<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 27, 1998.
1933 ACT FILE NO. 333-64151
1940 ACT FILE NO. 811-09013
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933 [X]
PRE-EFFECTIVE AMENDMENT NO. 1 [X]
POST-EFFECTIVE AMENDMENT NO.
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 1 [X]
(Check appropriate box or boxes)
Eaton Vance Senior Income Trust
-------------------------------
(Exact Name of Registrant as Specified in Charter)
24 Federal Street, Boston, Massachusetts 02110
----------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(617) 482-8260
--------------
(Registrant's Telephone Number, including Area Code)
ALAN R. DYNNER
24 Federal Street, Boston, Massachusetts 02110
----------------------------------------------
(Name and Address of Agent for Service)
-------------
copies to:
Mark P. Goshko, Esq. Thomas A. Hale, Esq.
Kirkpatrick & Lockhart LLP Skadden, Arps, Slate, Meagher
One International Place & Flom LLP (Illinois)
Boston, Massachusetts 02110 333 Wacker Drive
Chicago, Illinois 60606
Approximate Date of Proposed Public Offering: As soon as practicable after
the effective date of this Registration Statement.
If any 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. [ ]
<TABLE>
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(2) Per Unit(1) Offering Price(1) Fee(1)
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Shares of Beneficial Interest 30,000,000 $10.00 $300,000,000 $84,573*
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
* $20,355 has been previously paid.
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Includes 4,500,000 shares which may be offered by the Underwriters pursuant
to an option to cover over-allotments.
<PAGE> 2
<TABLE>
EATON VANCE SENIOR INCOME TRUST
Cross Reference Sheet
Items Required By Form N-2
--------------------------
Part A
Item No. Item Caption Prospectus Caption
- -------- ------------ ------------------
<S> <C> <C>
1..................... Outside Front Cover Front Cover Page
2..................... Inside Front and Outside Back Cover Page Front and Back Cover Page
3..................... Fee Table and Synopsis Prospectus Summary; Trust Expenses
4..................... Financial Highlights Not Applicable
5..................... Plan of Distribution Front Cover Page; Prospectus Summary;
Underwriting; Dividend Reinvestment
Plan
6..................... Selling Shareholders Not Applicable
7..................... Use of Proceeds Use of Proceeds; Investment Objective,
Policies and Risks
8..................... General Description of the Registrant Management of the Trust; Investment
Objective, Policies and Risks; Description
of Capital Structure
9..................... Management Management of the Trust; Shareholder Servicing
Agent, Custodian and Transfer Agent
10...................... Capital Stock, Long-Term Debt, Distributions and Taxes; Dividend
and Other Securities Reinvestment Plan; Description of Capital
Structure
11...................... Defaults and Arrears on Senior Not Applicable
Securities
12...................... Legal Proceedings Not Applicable
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 History Not Applicable
17...................... Investment Objective and Additional Investment Information and
Policies Restrictions
18...................... Management Trustees and Officers;
Investment Advisory and
Other Services
19...................... Control Persons and Principal Other Information
Holders of Securities
20...................... Investment Advisory and Other Investment Advisory and Other
Services Services
21...................... Brokerage Allocation and Other Portfolio Trading
Practices
22...................... Tax Status Taxes
23...................... Financial Statements Financial Statements
</TABLE>
<PAGE> 3
[EATON VANCE LOGO]
SHARES
EATON VANCE SENIOR INCOME TRUST
------------------------
Eaton Vance Senior Income Trust (the "Trust") is a newly organized,
non-diversified, closed-end management investment company. The Trust's
investment objective is to provide a high level of current income, consistent
with the preservation of capital, by investing primarily in senior secured
floating rate loans ("Senior Loans"). Investment in such floating rate
instruments is expected to minimize changes in the underlying principal value of
the Senior Loans, and therefore the Trust's net asset value, resulting from
changes in market interest rates. Nevertheless, the Trust's net asset value and
distribution rate will vary, and may be affected by several factors, including
changes in the credit quality of the borrowers underlying Senior Loans.
Fluctuations in net asset value may be magnified as a result of the Trust's use
of leverage. An investment in the Trust may not be appropriate for all investors
and there is no assurance that the Trust will achieve its investment objective.
See "Investment Objective, Policies and Risks."
Senior Loans are made to corporations, partnerships and other business
entities ("Borrowers") which operate in various industries and geographical
regions. Senior Loans pay interest at rates which are redetermined periodically
on the basis of a floating base lending rate plus a premium. Senior Loans hold
the most senior position in the capital structure of the Borrower, are secured
with specific collateral and will have a claim on the assets of the Borrower
that is senior to that of subordinated debt, preferred stock and common stock of
the Borrower. Although Senior Loans have the most senior position in a
Borrower's capital structure and are secured by specific collateral, they are
typically of below investment grade quality and may have below investment grade
ratings, which ratings are associated with securities having speculative
characteristics. Because of the protective features of Senior Loans, the Adviser
believes, based on its experience, that these ratings do not necessarily reflect
the true risk of loss of principal or interest on a Senior Loan. The Trust
offers investors the opportunity to receive current income through a
professionally managed portfolio of Senior Loans, which is normally accessible
only to financial institutions and large corporate and institutional investors
and is not widely available to individual investors.
The Trust's investment adviser is Eaton Vance Management (the "Adviser" or
"Eaton Vance"). The Adviser was one of the first investment advisers to manage a
portfolio of Senior Loans in a publicly offered investment company, and has done
so continuously since 1989. (continued on the following page)
------------------------
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.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
Price to Proceeds to
Public Sales Load(1) Trust(2)
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................ $10.00 None $10.00
- -----------------------------------------------------------------------------------------------------------------------
Total.................................... $ None $
- -----------------------------------------------------------------------------------------------------------------------
Total Assuming Full Exercise of Over-
Allotment Option(3).................... $ None $
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(footnotes on the following page)
------------------------
The Shares are offered by the Underwriters, subject to prior sale, when, as
and if delivered to and accepted by the Underwriters and subject to their right
to reject orders in whole or in part. It is expected that delivery of the Shares
will be made in New York City on or about October 30, 1998.
------------------------
PAINEWEBBER INCORPORATED
A.G. EDWARDS & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
DAIN RAUSCHER WESSELS FAHNESTOCK & CO. INC. FIRST OF MICHIGAN CORPORATION
A DIVISION OF DAIN RAUSCHER INCORPORATED
GRUNTAL & CO. INTERSTATE/JOHNSON LANE JANNEY MONTGOMERY SCOTT INC.
CORPORATION
LEGG MASON WOOD WALKER MCDONALD & COMPANY WHEAT FIRST UNION
INCORPORATED SECURITIES, INC.
------------------------
THE DATE OF THE PROSPECTUS IS OCTOBER 27, 1998
<PAGE> 4
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SHARES OF THE
TRUST AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE NASDAQ
MARKET OR OTHERWISE. SUCH STABILIZATION, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
------------------------
(continued from the cover page)
The Trust is offering shares of beneficial interest, par value $0.01 per
share ("Shares"). Prior to this offering, there has been no market for the
Shares. The Shares have been approved for listing, subject to notice of
issuance, on the New York Stock Exchange under the symbol "EVF." The shares of
closed-end investment companies, such as the Trust, have frequently traded at a
discount to their net asset values. Investors in this offering should note that
the Shares may likewise trade at a discount to net asset value. This risk may be
greater for investors who sell their Shares in a relatively short period after
completion of the public offering.
The Trust expects to utilize financial leverage through borrowings,
including the issuance of debt securities, the issuance of preferred shares or
through other transactions, such as reverse repurchase agreements. The Trust
intends to utilize financial leverage in an amount up to 33 1/3% of its total
assets (including the amount obtained through leverage). The Trust intends to
utilize leverage if it is expected to result in higher income to Shareholders
over time. Use of financial leverage creates an opportunity for increased income
but, at the same time, creates special risks. There can be no assurance that a
leveraging strategy will be successful. SEE "INVESTMENT OBJECTIVE, POLICIES AND
RISKS -- USE OF LEVERAGE AND RELATED RISKS" AND "DESCRIPTION OF CAPITAL
STRUCTURE."
This Prospectus sets forth concisely information that a prospective
investor should know before investing in the Shares of the Trust. Please read
and retain this Prospectus for future reference. A Statement of Additional
Information dated October 27, 1998, has been filed with the Securities and
Exchange Commission ("SEC") and can be obtained without charge by calling
1-800-225-6265 or by writing to the Trust. A table of contents to the Statement
of Additional Information is located at page 31 of this Prospectus. This
Prospectus incorporates by reference the entire Statement of Additional
Information. The Statement of Additional Information is available along with
other Trust-related materials at the SEC's internet web site
(http://www.sec.gov).
The Trust's address is 24 Federal Street, Boston, Massachusetts 02110 and
its telephone number is 1-800-225-6265.
The Trust's Shares do not represent a deposit or obligation of, and are not
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.
------------------------
(footnotes from the cover page)
(1) Eaton Vance Management or an affiliate (not the Trust) from its own assets
will pay a commission to the Underwriters in the amount of 4.50% of the
Price to Public per Share in connection with the sale of the Shares offered
hereby. The Trust and Eaton Vance have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933. See "Underwriting."
(2) Before deducting organizational and offering expenses payable by the Trust.
Offering expenses of $ will be deducted from net proceeds and
organizational expenses of approximately $110,000 will be capitalized and
amortized. Eaton Vance or an affiliate will pay all offering expenses that
exceed $0.02 per Share. Eaton Vance Management has also agreed to waive its
investment advisory and administration fees for the two-month period
following the date of this Prospectus.
(3) Assuming exercise in full of the 45-day option granted by the Trust to the
Underwriters to purchase up to additional Shares, on the same
terms, solely to cover over-allotments. See "Underwriting."
ii
<PAGE> 5
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information included elsewhere in this Prospectus and the Statement of
Additional Information.
THE TRUST..................... Eaton Vance Senior Income Trust (the "Trust")
is a newly organized, non-diversified,
closed-end management investment company. The
Trust offers investors the opportunity to
receive current income through a professionally
managed portfolio of senior secured floating
rate loans ("Senior Loans"). Investments in
Senior Loans are normally accessible only to
financial institutions and large corporate and
institutional investors, and are not widely
available to individual investors. An
investment in the Trust may not be appropriate
for all investors and there is no assurance
that the Trust will achieve its investment
objective.
THE OFFERING.................. The Trust is offering shares of
beneficial interest, par value $0.01 per share
(the "Shares"), through a group of underwriters
(the "Underwriters") led by PaineWebber
Incorporated, A.G. Edwards & Sons, Inc.,
Prudential Securities Incorporated, Dain
Rauscher Wessels, a division of Dain Rauscher
Incorporated, Fahnestock & Co. Inc., First of
Michigan Corporation, Gruntal & Co., L.L.C.,
Interstate/Johnson Lane Corporation, Janney
Montgomery Scott Inc., Legg Mason Wood Walker,
Incorporated, McDonald & Company Securities,
Inc., and Wheat First Union, a division of
Wheat First Securities, Inc. The Underwriters
have been granted an option to purchase up to
additional Shares solely to cover
over-allotments, if any. The initial public
offering price is $10.00 per share. The minimum
purchase in this offering is 100 Shares
($1,000).
NO SALES CHARGE............... The Shares will be sold in the initial public
offering without any sales load or underwriting
discounts payable by investors or the Trust.
Eaton Vance Management or an affiliate (not the
Trust) from its own assets will pay a
commission to the Underwriters in connection
with sales of the Shares in this offering. See
"Underwriting."
INVESTMENT OBJECTIVE AND
POLICIES.................... The Trust's investment objective is to provide
a high level of current income, consistent with
preservation of capital, by investing primarily
in Senior Loans. Senior Loans generally are
made to corporations, partnerships and other
business entities ("Borrowers") which operate
in various industries and geographical regions.
Senior Loans pay interest at rates which are
redetermined periodically by reference to a
base lending rate, such as the London Inter-
Bank Offered Rate ("LIBOR"), plus a premium. In
normal market conditions, at least 80% of the
Trust's total assets will be invested in
interests in Senior Loans. It is anticipated
that the proceeds of the Senior Loans in which
the Trust will acquire interests primarily will
be used to finance leveraged buyouts,
recapitalizations, mergers, acquisitions and
stock repurchases and, to a lesser extent, to
finance internal growth and for other corporate
purposes of Borrowers.
1
<PAGE> 6
Although Senior Loans have the most senior
position in a Borrower's capital structure and
are secured by specific collateral, they are
typically of below investment grade quality and
may have below investment grade ratings, which
ratings are associated with securities having
speculative characteristics. Because of the
protective features of Senior Loans, the
Adviser believes, based on its experience, that
these ratings do not necessarily reflect the
true risk of loss of principal or interest on a
Senior Loan. For example, the Adviser believes
that Senior Loans tend to have more favorable
loss recovery rates as compared to most other
types of below investment grade quality debt
obligations. Accordingly, the Adviser generally
does not take ratings into account when
determining whether to invest in a Senior Loan
and, in any event, does not view ratings as a
determinative factor in its investment
decisions. Investing in Senior Loans does,
however, involve investment risk, and some
Borrowers default on their Senior Loan
payments. The Trust attempts to manage these
risks through portfolio diversification and
ongoing analysis and monitoring of Borrowers.
As a result, the Trust is highly dependent on
the Adviser's credit analysis abilities.
The Trust may invest up to 20% of its total
assets in: loan interests which are not secured
by any, or that have lower than a senior claim
on, collateral; other income producing
securities such as investment and
non-investment grade corporate debt securities
and U.S. government and U.S. dollar-denominated
foreign government or supranational debt
securities (subject to the limit that not more
than 10% of the Trust's total assets may have a
fixed rate of interest); and warrants and
equity securities acquired in connection with
its investments in Senior Loans. The Trust may
also engage in lending of its securities,
repurchase agreements, reverse repurchase
agreements and, for hedging and risk management
purposes, certain derivative transactions. See
"Investment Objective, Policies and Risks."
LISTING....................... The Shares have been approved for listing,
subject to notice of issuance, on the New York
Stock Exchange under the symbol "EVF."
LEVERAGE...................... The Trust expects to utilize financial leverage
through borrowings, including the issuance of
debt securities, or the issuance of preferred
shares or through other transactions, such as
reverse repurchase agreements, which have the
effect of financial leverage. The Trust intends
to utilize financial leverage in an amount up
to 33 1/3% of its total assets (including the
amount obtained through leverage). The Trust
generally will not utilize leverage if it
anticipates that it would result in a lower
return to Shareholders over time. Use of
financial leverage creates an opportunity for
increased income for Shareholders but, at the
same time, creates special risks (including the
likelihood of greater volatility of net asset
value and market price of the Shares), and
there can be no assurance that a leveraging
strategy will be successful during any period
in which it is employed. Because leverage
achieved through borrowings is expected to be
based on a floating rate of interest that
fluctuates similarly to the floating rate on
Senior Loans in the Trust's
2
<PAGE> 7
portfolio, the Adviser believes that market
interest rate fluctuations should not adversely
affect returns on the Senior Loans obtained
with the proceeds of such borrowings. See
"Investment Objective, Policies and
Risks -- Use of Leverage and Related Risks."
INVESTMENT ADVISER AND
ADMINISTRATOR............... Eaton Vance Management (the "Adviser" or "Eaton
Vance"), a wholly-owned subsidiary of Eaton
Vance Corp., is the Trust's investment adviser
and administrator. The Adviser was one of the
first investment advisers to manage a portfolio
of Senior Loans in a publicly offered
investment company, and has done so
continuously since 1989. Eaton Vance currently
sponsors Eaton Vance Prime Rate Reserves, a
closed-end investment company that commenced
investment operations in August, 1989, and EV
Classic Senior Floating-Rate Fund, a closed-end
fund that commenced investment operations in
February, 1995. Each of these funds, as well as
an offshore fund offered to non-U.S. investors,
invests substantially all of its respective
assets in the Senior Debt Portfolio (the
"Portfolio"), a registered investment company
that serves as the vehicle through which such
funds invest in a common portfolio of Senior
Loans. The Portfolio is co-managed by the same
portfolio managers employed by the Adviser who
will co-manage the Trust's assets. For the
three-year and five-year periods ended
September 30, 1998 with respect to Eaton Vance
Prime Rate Reserves, and for the three-year
period ended September 30, 1998 with respect to
the EV Classic Senior Floating-Rate Fund, each
such fund was awarded five stars by
Morningstar, Inc. Morningstar is an independent
evaluator of public investment companies and
publishes proprietary ratings reflecting
historical risk-adjusted performance.
Morningstar ratings are calculated from a
fund's annual returns in excess of the 90-day
U.S. Treasury bill returns, with appropriate
fee adjustments, and are further adjusted with
a risk factor that reflects fund performance
below 90-day Treasury bill returns. Eaton Vance
Prime Rate Reserves and EV Classic Senior
Floating-Rate Fund are in the Morningstar
Taxable Bond Fund category, which includes
1,491 (for such three year period) and 940 (for
such five year period) other investment
companies. A fund receives five stars if its
risk-adjusted performance is in the top 10% of
its rating category. Certain investment
policies and restrictions of Eaton Vance Prime
Rate Reserves and the EV Classic Senior
Floating-Rate Fund differ from those of the
Trust. The portfolio holdings and investment
performance of such funds are expected to
differ from those of the Trust. Past
performance of such funds is not indicative of
the Trust's performance. See "Management of the
Trust."
SHAREHOLDER SERVICING AGENT... PaineWebber Incorporated has been retained by
the Administrator to act as the Shareholder
Servicing Agent of the Trust. See "Shareholder
Servicing Agent, Custodian and Transfer Agent."
DISTRIBUTIONS................. The Trust's policy will be to make monthly
distributions to Shareholders of substantially
all net investment income of the Trust.
Distributions to Shareholders cannot be
assured, and the amount of each monthly
distribution will vary. The initial
distribution to
3
<PAGE> 8
Shareholders is expected to be paid
approximately 60 days after the completion of
this offering. See "Distributions and Taxes,"
"Dividend Reinvestment Plan" and "Use of
Proceeds."
DIVIDEND REINVESTMENT PLAN.... The Trust has established a Dividend
Reinvestment Plan (the "Plan"). Under the Plan,
all dividend and capital gain distributions
will be automatically reinvested in additional
Shares either purchased in the open market, or
newly issued by the Trust if the Shares are
trading at or above their net asset value, in
either case unless a Shareholder elects to
receive cash. Shareholders who intend to hold
their Shares through a broker or nominee should
contact such broker or nominee to determine
whether or how they may participate in the
Plan. See "Dividend Reinvestment Plan."
CLOSED-END STRUCTURE.......... Closed-end funds differ from open-end
management investment companies (commonly
referred to as mutual funds) in that closed-
end funds generally list their shares for
trading on a securities exchange and do not
redeem their shares at the option of the
shareholder. By comparison, mutual funds issue
securities redeemable at net asset value at the
option of the shareholder and typically engage
in a continuous offering of their shares.
Mutual funds are subject to continuous asset
in-flows and out-flows that can complicate
portfolio management, whereas closed-end funds
generally can stay more fully invested in
securities consistent with the closed-end
fund's investment objective and policies. In
addition, in comparison to open-end funds,
closed-end funds have greater flexibility in
the employment of financial leverage and in the
ability to make certain types of investments,
including investments in illiquid securities
such as Senior Loans. However, shares of
closed-end funds frequently trade at a discount
from their net asset value. In recognition of
the possibility that the Shares might trade at
a discount to net asset value and that any such
discount may not be in the interest of
Shareholders, the Trust's Board of Trustees
(the "Board"), in consultation with Eaton
Vance, from time to time may review possible
actions to reduce any such discount. The Board
might consider open market repurchases or
tender offers for Shares at net asset value.
There can be no assurance that the Board will
decide to undertake any of these actions or
that, if undertaken, such actions would result
in the Shares trading at a price equal to or
close to net asset value per Share. The Board
might also consider the conversion of the Trust
to an open-end mutual fund. The Board of
Trustees believes, however, that the closed-end
structure is desirable, given the Trust's
investment objective and policies. Investors
should assume, therefore, that it is highly
unlikely that the Board would vote to convert
the Trust to an open-end investment company.
See "Description of Capital Structure."
SPECIAL RISK CONSIDERATIONS... No Operating History. The Trust is a
closed-end investment company with no history
of operations and is designed for long-term
investors and not as a trading vehicle.
Senior Loan Market. Senior Loans in which the
Trust will invest may not be rated by a
nationally recognized statistical rating
organization, will not be registered with the
SEC or any state securities commission and
generally will not be listed on any
4
<PAGE> 9
national securities exchange. Therefore, the
amount of public information available about
Senior Loans will be limited, and the
performance of the Trust is more dependent on
the analytical abilities of the Adviser than
would be the case for an investment company
that invests primarily in more widely rated,
registered or exchange-listed securities. In
evaluating the creditworthiness of Borrowers,
the Adviser will consider, and may rely in
part, on analyses performed by others.
Moreover, because Senior Loans are subject to
contractual restrictions on resale they are
illiquid, which may impair the Trust's ability
to realize the full value of its assets in the
event of a voluntary or involuntary liquidation
of such assets.
Credit Risk. Senior Loans, like other debt
obligations, are subject to the risk of
non-payment of scheduled interest or principal.
Such non-payment would result in a reduction of
income to the Trust, a reduction in the value
of the Senior Loan experiencing non-payment and
a potential decrease in the net asset value of
the Trust. Although Senior Loans in which the
Trust will invest will be secured by specific
collateral, there can be no assurance that
liquidation of such collateral would satisfy
the Borrower's obligation in the event of
default or that such collateral could be
readily liquidated. Senior Loans and the other
debt securities in which the Trust may invest
typically will be below investment grade
quality. Such investments generally have
speculative characteristics, and companies
obligated by such debt are generally more
vulnerable in an economic downturn. In the
event of bankruptcy of a Borrower, the Trust
could experience delays or limitations in its
ability to realize the benefits of any
collateral securing a Senior Loan. In addition,
the Trust may purchase interests in Senior
Loans from financial intermediaries whereby the
Trust depends on the intermediary for payment
of principal and interest on the Senior Loan. A
decline in the financial soundness of such
intermediaries may, therefore, adversely affect
the Trust. See "Investment Objective, Policies
and Risks."
Interest Rate Fluctuations. When interest
rates decline, the value of a portfolio
invested in fixed-rate obligations can be
expected to rise. Conversely, when interest
rates rise, the value of a portfolio invested
in fixed-rate obligations can be expected to
decline. Although the Trust's net asset value
will vary, the Trust's management expects the
Trust's policy of acquiring primarily interests
in floating rate Senior Loans to minimize
fluctuations in net asset value resulting from
changes in market interest rates. However,
because floating or variable rates on Senior
Loans only reset periodically, changes in
prevailing interest rates can be expected to
cause some fluctuation in the Trust's net asset
value. Similarly, a sudden and significant
increase in market interest rates, may cause a
decline in the Trust's net asset value.
Moreover, as much as 10% of the total assets of
the Trust may be invested in income securities
with fixed rates of interest, which may lose
value in direct response to market interest
rate increases.
Effects of Leverage. The use of leverage by
the Trust creates an opportunity for increased
net income, but, at the same time,
5
<PAGE> 10
creates special risks. There can be no
assurance that a leveraging strategy will be
successful during any period in which it is
employed. The Trust intends to utilize leverage
to provide the holders of Shares with a
potentially higher return. Leverage creates
risks for holders of Shares, including the
likelihood of greater volatility of net asset
value and market price of the Shares and the
risk that fluctuations in interest rates on
borrowings and debt or in the dividend rates on
any preferred shares may affect the return to
Shareholders. To the extent the income derived
from securities purchased with funds received
from leverage exceeds the cost of leverage, the
Trust's return will be greater than if leverage
had not been used. Conversely, if the income
from the securities purchased with such funds
is not sufficient to cover the cost of
leverage, the return to the Trust will be less
than if leverage had not been used, and
therefore the amount available for distribution
to Shareholders as dividends and other
distributions will be reduced. In the latter
case, Eaton Vance in its best judgment may
nevertheless determine to maintain the Trust's
leveraged position if it deems such action to
be appropriate in the circumstances. As
discussed under "Management of the Trust," the
fee paid to Eaton Vance will be calculated on
the basis of the Trust's total assets,
including proceeds from borrowings for leverage
and the issuance of preferred shares, so the
fees will be higher when leverage is utilized.
Certain types of borrowings by the Trust may
result in the Trust being subject to covenants
in credit agreements, including those relating
to asset coverage and portfolio composition
requirements. The Trust may be subject to
certain restrictions on investments imposed by
guidelines of one or more rating agencies,
which may issue ratings for the debt securities
or preferred shares issued by the Trust. These
guidelines may impose asset coverage or
portfolio composition requirements that are
more stringent than those imposed on the Trust
by the Investment Company Act of 1940, as
amended (the "Investment Company Act" or "1940
Act"). It is not anticipated that these
covenants or guidelines will impede Eaton Vance
in managing the Trust's portfolio in accordance
with its investment objective and policies. See
"Investment Objective, Policies and
Risks -- Use of Leverage and Related Risks."
Special Investment Practices. The Trust may
use various investment practices that involve
special considerations including lending its
portfolio securities and entering into
repurchase and reverse repurchase agreements.
In addition, the Trust has the authority to
engage in interest rate and other hedging and
risk management transactions. For a discussion
of these practices, see "Investment Objective,
Policies and Risks -- Special Investment
Practices."
Investment in Non-U.S. Issuers. The Trust may
invest in Senior Loans and other income
producing securities of issuers that are
organized or located in countries other than
the United States, provided that such
investments are denominated in U.S. dollars and
provide for the payment of interest and
repayment of principal in U.S. dollars. An
investment in non-U.S. issuers involves special
risks, including that non-U.S. issuers may be
subject to less rigorous accounting and
reporting requirements than U.S. issuers,
6
<PAGE> 11
less rigorous regulatory requirements,
differing legal systems and laws relating to
creditors' rights, the potential inability to
enforce legal judgments and the potential for
political, social and economic adversity.
Market Price of Shares. The shares of
closed-end investment companies often trade at
a discount from their net asset value, and the
Trust's Shares may likewise trade at a discount
from net asset value. The trading price of the
Trust's Shares may be less than the public
offering price. This risk may be greater for
investors who sell their Shares in a relatively
short period after completion of the public
offering.
Non-Diversification. The Trust has registered
as a "non-diversified" investment company under
the 1940 Act. Under federal income tax rules
applicable to the Trust, with respect to 50% of
its assets, it will be able to invest more than
5% of the value of its assets in the
obligations of any single issuer, although it
has no current intention to do so. The Trust
will not invest more than 10% of its assets in
securities (including interests in Senior
Loans) of any single Borrower. To the extent
the Trust invests a relatively high percentage
of its assets in obligations of a limited
number of issuers, the Trust may be more
susceptible than a more widely diversified
investment company to any single corporate,
economic, political or regulatory occurrence.
Anti-Takeover Provisions. The Trust's
Declaration of Trust includes provisions that
could have the effect of limiting the ability
of other persons or entities to acquire control
of the Trust or to change the composition of
its Board of Trustees. See "Description of
Capital Structure -- Anti-Takeover Provisions
in the Declaration of Trust."
7
<PAGE> 12
TRUST EXPENSES
The following tables are intended to assist investors in understanding the
various costs and expenses that an investor in the Trust will bear, directly or
indirectly.
<TABLE>
<CAPTION>
NET ASSETS
PLUS
LEVERAGE(1)
-----------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Load................................................ None
Dividend Reinvestment Plan Fees........................... None
ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF NET ASSETS
ATTRIBUTABLE TO SHARES)(1)
Investment Advisory Fee(2)................................ 1.28%
Interest Payments on Borrowed Funds....................... 3.05%
Other Expenses (including administration fee of
.38%)(2)(3)............................................ .66%
----
Total Annual Operating Expenses........................... 4.99%
====
</TABLE>
- ---------------
(1) The Trust intends to utilize leverage only if the Adviser believes that it
would result in higher income to Shareholders over time. See "Investment
Objective, Policies and Risks -- Use of Leverage and Related Risks." Assumes
borrowings of 33 1/3% of total assets (including amount borrowed) at an
interest rate of 6.10%, which is based upon the Trust's estimation of
current market conditions. At times when the Trust does not utilize
leverage, the estimated annual operating expenses would be:
<TABLE>
<S> <C>
Investment Advisory Fee(2)................................ .85%
Interest Payments on Borrowed Funds....................... None
Other Expenses (including administration fee of
.25%)(2)(3)............................................. .53%
----
Total Annual Operating Expenses........................... 1.38%
====
</TABLE>
(2) Although not reflected in the table, Eaton Vance has agreed to waive its
investment advisory and administration fees for the two-month period
following the date of this Prospectus. See "Management of the Trust."
(3) Reflects estimated amounts for the Trust's first year of operations.
EXAMPLE
An investor would pay the following expenses on a $1,000 investment in the
Trust, assuming a 5% annual return:
<TABLE>
<CAPTION>
ONE YEAR(*) THREE YEARS FIVE YEARS TEN YEARS
----------- ----------- ---------- ---------
<S> <C> <C> <C> <C>
Assuming No Leverage.......................... $14 $ 44 $ 76 $166
Assuming 33 1/3% Leverage..................... $50 $150 $250 $499
</TABLE>
- ---------------
* Does not give effect to the waiver by Eaton Vance of its investment advisory
and administration fees for the two-month period following the date of this
Prospectus. This Example assumes that all dividends and other distributions
are reinvested at net asset value and that the percentage amounts listed under
Total Annual Operating Expenses remain the same in the years shown, except for
amounts for the Three Years, Five Years and Ten Years periods which are after
completion of organization expense amortization. The above tables and the
assumption in the Example of a 5% annual return and reinvestment at net asset
value are required by regulation of the SEC; the assumed 5% annual return is
not a prediction of, and does not represent, the projected or actual
performance of the Trust's Shares. THIS EXAMPLE SHOULD NOT BE CONSIDERED A
REPRESENTATION OF FUTURE EXPENSES, AS THE TRUST'S ACTUAL EXPENSES MAY BE MORE
OR LESS THAN THOSE SHOWN.
8
<PAGE> 13
THE TRUST
Eaton Vance Senior Income Trust (the "Trust") is a newly organized,
non-diversified, closed-end management investment company which was organized as
a Massachusetts business trust on September 23, 1998 and has no operating
history. The Trust's principal office is located at 24 Federal Street, Boston,
MA 02110 and its telephone number is 1-800-225-6265.
This Prospectus relates to the initial public offering of the Trust's
shares of beneficial interest, $.01 par value (the "Shares"). The Shares will be
sold during the initial public offering without any sales load or underwriting
discounts payable by investors or the Trust. Eaton Vance Management (the
"Adviser" or "Eaton Vance") or an affiliate (not the Trust) from its own assets
will pay a commission to the Underwriters in connection with sales of the Shares
in this offering. See "Underwriting."
USE OF PROCEEDS
The proceeds of this offering, before deduction of offering expenses,
estimated to be $ (or $ assuming exercise of the
Underwriters' over-allotment option in full), will be invested in accordance
with the Trust's investment objective and policies as soon as practicable, but
in no event, under normal market conditions, later than three months after the
receipt thereof. Pending such investment, the proceeds may be invested in
high-quality, short-term debt securities. Eaton Vance has agreed to pay all
offering expenses of the Trust that exceed $0.02 per Share.
INVESTMENT OBJECTIVE, POLICIES AND RISKS
INVESTMENT OBJECTIVE
The Trust's investment objective is to provide Shareholders with a high
level of current income, consistent with preservation of capital, by investing
primarily in senior secured floating rate loans ("Senior Loans"). Investment in
such floating rate instruments is expected to minimize changes in the underlying
principal value of the Senior Loans, and therefore the Trust's net asset value,
resulting from changes in market interest rates. The borrowers of such loans
will be corporations, partnerships and other business entities ("Borrowers")
which operate in a variety of industries and geographical regions. The Trust
provides individual investors with access to a market normally accessible only
to financial institutions and larger corporate or institutional investors.
INVESTMENT POLICIES -- GENERAL COMPOSITION OF THE TRUST
In normal market conditions, at least 80% of the Trust's total assets will
be invested in interests in Senior Loans (either as an original Lender or as a
purchaser of an Assignment or Participation, each as defined below) of domestic
or foreign Borrowers (so long as foreign loans are U.S. dollar-denominated and
payments of interest and repayments of principal are required to be made in U.S.
dollars). The Trust may invest up to 20% of its total assets in (i) loan
interests which are not secured by any, or that have a lower than senior claim
on, collateral, (ii) other income producing securities such as investment and
non-investment grade corporate debt securities and U.S. government and U.S.
dollar-denominated foreign government or supranational debt securities (subject
to the limit that no more than 10% of the Trust's total assets may be invested
in securities with a fixed rate of interest), and (iii) warrants and equity
securities issued by a Borrower or its affiliates as part of a package of
investments in the Borrower or its affiliates. If the Adviser determines that
market conditions temporarily warrant a defensive investment policy, the Trust
may invest up to 100% of its assets in cash and high quality, short-term debt
securities.
Based upon available market data, the Adviser believes that the overall
market for U.S. debt securities, including U.S. government securities,
investment and non-investment grade corporate bonds, mortgage-related securities
and commercial paper, totaled an outstanding principal amount of approximately
$8.4 trillion at the end of 1997, and that Senior Loans represented
approximately $375 billion (or 4.5%) of that total amount. Senior Loans in which
the Trust will invest generally pay interest at rates which are redetermined
periodically by reference to a base lending rate, plus a premium. These base
lending rates generally are the prime rate offered by one or more major United
States banks (the "Prime Rate"), the London Inter-Bank
9
<PAGE> 14
Offered Rate ("LIBOR"), the certificate of deposit ("CD") rate or other base
lending rates used by commercial lenders. The following table is intended to
provide investors with a comparison of short-term money market rates, a
representative base commercial lending rate, and a representative indicator of
the premium over such base lending rate for Senior Loans. The representative
indicator shown below is derived from the DLJ Leveraged Loan Index, which was
designed in January 1992 to mirror the investible universe of the market for
Senior Loans. The DLJ Leveraged Loan Index includes approximately $58 billion of
Senior Loans and new Senior Loan issues are added when they meet certain
criteria. The DLJ Leveraged Loan Index is an unmanaged index and, although the
Adviser believes that the spreads over LIBOR reported in connection with the
determination of the Index (which are an average of the contractual spreads set
forth in the loan agreements relating to the Senior Loans included in the Index)
are representative of the historical average spreads in the overall market for
Senior Loans, the Trust will have no direct investment in, nor will its
performance be indicative of, this Index. The following comparison should not be
considered a representation of future money market rates, spreads of Senior
Loans over base reference rates nor what an investment in the Trust may earn or
what an investor's yield or total return may be in the future.
COMPARISON OF MONEY MARKET RATE,
LIBOR AND SENIOR LOANS
<TABLE>
<CAPTION>
JAN. JULY JAN. JULY JAN. JULY JAN. JULY JAN. JULY JAN. JULY JAN. JULY
1992 1992 1993 1993 1994 1994 1995 1995 1996 1996 1997 1997 1998 1998
---- ----- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 Month Treasury Bill(1)....... 3.91% 3.28% 3.07% 3.11% 3.04% 4.46% 5.90% 5.59% 5.15% 5.30% 5.18% 5.19% 5.18% 5.09%
3 Month LIBOR(2)............... 4.19 3.44 3.25 3.31 3.25 4.88 6.31 5.88 5.38 5.69 5.56 5.75 5.65 5.69
Average Senior Loan Spreads
Plus 3 Month LIBOR(3)........ 6.34 5.68 5.72 5.77 5.69 7.19 8.65 8.15 7.69 8.07 8.03 8.10 8.02 8.04
</TABLE>
- ---------------
(1) U.S. Treasury bills offer a government guarantee as to the timely payment of
interest and repayment of principal at maturity. Source: Bloomberg.
(2) The London InterBank Offer Rate, which is used worldwide as a base for loans
to large commercial and industrial companies and may not generally be
invested in directly. Source: Bloomberg.
(3) Derived from reported average Senior Loan spreads in the DLJ Leveraged Loan
Index. The data do not reflect fluctuations in the principal value of Senior
Loans included in the Index. Source: Donaldson, Lufkin & Jenrette.
It is anticipated that the proceeds of the Senior Loans in which the Trust
will acquire interests primarily will be used to finance leveraged buyouts,
recapitalizations, mergers, acquisitions, stock repurchases, and, to a lesser
extent, to finance internal growth and for other corporate purposes of
Borrowers. Senior Loans have the most senior position in a Borrower's capital
structure, although some Senior Loans may hold an equal ranking with other
senior securities of the Borrower. The capital structure of a Borrower may
include Senior Loans, senior and junior subordinated debt, preferred stock and
common stock issued by the Borrower, typically in descending order of seniority
with respect to claims on the Borrower's assets (described below). Senior Loans
are secured by specific collateral.
In order to borrow money pursuant to a Senior Loan, a Borrower will
frequently, for the term of the Senior Loan, pledge collateral, including but
not limited to, (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. In the case of Senior 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
certain instances, a Senior Loan may be secured only by stock in the Borrower or
its subsidiaries. Collateral may consist of assets that may not be readily
liquidated, and there is no assurance that the liquidation of such assets would
satisfy fully a Borrower's obligations under a Senior Loan. The Trust will not
invest in a Senior Loan unless, at the time of investment, the Adviser
determines that the value of the collateral equals or exceeds the aggregate
outstanding principal amount of the Senior Loan.
10
<PAGE> 15
The Trust is not subject to any restrictions with respect to the maturity
of Senior Loans held in its portfolio. Senior Loans typically have a stated term
of between five and nine years, and have rates of interest which typically are
redetermined either daily, monthly, quarterly or semi-annually. Longer interest
rate reset periods generally increase fluctuations in the Trust's net asset
value as a result of changes in market interest rates. The Senior Loans in the
Trust's portfolio will have a dollar-weighted average period until the next
interest rate adjustment of approximately 90 days or less. As a result, as
short-term interest rates increase, interest payable to the Trust from its
investments in Senior Loans should increase, and as short-term interest rates
decrease, interest payable to the Trust from its investments in Senior Loans
should decrease. The Trust may utilize certain investment practices to, among
other things, shorten the effective interest rate redetermination period of
Senior Loans in its portfolio. In the experience of the Adviser over the last
decade, because of prepayments the average life of Senior Loans has been two to
three years.
A lender may have certain obligations pursuant to a loan agreement relating
to Senior Loans, which may include the obligation to make additional loans in
certain circumstances. The Trust generally will reserve against such contingent
obligations by segregating a sufficient amount of cash, liquid securities and
liquid Senior Loans, subject to the Trust's borrowing limitations. The Trust
will not purchase interests in Senior Loans that would require the Trust to make
any such additional loans if such additional loan commitments in the aggregate
would exceed 20% of the Trust's total assets or would cause the Trust to fail to
meet its tax diversification requirements.
The Trust may purchase and retain in its portfolio a Senior Loan where the
Borrower has 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 debt restructuring. Such
investments may provide opportunities for enhanced income as well as capital
appreciation. At times, in connection with the restructuring of a Senior Loan
either outside of bankruptcy court or in the context of bankruptcy court
proceedings, the Trust may determine or be required to accept equity securities
or junior debt securities in exchange for all or a portion of a Senior Loan.
