it whether or not they may be
covered by insurance and shall notify the Fund from time to time as may be
appropriate, and at lest within 30 days following the end of each fiscal year of
FDISG, of the total outstanding claims made by FDISG under its insurance
coverage.
(b) The Fund represents and warrants to FDISG that:
(i) it is duly organized, existing and in good standing under the laws of
the jurisdiction in which it is organized;
(ii) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into this Agreement;
(iii) all corporate proceedings required by said Articles of Incorporation,
By-Laws and applicable laws have been taken to authorize it to enter into this
Agreement;
(iv) a registration statement under the Securities Act of 1933, as amended,
and/or the 1940 Act is currently effective and will remain effective, and all
appropriate state securities law filings have been made and will continue to be
made, with respect to all Shares of the Fund being offered for sale; and
(v) all outstanding Shares are validly issued, fully paid and
non-assessable and when Shares are hereafter issued in accordance with the terms
of the Fund's Articles of Incorporation and its Prospectus with respect to each
Portfolio, such Shares when issued shall be validly issued, fully paid and
non-assessable.
10. DUTY OF CARE AND INDEMNIFICATION.
(a) Each party shall fulfill its obligations hereunder by acting with
reasonable care and in good faith;
(b) The Fund will indemnify FDISG against and hold it harmless from any and
all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit not
resulting from the bad faith or negligence of FDISG, and arising out of, or in
connection with, its duties on behalf of the Fund hereunder. In addition, the
Fund will indemnify FDISG against and hold it harmless from any and all losses,
claims, damages, liabilities or expenses (including reasonable counsel fees and
expenses) resulting from any claim, demand, action or suit as a result of : (i)
any action taken in accordance with Written or Oral Instructions, or share
certificates reasonably believed by FDISG to be genuine and to be signed,
countersigned or executed, or orally communicated by an Authorized Person; (ii)
7
<PAGE>
any action taken in accordance with written or oral advice reasonably
believed by FDISG to have been given by counsel for the Fund; or (iii) any
action taken as a result of any error or omission in any record which FDISG had
no reasonable basis to believe was inaccurate (including but not limited to
magnetic tapes, computer printouts, hard copies and microfilm copies) and was
delivered, or caused to be delivered, by the Fund to FDISG in connection with
this Agreement;
(c) FDISG will indemnify the Fund against and hold it harmless from any and
all losses, claims, damages, liabilities or expenses (including reasonable
counsel fees and expenses) resulting from any claim, demand, action or suit not
resulting from the bad faith or negligence of the Fund, or arising out of, or in
connection with, FDISG's breach of this Agreement;
(d) In any case in which a party may be asked to indemnify or hold the
other party harmless, the indemnifying party shall be advised of all pertinent
facts concerning the situation in question and the party seeking indemnification
shall notify the indemnifying party promptly concerning any situation which
presents or appears likely to present a claim for indemnification. The
indemnifying party shall have the option to defend against any claim which may
be the subject of this indemnification and, in the event that the indemnifying
party so elects, such defense shall be conducted by counsel chosen by the
indemnifying party, and thereupon the indemnifying party shall take over
complete defense of the claim and the party seeking indemnification shall
sustain no further legal or other expenses in such situation for which it seeks
indemnification. The party seeking indemnification will not confess any claim or
make any compromise in any case in which the indemnifying party will be asked to
provide indemnification, except with the indemnifying party's prior written
consent; and
(e) The obligations of the parties hereto under this Section shall survive
the termination of this Agreement.
