As filed with the Securities and Exchange Commission on September 1, 1999
FILE NO. 811-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
Butterfield House, Fort Street, P.O. Box 2330, George Town, Grand
Cayman, Cayman Islands, BWI
(Address of Principal Executive Offices)
Registrant's Telephone Number, Including Area Code: (345) 949-4719
Philip W. Coolidge, 21 Milk Street, Boston, Massachusetts 02109
(Name and Address of Agent for Service)
Copy to: John E. Baumgardner, Esq.
Sullivan & Cromwell
125 Broad Street
New York, NY 10004
<PAGE>
EXPLANATORY NOTE
This Registration Statement on Form N-1A (the"Registration Statement")
has been filed by the Registrant pursuant to Section 8(b) of the Investment
Company Act of 1940, as amended. However, beneficial interests in the Registrant
are not being registered under the Securities Act of 1933 (the "1933 Act")
because such interests will be issued solely in private placement transactions
that do not involve any "public offering" within the meaning of Section 4(2) of
the 1933 Act. Investments in the Registrant may only be made by other investment
companies, insurance company separate accounts, common or commingled trust funds
or similar organizations or entities that are "accredited investors" within the
meaning of Regulation D under the 1933 Act. This Registration Statement does not
constitute an offer to sell, or the solicitation of an offer to buy, any
beneficial interests in the Registrant.
<PAGE>
PART A
Responses to Items 1 through 3, 5 and 9 have been omitted pursuant to
Item 2(b)of Instruction B of the General Instructions to Form N-1A.
ITEM 4. Investment Objectives, Principal Investment Strategies and Related
Risks.
The investment objective of the Dow Jones Islamic Market Index
Portfolio (the "Portfolio") is described below, together with the policies
employed to attempt to achieve this objective.
The investment objective of the Portfolio is to seek long-term capital
gains by matching the performance of the Dow Jones Islamic Market Index (SM)
(the "Index") - a globally diversified compilation of equity securities
considered by Dow Jones' Shari'ah Supervisory Board to be in compliance with
Shari'ah principles.
Under normal circumstances the assets of the Portfolio are fully
invested in securities which are included in the Index. Any uninvested cash will
be held in non-interest bearing deposits or invested in a manner compliant with
the Shari'ah principles.
SHARI'AH PROCESS
Primary Selection Criteria
Dow Jones selection process begins by excluding those firms who do not
meet specific business line and financial requirements. The selection criteria
and key features established by Dow Jones for inclusion of a company in its
Index and, in turn, the Portfolio are as follows:
Specifically, Dow Jones excludes firms whose products include:
Alcohol
Pork related products
Conventional financial services (banking, insurance, etc.)
Entertainment (hotels, casinos/gambling, cinema, pornography, music, etc.)
Tobacco
Defense
These incompatible lines of business, represented by 18 of the 122
industry groups within the Dow Jones Global Indexes are removed from the
"universe" of stocks considered for the Index. Other companies classified in
other industry groups may also be excluded if they are deemed to have a material
ownership in or revenues from prohibited business activities. After removing
companies with unacceptable primary business activities, the remaining universe
is tested by three financial-ratio "filters". The purpose is to remove companies
with unacceptable financial ratios.
The filters exclude companies if:
Total debt divided by total assets is equal to or greater than 33%.
(Note: total debt = short term debt + current portion of long-term debt +
long-term debt).
Accounts receivables divided by total assets is equal to or greater
than 47%.
(Note: accounts receivables = current receivables + long-term
receivables).
Non-operating interest income divided by operating income is equal to
or greater than 9%.
Companies that pass these screens are included in the Index investable
universe, from which Index components are selected.
<PAGE>
Shari'ah Supervisory Board
Dow Jones' Shari'ah Supervisory Board has approved of the above
criteria and any changes in the Shari'ah Supervisory Board or the selection
criteria are at the sole discretion of Dow Jones. Changes by Dow Jones in the
selection criteria or the composition of the Index will be reflected in the
composition of the Fund in a reasonable period of time.
BENCHMARK
The Portfolio will use as its benchmark the Dow Jones Islamic Market
Index (SM) which it intends to track. There is no guarantee that the Portfolio
will achieve the same return as the Index. Due to the large number of stocks in
the Index, the Trustees of the Portfolio may, in the initial stages of the
Portfolio, purchase a sub-group of equities from those contained in the Index
that Brown Brothers Harriman & Co. (the "Investment Manager") believes will best
track the Index. As the assets of the Portfolio grow, it is anticipated the
holdings of the Portfolio will be increased to include more of the components of
the Index.
The approximate geographic distribution of the market capitalization of
the Index is: Americas (70%), Europe (20%), and Asia (10%).
The 600 companies whose issues compromise the Index have an average
market capitalization of US$11.7 billion and a median market capitalization of
US$2.6 billion.
The following sectors are represented in the Index: Consumer,
Non-Cyclical (28%); Technology (25%); Utilities (12%); Energy (11%) Consumer
Cyclical (9%); Industrial (8%); Basic materials (4%); Others (3%). The above
composition is estimated and will change over time.
"Dow Jones" and "Dow Jones Islamic Market IndexSM" are service marks of
Dow Jones & Company, Inc. Dow Jones has no relationship to the Trust's
Investment Adviser or Investment Manager, other than the licensing of the Dow
Jones Islamic Market Index and its service marks for use in connection with the
Trust.
Dow Jones does not:
Sponsor, endorse, sell or promote the Trust.
Recommend that any person invest in the Trust or any other securities.
Have any responsibility or liability for or make any decisions about
the timing, amount or pricing of Trust.
Have any responsibility or liability for the administration,
management or marketing of the Trust.