The Trust also may invest up to 5% of its total assets in structured notes
with rates of return determined by reference to the total rate of return on one
or more Senior Loans referenced in such notes. The rate of return on the
structured note may be determined by applying a multiplier to the rate of total
return on the referenced Senior Loan or Loans. Application of a multiplier is
comparable to the use of financial leverage, a speculative technique. Leverage
magnifies the potential for gain and the risk of loss; as a result, a relatively
small decline in the value of a referenced note could result in a relatively
large loss in the value of a structured note. See "Use of Leverage and Related
Risks" below. Structured notes will be treated as Senior Loans for purposes of
the Trust's policy of normally investing at least 80% of its assets in Senior
Loans, and may be subject to the Trust's leverage limitations.
The Trust has adopted certain fundamental investment restrictions set forth
in the Statement of Additional Information which may not be changed without a
Shareholder vote. Except for such restrictions, the investment objective and
policies of the Trust may be changed by the Board of Trustees without
Shareholder action.
CERTAIN CHARACTERISTICS OF SENIOR LOANS
A Senior Loan 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 ("Lenders"). The Agent typically administers and enforces the
Senior Loan on behalf of the other Lenders in the syndicate. In addition, an
institution, typically but not always the Agent, holds any collateral on behalf
of the Lenders.
Senior Loans include senior secured floating rate loans and institutionally
traded senior secured floating rate debt obligations issued by an asset-backed
pool, and interests therein. 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 Senior Loan
acquired in secondary markets. Such loan interests may be acquired from U.S. or
foreign commercial banks, insurance companies, finance companies or other
11
<PAGE> 16
financial institutions who have made loans or are members of a lending syndicate
or from other holders of loan interests.
The Trust may purchase "Assignments" from Lenders. The purchaser of an
Assignment typically succeeds to all the rights and obligations under the Loan
Agreement of the assigning Lender and becomes a Lender under the Loan Agreement
with the same rights and obligations as the assigning Lender. Assignments may,
however, be arranged through private negotiations between potential assignees
and potential assignors, and the rights and obligations acquired by the
purchaser of an Assignment may differ from, and be more limited than, those held
by the assigning Lender.
The Trust also may invest without limit in "Participations." Participations
by the Trust in a Lender's portion of a Senior Loan typically will result in the
Trust having a contractual relationship only with such Lender, not with the
Borrower. As a result, the Trust may have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by such Lender of such payments
from the Borrower. In connection with purchasing Participations, the Trust
generally will have no right to enforce compliance by the Borrower with the
terms of the loan agreement, nor any rights with respect to any funds acquired
by other Lenders through set-off against the Borrower and the Trust may not
directly benefit from the collateral supporting the Senior Loan in which it has
purchased the Participation. As a result, the Trust may assume the credit risk
of both the Borrower and the Lender selling the Participation. In the event of
the insolvency of the Lender selling a Participation, the Trust may be treated
as a general creditor of such Lender. The selling Lenders and other persons
interpositioned between such Lenders and the Trust with respect to such
Participations will likely conduct their principal business activities in the
banking, finance and financial services industries. Persons engaged in such
industries may be more susceptible to, among other things, fluctuations in
interest rates, changes in the Federal Open Market Committee's monetary policy,
governmental regulations concerning such industries and concerning capital
raising activities generally and fluctuations in the financial markets
generally.
The Trust will only acquire Participations if the Lender selling the
Participation, and any other persons interpositioned between the Trust and the
Lender, at the time of investment has outstanding debt or deposit obligations
rated investment grade (BBB or A-3 or higher by Standard & Poor's Ratings Group
("S&P") or Baa or P-3 or higher by Moody's Investors Service, Inc. ("Moody's")
or comparably rated by another nationally recognized rating agency (each a
"Rating Agency")) or determined by the Adviser to be of comparable quality.
Similarly, the Trust will purchase an Assignment or Participation or act as a
Lender with respect to a syndicated Senior Loan only where the Agent with
respect to such Senior Loan at the time of investment has outstanding debt or
deposit obligations rated investment grade or determined by the Adviser to be of
comparable quality. Long-term debt rated BBB by S&P is regarded by S&P as having
adequate capacity to pay interest and repay principal and debt rated Baa by
Moody's is regarded by Moody's as a medium grade obligation, i.e., it is neither
highly protected nor poorly secured. Commercial paper rated A-3 by S&P indicates
that S&P believes such obligations exhibit adequate protection parameters but
that adverse economic conditions or changing circumstances are more likely to
lead to a weakened capacity of the obligor to meet its financial commitment on
the obligation and issues of commercial paper rated P-3 by Moody's are
considered by Moody's to have an acceptable ability for repayment of short-term
debt obligations but the effect of industry characteristics and market
compositions may be more pronounced. A description of the corporate bond ratings
of Moody's and S&P is included as Appendix A to the Statement of Additional
Information.
12
<PAGE> 17
OTHER INCOME PRODUCING SECURITIES
The Trust, with respect to 20% of its total assets, may purchase a variety
of U.S. and foreign corporate and government debt obligations that are U.S.
dollar-denominated. The Adviser may consider capital appreciation potential when
investing in such income producing debt securities, which may have fixed,
variable or floating rates of interest. These securities may include (i)
interests in loans from Borrowers that are not secured by any, or that have
lower than senior claim on, collateral, (ii) other income producing securities
such as investment and non-investment grade corporate debt securities and U.S.
government and U.S. dollar-denominated foreign government or supranational debt
securities (subject to the limit that no more than 10% of the Trust's total
assets may be invested in securities with a fixed rate of interest), and (iii)
warrants and equity securities issued by a Borrower or its affiliates as part of
a package of investments in the Borrower or its affiliates.
USE OF LEVERAGE AND RELATED RISKS
The Trust expects to utilize leverage through borrowings, including the
issuance of debt securities, or the issuance of preferred shares or through
other transactions, such as reverse repurchase agreements, which have the effect
of financial leverage. The Trust intends to utilize leverage in an amount up to
approximately 33 1/3% of its total assets (including the amount obtained from
leverage). The Trust generally will not utilize leverage if the Adviser
anticipates that it would result in a lower return to Shareholders for any
significant amount of time. The Trust also may borrow money as a temporary
measure for extraordinary or emergency purposes, including the payment of
dividends and the settlement of securities transactions which otherwise might
require untimely dispositions of Trust securities.
Leverage creates risks for holders of the Shares, including the likelihood
of greater volatility of net asset value and market price of the Shares.
Although there is a risk that fluctuations in interest rates on borrowings and
short-term debt or in the dividend rates on any preferred shares may adversely
affect the return to the holders of the Shares, the Adviser believes that this
should be mitigated when the Trust uses leverage with floating rate costs,
because the Trust's costs of leverage and its portfolio of Senior Loans will
ordinarily have similar floating rates of interest. If the income from the
securities purchased with such funds is not sufficient to cover the cost of
leverage, the return on the Trust will be less than if leverage had not been
used, and therefore the amount available for distribution to Shareholders as
dividends and other distributions will be reduced. The Adviser in its best
judgment nevertheless may determine to maintain the Trust's leveraged position
if it deems such action to be appropriate in the circumstances. As discussed
under "Management of the Trust," during periods in which the Trust is utilizing
leverage the fees paid to Eaton Vance for investment advisory and administrative
services will be higher than if the Trust did not utilize leverage because the
fees paid will be calculated on the basis of the Trust's total assets, including
proceeds from borrowings for leverage and the issuance of preferred shares.
Capital raised through leverage will be subject to interest costs or
dividend payments which may exceed the income and appreciation on the assets
purchased. The Trust also may be required to maintain, among other things,
minimum average balances in connection with borrowings or to pay a commitment or
other fee to maintain a line of credit; any such requirements will increase the
cost of borrowing over the stated interest rate. The issuance of preferred
shares involves offering expenses and other costs and may limit the Trust's
freedom to pay dividends on Shares or to engage in other activities. Borrowings
and the issuance of a class of preferred shares having priority over the Trust's
Shares create an opportunity for greater return per Share, but at the same time
such leveraging is a speculative technique in that it will increase the Trust's
exposure to capital risk. Unless the income and appreciation, if any, on assets
acquired with borrowed funds or offering proceeds exceed the cost of borrowing
or issuing additional classes of securities (and other Trust expenses), the use
of leverage will diminish the investment performance of the Trust's Shares
compared with what it would have been without leverage.
Certain types of borrowings may result in the Trust being subject to
covenants in credit agreements, including those relating to asset coverage and
portfolio composition requirements. The Trust may be subject to certain
restrictions on investments imposed by guidelines of one or more Rating Agencies
which may issue
13
<PAGE> 18
ratings for any corporate debt securities or preferred shares issued by the
Trust. These guidelines may impose asset coverage or portfolio composition
requirements that are more stringent than those imposed on the Trust by the
Investment Company Act. It is not anticipated that these covenants or guidelines
will impede the Adviser from managing the Trust's portfolio in accordance with
the Trust's investment objective and policies. The Trust currently is in
preliminary negotiations with commercial banks to arrange a credit facility. The
terms of any agreements relating to the credit facility, including commitment
and facility fees and the rate of interest charged on such borrowings, have not
been determined and are subject to a definitive agreement and other conditions.
Under the Investment Company Act, the Trust is not permitted to incur
indebtedness unless immediately after such incurrence the Trust has an asset
coverage of at least 300% of the aggregate outstanding principal balance of
indebtedness (i.e., such indebtedness may not exceed 33 1/3% of the Trust's
total assets). Additionally, under the Investment Company Act, the Trust may not
declare any dividend or other distribution upon any class of its capital shares
(including the Shares), or purchase any such capital shares, unless the
aggregate indebtedness of the Trust has, at the time of the declaration of any
such dividend or distribution or at the time of any such purchase, an asset
coverage of at least 300% after deducting the amount of such dividend,
distribution, or purchase price, as the case may be. Under the Investment
Company Act, the Trust is not permitted to issue preferred shares unless
immediately after such issuance the net asset value of the Trust's portfolio is
at least 200% of the liquidation value of the outstanding preferred shares
(i.e., such liquidation value may not exceed 50% of the Trust's total assets).
In addition, the Trust is not permitted to declare any cash dividend or other
distribution on its Shares unless, at the time of such declaration, the net
asset value of the Trust's portfolio (determined after deducting the amount of
such dividend or other distribution) is at least 200% of such liquidation value.
If preferred shares are issued, the Trust intends, to the extent possible, to
purchase or redeem preferred shares from time to time to maintain coverage of
any preferred shares of at least 200%.
The Trust's willingness to borrow money and issue new securities for
investment purposes, and the amount the Trust will borrow or issue, will depend
on many factors, the most important of which are market conditions and interest
rates. Successful use of a leveraging strategy depends on the Adviser's ability
to predict correctly interest rates and market movements, and there is no
assurance that a leveraging strategy will be successful during any period in
which it is employed.
Assuming the utilization of leverage in the amount of approximately 33 1/3%
of the Trust's total assets and an annual interest rate on borrowings of 6.10%
payable on such leverage based on market rates as of the date of this
Prospectus, the annual return that the total assets in the Trust's portfolio
must experience (net of expenses) in order to cover such interest payments would
be 2.03%. The Trust's actual cost of leverage will be based on market rates at
the time the Trust undertakes a leveraging strategy, and such actual cost of
leverage may be higher or lower than that assumed in the previous example.
The following table is designed to illustrate the effect on the return to a
holder of the Trust's Shares of leverage in the amount of approximately 33 1/3%
of the Trust's total assets, assuming hypothetical annual returns of the Trust's
portfolio of minus 10% to plus 10%. As the table shows, leverage generally
increases the return to Shareholders when portfolio return is positive and
greater than the cost of leverage and decreases the return when the portfolio
return is negative or less than the cost of leverage. The figures appearing in
the table are hypothetical and actual returns may be greater or less than those
appearing in the table.
<TABLE>
<S> <C> <C> <C> <C> <C>
Assuming Portfolio Return (net of expenses)....... (10)% (5)% 0% 5% 10%
Corresponding Share Return Assuming 33 1/3%
Leverage........................................ (18.05)% (10.55)% (3.05)% 4.45% 11.95%
</TABLE>
Until the Trust borrows or issues preferred shares, the Shares will not be
leveraged, and the risks and special considerations related to leverage
described in this Prospectus will not apply. Such leveraging of the Shares
cannot be achieved until the proceeds resulting from the use of leverage have
been invested in accordance with the Trust's investment objective and policies.
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ADDITIONAL RISK CONSIDERATIONS
Interest Rate Risk. When interest rates decline, the value of a portfolio
invested in fixed-rate obligations can be expected to rise. Conversely, when
interest rates rise, the value of a portfolio invested in fixed-rate obligations
can be expected to decline. Although the Trust's net asset value will vary, the
Trust's management expects the Trust's policy of acquiring primarily interests
in floating rate Senior Loans to minimize fluctuations in net asset value as a
result of changes in market interest rates. However, because floating rates on
Senior Loans only reset periodically, changes in prevailing interest rates can
be expected to cause some fluctuation in the Trust's net asset value. Similarly,
a sudden and significant increase in market interest rates may cause a decline
in the Trust's net asset value. Moreover, as much as 10% of the total assets of
the Trust may be invested in income securities with fixed rates of interest,
which may lose value in direct response to market interest rate increases.
Credit Risk. Senior Loans, like other corporate debt obligations, are
subject to the risk of non-payment of scheduled interest or principal. Such
non-payment would result in a reduction of income to the Trust, a reduction in
the value of the Senior Loan experiencing non-payment and a potential decrease
in the net asset value of the Trust. Although, with respect to Senior Loans, the
Trust generally will invest only in Senior Loans that the Adviser believes are
secured by specific collateral the value of which equals or exceeds the
principal amount of the Senior Loan at the time of initial investment, there can
be no assurance that the liquidation of any such collateral would satisfy the
Borrower's obligation in the event of non-payment of scheduled interest or
principal payments, or that such collateral could be readily liquidated. In the
event of bankruptcy of a Borrower, the Trust could experience delays or
limitations with respect to its ability to realize the benefits of the
collateral securing a Senior Loan. To the extent that a Senior Loan is
collateralized by stock in the Borrower or its subsidiaries, such stock may lose
all or substantially all of its value in the event of bankruptcy of the
Borrower. The Agent generally is responsible for determining that the Lenders
have obtained a perfected security interest in the collateral securing the
Senior Loan. Some Senior Loans in which the Trust may invest are subject to the
risk that a court, pursuant to fraudulent conveyance or other similar laws,
could subordinate such Senior Loans to presently existing or future indebtedness
of the Borrower or take other action detrimental to the holders of Senior Loans,
such as the Trust, including, in certain circumstances, invalidating such Senior
Loans.
Senior Loans in which the Trust will invest often are not rated by a Rating
Agency, will not be registered with the SEC or any state securities commission
and will not be listed on any national securities exchange. Although the Trust
will have access to financial and other information made available to the
Lenders in connection with Senior Loans, the amount of public information
available with respect to Senior Loans will generally be less extensive than
that available for rated, registered or exchange listed securities. Borrowers
may have outstanding debt obligations that are rated below investment grade by a
Rating Agency. More recently, such Rating Agencies have begun rating Senior
Loans and many Senior Loans have been assigned a rating below investment grade.
The Trust will invest in such Senior Loans. Debt securities which are unsecured
and rated below investment grade are viewed by the Rating Agencies as having
speculative characteristics and are commonly known as "junk bonds." A
description of the ratings of corporate bonds by Moody's and S&P is included as
Appendix A to the Statement of Additional Information. Because of the protective
features of Senior Loans (being senior and secured by specific collateral), the
Adviser believes, based on its experience, that these ratings do not necessarily
reflect the true risk of loss of principal or interest on a Senior Loan. For
example, the Adviser believes that Senior Loans tend to have more favorable loss
recovery rates as compared to most other types of below investment grade debt
obligations. Accordingly, the Adviser generally does not take ratings into
account when determining whether to invest in a Senior Loan and, in any event,
does not view ratings as a determinative factor in its investment decisions.
Investing in Senior Loans does, however, involve investment risk, and some
Borrowers default on their Senior Loan payments. The Trust attempts to manage
these risks through portfolio diversification and careful analysis and
monitoring of Borrowers. As a result, the Trust is more dependent on the
Adviser's credit analysis abilities than a fund that invests in other types of
debt securities.
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The Trust may invest up to 20% of its total assets in: Loans from Borrowers
that are not secured by any, or that have lower than a senior claim on,
collateral; in warrants and equity securities acquired in connection with the
Trust's ownership of Senior Loans; and in other income producing securities such
as investment grade and below investment grade corporate debt securities and
U.S. government and U.S. dollar-denominated foreign government or supranational
debt securities (subject to the limit that no more than 10% of the Trust's total
assets may be invested in securities with a fixed rate of interest). Securities
rated below investment grade are commonly referred to as "junk bonds."
Securities rated below investment grade or unrated securities of comparable
quality ("lower quality securities") are subject to the risk of an issuer's
inability to meet principal and interest payments on the obligations (credit
risk) and may also be subject to price volatility due to such factors as
interest rate sensitivity, market perception of the creditworthiness of the
issuer and general market liquidity (market risk). The prices of lower quality
securities are also more likely to react to real or perceived developments
affecting market and credit risk than are prices of investment grade quality
securities ("high quality securities"), which react primarily to movements in
the general level of interest rates. A substantial portion of the Trust's
portfolio of Senior Loans and other debt securities may be lower quality
securities issued in connection with mergers, acquisitions, leveraged buy-outs,
recapitalizations and other highly leveraged transactions, which pose a higher
risk of default or bankruptcy of the issuer than other higher quality debt
securities, particularly during periods of deteriorating economic conditions and
contraction in the credit markets. The investments in the Trust's portfolio will
have speculative characteristics.
Foreign Securities. Although the Trust will only invest in U.S.
dollar-denominated income securities, the Trust may invest in Senior Loans and
other debt securities of non-U.S. issuers. Investment in securities of non-U.S.
issuers involves special risks, including that non-U.S. issuers may be subject
to less rigorous accounting and reporting requirements than U.S. issuers, less
rigorous regulatory requirements, differing legal systems and laws relating to
creditors' rights, the potential inability to enforce legal judgments and the
potential for political, social and economic adversity. The willingness and
ability of sovereign issuers to pay principal and interest on government
securities depends on various economic factors, including among others the
issuer's balance of payments, overall debt level, and cash flow considerations
related to the availability of tax or other revenues to satisfy the issuer's
obligations. Supranational organizations do not have taxing powers, so they are
dependent upon their members' continued support in order to meet interest and
principal payments. The securities of some foreign issuers are less liquid and
at times more volatile than securities of comparable U.S. issuers. Foreign
settlement procedures and trade regulations may involve certain risks (such as
delay in the payment or delivery of securities and interest or in the recovery
of assets held abroad) and expenses not present in the settlement of domestic
investments. Investments may include securities issued by the governments of
lesser-developed countries, which are sometimes referred to as "emerging
markets." There may be a possibility of nationalization or expropriation of
assets, imposition of currency exchange controls, confiscatory taxation,
political or financial instability, armed conflict and diplomatic developments
which could affect the value of the Trust's investments in certain foreign
countries.
Liquidity Risk. Senior Loans, at present, are generally not readily
marketable and are subject to restrictions on resale. Interests in Senior Loans
generally are not listed on any national securities exchange or automated
quotation system and no active trading market may exist for many of the Senior
Loans in which the Trust will invest. Where a secondary market exists, such
market may be subject to irregular trading activity, wide bid/ask spreads and
extended trade settlement periods. Senior Loans are thus relatively illiquid,
which illiquidity may impair the Trust's ability to realize the full value of
its assets in the event of a voluntary or involuntary liquidation of such
assets. The Trust has no limitation on the amount of its assets which may be
invested in securities which are not readily marketable or are subject to
restrictions on resale. The substantial portion of the Trust's assets invested
in Senior Loan interests may restrict the ability of the Trust to dispose of its
investments in a timely fashion and at a fair price, and could result in capital
losses to the Trust and holders of Shares. The risks associated with illiquidity
are particularly acute in situations where the Trust's operations require cash,
such as if the Trust tenders for its Shares, and may result in the Trust
borrowing to meet short-term cash requirements.
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Regulatory Changes. To the extent that legislation or state or federal
regulators that regulate certain financial institutions impose additional
requirements or restrictions with respect to the ability of such institutions to
make loans, particularly in connection with highly leveraged transactions, the
availability of Senior Loans for investment by the Trust may be adversely
affected. Further, such legislation or regulation could depress the market value
of Senior Loans held by the Trust.
Closed-End Funds. The Trust is a closed-end investment company with no
history of operations and is designed primarily for long-term investors and not
as a trading vehicle. The shares of closed-end investment companies often trade
at a discount from their net asset value, and the Trust's Shares may likewise
trade at a discount from net asset value. The trading price of the Trust's
Shares may be less than the initial public offering price, creating a risk of
loss for investors purchasing in the initial public offering of the Shares. This
market price risk may be greater for investors who sell their Shares within a
relatively short period after completion of this offering.
Non-Diversification. The Trust has registered as a "non-diversified"
investment company under the 1940 Act so that, subject to its investment
restrictions and in connection with federal income tax rules applicable to the
Trust, with respect to 50% of its total assets, it will be able to invest more
than 5% of the value of its assets in the obligations of any single issuer,
including Senior Loans of a single Borrower or single Lender, although it has no
current intention to do so. The Trust will not invest more than 10% of the value
of its assets in securities (including interests in Senior Loans) of any single
Borrower. Moreover, the Trust may invest more than 10% (but not more than 25%)
of its total assets in Senior Loan interests for which the same intermediate
participant is interposed between the Trust and the Borrower. To the extent the
Trust invests a relatively high percentage of its assets in obligations of a
limited number of issuers, the Trust will be more susceptible than a more widely
diversified investment company to any single corporate, economic, political or
regulatory occurrence.
Year 2000 Compliance. The Trust could be adversely affected if the
computer systems used by the Adviser and other service providers do not properly
process and calculate date-related information and data from and after January
1, 2000. This is commonly known as the "Year 2000 Problem." Eaton Vance is
taking steps that it believes are reasonably designed to address the Year 2000
Problem with respect to computer systems that it uses and to obtain reasonable
assurances that comparable steps are being taken by the Trust's other major
service providers. At this time, there can be no assurance that these steps will
be sufficient to avoid any adverse impact to the Trust.
In addition, it is possible that the markets for Senior Loans and other
securities in which the Trust invests may be detrimentally affected by computer
failures throughout the financial services industry beginning on or before
January 1, 2000. Improperly functioning trading systems may result in settlement
problems and liquidity issues. In addition, corporate and governmental data
processing errors may result in production problems for individual companies and
overall economic uncertainties. Earnings of individual issuers will be affected
by remediation costs, which may be substantial and may be reported
inconsistently in U.S. and foreign financial statements. Accordingly, the
Trust's investments may be adversely affected.
SPECIAL INVESTMENT PRACTICES
The Trust may engage in the following investment practices to seek to
enhance income or reduce investment risk, but has no current intention to do so.
Interest Rate and Other Hedging Transactions. The Trust may purchase or
sell derivative instruments (which are instruments that derive their value from
another instrument, security or index) to seek to hedge against fluctuations in
securities prices or interest rates. The Trust's transactions in derivative
instruments may include the purchase or sale of futures contracts on securities,
securities indices or other indices, other financial instruments; options on
futures contracts; exchange-traded and over-the-counter options on securities or
indices; index-linked securities; and interest rate swaps. The Trust's
transactions in derivative instruments involve a risk of loss or depreciation
due to: unanticipated adverse changes in securities prices, interest rates, the
other financial instruments' prices; the inability to close out a position;
default by the counterparty; imperfect correlation between a position and the
desired hedge; tax constraints on closing out positions; and
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portfolio management constraints on securities subject to such transactions. The
loss on derivative instruments (other than purchased options) may substantially
exceed the Trust's initial investment in these instruments. In addition, the
Trust may lose the entire premium paid for purchased options that expire before
they can be profitably exercised by the Trust. Transaction costs will be
incurred in opening and closing positions in derivative instruments. There can
be no assurance that the Adviser's use of derivative instruments will be
advantageous to the Trust.
The Trust may use interest rate swaps for risk management purposes and not
as a speculative investment and would typically use interest rate swaps to
shorten the average time to interest rate reset of the Trust. Interest rate
swaps involve the exchange by the Trust 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. The
Adviser has had limited experience in the use of interest rate swaps but has
utilized other types of hedging and risk management techniques. If the Adviser
is incorrect in its forecasts of market values, interest rates and other
applicable factors, the investment performance of the Trust would be less
favorable than what it would have been if this investment technique were never
used.
Securities Lending. The Trust may seek to increase its income by lending
portfolio securities to broker-dealers or other institutional borrowers. During
the existence of a loan, the Trust will continue to receive the equivalent of
the interest paid by the issuer on the securities loaned and will also receive a
fee, or all or a portion of the interest on investment of the collateral, if
any. However, the Trust may pay lending fees to such borrowers. As with other
extensions of credit, there are risks of delay in recovery or even loss of
rights in the securities loaned if the borrower of the securities fails
financially. However, the loans will be made only to organizations deemed by the
Trust's Adviser to be of good standing and when, in the judgment of the Adviser,
the consideration which can be earned from securities loans of this type, net of
administrative expenses and any finders or other fees, justifies the attendant
risk. The financial condition of the borrower will be monitored by the Adviser
on an ongoing basis. The value of the securities loaned will not exceed 30% of
the Trust's total assets.
Repurchase Agreements. The Trust may enter into repurchase agreements with
member banks of the Federal Reserve System or primary dealers in U.S. Government
securities. Under a repurchase agreement, the Trust buys securities at one price
and simultaneously promises to sell back those securities at a higher price. The
Trust'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, the Adviser 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 Trust might experience delays in
recovering its cash. To the extent that, in the meantime, the value of the
securities the Trust purchased may have declined, the Trust could experience a
loss.
Reverse Repurchase Agreements. The Trust may also enter into "reverse"
repurchase agreements which involve the sale of securities held and an agreement
to repurchase the securities at an agreed-upon price, date, and interest
payment. Reverse repurchase agreements involve risks similar to those described
above under "-- Use of Leverage" and expose the Trust to the credit risk of the
counterparty.
MANAGEMENT OF THE TRUST
BOARD OF TRUSTEES
The management of the Trust, including general supervision of the duties
performed by the Adviser under the Advisory Agreement, is the responsibility of
the Trust's Board of Trustees under the laws of The Commonwealth of
Massachusetts.
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THE ADVISER
Eaton Vance Management acts as the Trust's investment adviser under an
Investment Advisory Agreement ("Advisory Agreement"). The Adviser's principal
office is located at 24 Federal Street, Boston, MA 02110. Eaton Vance, its
affiliates and predecessor companies have been managing assets of individuals
and institutions since 1924 and of investment companies since 1931. Eaton Vance
(or its affiliates) currently serves as the investment adviser to investment
companies and various individual and institutional clients with combined assets
under management of over $27 billion, of which approximately $25 billion is in
investment companies. 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.
Eaton Vance was one of the first investment advisers to manage a portfolio
of Senior Loans in a publicly offered investment company and has done so
continuously since 1989. Eaton Vance currently offers Eaton Vance Prime Rate
Reserves, a closed-end investment company that commenced investment operations
in August, 1989, and EV Classic Senior Floating-Rate Fund, a closed-end fund
that commenced investment operations in February, 1995. Each of these funds, as
well as an offshore fund offered to non-U.S. investors, invests substantially
all of its respective assets in the Senior Debt Portfolio, a registered
investment company that serves as the vehicle through which such funds invest in
a common portfolio of Senior Loans. For the three-year and five-year periods
ended September 30, 1998 with respect to Eaton Vance Prime Rate Reserves, and
for the three-year period ended September 30, 1998 with respect to the EV
Classic Senior Floating-Rate Fund, each such fund was awarded five stars by
Morningstar, Inc. Morningstar is an independent evaluator of public investment
companies and publishes proprietary ratings reflecting historical risk-adjusted
performance. Morningstar ratings are calculated from a fund's annual returns in
excess of the 90-day U.S. Treasury bill returns, with appropriate fee
adjustments and are further adjusted with a risk factor that reflects fund
performance below 90-day Treasury bill returns. Eaton Vance Prime Rate Reserves
and the EV Classic Senior Floating-Rate Fund are in the Morningstar Taxable Bond
Fund category, which includes 1,491 (for such three year period) and 940 (for
such five year period) other investment companies. A fund receives five stars if
its risk-adjusted performance is in the top 10% of its rating category. Although
these funds have substantially similar investment objectives and policies as the
Trust, certain investment policies and restrictions of Eaton Vance Prime Rate
Reserves and the EV Classic Senior Floating Rate Fund differ from those of the
Trust. For example, such funds have not employed financial leverage for
investment purposes and such funds have not invested in lower quality bonds with
fixed rates of interest. Moreover, such funds are continuously offered and
conduct quarterly tender offers so they have not been fully invested at all
times. The portfolio holdings and investment performance of such funds will
differ from those of the Trust. Past performance of such funds is not indicative
of the Trust's performance.
Under the general supervision of the Trust's Board of Trustees, the Adviser
will carry out the investment and reinvestment of the assets of the Trust, will
furnish continuously an investment program with respect to the Trust, will
determine which securities should be purchased, sold or exchanged, and will
implement such determinations. The Adviser will furnish to the Trust investment
advice and office facilities, equipment and personnel for servicing the
investments of the Trust. The Adviser will compensate all Trustees and officers
of the Trust who are members of the Adviser's organization and who render
investment services to the Trust, and will also compensate all other Adviser
personnel who provide research and investment services to the Trust. In return
for these services, facilities and payments, the Trust has agreed to pay the
Adviser as compensation under the Advisory Agreement a fee in the amount of .85%
of the average weekly gross assets of the Trust. Gross assets of the Trust shall
be calculated by deducting accrued liabilities of the Trust not including the
principal amount of any indebtedness constituting financial leverage. The
Adviser has agreed to waive its investment advisory fee for the two-month period
following the date of this Prospectus.
Scott H. Page and Payson F. Swaffield are co-portfolio managers of the
Trust and are responsible for day-to-day management of the Trust's investments.
Mr. Page has been an employee of Eaton Vance since 1989 and Mr. Swaffield has
been an employee of Eaton Vance since 1990. Each has been a Vice President of
Eaton Vance since 1992 and has been involved in the management of Senior Loans
throughout his tenure at Eaton Vance. They currently co-manage Senior Debt
Portfolio (described above) with assets of approximately $5.8 billion on October
21, 1998.
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The Trust and the Adviser have adopted Codes of Ethics relating to personal
securities transactions. The Codes permit Adviser personnel to invest in
securities (including securities that may be purchased or held by the Trust) for
their own accounts, subject to certain pre-clearance, reporting and other
restrictions and procedures contained in such Codes.
The Trust 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 Trust, subject to the supervision of the Trust's Board of
Trustees. Eaton Vance will furnish to the Trust all office facilities, equipment
and personnel for administering the affairs of the Trust. 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 Trust's custodian and transfer agent, providing assistance
in connection with the Trustees' and shareholders' meetings, providing service
in connection with any repurchase offers and other administrative services
necessary to conduct the Trust's business. In return for these services,
facilities and payments, the Trust is authorized to pay Eaton Vance as
compensation under the Administration Agreement a fee in the amount of .25% of
the average weekly gross assets of the Trust. The Administrator has agreed to
waive its administration fee for the two-month period following the date of this
Prospectus.
DISTRIBUTIONS AND TAXES
The Trust intends to make monthly distributions of net investment income,
after payment of interest on any outstanding borrowings or dividends on any
outstanding preferred shares. The Trust will distribute annually any net
short-term capital gain and any net capital gain (which is the excess of net
long-term capital gain over net short-term capital loss). Distributions to
Shareholders cannot be assured, and the amount of each monthly distribution is
likely to vary. Initial distributions to Shareholders are expected to be paid
approximately 60 days after the completion of this offering. While there are any
borrowings or preferred shares outstanding, the Trust may not be permitted to
declare any cash dividend or other distribution on its Shares in certain
circumstances. See "Description of Capital Structure."
Distributions of the Trust's investment company taxable income (consisting
generally of net investment income and net short-term capital gain) are taxable
to Shareholders as ordinary income, whether paid in cash or reinvested in
additional Shares. Distributions of the Trust's net capital gain ("capital gain
dividends"), if any, are taxable to Shareholders at the rates applicable to
long-term capital gains, regardless of the length of time Shares have been held
by Shareholders. Distributions, if any, in excess of the Trust's earnings and
profits will first reduce the adjusted tax basis of a holder's Shares and, after
such adjusted tax basis has been reduced to zero, will constitute capital gains
to such holder (assuming such Shares are held as a capital asset). See below for
a summary of the maximum tax rates applicable to capital gains (including
capital gain dividends).
The Trust will inform Shareholders of the source and tax status of all
distributions promptly after the close of each calendar year. The Trust's
distributions will not qualify for the dividends-received deduction for
corporations.
Selling Shareholders will generally recognize gain or loss in an amount
equal to the difference between their adjusted tax basis in the Shares and the
amount received. If such Shares are held as a capital asset, the gain or loss
will be a capital gain or loss. The maximum tax rate applicable to net capital
gains recognized by individuals and other non-corporate taxpayers is (i) the
same as the maximum ordinary income tax rate for capital assets held for one
year or less or (ii) 20% for capital assets held for more than one year. Any
loss recognized upon a taxable disposition of Shares held for six months or less
will be treated as a long-term capital loss to the extent of any capital gain
dividends received with respect to such Shares. For purposes of determining
whether Shares have been held for six months or less, the holding period is
suspended for any periods during which the Shareholder's risk of loss is
diminished as a result of holding one or more other positions in substantially
similar or related property, or through certain options or short sales. Any loss
realized on a sale or exchange of Shares will be disallowed to the extent those
Shares are replaced by other Shares within a period of 61 days beginning 30 days
before and ending 30 days after the date of disposition of the
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Shares (which could occur, for example, if the Shareholder is a participant in
the Plan (as defined below)). In that event, the basis of the replacement Shares
will be adjusted to reflect the disallowed loss.
An investor should be aware that if Shares are purchased in the open market
shortly before the record date for any dividend (including a capital gain
dividend), the purchase price likely will reflect the value of the distribution
and the investor then would receive a taxable distribution likely to reduce the
trading value of such Shares, in effect resulting in a taxable return of some of
the purchase price. Shareholders that are not liable for tax on their income and
whose Shares are not debt-financed are not required to pay tax on dividends they
receive from the Trust. Taxable distributions to individuals and certain other
non-corporate Shareholders, including those who have not provided their correct
taxpayer identification number and other required certifications, may be subject
to "backup" federal income tax withholding of 31%.
The foregoing briefly summarizes some of the important federal income tax
consequences to Shareholders of investing in Shares 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.
There may be other federal, state, local or foreign tax considerations
applicable to a particular investor. Investors should consult their tax
advisers.
DIVIDEND REINVESTMENT PLAN
Pursuant to the Trust's Dividend Reinvestment Plan (the "Plan"), unless a
Shareholder otherwise elects, all distributions of dividends (including all
capital gain dividends) will be automatically reinvested in Shares.
First Data Investor Services Group (the "Plan Agent") serves as agent for
the Shareholders in administering the Plan. Shareholders who elect not to
participate in the Plan will receive all distributions of dividends in cash paid
by check mailed directly to the Shareholder of record (or if the Shares are held
in street or other nominee name, then to the nominee) by First Data Investor
Services Group as disbursing agent. Participation in the Plan is completely
voluntary and may be terminated or resumed at any time without penalty by
written notice if received by the Plan Agent not less than ten days prior to any
dividend record date.
Shares will be acquired by the Plan Agent or an independent broker-dealer
for the participants' accounts, depending upon the circumstances described
below, either (i) through receipt of additional previously authorized but
unissued Shares from the Trust ("newly issued shares") or (ii) by purchase of
outstanding Shares on the open market ("open-market purchases") on the New York
Stock Exchange or elsewhere. If on the payment date for the dividend, the net
asset value per Share is equal to or less than the market price per Share plus
estimated brokerage commissions (such condition being referred to herein as
"market premium"), the Plan Agent will invest the dividend amount in newly
issued Shares on behalf of the participants. The number of newly issued Shares
to be credited to each participant's account will be determined by dividing the
dollar amount of the dividend by the net asset value per Share on the date the
Shares are issued, provided that the maximum discount from the then current
market price per Share on the date of issuance may not exceed 5%. If on the
dividend payment date the net asset value per Share is greater than the market
value plus estimated brokerage commissions (such condition being referred to
herein as "market discount"), the Plan Agent will invest the dividend amount in
Shares acquired on behalf of the participants in open-market purchases.
In the event of a market discount on the dividend payment date, the Plan
Agent will have up to 30 days after the dividend payment date to invest the
dividend amount in Shares acquired in open-market purchases. If, before the Plan
Agent has completed its open-market purchases, the market price of a Share
exceeds the net asset value per Share, the average per Share purchase price paid
by the Plan Agent may exceed the net asset value of the Trust's Shares,
resulting in the acquisition of fewer Shares than if the dividend had been paid
in newly issued Shares on the dividend payment date. Therefore, the Plan
provides that if the Plan Agent is unable to invest the full dividend amount in
open-market purchases during the purchase period or if the market discount
shifts to a market premium during the purchase period, the Plan Agent will cease
making open-market purchases and will invest the uninvested portion of the
dividend amount in newly issued Shares.
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The Plan Agent maintains all Shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by Shareholders for tax records. Shares in the account of
each Plan participant will be held by the Plan Agent on behalf of the Plan
participant, and each Shareholder proxy will include those Shares purchased or
received pursuant to the Plan. The Plan Agent will forward all proxy
solicitation materials to participants and vote proxies for Shares held pursuant
to the Plan in accordance with the instructions of the participants.
In the case of Shareholders such as banks, brokers or nominees that hold
Shares for others who are the beneficial owners, the Plan Agent will administer
the Plan on the basis of the number of Shares certified from time to time by the
record Shareholder's name and held for the account of beneficial owners who
participate in the Plan.
There will be no brokerage charges with respect to Shares issued directly
by the Trust as a result of dividends payable either in Shares or in cash.
However, each participant will pay a pro rata share of brokerage commissions
incurred with respect to the Plan Agent's open-market purchases in connection
with the reinvestment of dividends.
Shareholders participating in the Plan may receive benefits not available
to Shareholders not participating in the Plan. If the market price (plus
commissions) of the Trust's Shares is above their net asset value, participants
in the Plan will receive Shares of the Trust at less than they could otherwise
purchase them and will have Shares with a cash value greater than the value of
any cash distribution they would have received on their Shares. If the market
price plus commissions is below the net asset value, participants will receive
distributions in Shares with a net asset value greater than the per Share value
of any cash distribution they would have received on their Shares. However,
there may be insufficient Shares available in the market to make distributions
in Shares at prices below the net asset value. Also, since the Trust does not
redeem its Shares, the price on resale may be more or less than the net asset
value.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan. There
is no direct service charge to participants in the Plan; however, the Trust
reserves the right to amend the Plan to include a service charge payable by the
participants.
All correspondence concerning the Plan should be directed to the Plan Agent
at P. O. Box 8030, Boston, MA 02266-8030. Please call 1-800-331-1710 between the
hours of 9:00 a.m. and 5:00 p.m. Eastern Standard Time if you have questions
regarding the Plan.
DESCRIPTION OF CAPITAL STRUCTURE
The Trust is an unincorporated business trust established under the laws of
The Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated
September 23, 1998 (the "Declaration of Trust"). The Declaration of Trust
provides that the Trustees of the Trust may authorize separate classes of shares
of beneficial interest. The Trustees have authorized an unlimited number of
Shares. The Declaration of Trust also authorizes the Trust to borrow money or
otherwise obtain credit and in this connection issue notes or other evidence of
indebtedness. The Trust intends to hold annual meetings of the holders of Shares
in compliance with the requirements of the New York Stock Exchange.