11. TERMS AND TERMINATION.
(a) Either party may terminate this Agreement without cause on or after
July 31, 2002 by giving 180 days written notice to the other party;
(b) Either party may terminate this Agreement if the other party has
materially breached the Agreement by giving the defaulting party 30 days written
notice and the defaulting party has failed to cure the breach within 60 days
thereafter; and
(c) Any written notice of termination shall specify the date of
termination. The Fund shall provide notice of the successor transfer agent
within 30 days of the termination date. Upon termination, FDISG will deliver to
such successor a certified list of shareholders of the Fund (with names,
addresses and taxpayer identification of Social Security numbers and such other
federal tax information as FDISG may be required to maintain), an historical
record of the account of each shareholder and the status thereof, and all other
relevant books, records, correspondence, and other data established or
maintained by the books, records, correspondence, and other data established or
8
<PAGE>
maintained by FDISG under this Agreement in the form reasonably acceptable
to the Fund, and will cooperate in the transfer of such duties and
responsibilities, including provisions for assistance from FDISG's personnel in
the establishment of books, records and other data by such successor or
successors. FDISG shall be entitled to its out-of-pocket expenses set forth in
Schedule C incurred in the delivery of such records net of the fees owed to
FDISG for the last month of service if this Agreement is terminated pursuant to
paragraph (b) immediately above.
(d) If a majority of the non-interested trustees of any of the Funds
determines, in the exercise of their fiduciary duties and pursuant to their
reasonable business judgement after consultation with Eaton Vance Management,
that the performance of FDISG has been unsatisfactory or adverse to the
interests of shareholders of any Fund or Funds or that the terms of the
Agreement are no longer consistent with publicly available industry standards,
then the Fund or Funds shall give written notice to FDISG of such determination
and FDISG shall have 60 days (or such longer period if the non-interested
Trustees so determine) 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 Funds. If the conditions of the preceding
sentence are not met then the Fund or Funds may terminate this Agreement on
sixty (60) days written notice provided, however, that the provisions of
Paragraph 11(c) shall remain outstanding for an additional 30 days if necessary
to transfer records to a successor transfer agent.
(e) If the Board of Trustees hereafter establishes and designates a new
Fund, FDISG agrees that it will act as transfer agent and shareholder servicing
agent for such new Fund in accordance with the terms set forth herein. The
Trustees shall cause a written notice to be sent to FDISG to the effect that it
has established a new Fund and that it appoints FDISG as transfer agent and
shareholder servicing agent for the new Fund. Such written notice must be
received by FDISG in a reasonable period of time prior to the commencement of
operations of the new Fund to allow FDISG, in the ordinary course of its
business, to prepare to perform its duties.
12. CONFIDENTIALITY OF RECORDS.
(a) FDISG agrees to treat all records and other information relative to the
Fund and its prior, present or potential Shareholders in confidence except that,
after prior notification to and approval in writing by the Fund, which approval
shall not be unreasonably withheld and may not be withheld where FDISG 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 Fund.
(b) FDISG shall make available during regular business hours all records
and other data created and maintained pursuant to this Agreement for reasonable
audit and inspection by the Fund, or any person retained by the Fund. Upon
reasonable notice by the Fund, FDISG shall make available during regular
business hours its facilities and premises employed in connection with its
performance of this Agreement for reasonable visitation by the Fund, or any
person retained by the Fund, to inspect its operating capabilities or for any
other reason.
9
<PAGE>
(c) The Fund agrees to keep all records and information of FDISG (including
trade secrets) in confidence, unless such is required to be divulged pursuant to
law or where the Fund may be exposed to or criminal contempt proceedings for
failure to comply. FDISG acknowledges that such records and information may be
disclosed to Eaton Vance Management personnel and to Fund auditors consistent
with the responsibilities of such parties, and in such cases the Fund shall take
reasonable precautions to safeguard the confidentiality of such data to the
extent practicable.
13. AMENDMENT, ASSIGNMENT AND SUBCONTRACTING.
(a) This Agreement may not be amended or modified in any manner except by a
written agreement executed by both parties.
(b) This Agreement shall extend to and shall be binding upon the parties
hereto, and their respective successors and assigns; provided, however, that any
assignment of this Agreement (as defined in the 1940 Act) to an entity shall
require the written consent of the other party.