Shares. The Declaration of Trust permits the Trust to issue an unlimited
number of full and fractional Shares of beneficial interest, $0.01 par value per
Share. Each Share represents an equal proportionate interest in the assets of
the Trust with each other Share in the Trust. Holders of Shares will be entitled
to the payment of dividends when, as and if declared by the Board of Trustees.
The 1940 Act or the terms of any borrowings or preferred shares may limit the
payment of dividends to the holders of Shares. Each whole Share shall be
entitled to one vote as to matters on which it is entitled to vote pursuant to
the terms of the Declaration of Trust on file with the SEC. Upon liquidation of
the Trust, after paying or adequately providing for the payment of all
liabilities of the Trust and the liquidation preference with respect to any
outstanding preferred shares, and upon receipt of such releases, indemnities and
refunding agreements as they deem necessary for their protection, the Trustees
may distribute the remaining assets of the Trust among the holders of the
Shares. The Declaration of Trust provides that Shareholders are not liable for
any liabilities of the Trust,
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<PAGE> 27
requires inclusion of a clause to that effect in every agreement entered into by
the Trust and indemnifies shareholders against any such liability. Although
shareholders of an unincorporated business trust established under Massachusetts
law, in certain limited circumstances, may be held personally liable for the
obligations of the trust as though they were general partners, the provisions of
the Declaration of Trust described in the foregoing sentence make the likelihood
of such personal liability remote.
While there are any borrowings or preferred shares outstanding, the Trust
may not be permitted to declare any cash dividend or other distribution on its
Shares, unless at the time of such declaration, (i) all accrued dividends on
preferred shares or accrued interest on borrowings has been paid and (2) the
value of the Trust's total assets (determined after deducting the amount of such
dividend or other distribution), less all liabilities and indebtedness of the
Trust not represented by senior securities, is at least 300% of the aggregate
amount of such securities representing indebtedness and at least 200% of the
aggregate amount of securities representing indebtedness plus the aggregate
liquidation value of the outstanding preferred shares (expected to equal the
aggregate original purchase price of the outstanding preferred shares plus
redemption premium, if any, together with any accrued and unpaid dividends
thereon, whether or not earned or declared and on a cumulative basis). In
addition to the requirements of the 1940 Act, the Trust may be required to
comply with other asset coverage requirements as a condition of the Trust
obtaining a rating of the preferred shares from a Rating Agency or as a
condition to borrowing money. These requirements may include an asset coverage
test more stringent than under the 1940 Act. This limitation on the Trust's
ability to make distributions on its Shares could in certain circumstances
impair the ability of the Trust to maintain its qualification for taxation as a
regulated investment company. The Trust intends, however, to the extent possible
to purchase or redeem preferred shares or to repay borrowings from time to time
to maintain compliance with such asset coverage requirements and may pay special
dividends to the holders of the preferred shares in certain circumstances in
connection with any such impairment of the Trust's status as a regulated
investment company. See "Investment Objective, Policies and Risks" and
"Distributions and Taxes." Depending on the timing of any such redemption or
repayment, the Trust may be required to pay a premium in addition to the
liquidation preference of the preferred shares or the principal amount of the
borrowings to the holders thereof. See "--Borrowings" below.
The Trust has no present intention of offering additional Shares, except as
described herein. Other offerings of its Shares, if made, will require approval
of the Board of Trustees. Any additional offering will not be sold at a price
per Share below the then current net asset value (exclusive of underwriting
discounts and commissions) except in connection with an offering to existing
Shareholders or with the consent of a majority of the Trust's outstanding
Shares. The Shares have no preemptive rights.
The Trust generally will not issue Share certificates. However, upon
written request to the Trust's transfer agent, a share certificate will be
issued for any or all of the full Shares credited to an investor's account.
Share certificates which have been issued to an investor may be returned at any
time.
Repurchase Of Shares and Other Discount Corrective Measures. Because
shares of closed-end management investment companies frequently trade at a
discount to their net asset values, the Board of Trustees has determined that
from time to time it may be in the interest of Shareholders for the Trust to
take corrective actions. The Board of Trustees, in consultation with Eaton
Vance, will review at least annually the possibility of open market repurchases
and/or tender offers for the Shares and will consider such factors as the market
price of the Shares, the net asset value of the Shares, the liquidity of the
assets of the Trust, effect on the Trust's expenses, whether such transactions
would impair the Trust's status as a regulated investment company or result in a
failure to comply with applicable asset coverage requirements, general economic
conditions and such other events or conditions which may have a material effect
on the Trust's ability to consummate such transactions. There are no assurances
that the Board of Trustees will, in fact, decide to undertake either of these
actions or if undertaken, that such actions will result in the Trust's Shares
trading at a price which is equal to or approximates their net asset value. In
recognition of the possibility that the Shares might trade at a discount to net
asset value and that any such discount may not be in the interest of
Shareholders, the Board of Trustees, in consultation with Eaton Vance, from time
to time may review possible actions to reduce any such discount.
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<PAGE> 28
Borrowings. The Declaration of Trust authorizes the Trust, without prior
approval of the Shareholders, to borrow money in an amount up to 33 1/3% of the
Trust's total assets (including the amount borrowed). In this regard, the Trust
may issue notes or other evidence of indebtedness (including bank borrowings or
commercial paper) and may secure any such borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust's assets. In connection with such
borrowing, the Trust may be required to maintain minimum average balances with
the lender or to pay a commitment or other fee to maintain a line of credit. Any
such requirements will increase the cost of borrowing over the stated interest
rate. Under the requirements of the 1940 Act, the Trust, immediately after any
such borrowings, must have an "asset coverage" of at least 300%. With respect to
any such borrowing, asset coverage means the ratio which the value of the total
assets of the Trust, less all liabilities and indebtedness not represented by
senior securities (as defined in the 1940 Act), bears to the aggregate amount of
such borrowing represented by senior securities by the Trust. Certain types of
borrowing may result in the Trust being subject to covenants in credit
agreements relating to asset coverages or portfolio composition or otherwise.
Such restrictions may be more stringent than those imposed by the 1940 Act. The
rights of lenders to the Trust to receive interest on and repayment of principal
of any such borrowings will be senior to those of the Shareholders, and the
terms of any such borrowings may contain provisions which limit certain
activities of the Trust, including the payment of dividends to Shareholders in
certain circumstances. Further, the terms of any such borrowing may and the 1940
Act does (in certain circumstances) grant to the lenders to the Trust certain
voting rights in the event of default in the payment of interest on or repayment
of principal. In the event that such provisions would impair the Trust's status
as a regulated investment company, the Trust, subject to its ability to
liquidate its relatively illiquid portfolio, intends to repay the borrowings.
Any borrowing will likely rank senior to or pari passu (on the same level as)
with all other existing and future borrowings of the Trust. See "Investment
Objective, Policies and Risks -- Use of Leverage and Related Risks." The Trust
may also borrow up to an additional 5% of its total assets for temporary
purposes, as permitted by the 1940 Act.
The Trust currently expects that it may enter into definitive agreements
with respect to a credit facility shortly after the closing of the offer and
sale of the Shares offered hereby. The Trust is currently in negotiations with a
limited number of large commercial banks to arrange a credit facility pursuant
to which the Trust expects to be entitled to borrow an amount equal to
approximately 33 1/3 of the Trust's total assets (inclusive of the amount
borrowed) as of the closing of the offer and sale of the Shares offered hereby.
Any such borrowings would constitute financial leverage. The terms of any
agreements relating to such a credit facility have not been determined and are
subject to definitive agreement and other conditions but the Trust anticipates
that such a credit facility would have terms substantially similar to the
following: (i) a final maturity not expected to exceed three years, subject to
possible extension by the Trust; (ii) with respect to each draw under the
facility, an interest rate equal to the lesser of LIBOR plus a stated premium or
an alternate rate on the outstanding amount of each such draw, reset over
periods ranging from one to six months; and (iii) payment by the Trust of
certain fees and expenses including an underwriting fee, a commitment fee on the
average undrawn amount of the facility, an ongoing administration fee and the
expenses of the lenders under the facility incurred in connection therewith. The
facility is not expected to be convertible into any other securities of the
Trust, outstanding amounts are expected to be prepayable by the Trust prior to
final maturity without significant penalty and there are not expected to be any
sinking fund or mandatory retirement provisions. Outstanding amounts would be
payable at maturity or such earlier times as required by the agreement. The
Trust may be required to prepay outstanding amounts under the facility or incur
a penalty rate of interest in the event of the occurrence of certain events of
default. The Trust expects to indemnify the lenders under the facility against
liabilities they may incur in connection with the facility. In addition the
Trust expects that such a credit facility would contain covenants which, among
other things, likely will limit the Trust's ability to pay dividends in certain
circumstances, incur additional debt, change its fundamental investment policies
and engage in certain transactions including mergers and consolidations, and may
require asset coverage ratios in addition to those required by the 1940 Act. The
Trust may be required to maintain a portion of its assets in cash or high-grade
securities as a reserve against interest or principal payments and expenses. The
Trust expects that any credit facility would have customary covenant, negative
covenant and default provisions. There can be no assurance that the Trust will
enter into an agreement for a credit facility on terms and conditions
representative of the foregoing, or that additional material terms will not
apply. In
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<PAGE> 29
addition, if entered into, any such credit facility may in the future be
replaced or refinanced by one or more credit facilities having substantially
different terms or by the issuance of preferred shares or debt securities.
Preferred Shares. The Declaration of Trust authorizes the issuance of an
unlimited number of shares of beneficial interest with preference rights,
including preferred shares (the "Preferred Shares"), having a par value of $0.01
per share, in one or more series, with rights as determined by the Board of
Trustees, by action of the Board of Trustees without the approval of the
Shareholders.
Under the requirements of the 1940 Act, the Trust must, immediately after
the issuance of any Preferred Shares, have an "asset coverage" of at least 200%.
Asset coverage means the ratio which the value of the total assets of the Trust,
less all liability and indebtedness not represented by senior securities (as
defined in the 1940 Act), bears to the aggregate amount of senior securities
representing indebtedness of the Trust, if any, plus the aggregate liquidation
preference of the Preferred Shares. If the Trust seeks a rating of the Preferred
Shares, asset coverage requirements, in addition to those set forth in the 1940
Act, may be imposed. The liquidation value of the Preferred Shares is expected
to equal their aggregate original purchase price plus redemption premium, if
any, together with any accrued and unpaid dividends thereon (on a cumulative
basis), whether or not earned or declared. The terms of the Preferred Shares,
including their dividend rate, voting rights, liquidation preference and
redemption provisions, will be determined by the Board of Trustees (subject to
applicable law and the Trust's Declaration of Trust) if and when it authorizes
the Preferred Shares. The Trust may issue Preferred Shares that provide for the
periodic redetermination of the dividend rate at relatively short intervals
through an auction or remarketing procedure, although the terms of the Preferred
Shares may also enable the Trust to lengthen such intervals. At times, the
dividend rate as redetermined on the Trust's Preferred Shares may approach or
exceed the Trust's return after expenses on the investment of proceeds from the
Preferred Shares and the Trust's leverage structure would result in a lower rate
of return to Shareholders than if the Trust were not so structured. However, the
Trust believes that the floating rate nature of Senior Loans in which the Trust
invests helps mitigate against the risks of increased dividend costs as a result
of redetermined market rates adversely impacting the return to Shareholders.
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Trust, the terms of any Preferred Shares may entitle the
holders of Preferred Shares to receive a preferential liquidating distribution
(expected to equal the original purchase price per share plus redemption
premium, if any, together with accrued and unpaid dividends, whether or not
earned or declared and on a cumulative basis) before any distribution of assets
is made to holders of Shares. After payment of the full amount of the
liquidating distribution to which they are entitled, the Preferred Shareholders
would not be entitled to any further participation in any distribution of assets
by the Trust.
Anti-Takeover Provisions in the Declaration of Trust. The Declaration of
Trust includes provisions that could have the effect of limiting the ability of
other entities or persons to acquire control of the Trust or to change the
composition of its Board of Trustees, and could have the effect of depriving
Shareholders of an opportunity to sell their Shares at a premium over prevailing
market prices by discouraging a third party from seeking to obtain control of
the Trust. These provisions may have the effect of discouraging attempts to
acquire control of the Trust, which attempts could have the effect of increasing
the expenses of the Trust and interfering with the normal operation of the
Trust. The Board of Trustees is divided into three classes, with the term of one
class expiring at each annual meeting of Shareholders. At each annual meeting,
one class of Trustees is elected to a three-year term. This provision could
delay for up to two years the replacement of a majority of the Board of
Trustees. A Trustee may be removed from office only for cause by a written
instrument signed by the remaining Trustees or by a vote of the holders of at
least two-thirds of the class of Shares of the Trust that elected such Trustee
and is entitled to vote on the matter.
In addition, the Declaration of Trust requires the favorable vote of the
holders of at least 75% of the outstanding shares of each class of the Trust,
voting as a class, then entitled to vote to approve, adopt or authorize certain
transactions with 5%-or-greater holders of a class of shares and their
associates, unless the Board of Trustees shall by resolution have approved a
memorandum of understanding with such holders, in which case normal voting
requirements would be in effect. For purposes of these provisions, a
5%-or-greater holder of a class of shares (a "Principal Shareholder") refers to
any person who, whether directly or indirectly
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<PAGE> 30
and whether alone or together with its affiliates and associates, beneficially
owns 5% or more of the outstanding shares of any class of beneficial interest of
the Trust. The transactions subject to these special approval requirements are:
(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 having 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 (iv) the sale, lease or exchange to the Trust or any subsidiary
thereof, in exchange for securities of the Trust, of any assets of any Principal
Shareholder (except assets having an aggregate fair market value of less than
$1,000,000, aggregating for the purposes of such computation all assets sold,
leased or exchanged in any series of similar transactions within a twelve-month
period).
The Board of Trustees has determined that provisions with respect to the
Board and the 75% voting requirements described above, which voting requirements
are greater than the minimum requirements under Massachusetts law or the 1940
Act, are in the best interest of Shareholders generally. Reference should be
made to the Declaration of Trust on file with the SEC for the full text of these
provisions.
Conversion to Open-End Fund. The Trust may be converted to an open-end
investment company at any time if approved by the lesser of (i) 2/3 or more of
the Trust's then outstanding Shares and preferred shares (if any), each voting
separately as a class, or (ii) more than 50% of the then outstanding Shares and
preferred shares (if any), voting separately as a class if such conversion is
recommended by at least 75% of the Trustees then in office. If approved in the
foregoing manner, conversion of the Trust could not occur until 90 days after
the Shareholders' meeting at which such conversion was approved and would also
require at least 30 days' prior notice to all Shareholders. The composition of
the Trust's portfolio likely would prohibit the Trust from complying with
regulations of the SEC applicable to open-end investment companies. Accordingly,
conversion likely would require significant changes in the Trust's investment
policies and liquidation of a substantial portion of its relatively illiquid
portfolio. Conversion of the Trust to an open-end investment company also would
require the redemption of any outstanding Preferred Shares and could require the
repayment of borrowings, which would eliminate the leveraged capital structure
of the Trust with respect to the Shares. In the event of conversion, the Shares
would cease to be listed on the New York Stock Exchange or other national
securities exchange or market system. The Board of Trustees believes, however,
that the closed-end structure is desirable, given the Trust's investment
objective and policies. Investors should assume, therefore, that it is unlikely
that the Board of Trustees would vote to convert the Trust to an open-end
investment company. Shareholders of an open-end investment company may require
the company to redeem their shares at any time (except in certain circumstances
as authorized by or under the 1940 Act) at their net asset value, less such
redemption charge, if any, as might be in effect at the time of a redemption.
The Trust expects to pay all such redemption requests in cash, but intends to
reserve the right to pay redemption requests in a combination of cash or
securities. If such partial payment in securities were made, investors may incur
brokerage costs in converting such securities to cash. If the Trust were
converted to an open-end fund, it is likely that new Shares would be sold at net
asset value plus a sales load.
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<PAGE> 31
UNDERWRITING
The underwriters named below (the "Underwriters"), acting through
PaineWebber Incorporated, 1285 Avenue of the Americas, New York, New York, A.G.
Edwards & Sons, Inc., One North Jefferson Avenue, St. Louis, Missouri,
Prudential Securities Incorporated, One New York Plaza, New York, New York, Dain
Rauscher Wessels, a division of Dain Rauscher Incorporated, 60 South Sixth
Street, Minneapolis, Minnesota, Fahnestock & Co. Inc., 125 Broad Street, New
York, New York, First of Michigan Corporation, 300 River Place, Detroit,
Michigan, Gruntal & Co., L.L.C., One Liberty Plaza, New York, New York,
Interstate/Johnson Lane Corporation, 945 East Paces Ferry Road, Atlanta,
Georgia, Janney Montgomery Scott Inc., 1801 Market Street, Philadelphia,
Pennsylvania, Legg Mason Wood Walker, Incorporated, 100 Light Street, Baltimore,
Maryland, McDonald & Company Securities, Inc., 800 Superior Avenue, Cleveland,
Ohio, and Wheat First Union, a division of Wheat First Securities, Inc., 901
East Byrd Street, Richmond, Virginia as their representatives (the
"Representatives"), have severally agreed, subject to the terms and conditions
of the Underwriting Agreement with the Trust and Eaton Vance (the "Underwriting
Agreement"), to purchase from the Trust the number of Shares set forth opposite
their respective names. The Underwriters are committed to purchase all of such
Shares if any are purchased.
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
PaineWebber Incorporated....................................
A.G. Edwards & Sons, Inc. ..................................
Prudential Securities Incorporated..........................
Dain Rauscher Wessels.......................................
Fahnestock & Co. Inc. ......................................
First of Michigan Corporation...............................
Gruntal & Co., L.L.C. ......................................
Interstate/Johnson Lane Corporation.........................
Janney Montgomery Scott Inc. ...............................
Legg Mason Wood Walker, Incorporated........................
McDonald & Company Securities, Inc. ........................
Wheat First Securities, Inc. ...............................
ABN AMRO Chicago Corporation................................
Bear, Stearns & Co. Inc. ...................................
BT Alex. Brown Incorporated.................................
Chase Securities Inc. ......................................
CIBC Oppenheimer Corp. .....................................
Schroder & Co. Inc. ........................................
SG Cowen Securities Corporation.............................
Advest, Inc. ...............................................
Robert W. Baird & Co. Incorporated..........................
J.C. Bradford & Co. ........................................
Crowell, Weedon & Co. ......................................
Everen Securities, Inc. ....................................
Fifth Third/The Ohio Company................................
First Albany Corporation....................................
Fleet Securities, Inc. .....................................
Gibraltar Securities Co. ...................................
Josephthal & Co. Inc. ......................................
Morgan Keegan & Company, Inc. ..............................
Parker/Hunter Incorporated..................................
Pennsylvania Merchant Group.................................
Piper Jaffray Inc. .........................................
Ragen Mackenzie Incorporated................................
Roney Capital Markets.......................................
Scott & Stringfellow, Inc. .................................
Stephens Inc. ..............................................
Stifel, Nicolaus & Company, Incorporated....................
Suntrust Equitable Securities Corporation...................
Sutro & Co. Incorporated....................................
C.E. Unterberg, Towbin......................................
Van Kasper & Company........................................
Allen & Company of Florida Inc. ............................
</TABLE>
27
<PAGE> 32
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
Ferris, Baker Watts, Inc. ..................................
First Southwest Company.....................................
J.B. Hanauer & Company......................................
Johnston, Lemon & Co. Incorporated..........................
JW Genesis Capital Markets, LLC.............................
Moors & Cabot, Inc. ........................................
NatCity Investments, Inc. ..................................
David A. Noyes & Company....................................
Paulson Investment Company, Incorporated....................
Southwest Securities, Inc. .................................
M.L. Stern & Co., Inc. .....................................
TD Securities Inc. .........................................
Utendahl Capital Partners, L.P. ............................
-----------
Total.............................................
===========
</TABLE>
The Trust has granted to the Underwriters an option, exercisable for 45
days from the date of this Prospectus to purchase up to an additional
Shares to cover over-allotments, if any, at the initial offering
price. The Underwriters may exercise such option solely for the purpose of
covering over-allotments incurred in the sale of the Shares offered hereby. To
the extent that the Underwriters exercise this option, each of the Underwriters
will have a firm commitment, subject to certain conditions, to purchase an
additional number of Shares proportionate to such Underwriter's initial
commitment.
As set forth in the notes to the table on the cover page of this
Prospectus, Eaton Vance or an affiliate (not the Trust) from its own assets has
agreed to pay a commission to the Underwriters in the amount of $0.45 per Share
(4.50% of the public offering price per Share) or an aggregate amount of $
($ assuming full exercise of the over-allotment option) for all Shares
covered by this Prospectus. Such payment will be the legal obligation of Eaton
Vance or an affiliate and made out of its own assets and will not in any way
represent an obligation of the Trust or its Shareholders. The Representatives
have advised the Trust that the Underwriters may pay up to $ per Share from
such payment received from Eaton Vance to selected dealers who sell the Shares
and that the Underwriters and such dealers may reallow a concession of up to
$ per Share to certain other dealers who sell Shares. Eaton Vance (or an
affiliate) has agreed to pay all offering expenses of the Trust that exceed
$0.02 per share.
Prior to this offering, there has been no public market for the Shares or
any other securities of the Trust. The Trust has applied for listing of its
Shares on the New York Stock Exchange under the symbol "EVF." In order to meet
the requirements for listing the Shares on the New York Stock Exchange, the
Underwriters have undertaken to sell lots of 100 or more Shares to a minimum of
2,000 beneficial holders. The minimum investment requirement is 100 Shares
($1,000).
The Trust and Eaton Vance have each agreed to indemnify the several
Underwriters for or to contribute to the losses arising out of certain
liabilities, including liabilities under the Securities Act of 1933, as amended.
The Trust has agreed not to offer or sell any additional Shares of the
Trust, other than as contemplated by this Prospectus, for a period of 180 days
after the date of the Underwriting Agreement without the prior written consent
of the Underwriters.
The Representatives have informed the Trust that the Underwriters do not
intend to confirm sale to any accounts over which they exercise discretionary
authority.
The Underwriters may take certain actions to discourage short-term trading
of Shares during a period of time following the initial offering date. Included
in these actions is the withholding of the concession and other payments to
dealers in connection with Shares which were sold by such dealers and which are
repurchased for the account of the Underwriters during such period. In addition,
physical delivery of certificates representing Shares is required to transfer
ownership of Shares for a certain period. Until the distribution of Shares is
completed, rules of the SEC may limit the ability of the Underwriters and
certain selling group members to
28
<PAGE> 33
bid for and purchase the Shares. As an exception to these rules, the
Underwriters are permitted to engage in certain transactions that stabilize the
price of the Shares. Such transactions consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Shares. If the
Underwriters create a short position in the Shares in connection with the
offering, i.e., if they sell more Shares than are set forth on the cover page of
this Prospectus, then the Underwriters may reduce that short position by
purchasing Shares in the open market. The Underwriters may also elect to reduce
any short position by exercising all or a part of the over-allotment option
described above. In general, purchases of a security for the purpose of
stabilization or to reduce a short position could cause the price of the
security to be higher than it might be in the absence of such purchases. In
addition, the Underwriters may impose "penalty bids" under contractual
arrangements with dealers participating in the offering whereby it may reclaim
the selling concession with respect to Shares distributed in the offering but
subsequently purchased for the account of the Underwriters in the open market.
Neither the Trust nor the Underwriters make any representation or prediction as
to the direction or magnitude of any effect that the transactions described
above may have on the price of the Shares. In addition, neither the Trust nor
the Underwriters make any representation that the Underwriters will engage in
such transactions or that such transactions, once commenced, will not be
discontinued without notice.
Under the terms of and subject to the conditions of the Underwriting
Agreement, the Underwriters are committed to purchase and pay for all Shares
offered hereby if any are purchased. The Underwriting Agreement provides that it
may be terminated at or prior to the closing date for the purchase of the Shares
if, in the judgement of the Representatives, payment for the delivery of the
Shares is rendered impracticable or inadvisable because (1) trading in the
equity securities of the Trust is suspended by the SEC, by an exchange that
lists the Shares, or by the National Association of Securities Dealers Automated
Quotation National Market System ("NASDAQ"), (2) trading in securities generally
on the New York Stock Exchange or NASDAQ shall have been suspended or limited or
minimum or maximum prices shall have been generally established on such exchange
or over-the-counter market, (3) additional material governmental restrictions,
not in force on the date of the Underwriting Agreement, have been imposed upon
trading in securities generally or trading in securities generally has been
suspended on any U.S. securities exchange, (4) a general banking moratorium has
been established by Federal or New York authorities, or (5) any material adverse
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or other calamity or crisis occurs, the
effect of which is such as to make it impracticable to market any or all of the
Shares. The Underwriting Agreement also may be terminated if any of the
conditions specified in the Underwriting Agreement have not been fulfilled when
and as required by such agreement.
The Trust anticipates that the Representatives and certain other
Underwriters may from time to time act as brokers or dealers in connection with
the execution of its portfolio transactions after they have ceased to be
Underwriters and, subject to certain restrictions, may act as such brokers while
they are Underwriters.
As described below under "Shareholder Servicing Agent, Custodian and
Transfer Agent," Painewebber Incorporated will provide shareholder services to
the Trust pursuant to a Shareholder Servicing Agreement with Eaton Vance. Eaton
Vance will pay a monthly fee on an annual basis equal to .10% of the average
weekly gross assets of the Trust for such services.
SHAREHOLDER SERVICING AGENT, CUSTODIAN AND TRANSFER AGENT
Pursuant to a Shareholder Servicing Agreement between PaineWebber
Incorporated (the "Shareholder Servicing Agent") and Eaton Vance, the
Shareholder Servicing Agent will (i) undertake to make public information
pertaining to the Trust on an ongoing basis and to communicate to investors and
prospective investors the Trust's features and benefits (including periodic
seminars or conference calls, responses to questions from current or prospective
shareholders and specific shareholder contact where appropriate); (ii) make
available to investors and prospective investors market price, net asset value,
yield and other information regarding the Trust, if reasonably obtainable, for
the purpose of maintaining the visibility of the Trust in the investor
community; (iii) at the request of Eaton Vance, provide certain economic
research and statistical information and reports, if reasonably obtainable, on
behalf of the Trust, and consult with representatives and Trustees of the Trust
in connection therewith, which information and reports shall include:
29
<PAGE> 34
(a) statistical and financial market information with respect to the Trust's
market performance and (b) comparative information regarding the Trust and other
closed-end management investment companies with respect to (1) the net asset
value of their respective shares, (2) the respective market performance of the
Trust and such other companies and (3) other relevant performance indicators;
and (iv) at the request of Eaton Vance, provide information to and consult with
the Board of Trustees with respect to applicable modifications to dividend
policies or capital structure, repositioning or restructuring of the Trust,
conversion of the Trust to an open-end investment company, liquidation or
merger; provided, however, that under the terms of the Shareholder Servicing
Agreement, the Shareholder Servicing Agent is not obligated to render any
opinions, valuations or recommendations of any kind or to perform any such
similar services. For these services, Eaton Vance will pay the Shareholder
Servicing Agent a fee equal on an annual basis to .10% of the Trust's average
weekly gross assets, payable in arrears at the end of each calendar month. Under
the terms of the Shareholder Servicing Agreement, the Shareholder Servicing
Agent is relieved from liability to Eaton Vance for any act or omission in the
course of its performances under the Shareholder Servicing Agreement in the
absence of gross negligence or willful misconduct by the Shareholder Servicing
Agent. The Shareholder Servicing Agreement will continue for an initial term of
two years and thereafter for successive one-year periods unless terminated by
either party upon 60 days written notice.
Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston, MA
02116 is the custodian of the Trust and will maintain custody of the securities
and cash of the Trust. IBT maintains the Trust's general ledger and computes net
asset value per share at least weekly. IBT also attends to details in connection
with the sale, exchange, substitution, transfer and other dealings with the
Trust's investments, and receives and disburses all funds. IBT also assists in
preparation of shareholder reports and the electronic filing of such reports
with the SEC.
First Data Investor Services Group, P.O. Box 5123, Westborough, MA
01581-5123 is the transfer agent and dividend disbursing agent of the Trust.
LEGAL OPINIONS
It is expected that certain legal matters in connection with the Shares
offered hereby will be passed upon for the Trust by Kirkpatrick & Lockhart LLP,
and for the Underwriters by Skadden, Arps, Slate, Meagher & Flom LLP and its
affiliated entities.
30
<PAGE> 35
ADDITIONAL INFORMATION
The Prospectus and the Statement of Additional Information do not contain
all of the information set forth in the Registration Statement that the Trust
has filed with the SEC. The complete Registration Statement may be obtained from
the SEC upon payment of the fee prescribed by its rules and regulations. The
Statement of Additional Information can be obtained without charge by calling
1-800-225-6265.
Statements contained in this Prospectus as to the contents of any contract
or other documents referred to are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, each such statement being qualified in all respects by such reference.
TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
PAGE
------
<S> <C>
Additional Investment Information and Restrictions.......... B-2
Trustees and Officers....................................... B-6
Investment Advisory and Other Services...................... B-8
Determination of Net Asset Value............................ B-9
Portfolio Trading........................................... B-10
Taxes....................................................... B-11
Other Information........................................... B-12
Auditors.................................................... B-12
Independent Auditors Report................................. B-13
Statement of Assets and Liabilities......................... B-14
Appendix A: Ratings of Corporate Bonds...................... B-15
</TABLE>
31
<PAGE> 36
- ---------------------------------------------------------------
- ---------------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN
CONNECTION WITH THIS OFFERING OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE,
SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
TRUST OR THE UNDERWRITERS. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE TRUST
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER
THAN THE REGISTERED SECURITIES TO WHICH IT RELATES. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.......................... 1
Trust Expenses.............................. 8
The Trust................................... 9
Use of Proceeds............................. 9
Investment Objective, Policies and Risks.... 9
Management of the Trust..................... 18
Distributions and Taxes..................... 20
Dividend Reinvestment Plan.................. 21
Description of Capital Structure............ 22
Underwriting................................ 27
Shareholder Servicing Agent, Custodian and
Transfer Agent............................ 29
Legal Opinions.............................. 30
Additional Information...................... 31
Table of Contents for the Statement of
Additional Information.................... 31
</TABLE>
------------------------
UNTIL NOVEMBER 21, 1998, ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
- ---------------------------------------------------------------
SHARES
EATON VANCE SENIOR
INCOME TRUST
[EATON VANCE LOGO]
------------------------
PROSPECTUS
------------------------
PAINEWEBBER INCORPORATED
A.G. EDWARDS & SONS, INC.
PRUDENTIAL SECURITIES INCORPORATED
DAIN RAUSCHER WESSELS
A DIVISION OF DAIN RAUSCHER INCORPORATED
FAHNESTOCK & CO. INC.
FIRST OF MICHIGAN CORPORATION
GRUNTAL & CO.
INTERSTATE/JOHNSON LANE
CORPORATION
JANNEY MONTGOMERY SCOTT INC.
LEGG MASON WOOD WALKER
INCORPORATED
MCDONALD & COMPANY
SECURITIES, INC.
WHEAT FIRST UNION
------------------------
OCTOBER 27, 1998
- ---------------------------------------------------------------
- ---------------------------------------------------------------
<PAGE> 37
STATEMENT OF
ADDITIONAL INFORMATION
OCTOBER 27, 1998
EATON VANCE SENIOR INCOME TRUST
24 FEDERAL STREET
BOSTON, MASSACHUSETTS 02110
(800) 225-6265
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Additional Investment Information and Restrictions.......... B-2
Trustees and Officers....................................... B-6
Investment Advisory and Other Services...................... B-8
Determination of Net Asset Value............................ B-9
Portfolio Trading........................................... B-10
Taxes....................................................... B-11
Other Information........................................... B-12
Auditors.................................................... B-12
Independent Auditors Report................................. B-13
Statement of Assets and Liabilities......................... B-14
Appendix A: Ratings of Corporate Bonds...................... B-15
</TABLE>
- --------------------------------------------------------------------------------
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 SENIOR INCOME TRUST (THE "TRUST")
DATED OCTOBER 27, 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 YOUR FINANCIAL INTERMEDIARY OR CALLING THE TRUST AT
1-800-225-6265.
<PAGE> 38
Capitalized terms used in this Statement of Additional Information and not
otherwise defined have the meanings given them in the Trust's Prospectus.
ADDITIONAL INVESTMENT INFORMATION AND RESTRICTIONS
Lending Fees. In the process of buying, selling and holding Senior Loans
the Trust 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 Trust buys a Senior Loan it
may receive a facility fee and when it sells a Senior Loan it may pay a facility
fee. On an ongoing basis, the Trust may receive a commitment fee based on the
undrawn portion of the underlying line of credit portion of a Senior Loan. In
certain circumstances, the Trust may receive a prepayment penalty fee upon the
prepayment of a Senior Loan by a Borrower. Other fees received by the Trust 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 Senior 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
Senior 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 Senior Loan in the form of a Participation, the
agreement between the buyer and seller may limit the rights of the holder of a
Senior Loan 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 the Participation
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 Senior 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 Trust will generally
rely upon the Agent or an intermediate participant to receive and forward to the
Trust its portion of the principal and interest payments on the Senior Loan.
Furthermore, unless under the terms of a Participation Agreement the Trust has
direct recourse against the Borrower, the Trust 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 Senior Loan usually does, but is
often not obligated to, notify holders of Senior Loans 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 Senior Loan, may give the
Borrower an opportunity to provide additional collateral or may seek other
protection for the benefit of the participants in the Senior 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 Senior Loan and other fees paid on a continuing basis. With respect to
Senior Loans for which the Agent does not perform such administrative and
enforcement functions, the Trust will perform such tasks on its own behalf,
although a collateral bank will typically hold any collateral on behalf of the
Trust 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
B-2
<PAGE> 39
Agreement should remain available to holders of Senior Loans. However, if assets
held by the Agent for the benefit of the Trust were determined to be subject to
the claims of the Agent's general creditors, the Trust might incur certain costs
and delays in realizing payment on a Senior Loan, or suffer a loss of principal
and/or interest. In situations involving other intermediate participants similar
risks may arise.
Prepayments. Senior Loans usually require, in addition to scheduled
payments of interest and principal, the prepayment of the Senior Loan from free
cash flow, as defined above. The degree to which Borrowers prepay Senior 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 Trust derives interest income will be
reduced. However, the Trust may receive both a prepayment penalty fee from the
prepaying Borrower and a facility fee upon the purchase of a new Senior Loan
with the proceeds from the prepayment of the former. Prepayments generally will
not materially affect the Trust's performance because the Trust should be able
to reinvest prepayments in other Senior Loans that have similar or identical
yields and because receipt of such fees may mitigate any adverse impact on the
Trust's yield.
Other Information Regarding Senior Loans. From time to time, the Adviser
and its affiliates may borrow money from various banks in connection with their
business activities. Such banks may also sell Senior Loans to or acquire them
from the Trust or may be intermediate participants with respect to Senior Loans
in which the Trust owns interests. Such banks may also act as Agents for Senior
Loans held by the Trust.
The Trust may acquire interests in Senior 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 Trust may also invest in Senior Loans 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.
To the extent that collateral consists of the stock of the Borrower's
subsidiaries or other affiliates, the Trust 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 Senior Loan to be
undercollateralized or unsecured. In most credit agreements there is no formal
requirement to pledge additional collateral. In addition, the Trust may invest
in Senior Loans guaranteed by, or fully secured by assets of, shareholders or
owners, even if the Senior 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 Senior
Loan. On occasions when such stock cannot be pledged, the Senior 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 Senior 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 Senior Loans. During any such period in which the
Senior Loan is temporarily unsecured, such Senior Loans will not be treated as
secured Senior Loans for purposes of the Trust's policy of investing in normal
market conditions at least 80% of its total assets in such secured Senior Loans.
If a Borrower becomes involved in bankruptcy proceedings, a court may
invalidate the Trust's security interest in the loan collateral or subordinate
the Trust's rights under the Senior 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 Trust. For Senior 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 Trust's security interest in
B-3
<PAGE> 40
loan collateral. If the Trust's security interest in loan collateral is
invalidated or the Senior Loan is subordinated to other debt of a Borrower in
bankruptcy or other proceedings, it is unlikely that the Trust would be able to
recover the full amount of the principal and interest due on the Loan.
Interest Rate Swaps. The Trust 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 Trust holds a Senior
Loan 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 Senior Loan because of subsequent changes in interest rates. This
would protect the Trust from a decline in the value of the Senior Loan due to
rising interest rates, but would also limit its ability to benefit from falling
interest rates.
The Trust will enter into interest rate swaps only on a net basis, i.e.,
the two payment streams are netted out, with the Trust 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 and risk management
purposes and because a segregated account will be used, the Trust will not treat
them as being subject to the Trust's borrowing restrictions. The net amount of
the excess, if any, of the Trust'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
Trust's custodian. The Trust 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 the Adviser. If
there is a default by the other party to such a transaction, the Trust 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.
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
Trust is contractually obligated to make or receive. Since interest rate swaps
are individually negotiated, the Trust expects to achieve an acceptable degree
of correlation between its rights to receive interest on Senior Loans and its
rights and obligations to receive and pay interest pursuant to interest rate
swaps.
Credit Derivatives. The Trust may engage in credit derivative
transactions. Default price risk derivatives are linked to the price of
reference securities or loans after a default by the issuer or borrower,
respectively. Market spread derivatives are based on the risk that changes in
market factors, such as credit spreads, can cause a decline in the value of a
security, loan or index. There are three basic transactional forms for credit
derivatives; swaps, options and structured instruments. The use of credit
derivatives is a highly specialized activity which involves strategies and risks
different from those associated with ordinary portfolio security transactions.
If the Adviser is incorrect in its forecasts of default risks, market spreads or
other applicable factors, the investment performance of the Trust would diminish
compared with what it would have been if these techniques were not used.
Moreover, even if the Adviser is correct in its forecasts, there is a risk that
a credit derivative position may correlate imperfectly with the price of the
asset or liability being hedged. Credit derivative transaction exposure will be
limited to 10% of the total assets of the Trust.
B-4
<PAGE> 41
Investment Restrictions. The following investment restrictions of the
Trust are designated as fundamental policies and as such cannot be changed
without the approval of the holders of a majority of the Trust's outstanding
voting securities, which as used in this Statement of Additional Information
means the lesser of (a) 67% of the shares of the Trust 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 Trust. As a
matter of fundamental policy the Trust may not:
(1) Borrow money, except as permitted by the 1940 Act;
(2) Issue senior securities, as defined in the 1940 Act, 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 Trust 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 Trust 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, 25% or
more of the Trust'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 Trust 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.
For the purpose of investment restriction (6), the Trust 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
Senior Loan, the interest rate environment, and general economic conditions
applicable to the Borrower and such interpositioned person.
The Trust has adopted the following nonfundamental investment policy which
may be changed by the Trustees without approval of the Trust's shareholders. As
a matter of nonfundamental policy, the Trust may not 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.
Notwithstanding the investment policies and restrictions of the Trust, upon
Board of Trustee approval the Trust may invest its investable assets in one or
more other management investment companies to the extent permitted by the 1940
Act and rules thereunder.
B-5
<PAGE> 42
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 Trust'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 Trust to dispose of such security or other asset. Notwithstanding
the foregoing, the Trust must always be in compliance with the borrowing
policies set forth above.
TRUSTEES AND OFFICERS
The Trust's Trustees and officers 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. Those
Trustees who are "interested persons" of the Trust as defined in the 1940 Act by
virtue of their affiliation with Eaton Vance, BMR, EVC or EV, are indicated by
an asterisk(*).
JAMES B. HAWKES (57), PRESIDENT AND TRUSTEE* (1)
Chairman, President and Chief Executive Officer of Eaton Vance, BMR and their
corporate parent and trustee (EVC and EV). Director of EVC and EV. Trustee and
officer of various investment companies managed by Eaton Vance or BMR.
DONALD R. DWIGHT (67), TRUSTEE (1)
President of Dwight Partners, Inc. (a corporate relations and communications
company). Trustee of various investment companies managed by Eaton Vance or BMR.
Address: Clover Mill Lane, Lyme, New Hampshire 03768
SAMUEL L. HAYES, III (63), TRUSTEE (2)
Jacob H. Schiff Professor of Investment Banking Emeritus, Harvard University
Graduate School of Business Administration. Trustee of Kobrick-Cendant
Investment Trust (mutual funds). Trustee of various investment companies managed
by Eaton Vance or BMR.
Address: 345 Nahatan Road, Westwood, Massachusetts 02090
NORTON H. REAMER (63), TRUSTEE (2)
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). Trustee of
various investment companies managed by Eaton Vance or BMR.
Address: One International Place, Boston, Massachusetts 02110
JOHN L. THORNDIKE (72), TRUSTEE (3)
Former Director of Fiduciary Company Incorporated. Trustee of various investment
companies managed by Eaton Vance or BMR.
Address: 175 Federal Street, Boston, Massachusetts 02110
JACK L. TREYNOR (68), TRUSTEE (3)
Investment Adviser and Consultant. Trustee of various investment companies
managed by Eaton Vance or BMR.
Address: 504 Via Almar, Palos Verdes Estates, California 90274
SCOTT H. PAGE (38), VICE PRESIDENT
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
B-6
<PAGE> 43
PAYSON F. SWAFFIELD (42), VICE PRESIDENT
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
MICHAEL W. WEILHEIMER (37), VICE PRESIDENT
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
JAMES L. O'CONNOR (53), TREASURER
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
ALAN R. DYNNER (58), SECRETARY
Vice President and Chief Legal Officer of Eaton Vance, BMR, 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.
JANET E. SANDERS (62), ASSISTANT TREASURER AND ASSISTANT SECRETARY
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
A. JOHN MURPHY (35), ASSISTANT SECRETARY
Assistant Vice President of Eaton Vance and BMR. Officer of various investment
companies managed by Eaton Vance or BMR.
ERIC G. WOODBURY (41), ASSISTANT SECRETARY
Vice President of Eaton Vance and BMR. Officer of various investment companies
managed by Eaton Vance or BMR.
- ---------------
(1) Class I Trustee whose term expires in 1999.
(2) Class II Trustee whose term expires in 2000.
(3) Class III Trustee whose term expires in 2001.
Messrs. Hayes (Chairman), Reamer and Thorndike are members of the Special
Committee of the Board of Trustees of the Trust. 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 Trust, including investment advisory, 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 Trust or its shareholders.
The Nominating Committee of the Board of Trustees of the Trust 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 Trust. 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,
B-7
<PAGE> 44
internal accounting controls, and the functions performed by the custodian,
transfer agent and dividend disbursing agent of the Trust.
Trustees of the Trust who are not affiliated with the 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 Trust 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
Trust's assets, liabilities, and net income per share, and will not obligate the
Trust to retain the services of any Trustee or obligate the Trust to pay any
particular level of compensation to the Trustee. The Trust does not have a
retirement plan for its Trustees.
The fees and expenses of the noninterested Trustees of the Trust are paid
by the Trust. (The Trustees of the Trust who are members of the Eaton Vance
organization receive no compensation from the Trust.) During the year ended
December 31, 1997, the noninterested Trustees of the Trust earned the
compensation set forth below in their capacities as Trustees from the funds in
the Eaton Vance fund complex(1). It is estimated that the noninterested Trustees
will receive from the Trust the amounts set forth below for the fiscal year
ending June 30, 1999.
<TABLE>
<CAPTION>
ESTIMATED TOTAL COMPENSATION
COMPENSATION FROM TRUST AND
NAME FROM TRUST FUND COMPLEX
---- ------------ ------------------
<S> <C> <C>
Donald R. Dwight.................................... $2,190 $160,000(2)
Samuel L. Hayes, III................................ 2,280 170,000(3)
Norton H. Reamer.................................... 2,170 160,000
John L. Thorndike................................... 2,218 160,000(4)
Jack L. Treynor..................................... 2,441 170,000
</TABLE>
- ---------------
(1) As of January 1, 1998 the Eaton Vance fund complex consists of 159
registered investment companies or series thereof.
(2) Includes $60,000 of deferred compensation.
(3) Includes $42,500 of deferred compensation.
(4) Includes $117,524 of deferred compensation.
INVESTMENT ADVISORY AND OTHER SERVICES
Eaton Vance, its affiliates and its predecessor companies have been
managing assets of individuals and institutions since 1924 and of 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.
The Trust will be responsible for all of its costs and expenses not
expressly stated to be payable by Eaton Vance under the Advisory Agreement or
Administration Agreement. Such costs and expenses to be borne by the Trust
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, stock exchange listing fees
and governmental fees; expenses of reports to shareholders, proxy statements and
other expenses of shareholders' meetings; insurance premiums; printing and
mailing expenses;
B-8
<PAGE> 45
interest, taxes and corporate fees; legal and accounting expenses; compensation
and expenses of Trustees not affiliated with Eaton Vance; expenses of conducting
repurchase offers for the purpose of repurchasing Trust shares; and investment
advisory and administration fees. The Trust will also bear expenses incurred in
connection with any litigation in which the Trust is a party and any legal
obligation to indemnify its officers and Trustees with respect thereto, to the
extent not covered by insurance.
The Advisory Agreement with the Adviser continues in effect to February 28,
2000 and 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
Trust or of the Adviser cast in person at a meeting specifically called for the
purpose of voting on such approval and (ii) by the Board of Trustees of the
Trust or by vote of a majority of the outstanding interests of the Trust. The
Trust'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 Trust's Trustees. Each agreement may be terminated at any time without
penalty on sixty (60) days' written notice by the Trustees of the Trust or Eaton
Vance, as applicable, or by vote of the majority of the outstanding shares of
the Trust. 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 Trust under such agreements on the part of Eaton Vance, Eaton Vance shall
not be liable to the Trust for any loss incurred, to the extent not covered by
insurance.
BMR and Eaton Vance are business trusts organized under Massachusetts law.
Eaton Vance, Inc. ("EV") serves as trustee of BMR and Eaton Vance. BMR, Eaton
Vance and EV are wholly-owned subsidiaries of Eaton Vance Corporation ("EVC"), a
Maryland corporation and publicly-held holding company. EVC through its
subsidiaries and affiliates engages primarily in investment management,
administration and marketing activities. The Directors of EVC are M. Dozier
Gardner, James B. Hawkes, Benjamin A. Rowland, Jr., John G.L. Cabot, John M.
Nelson, Vincent M. O'Reilly and Ralph Z. Sorenson. All of the issued and
outstanding shares of Eaton Vance 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, 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 EVC and EV. As indicated under "Trustees
and Officers", all of the officers of the Trust (as well as Mr. Hawkes who is
also a Trustee) hold positions in the Eaton Vance organization.
EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Trust, 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 Trust and such banks.
DETERMINATION OF NET ASSET VALUE
The net asset value per Share of the Trust is determined no less frequently
than weekly, generally on the last day of the week that 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 Trust's net
asset value per Share is determined by IBT, in the manner authorized by the
Trustees of the Trust. Net asset value is computed by dividing the value of the
Trust's total assets, less its liabilities by the number of shares outstanding.
Because Senior Loans are not currently actively traded in a public market,
the Adviser, following procedures established by the Trust's Trustees, will
value the Senior Loans held by the Trust at fair value. In valuing a Senior
Loan, Eaton Vance will consider relevant factors, data, and information,
including: (i) the characteristics of and fundamental analytical data relating
to the Senior Loan, including the cost, size, current interest rate, period
until next interest rate reset, maturity and base lending rate of the Senior
Loan, 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 Trust's rights, remedies and
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<PAGE> 46
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
Senior Loan, including price quotations (if considered reliable) for and trading
in the Senior Loan and interests in similar Loans and the market environment and
investor attitudes towards the Senior Loan and interests in similar Senior
Loans; (v) the reputation and financial condition of the Agent and any
intermediate participants in the Senior Loan; and (vi) general economic and
market conditions affecting the fair value of the loan interest. The Trustees
will monitor the market liquidity of Senior Loans and may require use of a
pricing service or mark-to-market procedures for some or all of such holdings in
the future.
Non-loan 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 Trust
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 Trust was more than 60 days, unless in each case this is determined not to
represent fair value. Repurchase agreements will be valued by the Trust 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 Trust.
PORTFOLIO TRADING
Specific decisions to purchase or sell securities for the Trust are made by
employees of the Adviser who are appointed and supervised by its senior
officers. Such employees may serve other clients of the Adviser in a similar
capacity. Changes in the Trust's investments are reviewed by the Board.
The Trust will acquire Senior Loans from major international banks,
selected domestic regional banks, insurance companies, finance companies and
other financial institutions. In selecting financial institutions from which
Senior Loans may be acquired, the Adviser 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 Senior Loans which they have sold, they may act as
principal or on an agency basis in connection with their sale by the Trust.
Other fixed-income obligations which may be purchased and sold by the Trust
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. The Trust 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 Trust 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 Trust will incur a brokerage commission. Although spreads or
commissions on portfolio transactions will, in the judgment of the Adviser, 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 Trust and the
Adviser's other clients for providing brokerage and research services to the
Adviser.
The frequency of portfolio purchases and sales, known as the "turnover
rate," will vary from year to year, and is expected to be less than 100% per
annum.
Securities considered as investments for the Trust may also be appropriate
for other investment accounts managed by the Adviser or its affiliates. Whenever
decisions are made to buy or sell securities by the Trust and
B-10
<PAGE> 47
one or more of such other accounts simultaneously, the Adviser 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 Trust 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
the Adviser 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
Trust from time to time, it is the opinion of the Trustees of the Trust that the
benefits from the Eaton Vance organization outweigh any disadvantage that may
arise from exposure to simultaneous transactions.
TAXES
The following discussion is for general information purposes only.
Prospective investors should consult their tax advisors regarding the specific
federal income tax consequences of purchasing, holding and disposing of Shares,
as well as the effects of state, local and foreign tax laws and any proposed tax
law changes.
The Trust intends to qualify each year for treatment as a regulated
investment company ("RIC"), under the Internal Revenue Code of 1986, as amended
(the "Code"), in order to reduce or eliminate federal income tax. Accordingly,
the Trust 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.
Dividends and other distributions declared by the Trust in October,
November or December of any year and payable to Shareholders of record on a date
in any of those months will be deemed to have been paid by the Trust and
received by the Shareholders on December 31st of that year if the distributions
are paid by the Trust during January of the following year. Accordingly, those
distributions will be taxed to Shareholders for the year in which that December
31st falls.
To avoid a non-deductible 4% federal excise tax, the Trust must distribute
to its Shareholders by the end of each calendar year substantially all of its
ordinary income and capital gain net income, plus certain other amounts. Under
current law, provided that the Trust qualifies as a RIC, it should not be liable
for any income, corporate excise or franchise tax in the Commonwealth of
Massachusetts.
Income and gains from investments in securities of foreign issuers may be
subject to foreign income, withholding or other taxes, which may reduce the
Trust's yield and/or total return. Tax conventions between certain countries and
the United States may reduce or eliminate these foreign taxes. Shareholders will
not be able to claim any foreign tax credit or deduction with respect to these
foreign taxes.
Certain investments of the Trust may bear original issue discount or market
discount for tax purposes. The Trust 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. In addition, the Trust may
be required to include in income each year, for federal income tax purposes,
income with respect to these or other investments even though the collectibility
by the Trust of cash payments corresponding to such income is doubtful. The
Trust may have to dispose of investments that it would otherwise have continued
to hold to provide cash to enable it to satisfy its distribution requirements
with respect to such income.
Some of the Trust's investment practices (including those involving certain
risk management transactions) may be subject to special provisions of the Code
that, among other things, may defer the Trust's deduction of certain losses and
affect the holding period of certain securities it holds and the character of
certain gains or losses it realizes. These provisions may also require the Trust
to recognize income or gain without receiving cash with which to make
distributions in the amounts necessary to satisfy the distribution requirements
for avoiding income and excise taxes. The Trust will monitor its transactions
and may make certain tax elections to mitigate the effect of these rules and
prevent its disqualification as a RIC.
B-11
<PAGE> 48
OTHER INFORMATION
The Trust is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, Shareholders of such a trust may, in
certain circumstances, be held personally liable as partners for the obligations
of the trust. The Declaration of Trust contains an express disclaimer of
Shareholder liability in connection with the Trust property or the acts,
obligations or affairs of the Trust. The Declaration of Trust also provides for
indemnification out of the Trust 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 Trust itself is unable to meet its obligations. The
Trust believes the risk of any Shareholder incurring any liability for the
obligations of the Trust is remote.
The 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 Trust 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.
The Declaration of Trust provides 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 Trust's
custodian or by votes cast at a meeting called for that purpose. The Declaration
of Trust further provides that 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.
The Trust'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 SEC. The complete Registration Statement may be obtained
from the SEC 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 Trust, providing audit services, tax return
preparation, and assistance and consultation with respect to the preparation of
filings with the SEC.
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<PAGE> 49
INDEPENDENT AUDITORS' REPORT
To the Trustees and Shareholders of
Eaton Vance Senior Income Trust:
We have audited the accompanying statement of assets and liabilities of
Eaton Vance Senior Income Trust (the "Fund") as of October 23, 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
Senior Income Trust as of October 23, 1998, in conformity with generally
accepted accounting principles.
Deloitte & Touche LLP
Boston, Massachusetts
October 26, 1998
B-13
<PAGE> 50
EATON VANCE SENIOR INCOME TRUST
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 23, 1998
<TABLE>
<S> <C>
ASSETS:
Cash................................................... $100,000
Deferred initial offering expenses..................... 400,000
Deferred organization expenses......................... 110,000
--------
Total assets........................................... $610,000
--------
LIABILITIES:
Organization expenses accrued.......................... $110,000
Initial offering expenses accrued...................... 400,000
--------
Total liabilities...................................... $510,000
--------
Net assets applicable to 10,000 common shares of beneficial
interest issued and outstanding........................... $100,000
========
NET ASSET VALUE AND OFFERING PRICE PER SHARE................ $ 10.00
========
</TABLE>
NOTE TO FINANCIAL STATEMENT
Eaton Vance Senior Income Trust was formed under a Declaration of Trust
dated September 23, 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 expenses are estimated to amount to $110,000. These
expenses will be deferred and amortized over the period from the commencement of
operations to June 30, 1999. The initial offering expenses, including federal
and state registration and qualification fees, will be deducted from net
proceeds, and will not exceed $0.02 per share, as Eaton Vance Management or an
affiliate will pay any such expenses in excess of $0.02 per share. The initial
offering expenses reflected above assume the initial sale of 20,000,000 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 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.
B-14
<PAGE> 51
APPENDIX A
RATINGS OF CORPORATE BONDS
DESCRIPTION OF CORPORATE BOND RATINGS OF STANDARD & POOR'S RATING GROUP:
AAA -- Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in small degree.
A -- Bonds rated A have a strong capacity to pay interest and repay
principal although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligations in higher
rated categories.
BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
bonds in this category than for bonds in higher rated categories.
BB -- Bonds rated BB have less near-term vulnerability to default than
other speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could lead
to inadequate capacity to meet timely interest and principal payments.
B -- Bonds rated B have a greater vulnerability to default but presently
have the capacity to meeting interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC -- Bonds rated CCC have a current identifiable vulnerability to default
and are dependent upon favorable business, financial and economic conditions to
meet timely payments of interest and repayment of principal. In the event of
adverse business, financial or economic conditions, they are not likely to have
the capacity to pay interest and repay principal.
CC -- The rating CC is typically applied to debt subordinated to senior
debt which is assigned an actual or implied CCC rating.
C -- The rating C is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC -- debt rating.
D -- Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.
S&P's letter ratings may be modified by the addition of a plus (+) or a
minus (-) sign designation, which is used to show relative standing within the
major rating categories, except in the AAA (Prime Grade) category.
DESCRIPTION OF BOND RATINGS OF MOODY'S INVESTORS SERVICE, INC.
Aaa -- Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.
Aa -- Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are known as
high grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in Aaa securities or fluctuation of protective
elements may be of greater amplitude or there may be other elements present
which make the long-term risks appear somewhat larger than in Aaa securities.
B-15
<PAGE> 52
A -- Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper medium grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may be
present which suggest a susceptibility to impairment sometime in the future.
Baa -- Bonds which are rated Baa are considered as medium grade
obligations, i.e., they are neither highly protected nor poorly secured.
Interest payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding investment
characteristics and in fact have speculative characteristics as well.
Ba -- Bonds which are rated Ba are judged to have speculative elements;
their future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and, therefore, not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B -- Bonds which are rated B generally lack characteristics of the
desirable investment. Assurance of interest and principal payments or of
maintenance of other terms of the contract over any long period of time may be
small.
Caa -- Bonds which are rated Caa are of poor standing. Such issues may be
in default or there may be present elements of danger with respect to principal
or interest.
Ca -- Bonds which are rated Ca present obligations which are speculative in
a high degree. Such issues are often in default or have other marked
shortcomings.
C -- Bonds which are rated C are the lowest rated class of bonds, and
issues so rated can be regarded as having extremely poor prospects of ever
attaining any real investment standing.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and in
the categories below B. The modifier 1 indicates a ranking for the security in
the higher end of a rating category; the modifier 2 indicates a mid-range
ranking; and the modifier 3 indicates a ranking in the lower end of a rating
category.
B-16
<PAGE> 53
EATON VANCE SENIOR INCOME TRUST
STATEMENT OF ADDITIONAL INFORMATION
OCTOBER 27, 1998
- --------------------------------------------------------------------------------
INVESTMENT ADVISER AND ADMINISTRATOR
Eaton Vance Management
24 Federal Street
Boston, MA 02110
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
SITSAI
<PAGE> 54
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 Senior Income Trust:
Statement of Assets and Liabilities as of October 23, 1998
Independent Auditors' Report
(2) Exhibits:
(a) Agreement and Declaration of Trust dated September 23, 1998 filed
as Exhibit (a) to the Registration Statement under the Securities
Act of 1933 (1933 Act File No. 333-64151) and to the Registration
Statement under the Investment Company Act of 1940 (1940 Act File
No. 811-09013) filed with the Commission on September 24, 1998
(Registration Statement) and incorporated herein by reference.
(b) Amended By-Laws filed herewith.
(c) Not applicable
(d) Specimen Certificate of Common Shares of Beneficial Interest
filed herewith.
(e) Dividend Reinvestment Plan filed herewith.
(f) Not applicable
(g) Investment Advisory Agreement dated October 19, 1998 filed
herewith.
(h) (1) Form of Underwriting Agreement dated October 27, 1998 filed
herewith.
(2) Amended and Restated Master Agreement Among Underwriters
filed herewith.
(3) Amended and Restated Master Selected Dealer Agreement filed
herewith.
(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 October 19, 1998 filed herewith.
(k) (1) Transfer Agency and Services Agreement dated as of
October 19, 1998 filed herewith.
(2) Administration Agreement dated October 19, 1998 filed
herewith.
(3) Form of Shareholder Servicing Agreement dated as of October
19, 1998 filed herewith.
(l) Opinion and Consent of Counsel filed herewith.
(m) Not applicable
(n) Consent of Independent Auditors' filed herewith.
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<PAGE> 55
(o) Not applicable
(p) Letter Agreement with Eaton Vance Management dated October 23,
1998 filed herewith.
(q) Not applicable
(r) Financial Data Schedule filed herewith.
(s) Power of Attorney dated October 19, 1998 filed herewith.
ITEM 25. MARKETING ARRANGEMENTS
See the Underwriting Agreement to be filed as Exhibit (h) herewith.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the approximate expenses incurred in
connection with the offerings of Registrant (some of which will be borne by the
Investment Adviser):
Registration fees........................................ $ 84,573
New York Stock Exchange Listing Fee...................... $ 137,100
National Association of Securities Dealers, Inc. Fees.... $ 20,500
Printing (other than stock certificates)................. $ 463,384
Engraving and printing stock certificates................ $ 19,000
Accounting fees and expenses............................. $ 10,000
Legal fees and expenses.................................. $ 100,000
----------
Total.................................................. $ 834,557
==========
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
Common Shares of beneficial interest, 1
par value $.01 per share as of
October 23, 1998
ITEM 29. INDEMNIFICATION
The Registrant's By-Laws filed herewith and the Underwriting Agreement to
be filed 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to trustees, officers and controlling persons of
the Registrant and the Adviser and any underwriter to the foregoing provisions
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in such Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a trustee, officer,
or controlling person or the Registrant and the Underwriters in connection with
the successful defense of any action, suit or proceeding) is asserted against
the
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<PAGE> 56
Registrant by such trustee, officer or controlling person or the Distributor in
connection with the Common Shares being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in such Act and
will be governed by the final adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
Reference is made to: (i) the information set forth under the caption
"Investment Advisory and Other Services" in the Statement of Additional
Information; (ii) the Eaton Vance Corp. 10-K filed under the Securities Exchange
Act of 1934 (File No. 1-8100); and (iii) the Form ADV of Eaton Vance Management
(File No. 801-15930) filed with the Commission, all of which are 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.
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.
ITEM 32. MANAGEMENT SERVICES
None.
ITEM 33. UNDERTAKINGS
(1) Registrant undertakes to suspend offering of its Common Shares until
it amends its prospectus if (a) subsequent to the effective date of
its Registration Statement, the net asset value declines more than 10
percent from its net asset value as of the effective date of the
Registration Statement, or (b) the net asset value increases to an
amount greater than its net proceeds as stated in the prospectus.
(2) Not applicable
(3) Not applicable
(4) Not applicable
(5) (a) For purpose of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as
part of a registration statement in reliance upon Rule 430A and
contained in the form of prospectus filed by the Registrant pursuant
to Rule 497(h) under the Securities Act of 1933, shall be deemed to
be part of this Registration Statement as of the time it was declared
effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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 initial bona fide
offering thereof.
(6) The registrant undertakes 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, its Statement of Additional
Information.
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<PAGE> 57
NOTICE
A copy of the Declaration of Trust of Eaton Vance Senior Income Trust is on file
with the Secretary of State of the Commonwealth of Massachusetts and notice is
hereby given that this instrument is executed on behalf of the Registrant by an
officer of the Registrant as an officer and not individually and that the
obligations of or arising out of this instrument are not binding upon any of the
Trustees, officers or shareholders individually, but are binding only upon the
assets and property of the Registrant.
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<PAGE> 58
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
the 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 26th day of October, 1998.
EATON VANCE SENIOR INCOME TRUST
By: /s/ James B. Hawkes
----------------------------
James B. Hawkes, President
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
Signature Title Date
/s/ James B. Hawkes President (Chief Executive
- --------------------------- Officer) and Trustee October 26, 1998
James B. Hawkes
/s/ James L. O'Connor Treasurer (Principal
- --------------------------- Financial and Accounting
James L. O'Connor Officer) October 26, 1998
Donald R. Dwight* Trustee October 26, 1998
- ---------------------------
Donald R. Dwight
Samuel L. Hayes, III* Trustee October 26, 1998
- ---------------------------
Samuel L. Hayes, III
Norton H. Reamer* Trustee October 26, 1998
- ---------------------------
Norton H. Reamer
John L. Thorndike* Trustee October 26, 1998
- ---------------------------
John L. Thorndike
Jack L. Treynor* Trustee October 26, 1998
- ---------------------------
Jack L. Treynor
*By: /s/ Alan R. Dynner
---------------------------
Alan R. Dynner
As Attorney-in-fact
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<PAGE> 59
EXHIBIT INDEX
Exhibits Description Page
- -------- ----------- ----
(b) Amended By-Laws
(d) Specimen Certificate of Common Shares of Beneficial Interest
(e) Dividend Reinvestment Plan
(g) Investment Advisory Agreement dated October 19, 1998
(h)(1) Form of Underwriting Agreement dated October 27, 1998
(2) Amended and Restated Master Agreement Among Underwriters
(3) Amended and Restated Master Selected Dealer Agreement
(j) Custodian Agreement dated October 19, 1998
(k)(1) Transfer Agency and Services Agreement dated as of October 19, 1998
(2) Administration Agreement dated October 19, 1998
(3) Form of Shareholder Servicing Agreement dated as of October 19, 1998
(l) Opinion and Consent of Counsel
(n) Consent of Independent Auditors'
(p) Letter Agreement with Eaton Vance Management dated October 23, 1998
(r) Financial Data Schedule
(s) Power of Attorney dated October 19, 1998
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<PAGE> 1
Exhibit (b)
BY-LAWS
OF
EATON VANCE SENIOR INCOME TRUST
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 be less than two
or exceed eighteen.
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.
<PAGE> 2
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> 3
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. Meetings of shareholders, at which the shareholders shall
elect Trustees and transact such other business as may properly come before the
meeting, shall be held annually so long as required by the New York Stock
Exchange or such other exchange or trading system on which shares are
principally traded. 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 twenty-five
percent (25%) 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 ten (10) days no more than ninety (90)
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 a majority 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 a majority 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
3
<PAGE> 4
present and entitled to vote on such matter may by vote adjourn the meeting 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
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
4
<PAGE> 5
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.
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
5
<PAGE> 6
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
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
6
<PAGE> 7
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 June 30 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.
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.
7
<PAGE> 8
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.
(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
8
<PAGE> 9
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.
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,
9
<PAGE> 10
(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.
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
10
<PAGE> 11
(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.
ARTICLE XIII
Amendments
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.
<PAGE> 1
Exhibit (d)
NUMBER [PICTURE OF STATE AND WORLD MAP] SHARES
CUSIP 27826S 10 3
SEE REVERSE FOR
WITHOUT PAR VALUE CERTAIN DEFINITIONS
THIS IS TO CERTIFY THAT
IS THE OWNER OF
COMMON SHARES OF BENEFICIAL INTEREST OF
Eaton Vance Senior Income Trust, a business trust established in accordance with
the laws of the Commonwealth of Massachusetts under and subject to the
provisions of a Declaration of Trust executed as of the 23rd day of September,
1998, as the same may be amended, and restated from time to time, and filed with
the Secretary of the Commonwealth of Massachusetts. The common shares of said
Trust evidenced by this certificate are issued under and subject to, and the
rights and preferences of the holders hereof are subject to, said Declaration of
Trust, and each common share of said Trust represents an equal proportionate
interest in said Trust with each other outstanding common share of said Trust.
The interest represented hereby is transferable only on the books of said Trust
by the holder hereof in person or by duly authorized attorney upon surrender of
this certificate, properly endorsed. This certificate is not valid until
countersigned by the Transfer Agent and Registrar.
WITNESS the facsimile signatures of the President and the Secretary of said
Trust.
ALAN R. DYNNER, TREASURER JAMES B. HAWKES, PRESIDENT
COUNTERSIGNED AND REGISTERED:
FIRST DATA INVESTOR SERVICES GROUP, INC.
BY TRANSFER AGENT AND REGISTRAR
AUTHORIZED SIGNATURE
<PAGE> 2
EXPLANATION OF ABBREVIATIONS
The following abbreviations, when used in the form of ownership of the face
of this certificate shall be construed as though they were written out in full
according to applicable laws or regulations. Abbreviations in addition to those
appearing below may be used.
ABBREVIATION EQUIVALENT ABBREVIATION EQUIVALENT
- ------------ ---------- ------------ ----------
JTTEN As joint tenants, with TEN IN COM As tenants in common
right of survivorship TEN BY ENT As tenants by the
and not as tenants UNIF GIFT MIN ACT entireties Uniform
in common Gift to Minors
ABBREVIATION EQUIVALENT ABBREVIATION EQUIVALENT
- ------------ ---------- ------------ ----------
ADM Administrator(s) FDN Foundation
Administratix PL Public Law
AGMT Agreement TR (As) trustee(s), for, of
CUST Custodian for UA Under Agreement
EST Estate, Of estate of UW Under Will of, Of will of,
EX Executor(s), Executrix Under last will & testament
FBO For the benefit of
Additional abbreviations may also be used though not in the above list.
================================================================================
TRANSFER FORM
PLEASE INSERT SOCIAL SECURITY OR OTHER FOR VALUE RECEIVED.........hereby sell,
IDENTIFYING NUMBER OF ASSIGNEE (I/we)
assign and transfer
...................................... ......................................
Please print or typewrite name and
address including postal zip code
of assignee
................................................................................
................................................................................
..........................................................................Shares
of the Common Shares of Beneficial interest represented by this Certificate and
do hereby irrevocably constitute and appoint
.......................................................................Attorney,
to transfer said shares on the books of the Trust with full power of
substitution in the premises.
Dated:
............................................................
SIGNATURE
GUARANTEED BY Signature(s)................................................
(The signature to this assignment must correspond with the
name as written upon the face of this Certificate in every
particular, without alteration or enlargement or any change
whatsoever. If more than one owner, all must sign.)
............................................
(Signature must be guaranteed by a commercial
bank or trust company or member firm of the
New York, American, Boston, Midwest or
Pacific Stock Exchanges).
IMPORTANT NOTICE:
When you sign your name to the Transfer Form without filling in the name of
your "Assignee" this stock certificate becomes fully negotiable, similar to a
check endorsed in blank. Therefore, to safeguard a signed certificate, it is
recommended that you fill in the name of the new owner in the "Assignee" space.
Alternatively, instead of using this Transfer Form, you may sign a separate
"stock power" form and then mail the unsigned stock certificate and the signed
"stock power" in separate envelopes. For added protection, use registered mail
for a stock certificate.
================================================================================
REDEMPTION FORM
The undersigned hereby tenders to the Trust the within Certificate properly
endorsed with any requisite guarantee of signature and supporting papers and
requests the redemption of
..........................................................................Shares
(Indicate the number of shares to be redeemed. A new certificate will be issued
for any unredeemed balance.)
of the Common Shares of Beneficial Interest represented by the within
Certificate in accordance with the terms of the Declaration of Trust of the
Trust.
<PAGE> 3
================================================================================
Dated: .................
............................................................
SIGNATURE Signature(s)................................................
GUARANTEED BY (The signature to this request for redemption must
correspond with the name as written upon the face of this
Certificate in every particular, without alteration or
enlargement or any change whatsoever. If more than one
owner, all must sign.)
..........................................................
(Signature must be guaranteed by a commercial bank or
trust company or member firm of the New York, American,
Boston, Midwest or Pacific Stock Exchanges).
.......................................................
Address
.......................................................
<PAGE> 1
Exhibit (e)
EATON VANCE SENIOR INCOME TRUST
TERMS AND CONDITIONS OF DIVIDEND REINVESTMENT PLAN
Holders of common shares (the "Shares") of Eaton Vance Senior Income Trust
(the "Fund") participating (the "Participants") in its Dividend Reinvestment
Plan (the "Plan") are advised as follows:
1. THE PLAN AGENT. First Data Investor Services Group (the "Agent") will
act as Agent for each Participant. The Agent will open an account for each
Participant under the Plan in the same name as his or her outstanding Shares are
registered.
2. CASH OPTION. The Fund will declare its income dividends and capital
gains distributions ("Distributions") payable in Shares, or, at the option of
Shareholders, in cash. Therefore, each Participant that does not choose cash
distributions will receive Shares.
3. MARKET PREMIUM ISSUANCES. If on the payment date for a Distribution, the
net asset value per Share is equal to or less than the market price per Share
plus estimated brokerage commissions, the Agent shall receive newly issued
Shares, including fractions, from the Fund for each Participant's account. The
number of additional shares to be credited shall be determined by dividing the
dollar amount of the Distribution by the greater of the net asset value per
Share on the payment date or 95% of the then current market price per Share on
the payment date.
4. MARKET DISCOUNT PURCHASES. If the net asset value per Share exceeds the
market price plus estimated brokerage commissions on the payment date for a
Distribution, the Agent (or a broker-dealer selected by the Agent) shall
endeavor, for a purchase period of 30 days to apply the amount of such
Distribution on each Participant's Shares (less their PRO RATA share of
brokerage commissions incurred) to purchase Shares on the open market. The
average price (including brokerage commissions) of all Shares purchased by the
Agent as Agent shall be the price per Share allocable to each Participant. If,
at the close of business on any day during the purchase period on which net
asset value per Share is calculated such net asset value equals or is less than
the market price per Share plus estimated brokerage commissions, the Agent will
cease open-market purchases, and the uninvested portion of such Distribution
shall be filled through the issuance of new Shares from the Fund at the price
set forth in paragraph 3 above. Open-market purchases may be made on any
securities exchange where Shares are traded, in the over-the-counter market or
in negotiated transactions and may be on such terms as to price, delivery and
otherwise as the Agent shall determine.
<PAGE> 2
5. VALUATION. The market price of Shares on a particular date shall be the
last sales price on the New York Stock Exchange on that date, or, if there is no
sale on such Exchange on that date, then the mean between the closing bid and
asked quotations on such Exchange on such date. The net asset value per Share on
a particular date shall be the amount most recently calculated by or on behalf
of the Fund as required by law.
6. LIABILITY OF AGENT. The Agent shall at all times act in good faith and
agree to use its best efforts within reasonable limits to ensure the accuracy of
all services performed under this Agreement and to comply with applicable law,
but assumes no responsibility and shall not be liable for loss or damage due to
errors unless such error is caused by the Agent's negligence, bad faith, or
willful misconduct or that of its employees. Each Participant's uninvested funds
held by the Agent will not bear interest. The Agent shall have no liability in
connection with any inability to purchase Shares within the time provided, or
with the timing of any purchases effected. The Agent shall have no
responsibility for the value of Shares acquired. For the purpose of cash
investments, the Agent may commingle Participants' funds.
7. RECORDKEEPING. The Agent may hold each Participant's Shares acquired
pursuant to the Plan together with the Shares of other shareholders of the Fund
acquired pursuant to the Plan in noncertificated form in the Agent's name or
that of the Agent's nominee. Upon a Participant's written request, the Agent
will deliver to the Participant, without charge, a certificate or certificates
for the full shares. Each Participant will be sent a confirmation by the Agent
of each acquisition made for their account as soon as practicable but not later
than 60 days after the date thereof. Although each Participant may from time to
time have an undivided fractional interest (computed to three decimal places) in
a share of the Fund, no certificates for a fractional share will be issued.
Distributions on fractional shares will be credited to each Participant's
account. In the event of termination of a Participant's account under the Plan,
the Agent will adjust for any such undivided fractional interest in cash at the
market value of Shares at the time of termination.
Any share dividends or split shares distributed by the Fund on Shares held
by the Agent for Participants will be credited to their accounts. In the event
that the Fund makes available to its shareholders rights to purchase additional
shares of other securities, the Shares held for each Participant under the Plan
will be added to other shares held by the Participant in calculating the number
of rights to be issued to each Participant.
8. PROXY MATERIALS. The Agent will forward to each Participant any proxy
solicitation material; and will vote any shares so held for each Participant
first in accordance with the instructions set forth on proxies returned by the
Participant to the Fund, and then with respect to any proxies not returned by
the Participant to the Fund in the same portion as the agent votes proxies
returned by the Participants to the Fund.
2
<PAGE> 3
9. FEES. The Agent's service fee for handling Distributions will be paid by
the Fund. Each Participant will be charged their PRO RATA share of brokerage
commissions on all open-market purchases. If a Participant elects by written
notice to the Agent to have the Agent sell part or all of his or her Shares and
remit the proceeds, the Agent is authorized to deduct a $5.00 fee plus brokerage
commissions from the proceeds.
10. TERMINATION IN THE PLAN. Each registered Participant may terminate his
or her account under the Plan by notifying the Agent in writing at P.O. Box
8030, Boston, MA 02266-8030, or by telephone at 800-331-1710. Such termination
will be effective with respect to a Distribution if the Participant's notice is
received by the Agent at least ten days prior to the Distribution record date.
The Plan may be terminated by the Agent or the Fund upon notice in writing
mailed to each Participant at least 90 days prior to any record date for the
payment of any Distribution. Upon any termination, the Agent will cause a
certificate or certificates to be issued for the full shares held for each
Participant under the Plan and cash adjustment for any fraction to be delivered
to them without charge.
11. AMENDMENT OF THE PLAN. These terms and conditions may be amended by the
Agent or the Fund at any time or times but, except when necessary or appropriate
to comply with applicable law or the rules or policies of the Securities and
Exchange Commission or any other regulatory authority, only by mailing to each
Participant appropriate written notice at least 30 days prior to the effective
date thereof. The amendment shall be deemed to be accepted by each Participant
unless, prior to the effective date thereof, the Agent receives written notice
of the termination of their account under the Plan. Any such amendment may
include an appointment by the Agent of a successor Agent.
12. APPLICABLE LAW. These terms and conditions shall be governed by the
laws of the Commonwealth of Massachusetts.
3
<PAGE> 1
Exhibit (g)
EATON VANCE SENIOR INCOME TRUST
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 19th day of October, 1998, between Eaton Vance Senior
Income Trust, a Massachusetts business trust (the "Trust"), and Eaton Vance
Management, a Massachusetts business trust (the "Adviser").
1. DUTIES OF THE ADVISER. The Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and to administer its affairs, subject to the supervision of
the Trustees of the Trust, for the period and on the terms set forth in this
Agreement.
The Adviser hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of interests in Senior Loans (as
defined in the Trust's registration statement) and other permitted investments
for the Trust and to furnish for the use of the Trust office space and all
necessary office facilities, equipment and personnel for servicing the
investments of the Trust and to pay the salaries and fees of all officers and
Trustees of the Trust who are members of the Adviser's organization and all
personnel of the Adviser performing services relating to research and investment
activities. The Adviser shall for all purposes herein be deemed to be an
independent contractor and shall, except as otherwise expressly provided or
authorized, have no authority to act for or represent the Trust in any way or
otherwise be deemed an agent of the Trust.
The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Trust. As investment adviser to the Trust, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what interests in Senior Loans and other securities shall be acquired, disposed
of or exchanged and what portion of the Trust's assets shall be held uninvested,
subject always to the applicable restrictions of the Declaration of Trust,
By-Laws and registration statement of the Trust. The Adviser is authorized, in
its discretion and without prior consultation with the Trust, to buy, sell, lend
and otherwise trade in any Senior Loans, stocks, bonds, debt instruments,
options and other securities and investment instruments on behalf of the Trust,
to purchase, write or sell derivative instruments on behalf of the Trust, and to
execute any and all agreements and instruments and to do any and all things
incidental thereto in connection with the investment management of the Trust.
Should the Trustees of the Trust at any time, however, make any specific
determination as to investment policy for the Trust and notify the Adviser
thereof in writing, the Adviser shall be bound by such determination for the
period, if any, specified in such notice or until similarly notified that such
determination has been revoked. The Adviser shall take, on behalf of the Trust,
all actions which it deems necessary or desirable to implement the investment
policies of the Trust.