(c) The Fund agrees that FDISG may, in its discretion, subcontract for
certain of the services described under this Agreement or the Schedules hereto;
provided that the appointment of any such Agent shall not relieve FDISG of its
responsibilities hereunder and provided that FDISG has given 30 days prior
written notice to an Authorized Person.
14. USE OF TRADE NAMES.
(a) FDISG shall approve all reasonable uses of its name which merely refer
in accurate terms to its appointment hereunder or which are required by the
Commission or a state securities commission. Notwithstanding the foregoing, any
reference to FDISG shall include a statement to the effect that it is a wholly
owned subsidiary of First Data Corporation.
(b) FDISG shall not use the name of the Fund or material relating to the
Fund on any documents or forms for other than internal use in a manner not
approved prior thereto in writing; provided, that the Fund shall approve all
reasonable uses of its name which merely refer in accurate terms to the
appointment of FDISG or which are required by the Commission or a state
securities commission.
10
<PAGE>
15. NOTICE. Any notice or other instrument authorized or required by this
Agreement to be given in writing to the Fund or FDISG, shall be sufficiently
given if addressed to that party and received by it at its office set forth
below or at such other place as it may from time to time designate in writing.
To the Fund:
[Name of Fund]
24 Federal Street
Boston, MA 02110
Attention: Fund Secretary
To FDISG:
First Data Investor Services Group, Inc.
4400 Computer Drive
Westboro, Massachusetts 01581
Attn: President
with a copy to FDISG's General Counsel
16. GOVERNING LAW/VENUE. The laws of the Commonwealth of Massachusetts,
excluding the laws on conflicts of laws, shall govern the interpretation,
validity, and enforcement of this agreement. All actions arising from or related
to this Agreement shall be brought in the state and federal courts sitting in
the City of Boston, and the parties hereby submit themselves to the exclusive
jurisdiction of those courts.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original; but such
counterparts shall, together, constitute only one instrument.
18. CAPTIONS. The captions of this Agreement are included for convenience
or reference only and in no way define or delimit any of the provisions hereof
or otherwise affect their construction or effect.
19. SEVERABILITY. The parties intend every provision of this Agreement to
be severable. If a court of competent jurisdiction determines that any term or
provision is illegal or invalid for any reason, the illegality or invalidity
shall not affect the validity of the remainder of this Agreement. In such case,
the parties shall in good faith modify or substitute such provision consistent
with the original intent of the parties. Without limiting the generality of this
paragraph, if a court determines that any remedy stated in this Agreement failed
of its essential purpose, then all provisions of this Agreement, including the
limitations on liability and exclusion of damages, shall remain fully effective.
11
<PAGE>
20. LIABILITY OF TRUSTEES, OFFICERS AND SHAREHOLDERS. The execution and
delivery of this Agreement have been authorized by the Trustees of the Fund and
signed by an authorized Officer of the Fund, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such Officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this Agreement are
not binding upon any of the Trustees or shareholders of the Fund, but bind only
the property of the Fund. No series or class of a Fund shall be liable for the
obligations of another series or class.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers thereunder duly authorized as of the day
and year first above written.
The Funds Listed on Schedule A hereto
Attest: /s/ Eric G. Woodbury By: /s/ James L. O'Connor
----------------------- ---------------------------------
First Data Investors Services Group, Inc.
Attest: /s/ David A. Egan By: /s/ Jerry Kokos
----------------------- ---------------------------------
12
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
------------------------------
Schedule A List of Fund Parties
Schedule B Duties of FDISG
Schedule C Fees
Schedule D Out-of-Pocket Charges
Schedule E Impress License
Schedule F Insurance Coverage
Exhibit 1 Performance Standards
Exhibit 2 Disaster Recovery Plan
13
<PAGE>
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Telephone: (617) 482-8260
Telecopy: (617) 338-8054
February 25, 1998
Eaton Vance Advisers Senior Floating-Rate Fund
24 Federal Street
Boston, MA 02110
Gentlemen:
Eaton Vance Advisers Senior Floating-Rate Fund (the "Trust") is a
Massachusetts business trust created under a Declaration of Trust dated February
19, 1998 executed and delivered in Boston, Massachusetts (the "Declaration of
Trust").