The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of the Trust either directly with the issuer or with
brokers or dealers or banks selected by the Adviser, or directly with a
co-lender or other participant in Senior Loans (as defined in the Trust's
<PAGE> 2
registration statement), and to that end the Adviser is authorized as the agent
of the Trust to give instructions to the custodian of the Trust as to deliveries
of securities and payments of cash for the account of the Trust. In connection
with the selection of such brokers or dealers or banks and the placing of such
orders, the Adviser shall use its best efforts to seek to execute portfolio
security transactions at prices which are advantageous to the Trust and (when a
disclosed commission is being charged) at reasonably competitive commission
rates. In selecting brokers or dealers qualified to execute a particular
transaction, brokers or dealers may be selected who also provide brokerage and
research services (as those terms are defined in Section 28(e) of the Securities
Exchange Act of 1934) to the Adviser and the Adviser is expressly authorized to
cause the Trust to pay any broker or dealer who provides such brokerage and
research services a commission for executing a security transaction which is in
excess of the amount of commission another broker or dealer would have charged
for effecting that transaction if the Adviser determines in good faith that such
amount of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer, viewed in terms of either
that particular transaction or the overall responsibilities which the Adviser
and its affiliates have with respect to accounts over which they exercise
investment discretion. Subject to the requirement set forth in the second
sentence of this paragraph, the Adviser is authorized to consider, as a factor
in the selection of any broker or dealer with whom purchase or sale orders may
be placed, the fact that such broker or dealer has sold or is selling shares of
any one or more investment companies sponsored by the Adviser or its affiliates.
The Adviser shall not be responsible for providing certain special
administrative services to the Trust under this Agreement. Eaton Vance
Management, in its capacity as Administrator of the Trust, shall be responsible
for providing such services to the Trust under the Trust's separate
Administration Agreement.
2. COMPENSATION OF THE ADVISER. For the services, payments and facilities
to be furnished hereunder by the Adviser, the Adviser shall be entitled to
receive from the Trust compensation in an amount equal to 17/240 of 1%
(equivalent to .85% annually) of average weekly gross assets of the Trust
throughout each month. (Gross assets shall be calculated by deducting accrued
liabilities of the Trust except the principal amount of any indebtedness for
money borrowed, including debt securities issued by the Trust. Accrued
liabilities are expenses incurred in the normal course of operations.)
Such compensation shall be paid monthly in arrears on the last business day
of each month. The Trust's net assets shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and determinations of
the Trustees of the Trust.
In case of initiation or termination of the Agreement during any month, the
fee for that month shall be 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 Adviser may, from time to time, waive all or a part of the above
compensation.
3. ALLOCATION OF CHARGES AND EXPENSES. It is understood that the Trust will
pay all expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Trust shall include, without implied
limitation, (i) expenses of maintaining the Trust and continuing its
-2-
<PAGE> 3
existence, (ii) registration of the Trust under the Investment Company Act of
1940, (iii) commissions, spreads, 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 listing shares of the Trust with a stock
exchange, and expenses of issue, sale, repurchase and redemption (if any) of
interests in the Trust, including expenses of conducting tender offers for the
purpose of repurchasing Trust interests, (viii) expenses of registering and
qualifying the Trust and its shares under federal and state securities laws and
of preparing and filing registration statements and amendments for such purposes
(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 Trust (including without
limitation safekeeping of funds, securities and other investments, keeping of
books, accounts and records, and determination of net asset values), (xiv) fees,
expenses and disbursements of transfer agents, dividend disbursing agents,
shareholder servicing agents and registrars for all services to the Trust, (xv)
expenses for servicing shareholder accounts, (xvi) any direct charges to
shareholders approved by the Trustees of the Trust, (xvii) compensation and
expenses of Trustees of the Trust who are not members of the Adviser's
organization, (xviii) pricing and valuation services employed by the Trust, and
(xix) such non-recurring items as may arise, including expenses incurred in
connection with litigation, proceedings and claims and the obligation of the
Trust to indemnify its Trustees, officers and shareholders with respect thereto.
4. OTHER INTERESTS. It is understood that Trustees and officers of the
Trust and shareholders of the Trust are or may be or become interested in the
Adviser as trustees, officers, employees, shareholders or otherwise and that
trustees, officers and shareholders of the Adviser are or may be or become
similarly interested in the Trust, and that the Adviser may be or become
interested in the Trust as Holder or otherwise. It is also understood that
trustees, officers, employees and shareholders of the Adviser may be or become
interested (as directors, trustees, officers, employees, shareholders or
otherwise) in other companies or entities (including, without limitation, other
investment companies) which the Adviser may organize, sponsor or acquire, or
with which it may merge or consolidate, and which may include the words "Eaton
Vance" or any combination thereof as part of their name, and that the Adviser or
its subsidiaries or affiliates may enter into advisory or management agreements
or other contracts or relationships with such other companies or entities.
5. LIMITATION OF LIABILITY OF THE ADVISER. The services of the Adviser to
the Trust are not to be deemed to be exclusive, the Adviser being free to render
services to others and engage in other business activities. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the Adviser shall
not be subject to liability to the Trust or to any shareholder the Trust for any
act or omission in the course of, or connected with, rendering services
hereunder or for any losses which may be sustained in the acquisition, holding
or disposition of any interest in a Loan or of any security, investment or other
asset.
6. SUB-INVESTMENT ADVISERS. The Adviser may employ one or more
sub-investment advisers from time to time to perform such of the acts and
services of the Adviser, including the selection of brokers or dealers to
execute the Trust's portfolio security transactions, and upon such terms and
conditions as may be agreed upon between the Adviser and such sub-investment
adviser and approved by the Trustees of the Trust, all as permitted by the
Investment Company Act of 1940.
-3-
<PAGE> 4
7. DURATION AND TERMINATION OF THIS AGREEMENT. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including February
28, 2000 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 2000 is specifically
approved at least annually (i) by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Trust and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested persons
of the Adviser or the Trust cast in person at a meeting called for the purpose
of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement without the payment of any
penalty, by action of Trustees of the Trust or the trustees of the Adviser, as
the case may be, and the Trust may, at any time upon such written notice to the
Adviser, terminate this Agreement by vote of a majority of the outstanding
voting securities of the Trust. This Agreement shall terminate automatically in
the event of its assignment.
8. AMENDMENTS OF THE AGREEMENT. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or the Trust
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding voting securities of the
Trust.
9. LIMITATION OF LIABILITY. The Adviser expressly acknowledges the
provision in the Declaration of Trust of the Trust limiting the personal
liability of the Trustees, officers and shareholders of the Trust, and the
Adviser hereby agrees that it shall have recourse to the Trust for payment of
claims or obligations as between the Trust and the Adviser arising out of this
Agreement and shall not seek satisfaction from any Trustee, officer or
shareholders of the Trust.
10. USE OF THE NAME "EATON VANCE". The Adviser hereby consents to the use
by the Trust of the name "Eaton Vance" as part of the Trust's name; provided,
however, that such consent shall be conditioned upon the employment of the
Adviser or one of its affiliates as the investment adviser of the Trust. The
name "Eaton Vance" or any variation thereof may be used from time to time in
other connections and for other purposes by the Adviser and its affiliates and
other investment companies that have obtained consent to the use of the name
"Eaton Vance". The Adviser shall have the right to require the Trust to cease
using the name "Eaton Vance" as part of the Trust's name if the Trust ceases,
for any reason, to employ the Adviser or one of its affiliates as the Trust's
investment adviser. Future names adopted by the Trust for itself, insofar as
such names include identifying words requiring the consent of the Adviser, shall
be the property of the Adviser and shall be subject to the same terms and
conditions.
11. CERTAIN DEFINITIONS. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of
shareholders, of the lesser of (a) 67 per centum or more of the shares of the
Trust present or represented by proxy at the meeting if the Holders of more than
50 per centum of the shares of the Trust are present or represented by proxy at
the meeting, or (b) more than 50 per centum of the shares of the Trust.
-4-
<PAGE> 5
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
EATON VANCE SENIOR INCOME TRUST
By: /s/ James B. Hawkes
------------------------------------
President, and not Individually
EATON VANCE MANAGEMENT
By: /s/ Alan R. Dynner
------------------------------------
Vice President, and not Individually
-5-
<PAGE> 1
Exhibit (h)(1)
FORM OF
[6,000,000] SHARES*
OF BENEFICIAL INTEREST
EATON VANCE SENIOR INCOME TRUST
UNDERWRITING AGREEMENT
----------------------
October ___, 1998
PAINEWEBBER INCORPORATED
A.G. EDWARDS & SONS, INC.
PRUDENTIAL SECURITIES, INC.
DAIN RAUSCHER WESSELS
FAHENSTOCK & CO., INC.
FIRST OF MICHIGAN CORPORATION
GRUNTAL & CO., L.L.C.
INTERSTATE/JOHNSON LANE CORPORATION
JANNEY MONTGOMERY SCOTT INC.
LEGG MASON WOOD WALKER INCORPORATED
MCDONALD & COMPANY SECURITIES INC.
WHEAT FIRST UNION
as Representatives of the Several Underwriters
named in Schedule 1 hereto
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
Eaton Vance Senior Income Trust, a Massachusetts business trust (the
"Trust"), proposes to issue and sell to you and the other underwriters named in
Schedule 1 hereto (the "Underwriters"), for whom you are acting as
representatives (the "Representatives"), up to [6,000,000] shares of beneficial
interest (the "Firm Shares"), par value $.01 per share (the "Shares of
Beneficial Interest"). In addition, the Trust
- -----------------
* Plus an option to purchase, in the aggregate, up to [900,000] additional
Shares to cover over-allotments.
<PAGE> 2
hereby grants to the Underwriters an option (the "Option") to purchase up to an
additional [900,000] of its Shares (the "Option Shares") solely for the purpose
of covering over-allotments. The Firm Shares and the Option Shares are referred
to collectively herein as the "Shares."
Eaton Vance Management, a Massachusetts business trust ("Eaton Vance" or
the "Investment Adviser"), will act as the Trust's investment adviser pursuant
to an Investment Advisory Agreement by and between the Trust and the Investment
Adviser, dated as of October 19, 1998 (the "Investment Advisory Agreement"). The
Trust has engaged Eaton Vance to act as its administrator pursuant to an
Administration Agreement, dated as of October 19, 1998. Investors Bank & Trust
Company ("IBT") will act as the custodian (the "Custodian") of the Trust's cash
and portfolio assets pursuant to a Custody Agreement, effective as of October
19, 1998 (the "Custody Agreement"). First Data Investor Services Group will act
as the Trust's transfer agent and dividend disbursing agent (the "Transfer
Agent") pursuant to a transfer agency agreement, dated as of October 19, 1998
(the "Transfer Agency Agreement").
The Trust and the Investment Adviser each hereby confirms as follows their
agreements with the Representatives and the several other Underwriters.
1. SALE AND PURCHASE; COMPENSATION
(a) The Trust will issue and sell to each Underwriter, and each
Underwriter will purchase from the Trust, the number of Firm Shares set forth
opposite such Underwriter's name in Schedule 1 hereto, at the purchase price of
$10.00 per Firm Share.
(b) The Trust grants to the Underwriters the Option to purchase all
or any part of the Option Shares for the same consideration per share as for the
Firm Shares. The Option may be exercised only to cover over-allotments in the
sales of the Firm Shares by the Underwriters. The number of Option Shares
(adjusted by the Representatives to eliminate fractions) to be purchased by each
Underwriter will be the same percentage of the aggregate number of Option Shares
being sold as such Underwriter is obligated to purchase of the Firm Shares. Such
Option may be exercised in whole or in part, only to cover over-allotments, at
any time or from time to time on or before the 45th day after the date of this
Underwriting Agreement, upon written or telefacsimile notice (the "Option Shares
Notice") from the Representatives to the Trust no later than 12:00 noon, New
York City time, at least two and not more than five business days before the
date specified for closing in the Option Shares Notice (the "Option Shares
Closing Date"), setting forth the number of Option Shares to be
2
<PAGE> 3
purchased and the time and date of such purchase. Upon delivery and receipt of
the Option Shares Notice, the Trust will issue and sell to each Underwriter, and
each Underwriter will purchase from the Trust, on the Option Shares Closing
Date, its portion of the number of Option Shares set forth in the Option Shares
Notice.
(c) The obligations of the Underwriters under this Underwriting
Agreement are several and not joint and are undertaken on the basis of the
representations and are subject to the conditions set forth in this Underwriting
Agreement.
(d) The Investment Adviser agrees to make the payments to the
Underwriters when and as required by Section 2 hereof.
2. PAYMENT AND DELIVERY. Delivery by the Trust of the Firm Shares (the
"Firm Shares Closing") to the Representatives for the accounts of the
Underwriters against payment of the purchase price by wire transfer of Federal
Funds or similar same day funds to the Trust for the Firm Shares, will take
place at the offices of PaineWebber Incorporated (the "Managing
Representative"), 1285 Avenue of the Americas, New York, New York or such other
location as is agreed upon by the parties hereto, or through the facilities of
the Depository Trust Company or another mutually agreeable facility, at 9:00
a.m., New York City time, on the third business day following the date of this
Underwriting Agreement, or at such time on such other date, not later than ten
business days after the date of this Underwriting Agreement, as may be agreed
upon by the Trust and the Managing Representative (the "Firm Shares Closing
Date").
If and to the extent that the Option is exercised, delivery of the Option
Shares and payment by the Underwriters (in the manner specified above) will take
place at the offices or through the facilities specified above for the Firm
Shares Closing at the time and date (which may be the Firm Shares Closing Date)
specified in the Option Shares Notice. Any Option Shares Closing Date may not be
later than three business days following the exercise of the related Option. The
Firm Shares Closing Date and any Option Shares Closing Date are called the
"Closing Dates."
Certificates evidencing Shares of Beneficial Interest will be in definitive
form (or temporary form acceptable to the New York Stock Exchange), registered
in such names and in such denominations as the Managing Representative requests
at least three full business days before the Firm Shares Closing Date or, in the
case of Option Shares, on the day of notice of exercise of the Option as
described in Section 1(b), and will be made available to the Managing
Representative for checking and packaging, at
3
<PAGE> 4
a place in New York City designated by the Managing Representative, at least one
full business day before the relevant Closing Date.
Simultaneous with delivery to the Underwriters of and payment by the
Underwriters for (i) Firm Shares on the Firm Shares Closing Date and (ii) Option
Shares on the Option Shares Closing Date, Eaton Vance (or an affiliate as
determined by Eaton Vance) will pay to the Underwriters an amount equal to 4.50%
of the purchase price per Share for each Share to be purchased by the
Underwriters on such date by wire transfer of Federal Funds or similar same-day
funds on such Firm Shares Closing Date or Option Shares Closing Date, as the
case may be, to the order of the Managing Representative, on behalf of itself
and the Underwriters.
3. REGISTRATION STATEMENT AND PROSPECTUS; PUBLIC OFFERING. The Trust has
filed with the Securities and Exchange Commission (the "Commission"), pursuant
to the Securities Act of 1933, as amended (the "Securities Act"), the Investment
Company Act of 1940, as amended (the "Investment Company Act"), and the
published rules and regulations adopted by the Commission under the Securities
Act (the "Securities Act Rules") and the Investment Company Act (the "Investment
Company Act Rules"), a Notification of Registration on Form N-8A (the
"Notification") pursuant to Section 8 of the Investment Company Act and a
registration statement on Form N-2 (File Nos. 333-64151 and 811-09013) relating
to the Shares (the "registration statement"), including a preliminary prospectus
(including any preliminary statement of additional information), and such
amendments to such registration statement as may have been required to the date
of this Underwriting Agreement. The preliminary prospectus (including any
preliminary statement of additional information) is to be used in connection
with the offering and sale of the Shares. The term "Preliminary Prospectus" as
used herein means any preliminary prospectus (including any preliminary
statement of additional information) included at any time as a part of the
registration statement and any preliminary prospectus (including any preliminary
statement of additional information) omitted therefrom pursuant to the
Securities Act Rules.
The Trust has furnished the Representatives copies of such registration
statement, each amendment to such registration statement filed by the Trust with
the Commission and the Preliminary Prospectus filed by the Trust with the
Commission or used by the Trust. If the registration statement has not become
effective, a further amendment (the "Final Amendment") to such registration
statement, including the forms of final prospectus (including any final
statement of additional information), necessary to permit such registration
statement to become effective will promptly be filed by the Trust with the
Commission. If such registration statement has become effective and any
prospectus (including any statement of additional information) contained therein
omits
4
<PAGE> 5
certain information at the time of effectiveness pursuant to Rule 430A of the
Securities Act Rules, a final prospectus (the "Rule 430A Prospectus") containing
such omitted information will be filed by the Trust with the Commission in
accordance with Rule 497(h) of the Securities Act Rules. The registration
statement as amended at the time it becomes or became effective (the "Effective
Date"), including financial statements and all exhibits, and any information
deemed to be included by Rule 430A, is called the "Registration Statement." The
term "Prospectus" means the prospectus (including any statement of additional
information) in the form in which it is first filed with the Commission pursuant
to Rule 497(b), (h) or (j) of the Securities Act Rules, as the case may be.
The Trust and the Investment Adviser understand that the Underwriters
propose to make a public offering of the Firm Shares, as described in the
Prospectus, as soon after the Effective Date (or, if later, after the date this
Underwriting Agreement is signed) as the Managing Representative deems
advisable. The Trust confirms that the Underwriters and dealers have been
authorized to distribute the Preliminary Prospectus relating to the Shares
included in the initial filing of the registration statement and are authorized
to distribute the Prospectus and any amendments or supplements thereto.
4. REPRESENTATIONS.
(a) Each of the Trust and the Investment Adviser jointly and
severally represents to each Underwriter as follows:
(i) On (A) the Effective Date and the date on which the
Prospectus is first filed with the Commission pursuant to Rule 497(b), (h)
or (j) of the Securities Act Rules, as the case may be, (B) the date on
which any post-effective amendment to the Registration Statement (except
any post-effective amendment which is filed with the Commission after the
later of (x) one year from the date of this Underwriting Agreement or (y)
the date on which the distribution of the Shares is completed) became or
becomes effective or any amendment or supplement to the Prospectus was or
is filed with the Commission and (C) the Closing Dates, the Registration
Statement, the Prospectus and any such amendment or supplement thereto and
the Notification complied or will comply in all material respects with the
requirements of the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules, as the case may
be. On the Effective Date and on the date that any post-effective amendment
to the Registration Statement (except any post-effective amendment which
5
<PAGE> 6
is filed with the Commission after the later of (x) one year from the date
of this Underwriting Agreement or (y) the date on which the distribution of
the Shares is completed) became or becomes effective, neither the
Registration Statement nor any such amendment did or will contain any
untrue statement of a material fact or omit to state a material fact
required to be stated in it or necessary to make the statements in it not
misleading. At the Effective Date and, if applicable, the date the
Prospectus or any amendment or supplement to the Prospectus was or is filed
with the Commission and at the Closing Dates, the Prospectus did not or
will not, as the case may be, contain any untrue statement of a material
fact or omit to state a material fact required to be stated in it or
necessary to make the statements in it, in light of the circumstances under
which they were made, not misleading. The foregoing representations in this
Section 4(a)(i) do not apply to statements or omissions relating to the
Underwriters made in reliance on and in conformity with information
furnished in writing to the Trust by the Representatives expressly for use
in the Registration Statement, the Prospectus, or any amendments or
supplements thereto, as described in Section 7(f) hereof.
(ii) The Trust has been duly formed, is validly existing as a
business trust under the laws of the Commonwealth of Massachusetts, with
full power and authority to conduct all the activities conducted by it, to
own or lease all assets owned or leased by it and to conduct its business
as described in the Registration Statement and Prospectus, and the Trust is
duly licensed and qualified to do business and in good standing in each
jurisdiction in which its ownership or leasing of property or its
conducting of business requires such qualification, except where the
failure to be so qualified or be in good standing would not have a material
adverse effect on the Trust, and the Trust owns, possesses or has obtained
and currently maintains all governmental licenses, permits, consents,
orders, approvals and other authorizations, whether foreign or domestic,
necessary to carry on its business as contemplated in the Prospectus. The
Trust has no subsidiaries.
(iii) The capitalization of the Trust is as set forth in the
Registration Statement and the Prospectus. The Shares of Beneficial
Interest of the Trust conform in all material respects to the description
of them in the Prospectus. All the outstanding Shares of
6
<PAGE> 7
Beneficial Interest have been duly authorized and are validly issued, fully
paid and nonassessable (except as described in the Registration Statement).
The Shares to be issued and delivered to and paid for by the Underwriters
in accordance with this Underwriting Agreement against payment therefor as
provided by this Underwriting Agreement have been duly authorized and when
issued and delivered to the Underwriters will have been validly issued and
will be fully paid and nonassessable (except as described in the
Registration Statement). No person is entitled to any preemptive or other
similar rights with respect to the Shares.
(iv) The Trust is duly registered with the Commission under the
Investment Company Act as a non-diversified, closed-end management
investment company, and, subject to the filing of the Final Amendment, if
not already filed, all action under the Securities Act, the Investment
Company Act, the Securities Act Rules and the Investment Company Act Rules,
as the case may be, necessary to make the public offering and consummate
the sale of the Shares as provided in this Underwriting Agreement has or
will have been taken by the Trust.
(v) The Trust has full power and authority to enter into each of
this Underwriting Agreement, the Investment Advisory Agreement, the Custody
Agreement, the Dividend Disbursing Agency Agreement and the Transfer Agency
Agreement (collectively, the "Trust Agreements") and to perform all of the
terms and provisions hereof and thereof to be carried out by it and (A)
each Trust Agreement has been duly and validly authorized, executed and
delivered by or on behalf of the Trust, (B) each Trust Agreement does not
violate in any material respect any of the applicable provisions of the
Investment Company Act, the Investment Advisers Act of 1940 (the "Advisers
Act"), the Investment Company Act Rules and the rules and regulations
adopted by the Commission under the Advisers Act (the "Advisers Act
Rules"), as the case may be, and (C) assuming due authorization, execution
and delivery by the other parties thereto, each Trust Agreement constitutes
the legal, valid and binding obligation of the Trust enforceable in
accordance with its terms, (1) subject, as to enforcement, to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights
generally and to general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law) and (2) except
7
<PAGE> 8
as rights to indemnity thereunder may be limited by federal or state
securities laws.
(vi) None of (A) the execution and delivery by the Trust of the
Trust Agreements, (B) the issue and sale by the Trust of the Shares as
contemplated by this Underwriting Agreement and (C) the performance by the
Trust of its obligations under any of the Trust Agreements or consummation
by the Trust of the other transactions contemplated by the Trust Agreements
conflicts with or will conflict with, or results or will result in a breach
of, the Declaration of Trust or the By-laws of the Trust or any agreement
or instrument to which the Trust is a party or by which the Trust is bound,
or any law, rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, applicable to the Trust, other than state securities
or "blue sky" laws applicable in connection with the purchase and
distribution of the Shares by the Underwriters pursuant to this
Underwriting Agreement.
(vii) The Trust is not currently in breach of, or in default
under, any written agreement or instrument to which it is a party or by
which it or its property is bound or affected.
(viii) No person has any right to the registration of any
securities of the Trust because of the filing of the registration
statement.
(ix) No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required by the Trust for the consummation by the
Trust of the transactions to be performed by the Trust or the performance
by the Trust of all the terms and provisions to be performed by or on
behalf of it in each case as contemplated in the Trust Agreements, except
such as (A) have been obtained under the Securities Act, the Investment
Company Act, the Advisers Act, the Securities Act Rules, the Investment
Company Act Rules, and the Advisers Act Rules, and (B) may be required by
the New York Stock Exchange or under state securities or "blue sky" laws,
in connection with the purchase and distribution of the Shares by the
Underwriters pursuant to this Underwriting Agreement.
8
<PAGE> 9
(x) The Shares are duly authorized for listing, subject to
official notice of issuance, on the New York Stock Exchange and the Trust's
Registration Statement on Form 8-A, under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), has become effective.
(xi) Deloitte & Touche LLP, whose report appears in the
Prospectus, are independent public accountants with respect to the Trust as
required by the Securities Act, the Investment Company Act, the Securities
Act Rules and the Investment Company Act Rules.
(xii) The statement of assets and liabilities included in the
Registration Statement and the Prospectus presents fairly in all material
respects, in accordance with generally accepted accounting principles in
the United States applied on a consistent basis, the financial position of
the Trust as of the date indicated.
(xiii) The Trust will maintain a system of internal accounting
controls sufficient to provide reasonable assurances that (A) transactions
are executed in accordance with management's general or specific
authorization; (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (C) access
to assets is permitted only in accordance with management's general or
specific authorization; and (D) the recorded accountability for assets is
compared with existing assets through an asset reconciliation procedure or
otherwise at reasonable intervals and appropriate action is taken with
respect to any differences.
(xiv) Since the date as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, business affairs or business of the Trust, whether
or not arising in the ordinary course of business, (B) there have been no
transactions entered into by the Trust other than those in the ordinary
course of its business and (C) there has been no dividend or distribution
of any kind declared, paid or made on any class of its capital shares.
9
<PAGE> 10
(xv) There is no action, suit or proceeding before or by any
court, commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending, or, to the
knowledge of the Trust, threatened against or affecting the Trust, which
(A) might result in any material adverse change in the condition, financial
or otherwise, business affairs or business prospects of the Trust or might
materially adversely affect the properties or assets of the Trust or (B) is
of a character required to be described in the Registration Statement or
the Prospectus; and there are no contracts, franchises or other documents
that are of a character required to be described in, or that are required
to be filed as exhibits to, the Registration Statement that have not been
described or filed as required.
(xvi) Except for stabilization transactions conducted by the
Underwriters, and except for tender offers, Share repurchases and the
issuance or purchase of Shares pursuant to the Trust's dividend
reinvestment plan ("DRP") effected following the date on which the
distribution of the Shares is completed in accordance with the policies of
the Trust as set forth in the Prospectus, the Trust has not taken and will
not take, directly or indirectly, any action designed or which might be
reasonably expected to cause or result in, or which will constitute,
stabilization or manipulation of the price of the Shares of Beneficial
Interest in violation of applicable federal securities laws.
(xvii) The Trust intends to direct the investment of the proceeds
of the offering of the Shares in such a manner as to comply with the
requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code").
(xviii) To the knowledge of the Trust after due inquiry, no
advertising, sales literature or other promotional materials (excluding
road show slides or road show tapes) were authorized or prepared by or on
behalf of the Trust and the Investment Adviser or any representative
thereof for use in connection with the public offering or sale of the
Shares other than the definitive client brochure and the broker selling
memo, drafts of which were filed with the NASD on September 24, 1998, and
final forms of which were filed with the NASD on October 11, 1998
(collectively, the "sales materials"); the sales materials and any road
show slides or road show tapes complied and comply in all material respects
with the applicable requirements of the Securities Act,
10
<PAGE> 11
the Securities Act Rules and the rules and interpretations of the NASD; and
no broker kits, road show slides, road show tapes or sales materials
authorized or prepared by the Trust or authorized or prepared on behalf of
the Trust by the Investment Adviser or any representative thereof for use
in connection with the public offering or sale of the Shares contained or
contains any untrue statement of a material fact or omitted or omits to
state any material fact required to be stated therein or necessary in order
to make the statements therein not misleading.
(b) The Investment Adviser represents to each Underwriter as follows:
(i) The Investment Adviser has been duly formed, is validly
existing as a business trust under the laws of the Commonwealth of
Massachusetts with full power and authority to conduct all of the
activities conducted by it, to own or lease all of the assets owned or
leased by it and to conduct its business as described in the Registration
Statement and Prospectus, and the Investment Adviser is duly licensed and
qualified to do business and in good standing in each jurisdiction in which
it is required to be so qualified, except to the extent that failure to be
so qualified or be in good standing would not have a material adverse
affect on the Investment Adviser; and the Investment Adviser owns,
possesses or has obtained and currently maintains all governmental
licenses, permits, consents, orders, approvals and other authorizations,
whether foreign or domestic, necessary to carry on its business as
contemplated in the Registration Statement and the Prospectus.
(ii) The Investment Adviser is (A) duly registered as an
investment adviser under the Advisers Act and (B) not prohibited by the
Advisers Act, the Investment Company Act, the Advisers Act Rules or the
Investment Company Act Rules from acting as the investment adviser for the
Trust as contemplated by the Investment Advisory Agreement, the
Registration Statement and the Prospectus.
(iii) The Investment Adviser has full power and authority to
enter into each of this Underwriting Agreement, the Investment Advisory
Agreement, the Administration Agreement and the Shareholder Services
Agreement dated as of October 19, 1998 (the "Shareholder Services
Agreement") between the Investment Adviser and
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<PAGE> 12
PaineWebber Incorporated (collectively, this Underwriting Agreement, the
Investment Advisory Agreement, the Administration Agreement and the
Shareholder Services Agreement being referred to as the "Investment Adviser
Agreement") and to carry out all the terms and provisions hereof and
thereof to be carried out by it; and each Investment Adviser Agreement has
been duly and validly authorized, executed and delivered by the Investment
Adviser; none of the Investment Adviser Agreements violate in any material
respect any of the applicable provisions of the Investment Company Act, the
Advisers Act, the Investment Company Act Rules and the Advisers Act Rules;
and assuming due authorization, execution and delivery by the other parties
thereto, each Investment Adviser Agreement constitutes a legal, valid and
binding obligation of the Investment Adviser, enforceable in accordance
with its terms, (1) subject, as to enforcement, to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally and to
general equitable principles (regardless of whether enforcement is sought
in a proceeding in equity or at law) and (2) except as rights to indemnity
thereunder may be limited by federal or state securities laws.
(iv) Neither (A) the execution and delivery by the Investment
Adviser of any Investment Adviser Agreement by the Investment Adviser nor
(B) the consummation by the Investment Adviser of the transactions
contemplated by, or the performance of its obligations under any Investment
Adviser Agreement conflicts or will conflict with, or results or will
result in a breach of, the Agreement and Declaration of Trust or By-Laws of
the Investment Adviser or any agreement or instrument to which the
Investment Adviser is a party or by which the Investment Adviser is bound,
or any law, rule or regulation, or order of any court, governmental
instrumentality, securities exchange or association or arbitrator, whether
foreign or domestic, applicable to the Investment Adviser.
(v) No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required for the consummation of the transactions
contemplated in, or the performance by the Investment Adviser of its
obligations under, any Investment Adviser Agreement, as the case may be,
except such as (A) have been obtained under the Investment Company Act, the
Advisers Act, the Securities Act, the Investment Company Act Rules, the
Advisers Act
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<PAGE> 13
Rules and the Securities Act Rules, and (B) may be required by the New York
Stock Exchange or under state securities or "blue sky" laws, in connection
with the purchase and distribution of the Shares by the Underwriters
pursuant to this Underwriting Agreement.
(vi) The description of the Investment Adviser and its business,
and the statements attributable to the Investment Adviser, in the
Registration Statement and the Prospectus complies with the requirements of
the Securities Act, the Investment Company Act, the Securities Act Rules
and the Investment Company Act Rules and do not contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading.
(vii) There is no action, suit or proceeding before or by any
court, commission, regulatory body, administrative agency or other
governmental agency or body, foreign or domestic, now pending or, to the
knowledge of the Investment Adviser, threatened against or affecting the
Investment Adviser of a nature required to be disclosed in the Registration
Statement or Prospectus or that might reasonably be expected to result in
any material adverse change in the condition, financial or otherwise,
business affairs or business prospects of the Investment Adviser or the
ability of the Investment Adviser to fulfill its respective obligations
under any Investment Adviser Agreement.
(viii) Except for stabilization activities conducted by the
Underwriters and except for tender offers, Share repurchases and the
issuance or purchase of Shares pursuant to the Trust's DRP effected
following the date on which the distribution of the Shares is completed in
accordance with the policies of the Trust as set forth in the Prospectus,
the Investment Adviser has not taken and will not take, directly or
indirectly, any action designed, or which might reasonably be expected to
cause or result in, or which will constitute, stabilization or manipulation
of the price of the Shares of Beneficial Interest in violation of
applicable federal securities laws.
(ix) In the event that the Trust or the Investment Adviser makes
available any promotional materials (other than the sales materials)
intended for use only by qualified broker-dealers and registered
representatives thereof by means of an Internet web site or
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similar electronic means, the Investment Adviser will install and maintain
pre-qualification and password-protection or similar procedures which will
effectively prohibit access to such promotional materials by persons other
than qualified broker-dealers and registered representatives thereof.
5. AGREEMENTS OF THE PARTIES.
(a) If the registration statement relating to the Shares has not
yet become effective, the Trust will promptly file the Final Amendment, if not
previously filed, with the Commission, and will use its best efforts to cause
such registration statement to become effective and, as soon as the Trust is
advised, will advise the Representative when the Registration Statement or any
amendment thereto has become effective. If the Registration Statement has become
effective and the Prospectus contained therein omits certain information at the
time of effectiveness pursuant to Rule 430A of the Securities Act Rules, the
Trust will file a 430A Prospectus pursuant to Rule 497(h) of the Securities Act
Rules as promptly as practicable, but no later than the second business day
following the earlier of the date of the determination of the offering price of
the Shares or the date the Prospectus is first used after the Effective Date. If
the Registration Statement has become effective and the Prospectus contained
therein does not so omit such information, the Trust will file a Prospectus
pursuant to Rule 497(b) or (j) of the Securities Act Rules as promptly as
practicable, but no later than the fifth business day following the date of the
later of the Effective Date or the commencement of the public offering of the
Shares after the Effective Date. In either case, the Trust will provide the
Representatives satisfactory evidence of the filing. The Trust will not file
with the Commission any Prospectus or any other amendment (except any
post-effective amendment which is filed with the Commission after the later of
(x) one year from the date of this Underwriting Agreement or (y) the date on
which distribution of the Shares is completed) or supplement to the Registration
Statement or the Prospectus unless a copy has first been submitted to the
Managing Representative a reasonable time before its filing and the Managing
Representative has not objected to it in writing within a reasonable time after
receiving the copy.
(b) For the period of three years from the date hereof, the
Trust will advise the Representatives promptly (1) of the issuance by the
Commission of any order in respect of the Trust or the Investment Adviser which
relates to the Trust, or which relates to any material arrangements or proposed
material arrangements involving the Trust or the Investment Adviser, (2) of the
initiation or threatening of any proceedings for, or receipt by the Trust of any
notice with respect to, the suspension of the qualification of the Shares for
sale in any jurisdiction or the issuance of any order
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<PAGE> 15
by the Commission suspending the effectiveness of the Registration Statement,
(3) of receipt by the Trust, or any representative or attorney of the Trust, of
any other communication from the Commission relating in any material way to the
Trust, the Registration Statement, the Notification, any Preliminary Prospectus,
the Prospectus or to the transactions contemplated by this Underwriting
Agreement and (4) the issuance by any court, regulatory body, administrative
agency or other governmental agency or body, whether foreign or domestic, of any
order, ruling or decree, or the threat to initiate any proceedings with respect
thereto, regarding the Trust, which relates in any material way to the Trust or
any material arrangements or proposed material arrangements involving the Trust.
The Trust will make every reasonable effort to prevent the issuance of any order
suspending the effectiveness of the Registration Statement and, if any such
order is issued, to obtain its lifting as soon as possible.
(c) If not delivered prior to the date of this Underwriting
Agreement, the Trust will deliver to the Representatives, without charge, a
signed copy of the registration statement and the Notification and of any
amendments (except any post-effective amendment which is filed with the
Commission after the later of (x) one year from the date of this Underwriting
Agreement or (y) the date on which the distribution of the Shares is completed)
to either the Registration Statement or the Notification (including all exhibits
filed with any such document) and as many conformed copies of the registration
statement and any amendments thereto (except any post-effective amendment which
is filed with the Commission after the later of (x) one year from the date of
this Underwriting Agreement or (y) the date on which the distribution of the
Shares is completed) (excluding exhibits) as the Representatives may reasonably
request.
(d) During such period as a prospectus is required by law to be
delivered by an underwriter or a dealer, the Trust will deliver, without charge,
to the Representatives, the Underwriters and any dealers, at such office or
offices as the Representatives may designate, as many copies of the Prospectus
as the Representatives may reasonably request, and, if any event occurs during
such period as a result of which it is necessary to amend or supplement the
Prospectus, in order to make the statements therein, in light of the
circumstances existing when such Prospectus is delivered to a purchaser of
Shares, not misleading in any material respect, or if during such period it is
necessary to amend or supplement the Prospectus to comply with the Securities
Act, the Investment Company Act, the Securities Act Rules or the Investment
Company Act Rules, the Trust promptly will prepare, submit to the Managing
Representative, file with the Commission and deliver, without charge, to the
Underwriters and to dealers (whose names and addresses the Representatives will
furnish to the Trust) to whom Shares may have been sold by the Underwriters, and
to other dealers on request, amendments or
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<PAGE> 16
supplements to the Prospectus so that the statements in such Prospectus, as so
amended or supplemented, will not, in light of the circumstances existing when
such Prospectus is delivered to a purchaser, be misleading in any material
respect and will comply with the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules. Delivery by the
Underwriters of any such amendments or supplements to the Prospectus will not
constitute a waiver of any of the conditions in Section 6 hereof.
(e) The Trust will make generally available to holders of the
Trust's securities, as soon as practicable but in no event later than the last
day of the 18th full calendar month following the calendar quarter in which the
Effective Date falls, an earnings statement, if applicable, satisfying the
provisions of Section 11(a) of the Securities Act and, at the option of the
Trust, Rule 158 of the Securities Act Rules.
(f) The Trust will take such actions as the Representatives
reasonably requests in order to qualify the Shares for offer and sale under the
securities or "blue sky" laws of such jurisdictions as the Representatives
reasonably designate; provided that the Trust shall not be required in
connection therewith or as a condition thereof to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction.
(g) If the transactions contemplated by this Underwriting
Agreement are consummated, the Trust shall pay all costs and expenses incident
to the performance of the obligations of the Trust under this Underwriting
Agreement (to the extent such expenses do not, in the aggregate, exceed $0.02
per Share), including but not limited to costs and expenses of or relating to
(1) the preparation, printing and filing of the registration statement and
exhibits to it, each Preliminary Prospectus, the Prospectus and all amendments
and supplements thereto, (2) the issuance of the Shares and the preparation and
delivery of certificates for the Shares, (3) the registration or qualification
of the Shares for offer and sale under the securities or "blue sky" laws of the
jurisdictions referred to in the foregoing paragraph, including the fees and
disbursements of counsel for the Underwriters in that connection, and the
preparation and printing of preliminary and supplemental "blue sky" memoranda,
(4) the furnishing (including costs of design, production, shipping and mailing)
to the Underwriters and dealers of copies of each Preliminary Prospectus
relating to the Shares, the sales materials, the Prospectus, and all amendments
or supplements to the Prospectus, and of the other documents required by this
Section to be so furnished, (5) the filing requirements of the National
Association of Securities Dealers, Inc., in connection with its review of the
financing, including filing fees and the fees, disbursements and other charges
of counsel for the Underwriters in that connection, (6) all transfer taxes, if
any, with respect to the sale and
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<PAGE> 17
delivery of the Shares to the Underwriters, (7) the listing of the Shares on the
New York Stock Exchange, (8) the transfer agent for the Shares, and (9) in
addition to the foregoing, an aggregate of $ as partial reimbursement of
the costs and expenses of the Underwriters. To the extent the foregoing costs
and expenses incident to the performance of the obligations of the Trust under
this Underwriting Agreement exceed, in the aggregate, $0.02 per Share Eaton
Vance or an affiliate will pay all such excess costs and expenses.
(h) If the transactions contemplated by this Underwriting
Agreement are not consummated, except as otherwise provided herein, no party
will be under any liability to any other party, except that (1) if this
Underwriting Agreement is terminated by (x) the Trust or the Investment Adviser
pursuant to any of the provisions hereof (otherwise than pursuant to Section 8
hereof) or (y) by the Representatives or the Underwriters because of any
inability, failure or refusal on the part of the Trust or the Investment Adviser
to comply with any material terms or because any of the conditions in Section 6
are not satisfied, Eaton Vance or an affiliate and the Trust, jointly and
severally, will reimburse the Underwriters for all out-of-pocket expenses
(including the reasonable fees, disbursements and other charges of their
counsel) reasonably incurred by them in connection with the proposed purchase
and sale of the Shares and (2) no Underwriter who has failed or refused to
purchase the Shares agreed to be purchased by it under this Underwriting
Agreement, in breach of its obligations pursuant to this Underwriting Agreement,
will be relieved of liability to the Trust and the Investment Adviser and the
other Underwriters for damages occasioned by its default.
(i) The Investment Adviser hereby agrees to waive any and all
fees to which it is entitled under the Investment Advisory Agreement and the
Administration Agreement for the two month period following the date of this
Underwriting Agreement.
(j) Without the prior written consent of the Representatives,
the Trust will not offer, sell or register with the Commission, or announce an
offering of, any equity securities of the Trust, within 180 days after the
Effective Date, except for the Shares as described in the Prospectus and any
issuances of Shares of Beneficial Interest pursuant to the dividend reinvestment
plan established by the Trust and except in connection with any offering of
preferred shares of beneficial interest as contemplated by the Prospectus.
(k) The Trust will use its best efforts to list the Shares on
the New York Stock Exchange and comply with the rules and regulations of such
exchange.
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<PAGE> 18
(l) The Trust will direct the investment of the net proceeds of
the offering of the Shares in such a manner as to comply with the investment
objective and policies of the Trust as described in the Prospectus.
6. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters to purchase the Shares are subject to the accuracy on the date of
this Underwriting Agreement, and on the Closing Dates, of the representations of
the Trust and the Investment Adviser in this Underwriting Agreement, to the
accuracy and completeness of all statements made by the Trust or the Investment
Adviser or any of their respective officers in any certificate delivered to the
Representatives or their counsel pursuant to this Underwriting Agreement, to
performance by the Trust and the Investment Adviser of their respective
obligations under this Underwriting Agreement and to each of the following
additional conditions:
(a) The registration statement must have become effective by
5:30 p.m., New York City time, on the date of this Underwriting Agreement or
such later date and time as the Managing Representative consents to in writing.
The Prospectus must have been filed in accordance with Rule 497(b), (h) or (j),
as the case may be, of the Securities Act Rules.
(b) No order suspending the effectiveness of the Registration
Statement may be in effect and no proceedings for such purpose may be pending
before or, to the knowledge of counsel to the Underwriters, threatened by the
Commission, and any requests for additional information on the part of the
Commission (to be included in the Registration Statement or the Prospectus or
otherwise) must be complied with or waived to the reasonable satisfaction of the
Managing Representative.
(c) Since the dates as of which information is given in the
Registration Statement and the Prospectus, (1) there must not have been any
material change in the Shares of Beneficial Interest or liabilities of the Trust
except as set forth in or contemplated by the Prospectus; (2) there must not
have been any material adverse change in the general affairs, prospects,
management, business, financial condition or results of operations of the Trust
or the Investment Adviser whether or not arising from transactions in the
ordinary course of business as set forth in or contemplated by the Prospectus;
(3) the Trust must not have sustained any material loss or interference with its
business from any court or from legislative or other governmental action, order
or decree, whether foreign or domestic, or from any other occurrence not
described in the Registration Statement and Prospectus; and (4) there must not
have occurred any event that makes untrue or incorrect in any material respect
any statement or information contained in the Registration Statement or
Prospectus or that is not reflected in the
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<PAGE> 19
Registration Statement or Prospectus but should be reflected therein in order to
make the statements or information therein (in the case of the Prospectus, in
light of the circumstances in which they were made) not misleading in any
material respect; if, in the judgment of the Managing Representative, any such
development referred to in clause (1), (2), (3) or (4) of this paragraph (c)
makes it impracticable or inadvisable to consummate the sale and delivery of the
Shares pursuant to this Underwriting Agreement by the Underwriters, at the
initial public offering price of the Shares.
(d) The Representatives must have received on each Closing Date
a certificate, dated such date, of the President or a Vice-President and the
chief financial or accounting officer of each of the Trust and the Investment
Adviser certifying that (1) the signers have carefully examined the Registration
Statement, the Prospectus, and this Underwriting Agreement, (2) the
representations of the Trust (with respect to the certificates from such Trust
officers) and the representations of the Investment Adviser (with respect to the
certificates from such officers of the Investment Adviser) in this Underwriting
Agreement are accurate on and as of the date of the certificate, (3) there has
not been any material adverse change in the general affairs, prospects,
management, business, financial condition or results of operations of the Trust
(with respect to the certificates from such Trust officers) or the Investment
Adviser (with respect to the certificates from such officers of the Investment
Adviser), which change would materially and adversely affect the ability of the
Trust or the Investment Adviser, as the case may be, to fulfill its obligations
under this Underwriting Agreement or the Investment Advisory Agreement, whether
or not arising from transactions in the ordinary course of business, (4) with
respect to the Trust only, to the knowledge of such officers after reasonable
investigation, no order suspending the effectiveness of the Registration
Statement, prohibiting the sale of any of the Shares or otherwise having a
material adverse effect on the Trust has been issued and no proceedings for any
such purpose are pending before or threatened by the Commission or any other
regulatory body, whether foreign or domestic, (5) to the knowledge of the
officers of the Investment Adviser, after reasonable investigation, no order
having a material adverse effect on the ability of the Investment Adviser to
fulfill its obligations under this Underwriting Agreement or the Investment
Advisory Agreement, as the case may be, has been issued and no proceedings for
any such purpose are pending before or threatened by the Commission or any other
regulatory body, whether foreign or domestic, and (6) each of the Trust (with
respect to the certificates from such Trust officers) and the Investment Adviser
(with respect to the certificates from such officers of the Investment Adviser)
has performed all of its respective agreements that this Underwriting Agreement
requires it to perform by such Closing Date (to the extent not waived in writing
by the Managing Representative).
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(e) The Representatives must receive on each Closing Date the
opinions dated such Closing Date substantially in the form of Annexes A and B to
this Underwriting Agreement from the counsel identified in each such Annex.
(f) The Representatives must receive on each Closing Date from
Skadden, Arps, Slate, Meagher & Flom LLP and its affiliated entities, its
counsel, an opinion dated such Closing Date with respect to the Trust, the
Shares, the Registration Statement and the Prospectus, this Underwriting
Agreement and the form and sufficiency of all proceedings taken in connection
with the sale and delivery of the Shares. Such opinion and proceedings shall
fulfill the requirements of this Section 6(f) only if such opinion and
proceedings are satisfactory in all respects to the Representatives. The Trust
and the Investment Adviser must have furnished to such counsel such documents as
counsel may reasonably request for the purpose of enabling them to render such
opinion.
(g) The Representatives must receive on the date this
Underwriting Agreement is signed and delivered by the Representatives a signed
letter, dated such date, substantially in the form of Annex C to this
Underwriting Agreement from the firm of accountants designated in such Annex.
The Representatives also must receive on each Closing Date a signed letter from
such accountants, dated as of such Closing Date, confirming on the basis of a
review in accordance with the procedures set forth in their earlier letter that
nothing has come to their attention during the period from a date not more than
five business days before the date of this Underwriting Agreement, specified in
the letter, to a date not more than five business days before such Closing Date,
that would require any change in their letter referred to in the foregoing
sentence.
All opinions, letters, evidence and certificates mentioned above
or elsewhere in this Underwriting Agreement will comply only if they are in form
and scope reasonably satisfactory to counsel for the Underwriters, provided that
any such documents, forms of which are annexed hereto, shall be deemed
satisfactory to such counsel if substantially in such form.
7. INDEMNIFICATION AND CONTRIBUTION.
(a) Each of the Trust and the Investment Adviser, jointly and
severally, will indemnify and hold harmless each Underwriter, the directors,
officers, employees and agents of such Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
and Section 20 of the Exchange Act from and against any and all losses, claims,
liabilities, expenses and damages (including, but not limited to, any and all
investigative, legal and other
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expenses reasonably incurred in connection with, and any and all amounts paid in
settlement of, any action, suit or proceeding between any of the indemnified
parties and any indemnifying parties or between any indemnified party and any
third party, or otherwise, or any claim asserted), to which such Underwriter or
any such person, or any of them, may become subject under the Securities Act,
the Exchange Act, the Investment Company Act, the Advisers Act or other federal
or state statutory law or regulation, at common law or otherwise, whether
foreign or domestic, insofar as such losses, claims, liabilities, expenses or
damages arise out of or are based on (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement, the
Preliminary Prospectus, the Prospectus, the sales materials, or any amendment or
supplement to the Registration Statement, the Preliminary Prospectus, the
Prospectus, the sales materials or in any documents filed under the Exchange Act
and deemed to be incorporated by reference into the Registration Statement, the
Preliminary Prospectus, the Prospectus, or in any application or other document
executed by or on behalf of the Trust or based on written information furnished
by or on behalf of the Trust filed in any jurisdiction in order to qualify the
Shares under the securities laws thereof or filed with the Commission, (ii) the
omission or alleged omission to state, in any or all such documents, a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) any act or failure to act or any alleged act or failure
to act by such Underwriter in connection with, or relating in any manner to, the
Shares or the offering contemplated hereby, and which is included as part of or
referred to in any loss, claim, liability, expense or damage arising out of or
based upon matters covered by clause (i) or (ii) above (provided, however, that
neither the Trust nor the Investment Adviser shall be liable under this clause
(iii) to the extent it is finally judicially determined by a court of competent
jurisdiction that such loss, claim, liability, expense or damage resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence, bad faith or willful
misconduct); provided that neither the Trust nor the Investment Adviser will be
liable to the extent that such losses, claims, liabilities, expenses or damages
are based on an untrue statement or omission or alleged untrue statement or
omission made in reliance on and in conformity with information relating to any
underwriter furnished in writing to the Trust by the Representative on behalf of
Underwriters expressly for inclusion in the Registration Statement, the
Preliminary Prospectus or the Prospectus. This indemnity agreement will be in
addition to any liability that the Trust or the Investment Adviser might
otherwise have.
(b) Each Underwriter will indemnify and hold harmless the Trust
and the Investment Adviser, each person, if any, who controls the Trust or the
Investment Adviser within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, each trustee of the Trust and each officer of
the Trust who signs
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the Registration Statement to the same extent as the foregoing indemnity from
the Trust or the Investment Adviser to the Underwriter, but only insofar as
losses, claims, liabilities, expenses or damages arise out of or are based on
any untrue statement or omission or alleged untrue statement or omission made in
reliance on and in conformity with information relating to such Underwriter
furnished in writing to the Trust by such Underwriter expressly for use in the
Registration Statement, the Preliminary Prospectus or Prospectus. This indemnity
will be in addition to any liability that such Underwriter might otherwise have;
provided, however, that in no case shall such Underwriter be liable or
responsible for any amount in excess of the fees and commissions received by the
Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section 7 will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim is to
be made against an indemnifying party or parties under this Section 7, notify
each such indemnifying party of the commencement of such action, enclosing a
copy of all papers served, but the omission to so notify such indemnifying party
will not relieve it from any liability that it may have to any indemnified party
under the foregoing provision of this Section 7 unless, and only to the extent
that, such omission results in the forfeiture of substantive rights or defenses
by the indemnifying party. If any such action is brought against any indemnified
party and it notifies the indemnifying party of its commencement, the
indemnifying party will be entitled to participate in and, to the extent that it
elects by delivering written notice to the indemnified party promptly after
receiving notice of the commencement of the action from the indemnified party,
jointly with any other indemnifying party similarly notified, to assume the
defense of the action, with counsel reasonably satisfactory to the indemnified
party, and after notice from the indemnifying party to the indemnified party of
its election to assume the defense, the indemnifying party will not be liable to
the indemnified party for any legal or other expenses except as provided below
and except for the reasonable costs of investigation subsequently incurred by
the indemnified party in connection with the defense. The indemnified party will
have the right to employ its own counsel in any such action, but the fees,
disbursements and other charges of such counsel will be at the expense of such
indemnified party unless (1) the employment of counsel by the indemnified party
has been authorized in writing by the indemnifying party, (2) the indemnified
party has reasonably concluded (based on the advice of counsel) that there may
be legal defenses available to it or other indemnified parties that are
different from or in addition to those available to the indemnifying party (3) a
conflict or potential conflict exists (based on advice of counsel to the
indemnified party) between the indemnified party and the indemnifying party (in
which case the indemnifying party will not have the right to direct the defense
of such action on behalf of the indemnified party) or (4) the
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indemnifying party has not in fact employed counsel reasonably satisfactory to
the indemnified party to assume the defense of such action within a reasonable
time after receiving notice of the commencement of the action, in each of which
cases the reasonable fees disbursements and other charges of counsel will be at
the expense of the indemnifying party or parties. Subject to the requirements of
Investment Company Act Release No. 11330, all such fees, disbursements and other
charges will be reimbursed by the indemnifying party promptly as they are
incurred. It is understood that the indemnifying party or parties shall not, in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the reasonable fees, disbursements and other charges of more than
one separate firm admitted to practice in such jurisdiction at any one time for
all such indemnified party or parties. An indemnifying party will not be liable
for any settlement of any action or claim effected without its written consent
(which consent will not be unreasonably withheld). No indemnifying party shall,
without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by this Section
7 (whether or not any indemnified party is a party thereto), unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising or that may arise out of such
claim, action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is
applicable but for any reason is held to be unavailable from the Trust, the
Investment Adviser or the Underwriters, the Trust, the Investment Adviser and
the Underwriters will contribute to the total losses, claims, liabilities,
expenses and damages (including any investigative, legal and other expenses
reasonably incurred in connection with, and any amount paid in settlement of,
any action, suit or proceeding or any claim asserted, but after deducting any
contribution received by the Trust and the Investment Adviser from persons other
than the Underwriter, such as persons who control the Trust or the Investment
Adviser within the meaning of the Securities Act or the Exchange Act, officers
of the Trust who signed the Registration Statement and directors of the Trust,
who may also be liable for contribution) to which the Trust, the Investment
Adviser and the Underwriters may be subject in such proportion as shall be
appropriate to reflect the relative benefits received by the Trust and the
Investment Adviser on the one hand and the Underwriters on the other. The
relative benefits received by the Trust and the Investment Adviser (treated
jointly for this purpose as one person) on the one hand and the Underwriters on
the other hand shall be deemed to be in the same proportion as the total net
proceeds from the offering (before deducting expenses) received by the Trust
bear to the total fees and commissions received by the Underwriters. If, but
only if, the allocation provided by the foregoing sentence is not permitted by
applicable law, the allocation of contribution
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shall be made in such proportion as is appropriate to reflect not only such
relative benefits referred to in the foregoing sentence but also the relative
fault of the Trust and the Investment Adviser (treated jointly for this purpose
as one person) on the one hand and the Underwriters on the other hand in
connection with respect to the statements or omissions or alleged statements or
omissions that resulted in the losses, claims, liabilities, expenses or damages
(including any investigative, legal or other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claim asserted), as well as any other relevant equitable
considerations appropriate in the circumstances. Such relative fault of the
parties shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Trust, the Investment
Adviser or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission and any other equitable considerations appropriate in the
circumstances. The Trust, the Investment Adviser and the Underwriters agree that
it would not be just and equitable if contributions pursuant to this Section
7(d) were to be determined by pro rata allocation or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, liability, expense or damage , or action in respect
thereof, referred to above in this Section 7(d) shall be deemed to include, for
purposes of this Section 7(d) any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding any other provisions of this Section 7(d), the
Underwriters shall not be required to contribute any amount in excess of the
fees and commissions received by it and no person found guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7(d), any person who
controls a party to this Agreement within the meaning of the Securities Act will
have the same rights to contribution as that party, and each trustee of the
Trust and each officer of the Trust who signed the Registration Statement will
have the same rights to contribution as the Trust, subject in each case to the
provisions hereof. Any party entitled to contribution will, promptly after
receipt of notice of commencement of any action against such party in respect of
which a claim for contribution may be made under this Section 7(d), notify such
party or parties from whom contribution may be sought, but the omission so to
notify will not relieve the party or parties from whom contribution may be
sought from any other obligation it or they may have under this Section 7(d). No
party will be liable for contribution with respect to any action or claim
settled without its written consent (which consent shall not be unreasonably
withheld). The Underwriter's obligations to contribute pursuant to this Section
7 are several in
24
<PAGE> 25
proportion to the respective number of Firm Shares set forth opposite their
names in Schedule 1 (or such number of Firm Shares as determined pursuant to
Section 9 hereof) and not joint.
(e) Notwithstanding any other provisions in this Section 7, no
party shall be entitled to indemnification or contribution under this Agreement
against any loss, claim, liability, expense or damage arising by reason of such
person's willful misfeasance, bad faith or gross negligence in the performance
of its duties hereunder, or by reason of such person's reckless disregard of
such person's obligations and duties hereunder.
(f) The Trust and the Investment Adviser acknowledge that the
statements with respect to (1) the public offering of the Shares as set forth on
the cover page of, (2) stabilization on the inside cover page of and (3) the
statements relating to the same and to selling concessions and reallowances of
selling concessions under the caption "Underwriting" in the Prospectus
constitute the only information furnished in writing to the Trust by the
Representative on behalf of the Underwriters expressly for use in such document.
The Underwriters severally confirm that these statements are correct in all
material respects and were so furnished by or on behalf of the Underwriters
severally for use in the Prospectus.
8. TERMINATION. This Underwriting Agreement may be terminated by the
Managing Representative by notifying the Trust at any time:
(a) before the later of the effectiveness of the Registration
Statement and the time when any of the Shares are first generally offered
pursuant to this Underwriting Agreement by the Managing Representative to
dealers by letter or telegram;
(b) at or before any Closing Date if, in the sole judgment of
the Managing Representative, payment for and delivery of any Shares is rendered
impracticable or inadvisable because (1) trading in the equity securities of the
Trust is suspended by the Commission or by the principal exchange that lists the
Shares, (2) trading in securities generally on the New York Stock Exchange or
the Nasdaq Stock Market shall have been suspended or limited or minimum or
maximum prices shall have been generally established on such exchange or
over-the-counter market, or, (3) additional material governmental restrictions,
not in force on the date of this Underwriting Agreement, have been imposed upon
trading in securities or trading has been suspended on any U.S. securities
exchange, (4) a general banking moratorium has been established by U.S. federal
or New York authorities or (5) any material adverse
25
<PAGE> 26
change in the financial or securities markets in the United States or in
political, financial or economic conditions in the United States or any outbreak
or material escalation of hostilities or declaration by the United States of a
national emergency or war or other calamity or crisis shall have occurred the
effect of any of which is such as to make it, in the sole judgement of the
Managing Representative, impracticable or inadvisable to market the Shares on
the terms and in the manner contemplated by the Prospectus; or
(c) at or before any Closing Date, if any of the conditions
specified in Section 6 have not been fulfilled when and as required by this
Underwriting Agreement.
9. SUBSTITUTION OF UNDERWRITERS. If one or more of the Underwriters
fails (other than for a reason sufficient to justify the termination of this
Underwriting Agreement) to purchase on any Closing Date the Shares agreed to be
purchased on such Closing Date by such Underwriter or Underwriters, the Managing
Representative may find one or more substitute underwriters to purchase such
Shares or make such other arrangements as the Managing Representative deems
advisable, or one or more of the remaining Underwriters may agree to purchase
such Shares in such proportions as may be approved by the Managing
Representative, in each case upon the terms set forth in this Underwriting
Agreement. If no such arrangements have been made within 36 hours after such
Closing Date, and
(a) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date does not exceed 10% of the Shares that the
Underwriters are obligated to purchase on such Closing Date, each of the
nondefaulting Underwriters will be obligated to purchase such Shares on the
terms set forth in this Underwriting Agreement in proportion to their respective
obligations under this Underwriting Agreement, or
(b) the number of Shares to be purchased by the defaulting
Underwriters on such Closing Date exceeds 10% of the Shares to be purchased by
all the Underwriters on such Closing Date, the Trust will be entitled to an
additional period of 24 hours within which to find one or more substitute
underwriters reasonably satisfactory to the Managing Representative to purchase
such Shares on the terms set forth in this Underwriting Agreement.
In any such case, either the Managing Representative or the Trust will
have the right to postpone the applicable Closing Date for not more than five
business days in order that necessary changes and arrangements (including any
necessary amendments or supplements to the Registration Statement or the
Prospectus) may be
26
<PAGE> 27
effected by the Managing Representative and the Trust. If the number of Shares
to be purchased on such Closing Date by such defaulting Underwriter or
Underwriters exceeds 10% of the Shares that the Underwriters are obligated to
purchase on such Closing Date, and none of the nondefaulting Underwriters or the
Trust makes arrangements pursuant to this Section within the period stated for
the purchase of the Shares that the defaulting Underwriters agreed to purchase,
this Underwriting Agreement will terminate without liability on the part of any
nondefaulting Underwriter, the Trust or the Investment Adviser, except as
provided in Sections 5(g) and 7 hereof. This Section will not affect the
liability of any defaulting Underwriter to the Trust or the nondefaulting
Underwriters arising out of such default. A substitute underwriter will become a
Underwriter for all purposes of this Underwriting Agreement.
10. MISCELLANEOUS.
(a) The reimbursement, indemnification and contribution
agreements in Sections 5(g) and 7 hereof and the representations of the Trust,
the Investment Adviser and the Underwriters in this Underwriting Agreement will
remain in full force and effect regardless of any termination of this
Underwriting Agreement. The reimbursement, indemnification and contribution
agreements in Sections 5(g) and 7 hereof and the representations and agreements
of the Trust, the Investment Adviser and the Underwriters in this Underwriting
Agreement shall survive the Closing Dates and shall remain in full force and
effect regardless of any investigation made by or on behalf of any Underwriter,
the Trust, the Investment Adviser or any controlling person and delivery of and
payment for the Shares.
(b) This Underwriting Agreement is for the benefit of the
Underwriters, the Trust, the Investment Adviser and their successors and
assigns, and, to the extent expressed in this Underwriting Agreement, for the
benefit of persons controlling any of the Underwriters, the Trust, the
Investment Adviser and directors and officers of the Trust and the Investment
Adviser, and their respective successors and assigns, and no other person,
partnership, association or corporation will acquire or have any right under or
by virtue of this Underwriting Agreement. The term "successors and assigns" does
not include any purchaser of the Shares from any Underwriter merely because of
such purchase.
(c) All notices and communications under this Underwriting
Agreement will be in writing, effective only on receipt and mailed or delivered,
by messenger, facsimile transmission or otherwise, to the Representatives in
care of PaineWebber Incorporated, Attn: Financial Institutions Group, 1285
Avenue of the
27
<PAGE> 28
Americas, New York, New York 10019, to the Trust or the Investment Adviser at 24
Federal Street, Boston, MA 02110, Attn: Chief Legal Officer.
(d) This Underwriting Agreement may be signed in multiple
counterparts that taken as a whole constitute one agreement.
(e) This Underwriting Agreement will be governed by and
construed in accordance with the laws of the State of New York without reference
to choice of law principles thereof.
(f) A copy of the Agreement and Declaration of Trust of each of
the Trust and the Investment Adviser is on file with the Secretary of The
Commonwealth of Massachusetts, and notice hereby is given that this Underwriting
Agreement is executed on behalf of the respective Trustees of the Trust and the
Investment Adviser as Trustees and not individually and that the obligations or
arising out of this Underwriting Agreement are not binding upon any of the
Trustees or beneficiaries individually but are binding only upon the respective
assets and properties of the Trust and the Investment Adviser.
28
<PAGE> 29
Please confirm that the foregoing correctly sets forth the agreement
between us.
Very truly yours,
Eaton Vance Senior Income Trust
By: ___________________________________
Name:
Title:
Eaton Vance Management
By: ___________________________________
Name:
Title:
Confirmed:
PaineWebber Incorporated
A.G. Edwards & Sons, Inc.
Prudential Securities, Inc.
Dain Rauscher Wessels
Fahnestock & Co., Inc.
First of Michigan Corporation
Gruntal & Co., L.L.C.
Interstate/Johnson Lane Corporation
Janney Montgomery Scott Inc.
Legg Mason Wood Walker Incorporated
McDonald & Company Securities, Inc.
Wheat First Union
As Representatives of the Underwriters
c/o PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
By: PaineWebber Incorporated
By: _____________________________
Name:
Title:
Acting on behalf of itself
and the Underwriters
named in Schedule 1
<PAGE> 30
SCHEDULE 1
NUMBER OF FIRM SHARES
NAME TO BE PURCHASED
PaineWebber Incorporated
A.G. Edwards & Sons, Inc.
Prudential Securities Incorporated
Dain Rauscher Wessels
Fahnestock & Co. Inc.
First of Michigan Corporation
Gruntal & Co., L.L.C.
Interstate/Johnson Lane Corporation
Janney Montgomery Scott Inc.
Legg Mason Wood Walker, Incorporated
McDonald & Company Securities, Inc.
Wheat First Securities, Inc.
ABN AMRO Chicago Corporation
Bear, Stearns & Co. Inc.
BT Alex.Brown Incorporated
Chase Securities Inc.
CIBC Oppenheimer Corp.
Schroder & Co. Inc.
SG Cowen Securities Corporation
Advest, Inc.
Robert W. Baird & Co. Incorporated
J.C. Bradford & Co.
Crowell, Weedon & Co.
Everen Securities, Inc.
Fifth Third/The Ohio Company
First Albany Corporation
Fleet Securities, Inc.
Gibralter Securities Co.
Josephthal & Co. Inc.
Morgan Keegan & Company, Inc.
<PAGE> 31
Parker/Hunter Incorporated
Pennsylvania Merchant Group
Piper Jaffray Inc.
Ragen Mackenzie Incorporated
Roney Capital Markets
Scott & Stringfellow, Inc.
Stephens Inc.
Stifel, Nicolaus & Company, Incorporated
Suntrust Equitable Securities Corporation
Sutro & Co. Incorporated
C.E. Unterberg, Towbin
Van Kasper & Company
Allen & Company of Florida Inc.
Ferris, Baker Watts, Inc.
First Southwest Company
J.B. Hanauer & Co.
Johnston, Lemon & Co. Incorporated
JW Genesis Capital Markets, LLC
Moors & Cabot, Inc.
Natcity Investments, Inc.
David A. Noyes & Company
Paulson Investment Company, Incorporated
Southwest Securities, Inc.
M.L. Stern & Co., Inc.
TD Securities
Utendahl Capital Partners, L.P.
Total Underwriters (56)
<PAGE> 32
ANNEX A
FORM OF OPINION OF
KIRKPATRICK & LOCKHART LLC REGARDING THE TRUST
11. The Registration Statement and all post-effective amendments, if
any, are effective under the Securities Act and no stop order with respect
thereto has been issued and no proceeding for that purpose has been instituted
or, to the best of our knowledge, is threatened by the Commission. Any filing of
the Prospectus or any supplements thereto required under Rule 497 of the
Securities Act Rules prior to the date hereof have been made in the manner and
within the time required by such rule.
12. The Trust has been duly formed and is validly existing as a
Massachusetts business trust under the laws of the Commonwealth of
Massachusetts, with full power and authority to conduct all the activities
conducted by it, to own or lease all assets owned (or to be owned) or leased (or
to be leased) by it and to conduct its business as described in the Registration
Statement and Prospectus, and the Trust is duly licensed and qualified to do
business and in good standing in each jurisdiction in which its ownership or
leasing of property or its conducting of business requires such qualification,
and the Trust owns, possesses or has obtained and currently maintains all
governmental licenses, permits, consents, orders, approvals and other
authorizations, whether foreign or domestic, necessary to carry on its business
as contemplated in the Prospectus. The Trust has no subsidiaries.
13. The capitalization of the Trust is as set forth in the
Registration Statement and the Prospectus. The Shares of Beneficial Interest of
the Trust conform in all respects to the description of them in the Prospectus.
All the outstanding Shares of Beneficial Interest have been duly authorized and
are validly issued, fully paid and nonassessable. The Shares to be issued and
delivered to and paid for by the Underwriters in accordance with the
Underwriting Agreement against payment therefor as provided by the Underwriting
Agreement have been duly authorized and when issued and delivered to the
Underwriters will have been validly issued and will be fully paid and
nonassessable (except as described in the Registration Statement). No person is
entitled to any preemptive or other similar rights with respect to the Shares.
14. The Trust is duly registered with the Commission under the
Investment Company Act as a non-diversified, closed-end management investment
company and all action under the Securities Act, the Investment Company Act, the
Securities Act Rules and the Investment Company Act Rules, as the case may be,
necessary to make the public offering and consummate the sale of the Shares as
provided in the Underwriting Agreement has or will have been taken by the Trust.
A-1
<PAGE> 33
15. The Trust has full power and authority to enter into each of the
Underwriting Agreement, the Investment Advisory Agreement, the Custody Agreement
and the Transfer Agency Agreement (collectively, the "Trust Agreements") and to
perform all of the terms and provisions thereof to be carried out by it and (A)
each Trust Agreement has been duly and validly authorized, executed and
delivered by the Trust, (B) each Trust Agreement complies in all material
respects with all applicable provisions of the Investment Company Act, the
Advisers Act , the Investment Company Act Rules and the Advisers Act Rules, as
the case may be, and (C) assuming due authorization, execution and delivery by
the other parties thereto, each Trust Agreement constitutes the legal, valid and
binding obligation of the Trust enforceable in accordance with its terms, (1)
subject, as to enforcement, to applicable bankruptcy, insolvency and similar
laws affecting creditors' rights generally and to general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law) and (2) as rights to indemnity thereunder may be limited by federal or
state securities laws.
16. None of (A) the execution and delivery by the Trust of the Trust
Agreements, (B) the issue and sale by the Trust of the Shares as contemplated by
the Underwriting Agreement and (C) the performance by the Trust of its
obligations under the Trust Agreements or consummation by the Trust of the other
transactions contemplated by the Trust Agreements conflicts with or will
conflict with, or results or will result in a breach of, the Declaration of
Trust or the By-laws of the Trust or any agreement or instrument to which the
Trust is a party or by which the Trust is bound, or any law, rule or regulation,
or order of any court, governmental instrumentality, securities exchange or
association or arbitrator, whether foreign or domestic, applicable to the Trust,
except that we express no opinion as to the securities or "blue sky" laws
applicable in connection with the purchase and distribution of the Shares by the
Underwriters pursuant to the Underwriting Agreement.
17. The Trust is not currently in breach of, or in default under, any
written agreement or instrument to which it is a party or by which it or its
property is bound or affected.
18. No consent, approval, authorization or order of any court or
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required by the Trust for the consummation by the Trust
of the transactions to be performed by the Trust or the performance by the Trust
of all the terms and provisions to be performed by or on behalf of it in each
case as contemplated in the Trust Agreements, except such as (A) have been
obtained under the Securities Act, the Investment Company Act, the Advisers Act,
the Securities Act Rules, the Investment Company Act Rules and the Advisers Act
Rules and (B) may be required by the New York Stock Exchange or under state
securities or "blue sky" laws in connection with the purchase and distribution
of the Shares by the Underwriters pursuant to the Underwriting Agreement.
A-2
<PAGE> 34
19. The Shares have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance, and the Trust's Registration
Statement on Form 8-A under the 1934 Act is effective.
20. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to our knowledge, threatened
against or affecting the Trust, which is required to be disclosed in the
Prospectus that is not disclosed in the Prospectus, and there are no contracts,
franchises or other documents that are of a character required to be described
in, or that are required to be filed as exhibits to, the Registration Statement
that have not been described or filed as required.
21. The Trust does not require any tax or other rulings to enable it
to qualify as a regulated investment company under Subchapter M of the Code.
22. Each of the section in the Prospectus entitled "Distributions and
Taxes" and the section in the Statement of Additional Information entitled
"Taxes" is a fair summary of the principal United States federal income tax
rules currently in effect applicable to the Trust and to the purchase, ownership
and disposition of the Shares.
13. The Registration Statement (except the financial statements and
schedules and other financial data included therein as to which we express no
view), at the time it became effective, and the Prospectus (except as
aforesaid), as of the date thereof, complied as to form in all material respects
to the requirements of the Securities Act, the Investment Company Act and the
rules and regulations of the Commission thereunder.
In rendering our opinion, we have relied, as to factual matters,
upon the attached written certificates and statements of officers of the Trust.
In connection with the registration of the Shares, we have advised the
Trust as to the requirements of the Securities Act, the Investment Company Act
and the applicable rules and regulations of the Commission thereunder and have
rendered other legal advice and assistance to the Trust in the course of its
preparation of the Registration Statement and the Prospectus. Rendering such
assistance involved, among other things, discussions and inquiries concerning
various legal and related subjects and reviews of certain corporate records,
documents and proceedings. We also participated in conferences with
representatives of the Trust and its accountants at which the contents of the
Registration Statement and Prospectus and related matters were discussed. With
your permission, we have not undertaken, except as otherwise indicated herein,
to determine independently, and do not assume any responsibility for, the
accuracy, completeness or fairness of the statements in the Registration
Statement or Prospectus. On the basis of the information which was developed in
the course of the performance of the services referred to above, no information
has come to our attention that would lead us to believe that the
A-3
<PAGE> 35
Registration Statement, at the time it became effective, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, as of its date and as of such Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or that any
amendment or supplement to the Prospectus, as of its respective date, and as of
such Closing Date, contained any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements in
the Prospectus, in the light of the circumstances under which they were made,
not misleading (except the financial statements, schedules and other financial
data included therein, as to which we express no view).
A-4
<PAGE> 36
ANNEX B
FORM OF OPINION OF INTERNAL COUNSEL
REGARDING EATON VANCE MANAGEMENT
1. Eaton Vance has been duly formed and is validly existing as a
Massachusetts business trust under the laws of its jurisdiction of incorporation
with full power and authority to conduct all of the activities conducted by it,
to own or lease all of the assets owned or leased by it and to conduct its
business as described in the Registration Statement and Prospectus, and Eaton
Vance is duly licensed and qualified and in good standing in each other
jurisdiction in which it is required to be so qualified and Eaton Vance owns,
possesses or has obtained and currently maintains all governmental licenses,
permits, consents, orders, approvals and other authorizations, whether foreign
or domestic, necessary for Eaton Vance to carry on its business as contemplated
in the Registration Statement and the Prospectus.
2. Eaton Vance is duly registered as an investment adviser under the
Advisers Act and is not prohibited by the Advisers Act, the Investment Company
Act, the Advisers Act Rules or the Investment Company Act Rules from acting as
investment adviser for the Trust as contemplated by the Investment Advisory
Agreement, the Registration Statement and the Prospectus.
3. Eaton Vance has full power and authority to enter into each of
the Underwriting Agreement, the Investment Advisory Agreement, the
Administration Agreement and the Shareholder Servicing Agreement (collectively,
the "Eaton Vance Agreements") and to carry out all the terms and provisions
thereof to be carried out by it, and each such agreement has been duly and
validly authorized, executed and delivered by Eaton Vance; each Eaton Vance
Agreement complies in all material respects with all provisions of the
Investment Company Act, the Advisers Act, the Investment Company Act Rules and
the Advisers Act Rules; and assuming due authorization, execution and delivery
by the other parties thereto, each Eaton Vance Agreement constitutes a legal,
valid and binding obligation of Eaton Vance, enforceable in accordance with its
terms, (1) subject, as to enforcement, to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and to general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (2) as rights to indemnity thereunder may be limited by
federal or state securities laws.
4. Neither (A) the execution and delivery by Eaton Vance of any
Eaton Vance Agreement nor (B) the consummation by Eaton Vance of the
transactions contemplated by, or the performance of its obligations under any
Eaton Vance Agreement conflicts or will conflict with, or results or will result
in a breach of, the Agreement and Declaration of Trust or By-Laws of Eaton Vance
or any agreement or instrument to which
B-1
<PAGE> 37
Eaton Vance is a party or by which Eaton Vance is bound, or any law, rule or
regulation, or order of any court, governmental instrumentality, securities
exchange or association or arbitrator, whether foreign or domestic, applicable
to Eaton Vance.
5. No consent, approval, authorization or order of any court,
governmental agency or body or securities exchange or association, whether
foreign or domestic, is required for the consummation of the transactions
contemplated in, or the performance by Eaton Vance of its obligations under, any
Eaton Vance Agreement, except such as have been obtained under the Investment
Company Act, the Advisers Act, the Securities Act, the Investment Company Act
Rules, the Advisers Act Rules and the Securities Act Rules.
6. The description of Eaton Vance and its business, and the
statements attributable to Eaton Vance, in the Registration Statement and the
Prospectus complies with the requirements of the Securities Act, the Investment
Company Act, the Securities Act Rules and the Investment Company Act Rules and
do not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
7. There is no action, suit or proceeding before or by any court,
commission, regulatory body, administrative agency or other governmental agency
or body, foreign or domestic, now pending or, to our knowledge, threatened
against or affecting Eaton Vance of a nature required to be disclosed in the
Registration Statement or Prospectus or that might reasonably result in any
material adverse change in the condition, financial or otherwise, business
affairs or business prospects of Eaton Vance or the ability of Eaton Vance to
fulfill its respective obligations under any Eaton Vance Agreement.
8. The Registration Statement (except the financial statements and
schedules and other financial data included therein as to which we express no
view), at the time it became effective, and the Prospectus (except as
aforesaid), as of the date thereof, appeared on their face to be appropriately
responsive in all material respects to the requirements of the Securities Act,
the Investment Company Act and the rules and regulations of the Commission
thereunder.
In rendering our opinion, we have relied, as to factual matters, upon
the attached written certificates and statements of officers of Eaton Vance.
In connection with the registration of the Shares, we have advised
Eaton Vance as to the requirements of the Securities Act, the Investment Company
Act and the applicable rules and regulations of the Commission thereunder and
have rendered other legal advice and assistance to Eaton Vance in the course of
the preparation of the registration Statement and the Prospectus. Rendering such
assistance involved, among other things, discussions and inquiries concerning
various legal and related subjects and reviews of certain corporate records,
documents and proceedings. We also participated
B-2
<PAGE> 38
in conferences with representatives of the Trust and its accountants and Eaton
Vance at which the contents of the registration and Prospectus and related
matters were discussed. With your permission, we have not undertaken, except as
otherwise indicated herein, to determine independently, and do not assume any
responsibility for, the accuracy, completeness or fairness of the statements in
the Registration Statement or Prospectus. On the basis of the information which
was developed in the course of the performance of the services referred to
above, no information has come to our attention that would lead us to believe
that the Registration Statement, at the time it became effective, contained any
untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not misleading,
or that the Prospectus, as of its date and as of such Closing Date, contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading or that any
amendment or supplement to the Prospectus, as of its respective date, and as of
such Closing Date, contained any untrue statement of a material fact or omitted
or omits to state a material fact necessary in order to make the statements in
the Prospectus, in the light of the circumstances under which they were made,
not misleading (except the financial statements, schedules and other financial
data included therein, as to which we express no view).