I am of the opinion that all legal requirements have been complied with in
the creation of the Trust, and that said Declaration of Trust is legal and
valid.
The Trustees of the Trust have the powers set forth in the Declaration of
Trust, subject to the terms, provisions and conditions therein provided. As
provided in the Declaration of Trust, the Trustees may authorize one or more
classes of shares and the number of shares of each class authorized is
unlimited. Furthermore, the Trustees may from time to time issue and sell or
cause to be issued and sold shares for the Trust for cash or for property. All
such shares, when so issued, shall be fully paid and nonassessable by the Trust.
By votes duly adopted, the Trustees of the Trust have authorized the
issuance of common shares of beneficial interest, without par value, of the
Trust. The Trust is now registering on Form N-2 with the Securities and Exchange
Commission 20,000,000 common shares of beneficial interest with a maximum
aggregate offering price of $10.00 under the Securities Act of 1933, as amended.
I have examined originals, or copies, certified or otherwise identified to
my satisfaction, of such certificates, records and other documents as we have
deemed necessary or appropriate for the purpose of this opinion.
Based upon the foregoing, and with respect to Massachusetts law (other than
the Massachusetts Uniform Securities Act), only to the extent that Massachusetts
law may be applicable and without reference to the laws of the other several
states or of the United States of America, I am of the opinion that under
existing law:
1. The Trust is a trust with transferable shares of beneficial interest
organized in compliance with the laws of the Commonwealth of Massachusetts, and
the Declaration of Trust is legal and valid under the laws of the Commonwealth
of Massachusetts.
<PAGE>
Eaton Vance Advisers Senior Floating-Rate Fund
February 25, 1998
Page 2
2. Common shares of beneficial interest of the Trust registered by Form N-2
may be legally and validly issued in accordance with the Declaration of Trust
upon receipt of payment in compliance with the Declaration of Trust and, when so
issued and sold, will be fully paid and nonassessable by the Trust.
I am a member of the Massachusetts bar and have acted as internal legal
counsel of the Trust in connection with the registration of shares.
I hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Trust's Registration Statement on Form
N-2 pursuant to the Securities Act of 1933, as amended.
Very truly yours,
/s/ Eric G. Woodbury
Eric G. Woodbury, Esq.
Vice President
<PAGE>
EXHIBIT (n)(a)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in the Registration Statement of Eaton Vance Advisers
Senior Floating-Rate Fund of our report, dated February 20, 1998, appearing in
the Statement of Additional Information, which is part of this Registration
Statement.
/s/Deloitte & Touche LLP
- ----------------------
Deloitte & Touche LLP
Boston, Massachusetts
February 24, 1998
<PAGE>
EXHIBIT (n)(b)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Eaton Vance Advisers Senior Floating-Rate Fund of our report relating to
Senior Debt Portfolio dated February 13, 1998, in the Statement of Additional
Information, which is part of such Registration Statement.
We also consent to the reference to our Firm under the captions "Auditors" and
"Financial Statements" in the Statement of Additional Information of the
Registration Statement.
/s/ Deloitte & Touche
- ----------------------
Deloitte & Touche
Grand Cayman, Cayman Islands
British West Indies
February 24, 1998
<PAGE>
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Telephone: (617) 482-8260
Telecopy: (617)-338-8054
February 20, 1998
Eaton Vance Advisers Senior Floating-Rate Fund
24 Federal Street
Boston, MA 02110
Ladies and Gentlemen:
With respect to our purchase from you, at the purchase price of
$100,000, of 10,000 shares of beneficial interest, net asset value of $10.00 per
share for ("Initial Shares") in Eaton Vance Advisers Senior Floating-Rate Fund
(the "Fund"), we hereby advise you that we are purchasing such Initial Shares
for investment purposes without any present intention of redeeming or reselling.