B-3
<PAGE> 39
ANNEX C
FORM OF ACCOUNTANT'S LETTER
October 27, 1998
The Board of Trustees of
Eaton Vance Senior Income Trust
24 Federal Street
Boston, Massachusetts 02110
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
as Managing Representative of the Underwriters
Ladies and Gentlemen:
We have audited the statement of assets and liabilities of Eaton Vance
Senior Income Trust (the "Trust") as of October 23, 1998 included in the
Registration Statement on Form N-2 filed by the Trust under the Securities Act
of 1933 (the "Act") (File No. 333-64151) and under the Investment Company Act of
1940 (the "1940 Act") (File No. 811-09013); such statement and our report with
respect to such statement are included in the Registration Statement.
In connection with the Registration Statement:
1. We are independent public accountants with respect to the Trust
within the meaning of the Act and the applicable rules and regulations
thereunder.
2. In our opinion, the statement of assets and liabilities included in
the Registration Statement and audited by us complies as to form in
all respects with the applicable accounting requirements of the Act,
the 1940 Act and the respective rules and regulations thereunder.
3. For purposes of this letter we have read the minutes of all
meetings of the Shareholders, the Board of Trustees and all Committees
of the Board of Trustees of the Trust as set forth in the minute books
at the offices of the Trust, officials of the Trust having advised us
that the minutes of all such meetings through October 26, 1998, were
set forth therein.
C-1
<PAGE> 40
4. Trust officials have advised us that no financial statements as of
any date subsequent to October 23, 1998, are available. We have made
inquiries of certain officials of the Trust who have responsibility
for financial and accounting matters regarding whether there was any
change at October 27, 1998, in the capital shares or net assets of the
Trust as compared with amounts shown in the October 23, 1998 statement
of assets and liabilities included in the Registration Statement,
except for changes that the Registration Statement discloses have
occurred or may occur. On the basis of our inquiries and our reading
of the minutes as described in Paragraph 3, nothing came to our
attention that caused us to believe that there were any such changes.
The foregoing procedures do not constitute an audit made in accordance
with generally accepted auditing standards. Accordingly, we make no
representations as to the sufficiency of the foregoing procedures for your
purposes.
This letter is solely for the information of the addressees and to
assist the underwriters in conducting and documenting their investigation of the
affairs of the Trust in connection with the offering of the securities covered
by the Registration Statement, and is not to be used, circulated, quoted or
otherwise referred to within or without the underwriting group for any other
purpose, including but not limited to the registration, purchase or sale of
securities, nor is it to be filed with or referred to in whole or in part in the
Registration Statement or any other document, except that reference may be made
to it in the underwriting agreement or in any list of closing documents
pertaining to the offering of the securities covered by the Registration
Statement.
Very truly yours,
DELOITTE & TOUCHE LLP
C-2
<PAGE> 1
Exhibit (h)(2)
AMENDED AND RESTATED
MASTER AGREEMENT AMONG UNDERWRITERS
June 11, 1984
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Gentlemen:
1. General. We understand that PaineWebber Incorporated ("PWI") is
entering into this Agreement in counterparts with us and other firms who may be
underwriters for issues of securities for which PWI is acting as Representative
or one of the Representatives of the several underwriters. This Agreement shall
apply to any offering of securities in which we elect to act as an underwriter
after receipt of a telegram, telex or other form of written communication
("Written Communication") from PWI stating the identity of the issuer and, if
different from the issuer, the seller or sellers of such securities, the
securities proposed to be offered, whether the underwriters are afforded an
option to purchase additional securities to cover over-allotments, the price to
underwriters, public offering price and date, interest rate, if any, and other
variables, the amount of our proposed participation and the names of the other
Representatives, if any, and that our participation as an underwriter in the
proposed offering shall be subject to the provisions of this Agreement. Upon our
telegraphic acceptance of such Written Communication we shall become one of the
underwriters of such issue for the amount specified in the Written
Communication, and this Agreement shall become binding upon us and the
Representatives with respect to such offering. The obligations of each
underwriter shall be several and not joint. The issuer of the securities offered
in any offering of securities made pursuant to this Agreement is hereinafter
referred to as the "Company", and such securities are hereinafter called the
"Securities". The seller or sellers of the Securities (including, if applicable,
the Company) are hereinafter referred to collectively as the "Seller". All
references herein to "you" or the "Representatives" shall include PWI and the
other firms, if any, which are named as Representatives in the Written
Communication. The Securities to be offered in any offering may but need not be
registered in a shelf registration pursuant to Rule 415 under the Securities Act
of 1933 (the "Securities Act"). The following provisions of this Agreement shall
apply separately to each individual offering of Securities.
2. Underwriting Arrangements. The Representatives shall determine which
signatories to this Agreement will be invited to become underwriters for the
Securities. Changes may be made by the Representatives in those who are to be
underwriters and in the respective amounts of Securities to be purchased by
them, but the amount of Securities to be purchased by us as set forth in the
Written Communication to us will not be changed without our consent except as
provided herein or in the underwriting agreement (the "Underwriting Agreement")
with the Seller covering the Securities. We authorize you on our behalf to
execute and deliver the Underwriting Agreement in such form as you determine and
to take such action as you deem
<PAGE> 2
advisable in connection with the performance of the Underwriting Agreement and
this Agreement and the purchase, carrying, sale and distribution of the
Securities, including the election to exercise any option to purchase additional
Securities to cover over-allotments if so provided. The parties on whose behalf
you execute the Underwriting Agreement are hereinafter called the
"Underwriters". You may waive performance or satisfaction by the Seller of
certain of its obligations or conditions included in the Underwriting Agreement,
if in your judgment such waiver will not have a material adverse effect upon the
interests of the Underwriters. It is understood that, if so specified in the
Written Communication for the issue, arrangements may be made for the sale of
Securities by the Seller pursuant to delayed delivery contracts. Such Securities
are hereinafter referred to as "Delayed Delivery Securities", and such contracts
as "Delayed Delivery Contracts". References herein to delayed delivery and
Delayed Delivery Contracts apply only to offerings in which delayed delivery is
authorized. The term "underwriting obligation", as used in this Agreement with
respect to any Underwriter, shall refer to the principal amount or number of
shares of the Securities which such Underwriter is obligated to purchase
pursuant to the provisions of the Underwriting Agreement, without regard to any
reduction in such obligation as a result of Delayed Delivery Contracts which are
entered into by the Seller.
As compensation for your services we will pay a management fee as specified
in the Written Communication for the issue (without deduction in respect of
Delayed Delivery Securities), and you may charge our account therefor. If there
is more than one Representative, such compensation will be divided among the
Representatives in such proportions as they determine.
3. Prospectus and Registration Statement. You will furnish to us as soon
as possible copies of the prospectus or supplemented prospectus to be used in
connection with the offering of the Securities. As used herein with respect to
an offering of Securities registered under the Securities Act, "Prospectus"
means the form of prospectus (including any supplements) authorized for use in
connection with such offering, and "Registration Statement" means the
registration statement, as amended, filed under the Securities Act pursuant to
which the Securities are registered under the Securities Act. As used herein
with respect to an offering of Securities not registered under the Securities
Act, "Prospectus" or "Registration Statement" means the form of final offering
circular (including any supplements) authorized for use in connection with such
offering and "preliminary prospectus" means any preliminary offering circular
authorized for use in connection with such offering. We consent to being named
in the prospectus as one of the Underwriters of the Securities.
4. Public Offering. (a) In connection with the public offering of the
Securities, we authorize you, in your discretion
(i) to determine the time of the initial public offering, to change
the public offering price and the concessions and discounts to dealers
after the initial public offering, to furnish the Company with the
information to be included in the Registration Statement or Prospectus with
respect to the terms of offering, and to determine all matters relating to
advertising and communications with dealers or others;
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<PAGE> 3
(ii) to reserve for sale to dealers selected by you ("Selected
Dealers") and to others, and to reserve for sale pursuant to Delayed
Delivery Contracts (including Delayed Delivery Contracts arranged by you
through Selected Dealers), all or any part of our Securities, which
reservations for sales to others and for sales pursuant to Delayed Delivery
Contracts not arranged through Selected Dealers are to be as nearly as
practicable in proportion to the respective underwriting obligations of the
Underwriters, unless you agree to a smaller proportion at the request of
any Underwriter, and such other reservations to be in such proportions as
you determine, and, from time to time, to add to the reserved Securities
any Securities retained by us remaining unsold and to release to us any of
our Securities reserved but not sold;
(iii) to sell reserved Securities, as nearly as practicable in
proportion to the respective reservations, to Selected Dealers at the
public offering price less the Selected Dealers' concession and to others
at the public offering price; and
(iv) to buy Securities for our account from Selected Dealers at the
public offering price less such amount not in excess of the Selected
Dealers' concession as you determine.
If, in accordance with the terms of offering set forth in the Prospectus,
the offering of the Securities is not at a fixed price but at varying prices set
by individual Underwriters based on market prices or at negotiated prices, the
provisions of clause (i) above relating to your right to change the public
offering price and concessions and discounts to dealers shall not apply, and
other references in this Section and elsewhere in this Agreement to the public
offering price or Selected Dealers' concession shall be deemed to mean the
prices and concessions determined by you from time to time in your discretion.
Sales of Securities between Underwriters may be made with your prior
consent, or as you deem advisable for Blue Sky purposes.
After advice from you that the Securities are released for public offering,
we will offer to the public in conformity with the terms of offering set forth
in the Prospectus such of our Securities as you advise us are not reserved.
Any Securities sold by us (otherwise than through you) which you purchase
in the open market for the account of any Underwriter will be repurchased by us
on demand at a price equal to the total cost of such purchase including any
taxes on redelivery, commissions, accrued interest and dividends. Securities
delivered on such repurchase need not be the identical certificates so
purchased. In lieu of such action you may in your discretion sell for our
account the Securities so purchased and debit or credit our account for the loss
or profit resulting from such sale, or charge our account with an amount not in
excess of the Selected Dealers' concession with respect to such Securities.
(b) We authorize you to act on our behalf in making all arrangements for
the solicitation of offers to purchase Delayed Delivery Securities from the
Seller pursuant to Delayed Delivery Contracts and we agree that all such
arrangements will be made only through you,
3
<PAGE> 4
directly or through Selected Dealers (including Underwriters acting as Selected
Dealers) to whom you may pay a commission as provided in the Prospectus and
herein.
The obligation of each of the Underwriters to purchase and pay for
Securities as set forth in the Underwriting Agreement shall be reduced in the
proportion provided for therein, except that (i) as to any Delayed Delivery
Contract determined by you, in your discretion, to have been directed and
allocated by a purchaser to a particular Underwriter, such obligation of such
Underwriters shall be reduced by the amount of Delayed Delivery Securities
covered thereby, (ii) as to any Delayed Delivery Contracts for which
arrangements are made through Selected Dealers, such obligation of each
Underwriter shall be reduced as nearly as practicable in the proportion
determined by you that the amount of Securities of such Underwriter reserved and
sold pursuant to Delayed Delivery Contracts arranged through Selected Dealers
bears to the total Securities so reserved and sold, and (iii) such reductions
shall be rounded, as you shall determine, to the nearest $1,000 principal amount
or whole share of the Securities.
The fee payable to each Underwriter with respect to Delayed Delivery
Securities pursuant to the Underwriting Agreement shall be credited to the
account of such Underwriter based upon the amount by which such Underwriter's
underwriting obligation is reduced as specified in the preceding paragraph.
If the amount of Delayed Delivery Securities applied to reduce an
Underwriter's underwriting obligation and the amount of Securities sold by or
for the account of such Underwriter exceeds such Underwriter's underwriting
obligation, there shall be credited to such Underwriter in connection with such
excess amount of Securities only the amount of the Selected Dealers' concession
with respect thereto.
The commissions payable to Selected Dealers in respect of Delayed Delivery
Contracts arranged through them shall be charged to each Underwriter in the
proportion which the amount of Securities of such Underwriter reserved and sold
pursuant to Delayed Delivery Contracts arranged through Selected Dealers bears
to the total Securities so reserved and sold.
5. Payment and Delivery. We authorize you to make payment on our behalf
to the Seller of the purchase price of our Securities, to take delivery of our
Securities, registered as you may direct in order to facilitate deliveries, and
to deliver our reserved Securities against sales. At your request we will pay
you, as you direct, (i) an amount equal to the public offering price, less the
selling concession, of either our Securities or our unreserved Securities or
(ii) the amount set forth or indicated in the Written Communication with respect
to the Securities, and such payment will be credited to our account and applied
to the payment of the purchase price. After you receive payment for reserved
Securities sold for our account, you will remit to us the purchase price (if
any) paid by us for such Securities and credit or debit our account with the
difference between the sale prices and the purchase price thereof. You will
deliver to us our unreserved Securities promptly, and our reserved but unsold
Securities, against payment of the purchase price therefor (except in the case
of Securities for which payment has previously been made), as soon as
practicable after the termination of the provisions referred to in Section 9,
except that if the aggregate amount of reserved but unsold Securities upon such
termination does not exceed
4
<PAGE> 5
10% of the total amount of the Securities, you may in your discretion sell such
reserved but unsold Securities for the accounts of the several Underwriters as
soon as practicable after such termination, at such prices and in such manner as
you determine. Unless we promptly give you written instructions otherwise, if
transactions in the Securities may be settled through the facilities of The
Depository Trust Company, payment for and delivery of securities purchased by us
will be made through such facilities, if we are a member, or if we are not a
member, settlement may be made through our ordinary correspondent who is a
member.
6. Authority to Borrow. In connection with the purchase or carrying of
our Securities or other securities purchased for our account, we authorize you,
in your discretion, to advance your funds for our account, charging current
interest rates, to arrange loans for our account, and in connection therewith to
execute and deliver any notes or other instruments and hold or pledge as
security any of our Securities or such other securities. Any lender may rely
upon your instructions in all matters relating to any such loan. Any Securities
or such other securities held by you for our account may be delivered to us for
carrying purposes, and if so delivered will be redelivered to you upon demand.
7. Stabilization and Over-Allotment. We authorize you, in your
discretion, to make purchases and sales of Securities, any other securities of
the Company of the same class and series and any other securities of the Company
which you may designate in the open market or otherwise, for long or short
account, on such terms as you deem advisable, and, in arranging sales, to
over-allot and cover any such over-allotment, at your discretion, by purchasing
Securities, exercising the over-allotment option, if any, indicated in the
Written Communication, or both. Such purchases and sales and over-allotments
will be made for the accounts of the Underwriters as nearly as practicable in
proportion to their respective underwriting obligations. It is understood that
you may have made purchases of securities of the Company for stabilizing
purposes prior to the time when we become one of the Underwriters, and we agree
that any securities so purchased shall be treated as having been purchased for
the respective accounts of the Underwriters pursuant to the foregoing
authorization. We authorize you, in your discretion, to cover any short position
incurred pursuant to this Section by purchasing securities on such terms as you
deem advisable. At no time will our net commitment under the foregoing
provisions of this Section exceed 15% of our underwriting obligation. Solely for
purposes of the immediately preceding sentence, our "underwriting obligation"
shall be deemed to exclude any Securities which we are obligated to purchase
solely by virtue of the exercise of an over-allotment option. We will on demand
take up at cost any securities so purchased and deliver any securities so sold
or over-alloted for our account, and, if any other Underwriter defaults in its
corresponding obligation, we will assume our proportionate share of such
obligation without relieving the defaulting Underwriter from liability. Upon
request, we will advise you of the Securities retained by us and unsold and will
sell to you for the account of one or more of the Underwriters such of our
unsold Securities and at such price, not less than the net price to Selected
Dealers nor more than the public offering price, as you determine.
8. Open Market Transactions. We and you agree not to bid for, purchase,
attempt to induce others to purchase, or sell, directly or indirectly, any
Securities, any other securities of the Company of the same class and series and
any other securities of the Company which you may
5
<PAGE> 6
designate, except as brokers pursuant to unsolicited orders and as otherwise
provided in this Agreement. If the Securities are common stock or securities
convertible into common stock, we and you also agree not to effect, or attempt
to induce others to effect, directly or indirectly, any transactions in or
relating to put or call options on any stock of the Company, except to the
extent permitted by Rule 10b-6 under the Securities Exchange Act of 1934 (the
"Exchange Act") as interpreted by the Securities and Exchange Commission. An
opening uncovered writing transaction in options to acquire Securities for our
account or for the account of any customer shall be deemed, for purposes of the
preceding sentence, to be a transaction effected by us in or relating to put or
call options on stock of the Company not permitted by Rule 10b-6. The term
"opening uncovered writing transaction" means an opening sale transaction where
the seller intends to become a writer of an option to purchase stock which it
does not own or have the right to acquire upon exercise of conversion or option
rights.
9. Termination as to an Offering. The provisions of the last two
paragraphs of Section 4(a), the first sentence of Section 7, and Section 8 will
terminate at the close of business on the thirtieth day after the date of the
initial public offering of the Securities, unless sooner terminated as
hereinafter provided. You may terminate such provision as to such offering at
any time by notice to us to the effect that the offering provisions of this
Agreement as to such offering are terminated.
10. Expenses and Settlement. You may charge our account with any transfer
taxes on sales made by you of Securities purchased by us under the Underwriting
Agreement and with our proportionate shares (based upon our underwriting
obligation) of all other expenses incurred by you under this Agreement or in
connection with the purchase, carrying, sale or distribution of the Securities.
The accounts hereunder will be settled as promptly as practicable after the
termination of the provisions referred to in Section 9, but you may reserve such
amount as you deem advisable for additional expenses. Your determination of the
amount to be paid to or by us will be conclusive. You may at any time make
partial distributions of credit balances or call for payment of debit balances.
Any of our funds in your hands may be held with your general funds without
accountability for interest. Notwithstanding any settlement, we will remain
liable for any taxes on transfers for our account, and for our proportionate
share (based upon our underwriting obligation) of all expenses and liabilities
which may be incurred by or for the accounts of the Underwriters.
11. Default by Underwriters. Default by one or more Underwriters hereunder
or under the Underwriting Agreement will not release the other Underwriters from
their obligations or affect the liability of any defaulting Underwriter to the
other Underwriters for damages resulting from such default. If one or more
Underwriters default under the Underwriting Agreement, you may arrange for the
purchase by others, including nondefaulting Underwriters, of Securities not
taken up by the defaulting Underwriter or Underwriters.
12. Position of Representatives. You will be under no liability to us for
any act or omission except for obligations expressly assumed by you herein, and
no obligations on your part will be implied or inferred herefrom. Your authority
hereunder and under the Underwriting Agreement may be exercised by you jointly
or by PWI. The rights and liabilities of the
6
<PAGE> 7
Underwriters are several and not joint, and nothing will constitute the
Underwriters a partnership, association or separate entity.
If for Federal income tax purposes the Underwriters should be deemed to
constitute a partnership then each Underwriter elects to be excluded from the
application of Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code
of 1954, as amended. You, as Representatives of the several Underwriters, are
authorized, in your discretion, to execute on behalf of the Underwriters such
evidence of such election as may be required by the Internal Revenue Service.
13. Indemnification. We will indemnify and hold harmless each other
Underwriter and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Securities Act to the extent and upon the terms
upon which each Underwriter agrees to indemnify the Company and any other Seller
in the Underwriting Agreement.
14. Contribution. Each Underwriter (including you) will pay upon your
request, as contribution, its proportionate share, based upon its underwriting
obligation, of any losses, claims, damages or liabilities, joint or several,
paid or incurred by any Underwriter to any person other than an Underwriter,
arising out of or based upon any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus, any
amendment or supplement thereto or any related preliminary prospectus or any
other selling or advertising material approved by you for use by the
Underwriters in connection with the sale of the Securities, or the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading (other than an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by an Underwriter specifically for use therein); and will pay such
proportionate share of any legal or other expenses reasonably incurred by you or
with your consent in connection with investigating or defending against any such
loss, claim, damage or liability, or any action or proceeding (including any
action or proceeding brought by a governmental or regulatory body) in respect
thereof. In determining the amount of any Underwriter's obligation under this
Section, appropriate adjustment may be made by you to reflect any amounts
received by any one or more Underwriters in respect of such claim from the
Company or any other Seller pursuant to the Underwriting Agreement or otherwise.
There shall be credited against any amount paid or payable by us pursuant to
this Section any loss, damage, liability or expense which is incurred by us as a
result of any such claim asserted against us, and if such loss, claim, damage,
liability or expense is incurred by us subsequent to any payment by us pursuant
to this Section, appropriate provision shall be made to effect such credit, by
refund or otherwise. If any such claim is asserted, you may take such action in
connection therewith as you deem necessary or desirable, including retention of
counsel for the Underwriters, and in your discretion separate counsel for any
particular Underwriter or group of Underwriters, and the fees and disbursements
of any counsel so retained by you shall be included in the amounts payable
pursuant to this Section. In determining amounts payable pursuant to this
Section, any loss, claim, damage, liability or expense incurred by any person
controlling any Underwriter within the meaning of Section 15 of the Securities
Act which has been incurred by reason of such control relationship shall be
deemed to have been incurred by such Underwriter.
7
<PAGE> 8
Any Underwriter may elect to retain at its own expense its own counsel. You may
settle or consent to the settlement of any such claim, on advice of counsel
retained by you, with the approval of a majority in interest of the
Underwriters. Whenever you receive notice of the assertion of any claim to which
the provisions of this Section would be applicable, you will give prompt notice
thereof to each Underwriter. You will also furnish each Underwriter with
periodic reports, at such times as you deem appropriate, as to the status of
such claim and the action taken by you in connection therewith. If any
Underwriter or Underwriters default in their obligation to make any payments
under this Section, each nondefaulting Underwriter shall be obligated to pay its
proportionate share of all defaulted payments, based upon such Underwriter's
underwriting obligation as related to the underwriting obligations of all
nondefaulting Underwriters.
15. Reports and Blue Sky Matters. We authorize you to file with the
Securities and Exchange Commission and any other governmental agency any reports
required in connection with any transactions effected by you for our account
pursuant to this Agreement, and we will furnish any information needed for such
reports. If you effect stabilizing purchases pursuant to Section 7, you will
notify us promptly of the initiation and termination thereof. If stabilization
is effected we will file with you, c/o PWI, not later than the fifth full
business day following the termination of stabilization, any report required to
be filed pursuant to Rule 17a-2 under the Exchange Act. You will not have any
responsibility with respect to the right of any Underwriter or other person to
sell the Securities in any jurisdiction, notwithstanding any information you may
furnish in that connection.
16. Representations and Agreements. (a) You represent that you are a
member in good standing of the National Association of Securities Dealers, Inc.
(the "NASD"), and we represent that we are either a member in good standing of
the NASD or a foreign dealer not eligible for membership. If we are such a
member we agree that in making sale of the Securities we will comply with all
applicable rules of the NASD, including, without limitation, the NASD's
interpretation with Respect to Free-Riding and Withholding and Section 24 of
Article III of the Rules of Fair Practice. If we are such a foreign dealer, we
agree not to offer or sell any Securities in the United States of America except
through you and in making sales of Securities outside the United States of
America we agree to comply as though we were a member with such interpretation
and Sections 8, 24 and 36 of Article III of the NASD's Rules of Fair Practice
and to comply with Section 25 of such Article III as it applies to a nonmember
broker or dealer in a foreign country.
(b) We understand that it is our responsibility to examine the
Registration Statement, the Prospectus, any amendment or supplement thereto
relating to the offering of the Securities, any preliminary prospectus and the
material, if any, incorporated by reference therein and we will familiarize
ourselves with the terms of the Securities and the other terms of the offering
thereof which are to be reflected in the Prospectus and the Written
Communication with respect thereto. You are authorized, with the approval of
counsel for the Underwriters, to approve on our behalf any amendments or
supplements to the Registration Statement or the Prospectus.
(c) We confirm that the information that we have given or are deemed to
have given in response to the Master Underwriters' Questionnaire attached as
Exhibit A hereto (which
8
<PAGE> 9
information has been furnished to the Company for use in the Registration
Statement or the Prospectus) is correct. We will notify you immediately of any
development before the termination of this Agreement under Section 9 as to the
offering of the Securities which makes untrue or incomplete any information that
we have given or are deemed to have given in response to the Master
Underwriters' Questionnaire.
(d) Unless we have promptly notified you in writing otherwise, our name as
it should appear in the Prospectus and our address are set forth on the
signature page hereof.
(e)(i) If the Securities are being registered under the Securities Act, we
represent that we are familiar with Rule 15c2-8 under the Exchange Act
relating to the distribution of preliminary and final prospectuses and
agree that we will comply therewith; we agree to keep an accurate record of
the distribution (including dates, number of copies and persons to whom
sent) by us of copies of the Registration Statement, the Prospectus or any
preliminary prospectus (or any amendment or supplement to any thereof), and
promptly upon request by you, to bring all subsequent changes to the
attention of anyone to whom such material shall have been distributed; and
we agree to furnish to persons who receive a confirmation of sale a copy of
the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under the
Securities Act.
(ii) If the Securities will not be registered under the Securities
Act, we agree that we will deliver all preliminary and final offering
circulars required for compliance with the applicable laws and regulations
governing the use and distribution of offering circulars by underwriters,
and, to the extent consistent with such laws and regulations, we confirm
that we have delivered and agree that we will deliver all preliminary and
final offering circulars which would be required if the provisions of Rule
15c2-8 under the Exchange Act applied to this offering.
(f) If the Securities are being registered under the Securities Act, we
agree that, if we are advised by you that the Company was not, immediately prior
to the filing of the Registration Statement, subject to the requirements of
Section 13(a) or 15(d) of the Exchange Act, we will not, without your consent,
sell any of the Securities to an account over which we exercise discretionary
authority.
17. Miscellaneous. (a) This Agreement may be terminated by either party
hereto upon five business days' written notice to the other party; provided that
with respect to any offering of Securities for which a Written Communication was
sent by you and accepted by us prior to such notice, this Agreement shall remain
in full force and effect as to such offering and shall terminate with respect to
such offering in accordance with the provisions of Section 9. This Agreement may
be supplemented or amended by you by written notice thereof to us, and any such
supplement or amendment to this Agreement shall be effective with respect to any
offering of securities to which this Agreement applies after the date of such
supplement or amendment. Each reference to "this Agreement" herein shall, as
appropriate, be to this Agreement as so amended and supplemented.
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<PAGE> 10
(b) This Agreement and the terms and conditions set forth herein with
respect to any offering of Securities together with such supplementary terms and
conditions with respect to such offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.
Very truly yours,
---------------------------------------
(Name of Firm)
by
------------------------------------
Confirmed, as of the date first
above written.
PAINEWEBBER INCORPORATED,
by
------------------------------
Vice President
10
<PAGE> 11
EXHIBIT A
PaineWebber Incorporated
MASTER UNDERWRITERS' QUESTIONNAIRE
The terms used herein and not otherwise defined shall have the meanings
assigned thereto in the Amended and Restated Master Agreement Among Underwriters
dated June 11, 1984, between you and PaineWebber Incorporated ("PWI"). Reference
will be made to this Master Underwriters' Questionnaire in each Written
Communication described in Section 1 of the Amended and Restated Master
Agreement Among Underwriters received by you from PWI in connection with
offerings of securities in which PWI is acting as Representative or the manager
of the Representatives of the several Underwriters. Your telegraphic acceptance
of any such Written Communication should respond to this Master Underwriters'
Questionnaire.
Except as indicated in your telegraphic acceptance of our Written
Communication with respect to the Securities:
(1) neither you nor any of your directors, officers, partners or branch
managers has (nor have you or they had within the last three years) a
material relationship (as "material" is defined in Regulation C under the
Securities Act) with the Company or its parent (if any), nor are you an
affiliate of (within the meaning of the By-laws of the NASD), controlled
by, controlling or under common control with the Company;
(2) neither you nor any of your partners, officers, directors or branch
managers, separately or as a group, owns of record or beneficially more
than 5% of any class of voting securities of the Company or its parent (if
any);
(3) if the Securities are to be issued under an indenture to be qualified
under the Trust Indenture Act of 1939;
(a) neither you nor any of your directors, officers or partners is an
affiliate (as defined in Rule 0-2 under the Trust Indenture Act of 1939) of
the Trustee, or its parent (if any) and neither the Trustee nor its parent
(if any) nor any of their directors or executive officers is a director,
officer, partner, employee, appointee or representative of yours;
(b) neither you nor any of your directors, partners or executive
officers, separately or as a group, owns beneficially more than 1% of any
class of voting securities of the Trustee or its parent (if any); and
(c) if you are a corporation, you do not have outstanding nor have you
assumed or guaranteed any securities otherwise than in your corporate name,
and neither the Trustee nor its parent (if any) is a holder of such
securities.
<PAGE> 12
(4) other than as is, or is to be, stated in the Registration Statement,
the PWI Amended and Restated Master Agreement Among Underwriters, the PWI
Amended and Restated Master Selected Dealer Agreement, or the Underwriting
Agreement relating to the proposed offering, you do not know of or have
reason to believe that (a) there are any discounts or commissions to be
allowed or paid to underwriters or any other items that would be deemed by
the NASD to constitute underwriting compensation for purposes of the NASD's
Rules of Fair Practice, (b) there are any discounts or commissions to be
allowed or paid to dealers, including all cash, securities, contracts, or
other considerations to be received by any dealer in connection with the
sale of the Securities, (c) there is an intention to over-allot or (d) the
price of any security may be stabilized to facilitate the offering of the
Securities;
(5) your proposed commitment to purchase Securities will not result in a
violation of the financial responsibility requirements of Section 15(c)(3)
of the Exchange Act or the rules and regulations thereunder, including Rule
15c3-1, or any provisions of the applicable rules of the NASD or of any
securities exchange to which you are subject or any restrictions imposed
upon you by the NASD or any such exchange;
(6) neither you nor any related person (as defined by the NASD) has (a)
purchased any warrants, options or other securities of the Company within
the preceding 12 months or (b) had any other dealings with the Company
within the preceding 12 months as to which documents or other information
is required to be furnished to the NASD, and, except as stated in the
Registration Statement, you have no knowledge of any private placement of
the Company's Securities within the preceding 18 months;
(7) you have not prepared nor had prepared for you any report or
memorandum for external use in connection with the proposed offering of the
Securities, and if the Registration Statement is on Form S-1, you have not
prepared any engineering, management or similar reports or memoranda
relating to broad aspects of the business, operations or products of the
Company within the past 12 months (except for reports solely comprised of
recommendations to buy, sell or hold the securities of the Company, unless
such recommendations have changed within the past six months). (If any such
report or memorandum has been prepared furnish to PWI (a) four copies
thereof and (b) a statement as to the actual or proposed use, identifying
(i) each class of persons (institutional mailing lists, retail clients,
etc.) who have received or will receive the report or memorandum, (ii) the
number of copies distributed to each such class and (iii) the period of
distribution.);
(8) if the Written Communication states that the Company is subject to
regulation under the Public Utility Holding Company Act of 1935 (the
"Holding Company Act"), you are not a "holding company", or an "affiliate",
or a "subsidiary company" of a "public utility company" or "holding
company", each as defined in the Holding Company Act; and
<PAGE> 13
(9) if the Written Communication states that the Company is subject to
regulation under the Holding Company Act, to the best of your knowledge,
you are not a party to any proceeding being conducted by the Securities and
Exchange Commission pursuant to any of the Acts administered by it, which
is required to be disclosed in the Registration Statement or Prospectus or
which would disqualify you from purchasing the Securities.
<PAGE> 1
Exhibit (h)(3)
AMENDED AND RESTATED MASTER SELECTED DEALER AGREEMENT
June 11, 1984
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Gentlemen:
1. General. We understand that PaineWebber Incorporated ("PW") is
entering into this Agreement with us and other firms who may be offered the
right to purchase as principal a portion of securities being distributed to the
public. The terms and conditions of this Agreement shall be applicable to any
public offering of securities ("Securities") wherein PW (acting for its own
account or for the account of any underwriting or similar group or syndicate) is
responsible for managing or otherwise implementing the sale of the Securities to
selected dealers ("Selected Dealers") and has expressly informed us that such
terms and conditions shall be applicable. Any such offering of Securities to us
as a Selected Dealer is hereinafter called an "Offering". In the case of any
Offering in which you are acting for the account of any underwriting or similar
group or syndicate ("Underwriters"), the terms and conditions of this Agreement
shall be for the benefit of, and binding upon, such Underwriters, including, in
the case of any Offering in which you are acting with others as representatives
of Underwriters, such other representatives. The term "preliminary prospectus"
means, in the case of an Offering registered under the Securities Act of 1933
(the "Securities Act"), any preliminary prospectus relating to an Offering of
Securities or any preliminary prospectus supplement together with a prospectus
relating to an Offering of Securities and, in the case of an Offering not
registered under the Securities Act, any preliminary offering circular relating
to an Offering of Securities or any preliminary offering circular supplement
together with an offering circular relating to an Offering of Securities; the
term "Prospectus" means in the case of an Offering registered under the
Securities Act of 1933 (the "Securities Act"), the prospectus, together with the
final prospectus supplement, if any, relating to such Offering of Securities,
filed pursuant to Rule 424(b) or Rule 424(c) under the Securities Act and, in
the case of an Offering not registered under the Securities Act, the final
offering circular, including any supplements, relating to such Offering of
Securities.
2. Conditions of Offering; Acceptance and Purchase. Any Offering will be
subject to delivery of the Securities and their acceptance by you and any other
Underwriters may be subject to the approval of all legal matters by counsel and
the satisfaction of other conditions, and may be made on the basis of
reservation of Securities or an allotment against subscription. You will advise
us by telegram, telex or other form of written communication ("Written
Communication") of the particular method and supplementary terms and conditions
(including, without limitation, the information as to prices and offering date
referred to in Section 3(b)) of any Offering in which we are invited to
participate. To the extent such supplementary terms and conditions are
inconsistent with any provision herein,
<PAGE> 2
such terms and conditions shall supersede any such provision. Unless otherwise
indicated in any such Written Communication, acceptances and other
communications by us with respect to any Offering should be sent to PaineWebber
Incorporated, 1285 Avenue of the Americas, New York, New York 10019. You reserve
the right to reject any acceptance in whole or in part. Payment for Securities
purchased by us is to be made at such office as you may designate, at the public
offering price, or, if you shall so advise us, at such price less the concession
to dealers or at the price set forth or indicated in a Written Communication, on
such date as you shall determine, on one day's prior notice to us, by certified
or official bank check in New York Clearing House funds payable to the order of
PaineWebber Incorporated, against delivery of certificates evidencing such
Securities. If payment is made for Securities purchased by us at the public
offering price, the concession to which we shall be entitled will be paid to us
upon termination of the provisions of Section 3(b) with respect to such
Securities.
Unless we promptly give you written instructions otherwise, if transactions
in the Securities may be settled through the facilities of The Depository Trust
Company, payment for and delivery of Securities purchased by us will be made
through such facilities if we are a member, or if we are not a member,
settlement may be made through our ordinary correspondent who is a member.
3. Representations, Warranties and Agreements. (a) Prospectuses. You
shall provide us with such number of copies of each preliminary prospectus, the
Prospectus and any supplement thereto relating to each Offering as we may
reasonably request. If the Securities will be registered under the Securities
Act, we represent that we are familiar with Rule 15c2-8 under the Exchange Act
relating to the distribution of preliminary and final prospectuses and agree
that we will comply therewith; we agree to keep an accurate record of our
distribution (including dates, number of copies and persons to whom sent) of
copies of the Prospectus or any preliminary prospectus (or any amendment or
supplement to any thereof), and promptly upon request by you, to bring all
subsequent changes to the attention of anyone to whom such material shall have
been furnished; and we agree to furnish to persons who receive a confirmation of
sale a copy of the Prospectus filed pursuant to Rule 424(b) or Rule 424(c) under
the Securities Act. If the Securities will not be registered under the
Securities Act, we agree that we will deliver all preliminary and final offering
circulars required for compliance with the applicable laws and regulations
governing the use and distribution of the offering circulars by underwriters,
and, to the extent consistent with such laws and regulations, we confirm that we
have delivered and agree that we will deliver all preliminary and final offering
circulars which would be required if the provisions of Rule 15c2-8 under the
Exchange Act applied to this offering. We agree that in purchasing Securities in
an Offering we will rely upon no statements whatsoever, written or oral, other
than the statements in the Prospectus delivered to us by you. We will not be
authorized by the issuer or other seller of Securities offered pursuant to a
Prospectus or by any Underwriters to give any information or to make any
representation not contained in the Prospectus in connection with the sale of
such Securities.
2
<PAGE> 3
(b) Offer and Sale of the Public. With respect to any Offering of
Securities, you will inform us by a Written Communication of the public offering
price, the selling concession, the reallowance (if any) to dealers and the time
when we may commence selling Securities to the public. After such public
offering has commenced, you may change the public offering price, the selling
concession and the reallowance to dealers. With respect to each Offering of
Securities, until the provisions of this Section 3(b) shall be terminated
pursuant to Section 4, we agree to offer Securities to the public only at the
public offering price, except that if a reallowance is in effect, a reallowance
from the public offering price not in excess of such reallowance may be allowed
as consideration for services rendered in distribution to dealers who are
actually engaged in the investment banking or securities business, who execute
the written agreement prescribed by Section 24(c) of Article III of the Rules of
Fair Practice of the National Association of Securities Dealers, Inc. (the
"NASD"), and who are either members in good standing of the NASD or foreign
brokers or dealers not eligible for membership in the NASD who represent to us
that they will promptly reoffer such Securities at the public offering price and
will abide by the conditions with respect to foreign brokers and dealers set
forth in Section 3(e).
(c) Stabilization and Over-Allotment. You may, with respect to any
Offering, be authorized to over-allot in arranging sales to Selected Dealers, to
purchase and sell Securities, any other securities of the issuer of the
Securities of the same class and series and any other securities of such issuer
that you may designate for long or short account and to stabilize or maintain
the market price of the Securities. We agree to advise you from time to time
upon request, prior to the termination of the provisions of Section 3(b) with
respect to any Offering, of the amount of Securities purchased by us hereunder
remaining unsold and we will, upon your request, sell to you, for the accounts
of the Underwriters, such amount of Securities as you may designate, at the
public offering price thereof less an amount to be determined by you not in
excess of the concession to dealers. In the event that prior to the later of (i)
the termination of the provisions of Section 3(b) with respect to any Offering,
or (ii) the covering by you of any short position created by you in connection
with such Offering for your account or the account of one or more Underwriters,
you purchase or contract to purchase for the account of any of the Underwriters,
in the open market or otherwise, any Securities theretofore delivered to us, you
reserve the right to withhold the above-mentioned concession to dealers on such
Securities if sold to us at the public offering price, or if such concession has
been allowed to us through our purchase at a net price, we agree to repay such
concession upon your demand, plus in each case any taxes on redelivery,
commissions, accrued interest and dividends paid in connection with such
purchase or contract to purchase.
(d) Open Market Transactions. We agree not to bid for, purchase, attempt
to purchase, or sell, directly or indirectly, any Securities, any other
securities of the issuer of the Securities of the same class and series or any
other securities of such issuer as you may designate, except as brokers pursuant
to unsolicited orders and as otherwise provided in this Agreement. If the
Securities are common stock or securities convertible into common stock, we
agree not to effect, or attempt to induce others to effect, directly or
indirectly, any transactions in or relating to put or call options on any stock
of such issuer, except to the
3
<PAGE> 4
extent permitted by Rule 10b-6 under the Exchange Act as interpreted by the
Securities and Exchange Commission. An opening uncovered writing transaction in
options to acquire Securities for our account or for the account of any customer
shall be deemed, for purposes of the preceding sentence, to be a transaction
effected by us in or relating to put or call options on stock of the Company not
permitted by Rule 10b-6. The term "opening uncovered writing transaction" means
an opening sale transaction where the seller intends to become a writer of an
option to purchase stock which it does not own or have the right to acquire upon
exercise of conversion or option rights.
(e) NASD. We represent that we are actually engaged in the investment
banking or securities business and we are either a member in good standing of
the NASD, or, if not such a member, a foreign dealer not eligible for
membership. If we are such a member we agree that in making sales of the
Securities we will comply with all applicable rules of the NASD, including,
without limitation, the NASD's Interpretation with Respect to Fee-Riding and
Withholding and Section 24 of Article III of the Rules of Fair Practice. If we
are such a foreign dealer, we agree not to offer or sell any Securities in the
United States of America except through you and in making sales of Securities
outside the United States of America we agree to comply as though we were a
member with such Interpretation and Sections 8.24 and 36 of Article III of the
NASD's Rules of Fair Practice and to comply with Section 25 of such Article III
as it applies to a nonmember broker or dealer in a foreign country.
(f) Relationship among Underwriters and Selected Dealers. You may buy
Securities from or sell Securities to any Underwriter or Selected Dealer and,
with your consent, the Underwriters (if any) and the Selected Dealers may
purchase Securities from and sell Securities to each other at the public
offering price less all or any part of the concession. We are not authorized to
act as agent for you or any Underwriter or the issuer or other seller of any
Securities in offering Securities to the public or otherwise. Nothing contained
herein or in any Written Communication from you shall constitute the Selected
Dealers partners with you or any Underwriter or with one another. Neither you
nor any Underwriter shall be under any obligation to us except for obligations
assumed hereby or in any Written Communication from you in connection with any
Offering. In connection with any Offering, we agree to pay our proportionate
share of any claim, demand or liability asserted against us, and the other
Selected Dealers or any of them, or against you or the Underwriters, if any,
based on any claim that such Selected Dealers or any of them constitute an
association, unincorporated business or other separate entity, including in each
case our proportionate share of any expense incurred in defending against any
such claim, demand or liability.
(g) Blue Sky Laws. Upon application to you, you will inform us as to the
jurisdictions in which you believe the Securities have been qualified for sale
under the respective securities of "blue sky" laws of such jurisdictions. We
understand and agree that compliance with the securities or "blue sky" laws in
each jurisdiction in which we shall offer or sell any of the Securities shall be
our sole responsibility and that you assume no responsibility or obligations as
to the eligibility of the Securities for sale or our right to sell the
Securities in any jurisdiction.
4
<PAGE> 5
(h) Compliance with Law. We agree that in selling Securities pursuant to
any Offering (which agreement shall also be for the benefit of the issuer or
other seller of such Securities) we will comply with the applicable provisions
of the Securities Act and the Exchange Act, the applicable rules and regulations
of the Securities and Exchange Commission thereunder, the applicable rules and
regulations of the NASD and the applicable rules and regulations of any
securities exchange having jurisdiction over the Offering. You shall have full
authority to take such action as you may deem advisable in respect of all
matters pertaining to any Offering. Neither you nor any Underwriter shall be
under any liability to us, except for lack of good faith and for obligations
expressly assumed by you in this Agreement; provided, however, that nothing in
this sentence shall be deemed to relieve you from any liability imposed by the
Securities Act.
4. Termination; Supplements and Amendments. This agreement may be
terminated by either party hereto upon five business days' written notice to the
other party; provided that with respect to any Offering for which a Written
Communication was sent and accepted prior to such notice, this Agreement as it
applies to such Offering shall remain in full force and effect and shall
terminate with respect to such Offering in accordance with the last sentence of
this Section. This Agreement may be supplemented or amended by you by written
notice thereof to us, and any such supplement or amendment to this Agreement
shall be effective with respect to any Offering to which this Agreement applies
after the date of such supplement or amendment. Each reference to "this
Agreement" herein shall, as appropriate, be to this Agreement as so amended and
supplemented. The terms and conditions set forth in Sections 3(b) and (d) with
regard to any Offering will terminate at the close of business on the thirtieth
day after the date of the initial public offering of the Securities to which
such Offering relates, but such terms and conditions, upon notice to us, may be
terminated by you at any time.
5. Successors and Assigns. This Agreement shall be binding on, and inure
to the benefit of, the parties hereto and other persons specified or indicated
in Section 1, and the respective successors and assigns of each of them.
6. Governing Law. This Agreement and the terms and conditions set forth
herein with respect to any Offering together with such supplementary terms and
conditions with respect to such Offering as may be contained in any Written
Communication from you to us in connection therewith shall be governed by, and
construed in accordance with, the laws of the State of New York.
By signing this Agreement we confirm that our subscription to, or our
acceptance of any reservation of, any Securities pursuant to an Offering shall
constitute (i) acceptance of and agreement to other terms and conditions of this
Agreement (as supplemented and amended pursuant to Section 4) together with and
subject to any supplementary terms and conditions contained in any Written
Communication from you in connection with such Offering, all of which shall
constitute a binding agreement between us and you, individually or as
representative of any Underwriters, (ii) confirmation that our representations
and warranties set forth in Section 3 are true and correct at that time and
(iii) confirmation that
5
<PAGE> 6
our agreements set forth in Sections 2 and 3 have been and will be fully
performed by us to the extent and at the times required thereby.
Very truly yours,
-------------------------------------
(Name of Firm)
by
-----------------------------------
Confirmed, as of the date first
above written.
PAINEWEBBER INCORPORATED.
by
-------------------------------
Vice President
<PAGE> 1
Exhibit (j)
EATON VANCE SENIOR INCOME TRUST
October 19, 1998
Eaton Vance Senior Income Trust 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 SENIOR INCOME TRUST
By: /s/ James B. Hawkes
---------------------------
James B. Hawkes,
President
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By: /s/ Michael Rogers
----------------------------
Michael Rogers
Executive Vice President
<PAGE> 2
MASTER CUSTODIAN AGREEMENT
between
EATON VANCE GROUP OF FUNDS
and
INVESTORS BANK & TRUST COMPANY
<PAGE> 3
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.........................7
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
K. Appointment of Agents by the Custodian..............................10
L. Deposit of Fund Portfolio Securities in Securities Systems.......10-12
M. Deposit of Fund Commercial Paper in an Approved Book-Entry
System for Commercial Paper......................................12-13
N. Segregated Account..................................................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..................................15
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<PAGE> 4
S. Depository Receipts.................................................15
T. Interest Bearing Call or Time Deposits...........................15-16
U. Options, Futures Contracts and Foreign Currency Transactions.....16-17
V. Actions Permitted Without Express Authority.........................17
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value.........................................18
5. Records and Miscellaneous Duties........................................18
6. Opinion of Fund's Independent Public Accountants........................19
7. Compensation and Expenses of Bank.......................................19
8. Responsibility of Bank...............................................19-20
9. Persons Having Access to Assets of the Fund.............................20
10. Effective Period, Termination and Amendment; Successor Custodian........21
11. Interpretive and Additional Provisions..................................21
12. Notices.................................................................21
13. Massachusetts Law to Apply...........................................21-22
14. Adoption of the Agreement by the Fund...................................22
-ii-
<PAGE> 5
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).
<PAGE> 6
(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
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<PAGE> 7
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
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
-3-
<PAGE> 8
shall be in accordance with the then current "street delivery"
custom or in accordance with such procedures agreed to in writing
from time to time by the parties hereto; if the sale is effected
through a Securities System, delivery and payment therefor shall
be made in accordance with the provisions of Paragraph L hereof;
if the sale of commercial paper is to be effected through an
Approved Book-Entry System for Commercial Paper, delivery and
payment therefor shall be made in accordance with the provisions
of Paragraph M hereof; if the securities are to be sold outside
the United States, delivery 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;
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<PAGE> 9
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;
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;
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<PAGE> 10
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;
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
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<PAGE> 11
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,
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
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<PAGE> 12
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.
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
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<PAGE> 13
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;
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 transferred by book-entry and the written repurchase agreement
is received by the Custodian in due course; AND EXCEPT that if the
securities are to be purchased outside the United States, payment may
be made in accordance with procedures agreed to in writing from time to
time by the parties hereto.
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<PAGE> 14
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 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
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<PAGE> 15
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.
(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.
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<PAGE> 16
(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.
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
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<PAGE> 17
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 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.
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<PAGE> 18
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 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.
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<PAGE> 19
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 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
-15-
<PAGE> 20
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 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.
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<PAGE> 21
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 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.
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<PAGE> 22
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.
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.
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<PAGE> 23
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.
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.
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<PAGE> 24
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.
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
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<PAGE> 25
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.
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.
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<PAGE> 26
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.
* * * * *
<PAGE> 1
Exhibit (k)(1)
TRANSFER AGENCY AND SERVICES AGREEMENT
AGREEMENT dated as of October 19, 1998, between Eaton Vance Senior Income
Trust (the "Fund"), a voluntary association commonly known as a "Massachusetts
business trust" having its principal place of business at 24 Federal Street,
Boston, MA 02110, and FIRST DATA INVESTOR SERVICES GROUP, INC. (the "Transfer
Agent" or "FDISG"), a Massachusetts corporation with principal offices at 4400
Computer Drive, Westboro, Massachusetts 01581.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the 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, the 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;
(f) "Trustees" or "Board of Trustees" refers to the duly elected Trustees
or Directors of the Fund;
<PAGE> 2
(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;
(i) "Shares" refers to the shares of beneficial interest or common stock of
the Fund (which may be divided into classes);
(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 and transfer
(including coordination with the Custodian) of Shares. Such duties are described
in the written Schedule of Duties of FDISG annexed hereto as Schedule A. 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
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
administrator).
(c) FDISG shall serve as agent for Shareholders pursuant to the Fund's
dividend reinvestment plan, as amended from time to time.
2
<PAGE> 3
(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 A 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.
(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
3
<PAGE> 4
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 previously provided to the Eaton Vance Group of Funds,
which 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 B 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 C 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 C shall be upon
mutual agreement of the parties as provided in Schedule C.
(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
B. The Fund will promptly pay to FDISG the amount of such billing.
(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.
4
<PAGE> 5
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. 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;
5
<PAGE> 6
(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
(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, such Shares when
issued shall be validly issued, fully paid and non-assessable.
9. Duty of Care and Indemnification.
(a) Each party shall fulfill its obligations hereunder by acting with
reasonable care and in good faith;
6
<PAGE> 7
(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)
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.
10. 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;
7
<PAGE> 8
(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
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.
8
<PAGE> 9
11. 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.
(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.
12. 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.
13. 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.
9
<PAGE> 10
(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.
14. 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:
Eaton Vance Senior Income Trust
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
15. 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.
16. 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.
17. 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.
10
<PAGE> 11
18. 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.
19. 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 class of the Fund shall be liable for the
obligations of another 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.
Eaton Vance Senior Income Trust
Attest: /s/ Eric G. Woodbury By: /s/ Payson S. Swaffied
---------------------- ------------------------
First Data Investors Services Group, Inc.
Attest: /s/ Joseph P. Lundbohm By: /s/ Mark Hourihan
---------------------- ------------------------
Joseph P. Lundbohm Mark Hourihan
Executive Vice President
11
<PAGE> 12
SCHEDULE A
----------
DUTIES OF FDISG
1. Shareholder Information. FDISG shall maintain a record of the number of
Shares held by each Shareholder of record which shall include name, address,
taxpayer identification and which shall indicate whether such Shares are held in
certificates or uncertificated form.
2. Shareholder Services. FDISG will investigate all shareholder inquiries
relating to Shareholder accounts and will answer all communications from
Shareholders and others with respect to its duties hereunder. FDISG shall keep
records of all Shareholder correspondence and replies thereto, and of lapse of
time between the receipt of such correspondence and the mailing of such replies.
3. Share Certificates.
(a) At the expense of the Fund, the Fund shall supply FDISG with an
adequate supply of blank share certificates to meet FDISG requirements therefor.
Such Share certificates shall be properly signed by facsimile. The Fund agrees
that, notwithstanding the death, resignation, or removal of any officer of the
Fund whose signature appears on such certificates, FDISG or its agent may
continue to countersign certificates which bear such signatures until otherwise
directed by Written Instructions.
(b) FDISG shall issue replacement Share certificates in lieu of
certificates which have been lost, stolen or destroyed, upon receipt by FDISG of
properly executed affidavits and lost certificate bonds, in form satisfactory to
FDISG, with the Fund and FDISG as obligees under the bond.
(c) FDISG shall also maintain a record of each certificate issued, the
number of Shares represented thereby and the Shareholder of record. With respect
to Shares held in open accounts or uncertificated form (i.e., no certificate
being issued with respect thereto) FDISG shall maintain comparable records of
the Shareholders thereof, including their names, addresses and taxpayer
identification numbers. FDISG shall further maintain a stop transfer record on
lost and/or replaced certificates.
4. Mailing Communications to Shareholders; Proxy Materials. FDISG will
address and mail to Shareholders of the Fund, all reports to Shareholders,
dividend and distribution notices and proxy material for the Fund's meetings of
Shareholders, and such other communications as the Fund may authorize. In
connection with meetings of Shareholders, FDISG will prepare Shareholder lists,
mail and certify as to the mailing of proxy materials, process and tabulate
returned proxy cards, report on proxies voted prior to meetings, act as
inspector of election at meetings and certify Shares voted at meetings.
<PAGE> 13
5. Transfer of Shares.
(a) FDISG shall process all requests to transfer Shares in accordance with
the transfer procedures set forth in the Fund's Prospectus.
(b) FDISG will transfer Shares upon receipt of Written Instructions or
otherwise pursuant to the Prospectus and Share certificates, if any, properly
endorsed for transfer, accompanied by such documents as FDISG reasonably may
deem necessary.
(c) FDISG reserves the right to refuse to transfer Shares until it is
satisfied that the endorsement on the instructions is valid and genuine. FDISG
also reserves the right to refuse to transfer Shares until it is satisfied that
the requested transfer is legally authorized, and it shall incur no liability
for the refusal, in good faith, to make transfers which FDISG in its good
judgment, deems improper or unauthorized, or until it is reasonably satisfied
that there is no basis to any claims adverse to such transfer.
7. Dividends.
(a) Upon the declaration of each dividend and each capital gains
distribution by the Board of Directors of the Fund with respect to Shares of the
Fund, the Fund shall furnish or cause to be furnished to FDISG Written
Instructions setting forth the date of the declaration of such dividend or
distribution, the ex-dividend date, the date of payment thereof, the record date
as of which Shareholders entitled to payment shall be determined, the amount
payable per Share to the Shareholders of record as of that date, the total
amount payable on the payment date and whether such dividend or distribution is
to be paid in Shares at net asset value.
(b) On or before the payment date specified in such resolution of the Board
of Directors, the Fund will provide FDISG with sufficient cash to make payment
to the Shareholders of record as of such payment date.
(c) If FDISG does not receive sufficient cash from the Fund to make total
dividend and/or distribution payments to all Shareholders of the Fund as of the
record date, FDISG will, upon notifying the Fund, withhold payment to all
Shareholders of record as of the record date until sufficient cash is provided
to FDISG.
8. Miscellaneous
In addition to and neither in lieu nor in contravention of the services set
forth above, FDISG shall perform all the customary services of a transfer agent
registrar dividend disbursing agent and agent of the dividend reinvestment plan
as described herein consistent with those requirements in effect as at the date
of this Agreement. The detailed definition, frequency, limitations and
associated costs (if any) set out in the attached fee schedule, include but are
not limited to: maintaining all Shareholder accounts, preparing Shareholder
meeting lists, mailing proxies, tabulating proxies, mailing Shareholder reports
to current Shareholders, withholding taxes on U.S. resident and non-resident
alien accounts where applicable, preparing and filing U.S. Treasury Department
Forms 1099 and other appropriate forms required with respect to dividends and
distributions by federal authorities for all registered Shareholders.
<PAGE> 14
SCHEDULE B
----------
FEE SCHEDULE
1. Initial Public Offering Fees
IPO Project Administration Fee: $10,000.00
IPO Project Administration Fee covers:
Issuance of up to 1,000 certificates - Issuance of certificates in
excess of 1,000 to be billed at $2.00 per certificate
Administrative coordination with IPO client, underwriter and legal
representatives
Attendance at closing (out of pocket expenses associated with such
attendance will be billed as incurred)
Set-up, testing and implementation of electronic settlement and
delivery of shares through The Depository Trust Company
2. Over-allotment Fee: $5,000.00
Applies in the event that the underwriters elect to exercise an
over-allotment option which requires a second closing
3. Standard Service Fees: The following fees shall apply with respect to the
initial class of shares offered by the Fund. Should the Fund issue
additional classes of shares, the fees for such shall be mutually agreed to
in writing by the parties.
Annual Service Fee $15.00 Per Account
Monthly Minimum Fee $5,000.00
After the one year anniversary of the effective date of this Agreement,
FDISG may adjust the above fees once per calendar year, upon thirty
(30) days prior written notice in an amount not to exceed the
cumulative percentage increase in the Consumer Price Index for All
Urban Consumers (CPI-U) U.S. City Average, All items (unadjusted) -
(1982-84=100), published by the U.S. Department of Labor since the last
such adjustment in the Fund's monthly fees (or the Effective Date
absent a prior such adjustment).
<PAGE> 15
SCHEDULE C
----------
OUT-OF-POCKET EXPENSES
The Fund shall reimburse FDISG monthly for applicable out-of-pocket
expenses, including, but not limited to the following items:
- Microfie/microfilm production
- Magnetic media tapes and freight
- Printing costs, including certificates, envelopes, checks and
stationery
- Postage (bulk, pre-sort, ZIP+4, barcoding, first class) direct pass
through to the Fund
- Due diligence mailings
- Telephone and telecommunication costs, including all lease, maintenance
and line costs
- Ad hoc reports
- Proxy solicitations, mailings and tabulations
- Daily & Distribution advice mailings
- Shipping, Certified and Overnight mail and insurance
- Year-end form production and mailings
- Terminals, communication lines, printers and other equipment and any
expenses incurred in connection with such terminals and lines
- Duplicating services
- Courier services
- Incoming and outgoing wire charges
- Federal Reserve charges for check clearance
- Overtime, as approved by the Fund
- Temporary staff, as approved by the Fund
- Travel and entertainment, as approved by the Fund
- Record retention, retrieval and destruction costs, including, but not
limited to exit fees charged by third party record keeping vendors
- Third party audit reviews
- Ad hoc SQL time Insurance
- Such other miscellaneous expenses reasonably incurred by FDISG in
performing its duties and responsibilities under this Agreement.
The Fund agrees that postage and mailing expenses will be paid on the day
of or prior to mailing as agreed with FDISG. In addition, the Fund will promptly
reimburse FDISG for any other unscheduled expenses incurred by FDISG whenever
the Fund and FDISG mutually agree that such expenses are not otherwise properly
borne by FDISG as part of its duties and obligations under the Agreement.
<PAGE> 1
Exhibit (k)(2)
EATON VANCE SENIOR INCOME TRUST
ADMINISTRATION AGREEMENT
AGREEMENT made this 19th day of October, 1998, between Eaton Vance Senior
Income Trust, 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 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 assist in preparing 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
<PAGE> 2
2
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
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) monitor any variance between the market value and net asset
value per share, and periodically report to the Trustees available actions that
may conform such values; (xiv) monitor the activities of the Shareholder
Servicing Agent retained by the Administrator and periodically report to the
Trustees about such activities; (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, the National Association of Securities
Dealers, Inc. and any securities exchange where Fund shares are listed; and
(xvi) 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.
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 equivalent to .25%
annually of the average weekly gross assets of the Fund. (Gross assets shall be
calculated by deducting accrued liabilities of the Fund except the principal
amount of any indebtedness for money borrowed, including debt securities issued
by the Fund. Accrued liabilities are expenses incurred in the normal course of
operations.)
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,
<PAGE> 3
3
accounting and legal expenses; (v) taxes and interest; (vi) governmental fees;
(vii) expenses of 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
registration statements and amendments for such purposes; (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 of listing shares with a stock exchange; (xvi) any direct
charges to shareholders approved by the Trustees of the Fund; (xvii)
compensation of and any expenses of Trustees of the Fund who are not members of
the Administrator's organization; (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; (xxi) all expenses
incurred in connection with leveraging the Fund's assets through a line of
credit, or issuing and maintaining preferred shares; and (xxii) 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,
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, 2000 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after February 28, 2000 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.
<PAGE> 4
4
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. Each party expressly acknowledges the provision
in the other party's Agreement and Declaration of Trust limiting the personal
liability of its shareholders officers, and Trustees, and each party hereby
agrees that it shall have recourse to the other party 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 other party.
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
"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 SENIOR INCOME TRUST EATON VANCE MANAGEMENT
By: /s/James B. Hawkes By: /s/ Alan R. Dynner
------------------------------- ------------------------------------
President, and not Individually Vice President, and not Individually
<PAGE> 1
Exhibit (k)(3)
FORM OF
SHAREHOLDER SERVICING AGREEMENT
SHAREHOLDER SERVICING AGREEMENT (the "Agreement"), dated as of October 19,
1998, between Eaton Vance Management ("Eaton Vance") and PaineWebber
Incorporated ("PaineWebber").
WHEREAS, Eaton Vance Senior Income Trust (the "Trust") is a closed-end,
non-diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), and its shares of beneficial
interest are registered under the Securities Act of 1933, as amended; and
WHEREAS, Eaton Vance is the investment adviser and the administrator of the
Trust; and
WHEREAS, Eaton Vance desires to retain PaineWebber to provide shareholder
servicing and market information with respect to the Trust, and PaineWebber is
willing to render such services;
NOW, THEREFORE, in consideration of the mutual terms and conditions set
forth below, the parties hereto agree as follows:
1. Eaton Vance hereby employs PaineWebber, for the period and on the
terms and conditions set forth herein, to provide the following services:
(a) Undertake to make available public information pertaining to the
Trust on an ongoing basis and to communicate to investors and prospective
investors the Trust's features and benefits (including periodic seminars or
conference calls, responses to questions from current or prospective
shareholders and specific shareholder contact where appropriate);
(b) Make available to investors and prospective investors market
price, net asset value, yield and other information regarding the Trust, if
reasonably obtainable, for the purpose of maintaining the visibility of the
Trust in the investor community;
(c) At the request of Eaton Vance or the Trust, provide certain
economic research and statistical information and reports, if reasonably
obtainable, on behalf of Eaton Vance or the Trust and consult with
representatives of Eaton Vance and/or Trustees of the Trust in connection
therewith, which information and reports shall
<PAGE> 2
include: (i) statistical and financial market information with respect to the
Trust's market performance; and (ii) comparative information regarding the Trust
and other closed-end management investment companies with respect to (x) the net
asset value of their respective shares, (y) the respective market performance of
the Trust and such other companies, and (z) other relevant performance
indicators; and
(d) At the request of Eaton Vance or the Trust, provide information
to and consult with Eaton Vance and/or the Board of Trustees of the Trust with
respect to applicable strategies designed to address market value discounts,
which may include share repurchases, tender offers, modifications to dividend
policies or capital structure, repositioning or restructuring of the Trust,
conversion of the Trust to an open-end investment company, liquidation or
merger; including providing information concerning the use and impact of the
above strategic alternatives by other market participants.
(e) At the request of Eaton Vance or the Trust, PaineWebber shall
limit or cease any action or service provided hereunder to the extent and for
the time period requested by Eaton Vance or the Trust; provided, however, that
pending termination of this Agreement as provided for is Section 5 hereof, any
such limitation or cessation shall not relieve Eaton Vance of its payment
obligations pursuant to Section 2 hereof.
(f) PaineWebber will promptly notify Eaton Vance or the Trust, as the
case may be, if it learns of any material inaccuracy or misstatement in, or
material omission from, any written information provided by PaineWebber to Eaton
Vance or the Trust in connection with the performance of services by PaineWebber
under this Agreement.
2. Eaton Vance will pay PaineWebber a fee computed weekly and payable
quarterly at an annualized rate of 0.10% of the average weekly gross assets of
the Trust. Gross assets of the Trust shall be calculated by deducting accrued
liabilities of the Trust not including the principal amount of any indebtedness
of the Trust constituting financial leverage.
3. Eaton Vance acknowledges that the shareholder services of PaineWebber
provided for hereunder do not include any advice as to the value of securities
or regarding the advisability of purchasing or selling any securities for the
Trust's portfolio. No provision of this Agreement shall be considered as
creating, nor shall any provision create, any obligation on the part of
PaineWebber, and PaineWebber is not hereby agreeing, to: (i) furnish any advice
or make any recommendations
2
<PAGE> 3
regarding the purchase or sale of portfolio securities or (ii) render any
opinions, valuations or recommendations of any kind or to perform any such
similar services in connection with providing the services described in Section
1 hereof.
4. Nothing herein shall be construed as prohibiting PaineWebber or its
affiliates from providing similar or other services to any other clients
(including other registered investment companies or other investment managers),
so long as PaineWebber's services to Eaton Vance and the Trust are not impaired
thereby.
5. The term of this Agreement shall commence upon the date referred to
above, shall be in effect for a period of two years and shall thereafter
continue for successive one year periods provided that the agreement may be
terminated by either party upon 60 days' written notice of the intention to
terminate.
6. Eaton Vance will furnish PaineWebber with such information as
PaineWebber believes appropriate to its assignment hereunder (all such
information so furnished being the "Information"). Eaton Vance recognizes and
confirms that PaineWebber (a) will use and rely primarily on the Information and
on information available from generally recognized public sources in performing
the services contemplated by this Agreement without having independently
verified the same and (b) does not assume responsibility for the accuracy or
completeness of the Information and such other information. To the best of Eaton
Vance's knowledge, the Information to be furnished by Eaton Vance when
delivered, will be true and correct in all material respects and will not
contain any material misstatement of fact or omit to state any material fact
necessary to make the statements contained therein not misleading. Eaton Vance
will promptly notify PaineWebber if it learns of any material inaccuracy or
misstatement in, or material omission from, any Information delivered to
PaineWebber.
7. It is understood that PaineWebber is being engaged hereunder solely to
provide the services described above to Eaton Vance and to the Trust and that
PaineWebber is not acting as an agent or fiduciary of, and shall have no duties
or liability to the current or future shareholders of the Trust, the current or
future shareholders of the Trust or any other third party in connection with its
engagement hereunder, all of which are hereby expressly waived.
8. Eaton Vance agrees that PaineWebber shall have no liability to the
Eaton Vance or the Trust for any act or omission to act by PaineWebber in the
course of its performance under this Agreement, in the absence of gross
negligence or willful misconduct on the part of PaineWebber. Eaton Vance agrees
to the indemnifica tion and other agreements set forth in the Indemnification
Agreement
3
<PAGE> 4
attached hereto, the provisions of which are incorporated herein by reference
and shall survive the termination, expiration or supersession of this Agreement.
9. THIS AGREEMENT SHALL BE CONSTRUED IN ACCOR DANCE WITH THE LAWS OF THE
STATE OF NEW YORK FOR CONTRACTS TO BE PERFORMED ENTIRELY THEREIN AND WITHOUT
REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.
10. EACH OF THE EATON VANCE AND PAINEWEBBER AGREE THAT ANY ACTION OR
PROCEEDING BASED HEREON, OR ARISING OUT OF PAINEWEBBER'S ENGAGEMENT HEREUNDER,
SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EATON VANCE AND PAINEWEBBER EACH
HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK LOCATED IN THE CITY AND COUNTY OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH
ACTION OR PROCEEDING AS SET FORTH ABOVE AND IRREVOCABLY AGREE TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH ACTION OR PROCEEDING. EACH OF
EATON VANCE AND PAINEWEBBER HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE
LAYING OF VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH REFERRED TO
ABOVE AND ANY CLAIM THAT ANY SUCH ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
11. Eaton Vance and PaineWebber each hereby irrevocably waive any right
they may have to a trial by jury in respect of any claim based upon or arising
out of this Agreement or the transactions contemplated hereby. This Agreement
may not be assigned by either party without the prior written consent of the
other party.
12. This Agreement (including the attached Indemnification Agreement)
embodies the entire agreement and understanding between the parties hereto and
supersedes all prior agreements and understandings relating to the subject
matter hereof. If any provision of this Agreement is determined to be invalid or
unenforceable in any respect, such determination will not affect such provision
in any other respect or any other provision of this Agreement, which will remain
in full force and effect.
4
<PAGE> 5
This Agreement may not be amended or otherwise modified or waived except by an
instrument in writing signed by both PaineWebber and Eaton Vance.
13. All notices required or permitted to be sent under this Agreement
shall be sent, if to Eaton Vance:
Eaton Vance Corporation
24 Federal Street
Boston, MA 02110
Attention: Chhief Legal Officer
or if to PaineWebber:
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Attention: Oscar J. Junquera
or such other name or address as may be given in writing to the other parties.
Any notice shall be deemed to be given or received on the third day after
deposit in the U.S. mail with certified postage prepaid or when actually
received, whether by hand, express delivery service or facsimile transmission,
whichever is earlier.
14. This Agreement may be exercised on separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one
and the same agreement.
15. A copy of the Agreement and Declaration of Trust of Eaton Vance is on
file with the Secretary of The Commonwealth of Massachusetts, and notice hereby
is given that this Agreement is executed on behalf of the Trustees of Eaton
Vance as Trustees and not individually and that the obligations or arising out
of this Agreement are not binding upon any of the Trustees or beneficiaries
individually but are binding only upon the assets and properties of Eaton Vance.
IN WITNESS WHEREOF, the parties hereto have duly executed this Shareholder
Servicing Agreement as of the date first above written.
5
<PAGE> 6
EATON VANCE MANAGEMENT
By: _____________________________________
Name:
Title:
PAINEWEBBER INCORPORATED
By: _____________________________________
Name:
Title:
6
<PAGE> 7
PAINEWEBBER INDEMNIFICATION
- --------------------------------------------------------------------------------
Date October 19, 1998
Paine Webber Incorporated
1285 Avenue of the Americas
New York, NY 10019
Gentlemen:
In connection with the engagement of Paine Webber Incorporated ("Paine
Webber") to advise and assist the undersigned (referred to herein as "we," or
"us") with the matters set forth in the Agreement dated October 19, 1998 between
us and Paine Webber, we hereby agree to indemnify and hold harmless Paine
Webber, its affiliated companies, and each of Paine Webber's and such affiliated
companies' respective officers, directors, agents, employees and controlling
persons (within the meaning of each of Section 20 of the Securities Exchange Act
of 1934 and Section 15 of the Securities Act of 1933) (each of the foregoing,
including Paine Webber, being hereinafter referred to as an "Indemnified
Person") to the fullest extent permitted by law from and against any and all
losses, claims, damages, expenses (including reasonable fees, disbursements and
other charges of counsel), actions (including actions brought by us or our
equity holders or derivative actions brought by any person claiming through us
or in our name), proceedings, arbitrations or investigations (whether formal or
informal), or threats thereof (all of the foregoing being hereinafter referred
to as "Liabilities"), based upon, relating to or arising out of such engagement
or any Indemnified Person's role therein; PROVIDED, HOWEVER, that we shall not
be liable under this paragraph: (a) for any amount paid in settlement of claims
without our consent, unless our consent is unreasonably withheld, or (b) to the
extent that it is finally judicially determined, or expressly stated in an
arbitration award, that such Liabilities resulted primarily from the willful
misconduct or gross negligence of the Indemnified Person seeking
indemnification. If multiple claims are brought against any Indemnified Person
in an arbitration or other proceeding and at least one such claim is based upon,
relates to or arises out of the engagement of Paine Webber by us or any
Indemnified Person's role therein, we agree that any award, judgment and other
Liabilities resulting therefrom shall be deemed conclusively to be based on,
relate to or arise out of the engagement of Paine Webber by us or any
Indemnified Person's role
A-1
<PAGE> 8
therein, except to the extent that such award or judgment expressly states that
the award or judgment, or any portion thereof, is based solely upon, relates to
or arises out of other matters for which indemnification is not available
hereunder. In connection with our obligation to indemnify for expenses as set
forth above, we further agree to reimburse each Indemnified Person for all such
expenses (including reasonable fees, disbursements and other charges of counsel)
as they are incurred by such Indemnified Person; provided, however, that if an
Indemnified Person is reimbursed hereunder for any expenses, the amount so paid
shall be refunded if and to the extent it is finally judicially determined, or
expressly stated in an arbitration award, that the Liabilities in question
resulted primarily from the willful misconduct or gross negligence of such
Indemnified Person. We hereby also agree that neither Paine Webber nor any other
Indemnified Person shall have any liability to us (or anyone claiming through us
or in our name) in connection with Paine Webber's engagement by us except to the
extent that such Indemnified Person has engaged in willful misconduct or been
grossly negligent.
Promptly after Paine Webber receives notice of the commencement of any
action or other proceeding in respect of which indemnification or reimbursement
may be sought hereunder, Paine Webber will notify us thereof; but the omission
so to notify us shall not relieve us from any obligation hereunder unless, and
only to the extent that, such omission results in our forfeiture of substantive
rights or defenses. If any such action or other proceeding shall be brought
against any Indemnified Person, we shall, upon written notice given reasonably
promptly following your notice to us of such action or proceeding, be entitled
to assume the defense thereof at our expense with counsel chosen by us and
reasonably satisfactory to such Indemnified Person; PROVIDED, HOWEVER, that any
Indemnified Person may at its own expense retain separate counsel to participate
in such defense. Notwithstanding the foregoing, such Indemnified Person shall
have the right to employ separate counsel at our expense and to control its own
defense of such action or proceeding if, in the reasonable opinion of counsel to
such Indemnified Person, (i) there are or may be legal defenses available to
such Indemni fied Person or to other Indemnified Persons that are different from
or additional to those available to us, or (ii) a difference of position or
potential difference of position exists between us and such Indemnified Person
that would make such separate representation advisable; PROVIDED, HOWEVER, that
in no event shall we be required to pay fees and expenses under this indemnity
for more than one firm of attorneys (in addition to local counsel) in any
jurisdiction in any one legal action or group of related legal actions. We agree
that we will not, without the prior written consent of PaineWebber, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action or proceeding relating to the matters contemplated by
PaineWebber's engagement (whether or not any Indemnified Person is a party
thereto) unless such
A-2
<PAGE> 9
settlement, compromise or consent includes an unconditional release of
PaineWebber and each other Indemnified Person from all liability arising or that
may arise out of such claim, action or proceeding.
If the indemnification of an Indemnified Person provided for hereunder is
finally judicially determined by a court of competent jurisdiction to be
unenforceable, then we agree, in lieu of indemnifying such Indemnified Person,
to contribute to the amount paid or payable by such Indemnified Person as a
result of such Liabilities in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by us on the one hand and
by PaineWebber on the other from transactions in connection with which
PaineWebber has been engaged. If the allocation provided in the preceding
sentence is not permitted by applicable law, then we agree to contribute to the
amount paid or payable by such Indemnified Person as a result of such
Liabilities in such proportion as is appropriate to reflect not only the
relative benefits referred to in such preceding sentence but also the relative
fault of us and of such Indemnified Person. Notwithstanding the foregoing, in no
event shall the aggregate amount required to be contributed by all Indemnified
Persons taking into account our contributions as described above exceed the
amount of fees actually received by PaineWebber pursuant to such engagement. The
relative benefits received or sought to be received by us on the one hand and by
PaineWebber on the other shall be deemed to be in the same proportion as (a) the
total value of the transactions with respect to which PaineWebber has been
engaged bears to (b) the fees paid or payable to PaineWebber with respect to
such engagement.
A-3
<PAGE> 1
Exhibit (l)
KIRKPATRICK & LOCKHART LLP
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2637
TELEPHONE: (617) 261-3100
FACSIMILE (617) 261-3175
www.kl.com
Mark P. Goshko
(617) 261-3163
[email protected]
October 27, 1998
Eaton Vance Senior Income Trust
24 Federal Street
Boston, MA 02110
Dear Sirs:
This opinion is furnished in connection with the registration by Eaton
Vance Senior Income Trust, a business trust organized under the laws of the
Commonwealth of Massachusetts (Fund), of 30,000,000 shares of common stock, par
value $.01 per share (Shares), under the Securities Act of 1933, as amended,
pursuant to a registration statement on Form N-2 (File No. 333-64151), as
amended (Registration Statement), in the amounts set forth under Amount Being
Registered on the facing page of the Registration Statement.
As counsel for the Fund, we are familiar with the proceedings taken by it
in connection with the authorization, issuance and sale of the Shares. In
addition, we have examined and are familiar with the Declaration of Trust, as
amended, of the Fund, the By-Laws of the Fund, and such other documents as we
have deemed relevant to the matters referred to in this opinion.
Based upon the foregoing, we are of the opinion that the Shares, upon
issuance and sale in the manner referred to in the Registration Statement, will
be legally issued, fully paid and non-assessable (except as described in the
Registration Statement) shares of common stock of the Fund.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Prospectus constituting
a part thereof.
Very truly yours,
/s/ Kirkpatrick & Lockhart LLP
---------------------------------
Kirkpatrick & Lockhart LLP
BOSTON * HARRISBURG * MIAMI * NEW YORK * PITTSBURGH* WASHINGTON
<PAGE> 1
EXHIBIT (n)
INDEPENDENT AUDITORS' CONSENT
We consent to the use in the Registration Statement on Form N-2 of Eaton Vance
Senior Income Trust of our report, dated October 26, 1998, appearing in the
Statement of Additional Information, which is part of this Registration
Statement.
/s/ Deloitte & Touche LLP
- -------------------------
Deloitte & Touche LLP
Boston, Massachusetts
October 26, 1998
<PAGE> 1
Exhibit (p)
Eaton Vance Management
24 Federal Street
Boston, MA 02110
Telephone: (617) 482-8260
Telecopy: (617) 338-8054
October 23, 1998
Eaton Vance Senior Income Trust
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 Senior Income Trust (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/ William M. Steul
William M. Steul
Treasurer and Vice President
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> OCT-23-1998
<PERIOD-END> OCT-23-1998
<INVESTMENTS-AT-COST> 0
<INVESTMENTS-AT-VALUE> 0
<RECEIVABLES> 0
<ASSETS-OTHER> 100
<OTHER-ITEMS-ASSETS> 510
<TOTAL-ASSETS> 610
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 510
<TOTAL-LIABILITIES> 510
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 100
<SHARES-COMMON-STOCK> 10
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 100
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 0
<NET-INVESTMENT-INCOME> 0
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 100
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<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 100
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 0
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 100
<PER-SHARE-NAV-BEGIN> 10.00
<PER-SHARE-NII> 0
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE> 1
Exhibit (s)
POWER OF ATTORNEY
We, the undersigned officers and Trustees of Eaton Vance Senior Income
Trust, 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
Senior Income Trust 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 October 19, 1998
- ------------------------- Officer and Trustee
James B. Hawkes
/s/ James L. O'Connor Treasurer and Principal Financial October 19, 1998
- ------------------------- and Accounting Officer
James L. O'connor
/s/ Donald R. Dwight Trustee October 19, 1998
- -------------------------
Donald R. Dwight
/s/ Samuel L. Hayes, III Trustee October 19, 1998
- -------------------------
Samuel L. Hayes, III
/s/ Norton H. Reamer Trustee October 19, 1998
- -------------------------
Norton H. Reamer
/s/ John L. Thorndike Trustee October 19, 1998
- -------------------------
John L. Thorndike
/s/ Jack L. Treynor Trustee October 19, 1998
- -------------------------
Jack L. Treynor