Very truly yours,
EATON VANCE MANAGEMENT
By: /s/ Alan R. Dynner
---------------------------
Vice President
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Eaton Vance Advisers Senior
Floating-Rate Fund, a Massachusetts business trust, do hereby severally
constitute and appoint Alan R. Dynner, James B. Hawkes and Eric G. Woodbury, or
any of them, to be true, sufficient and lawful attorneys, or attorney for each
of us, to sign for each of us, in the name of each of us in the capacities
indicated below, the Registration Statement and any and all amendments
(including post-effective amendments) to the Registration Statement on Form N-2
filed by Eaton Vance Advisers Senior Floating-Rate Fund with the Securities and
Exchange Commission in respect of shares of beneficial interest and other
documents and papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands on the dates set opposite
our respective signatures.
SIGNATURE TITLE DATE
/s/ James B. Hawkes President, Principal
- ------------------------ Executive Officer and February 20, 1998
James B. Hawkes Trustee
/s/ James L. O'Connor* Treasurer and Principal
- ------------------------ Financial and Accounting February 20, 1998
James L. O'Connor Officer
/s/ Donald R. Dwight Trustee February 20, 1998
- ------------------------
Donald R. Dwight
/s/ Samuel L. Hayes, III Trustee February 20, 1998
- ------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee February 20, 1998
- ------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee February 20, 1998
- ------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee February 20, 1998
- ------------------------
Jack L. Treynor
*Signed in Boston, Massachusetts
<PAGE>
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Senior Debt Portfolio, a New
York trust, do hereby severally constitute and appoint Alan R. Dynner, James B.
Hawkes and Eric G. Woodbury, or any of them, to be true, sufficient and lawful
attorneys, or attorney for each of us, to sign for each of us, in the name of
each of us in the capacities indicated below, any and all amendments (including
post-effective amendments) to the Registration Statement on Form N-2 filed by
Eaton Vance Advisers Senior Floating-Rate Fund with the Securities and Exchange
Commission in respect of shares of beneficial interest and other documents and
papers relating thereto.
IN WITNESS WHEREOF we have hereunto set our hands in Hamilton, Bermuda on
the dates set opposite our respective signatures.
SIGNATURE TITLE DATE
/s/ James B. Hawkes President, Principal February 20, 1998
- ------------------------- Executive Officer and
James B. Hawkes Trustee
/s/ James L. O'Connor* Treasurer and Principal February 20, 1998
- ------------------------- Financial and
James L. O'Connor Accounting Officer
/s/ Donald R. Dwight Trustee February 20, 1998
- -------------------------
Donald R. Dwight
/s/ M. Dozier Gardner Trustee February 20, 1998
- -------------------------
M. Dozier Gardner
/s/ Samuel L. Hayes, III Trustee February 20, 1998
- -------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee February 20, 1998
- -------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee February 20, 1998
- -------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee February 20, 1998
- -------------------------
Jack L. Treynor
Signed in Boston, Massachusetts
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 160
<NAME> SENIOR DEBT PORTFOLIO
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 3916266
<INVESTMENTS-AT-VALUE> 3918942
<RECEIVABLES> 26336
<ASSETS-OTHER> 93405
<OTHER-ITEMS-ASSETS> 1011
<TOTAL-ASSETS> 4039695
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 4623
<TOTAL-LIABILITIES> 4623
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 0
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 2676
<NET-ASSETS> 4035072
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 283457
<OTHER-INCOME> 4772
<EXPENSES-NET> 34217
<NET-INVESTMENT-INCOME> 254014
<REALIZED-GAINS-CURRENT> (9001)
<APPREC-INCREASE-CURRENT> 8549
<NET-CHANGE-FROM-OPS> 253563
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1024997
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 31752
<INTEREST-EXPENSE> 610
<GROSS-EXPENSE> 34217
<AVERAGE-NET-ASSETS> 3568369
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 0.96
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