Consider the needs of the Trust or the owners of the Trust in
determining, composing or calculating the Dow Jones Islamic Market
IndexSM or have any obligation to do so.
Dow Jones will not have any liability in connection with the Trust.
Specifically, Dow Jones does not make any warranty, express or implied, and Dow
Jones disclaims any warranty about:
The results to be obtained by the Trust, the owner of the Trust or any other
person in connection with the use of the Dow Jones Islamic Market IndexSM and
the data included in the Dow Jones Islamic Market IndexSM;
The accuracy or completeness of the Dow Jones Islamic Market IndexSM
and its data;
The merchantability and the fitness for a particular purpose or use of the Dow
Jones Islamic Market IndexSM and its data;
Although Dow Jones uses reasonable efforts to comply with its guidelines
regarding the selection of components in the Dow Jones Islamic Market Index,
Dow Jones disclaims any warranty of compliance with Shariah law or other
Islamic principles;
Dow Jones will have no liability for any errors, omissions or interruptions
in the Dow Jones Islamic Market IndexSM or its data;
Under no circumstances will Dow Jones be liable for any lost profits or
indirect, punitive, special or consequential damages or losses, even
if Dow Jones knows that they might occur.
The licensing agreement between the Trust's Investment Adviser, Investment
Manager and Dow Jones is solely for their benefit and not for the benefit of the
owners of the Trust or any other third parties.
<PAGE>
PRINCIPAL RISK FACTORS
The principal risks of investing in the Portfolio and the circumstances
reasonably likely to adversely affect an investment are described below. An
investor may lose money by investing in the Portfolio.
The principal risks of investing in the Portfolio are:
Market Risk.
This is the risk that the price of a security falls due to changing
economic, political or market conditions, or due to a company's individual
situation. Index Investing Risk.
Unlike other non-index investment portfolios, the Portfolio will not be
engaged in buying and selling of securities based upon economic, financial and
market analysis and investment judgement. Instead, the Portfolio will be
invested under an indexed investment approach, which attempts to approximate the
investment performance of the Index. Therefore, an investor should not expect to
achieve the potentially greater results that could be obtained by investment
portfolios that aggressively seek growth or investment portfolios that attempt
to limit losses in a falling market.
The strategy of investing in a representative sample of Index
components may result in some deviation between Portfolio performance and that
of the Index. The Portfolio's return is also likely to be lower than that of the
Index because the Portfolio incurs brokerage commissions, transaction fees and
other expenses. However, transaction costs will likely be lower than typical
stock funds because of lower portfolio turnover. In addition, the Portfolio's
ability to replicate the Index return will depend to a certain extent on cash
flow into and out of the Portfolio. Even if the Portfolio's investments were
fairly representative of the Index its return could differ because of
differences in how the Portfolio and the Index are valued. The Index is valued
by Dow Jones, which may use different closing prices, currency exchange rates or
dividend reinvestment assumptions than the Portfolio does.
Foreign Investment Risk.
Changes in political or social conditions, diplomatic relations,
confiscatory taxation, expropriation, nationalization, limitation on the removal
of funds or assets, or imposition of (or change in) exchange control or tax
regulations may adversely affect the value of such investments. Changes in
government administrations or economic or monetary policies in the United States
or other countries could result in appreciation or depreciation of portfolio
securities and could favorably or unfavorably affect the operations of the
Portfolio. The economies of individual foreign nations differ from the U.S.
economy, whether favorably or unfavorably, in areas such as growth of gross
domestic product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payments position. It may be more difficult to
obtain and enforce a judgment against a foreign company. Dividends paid by
foreign issuers may be subject to withholding and other foreign taxes which may
decrease the net return on foreign investments as compared to dividends paid by
domestic companies.
In addition, while the volume of transactions effected on foreign stock
exchanges has increased in recent years, in most cases it remains appreciably
below that of the New York Stock Exchange. Accordingly, foreign investments are
less liquid and their prices are more volatile than comparable investments in
securities of U.S. companies. Moreover, the settlement periods for foreign
securities, which are often longer than those for securities of U.S. companies,
may affect portfolio liquidity. In buying and selling securities on foreign
exchanges, fixed commissions are normally paid that are generally higher than
the negotiated commissions charged in the United States. In addition, there is
generally less government supervision and regulation of securities exchanges,
brokers and companies in foreign countries than in the United States.
The foreign investments made by the Portfolio are made in compliance
with the currency regulations and tax laws of the United States and foreign
governments. There may also be foreign government regulations and laws that
restrict the amounts and types of foreign investments.
Because securities in the Portfolio are denominated and pay dividends
in various currencies, and the Portfolio holds various foreign currencies from
time to time, the value of the net assets of the Portfolio as measured in U.S.
dollars is affected favorably or unfavorably by changes in exchange rates. The
Portfolio also incurs costs in connection with conversion between various
currencies.
<PAGE>
Developing Countries Investment Risk
The Portfolio may invest its assets in securities of issuers
based in developing countries. Investments in securities of issuers in
developing countries may involve a high degree of risk and many may be
considered speculative. These investments carry all of the risks of investing in
securities of foreign issuers outlined in this section to a heightened degree.
These heightened risks include: (i) greater risks of expropriation, confiscatory
taxation, nationalization, and less social, political and economic stability;
(ii) the small current size of the markets for securities of issuers in
developing countries and the currently low or non-existent volume of trading
resulting in lack of liquidity and in price volatility; (iii) certain national
policies which may restrict the Portfolio's investment opportunities including
restrictions on investing in issuers or industries deemed sensitive to relevant
national interests; and (iv) the absence of developed legal structures governing
private or foreign investment and private property.
Non-Diversification Risk.
The Portfolio is classified as "non-diversified" under the 1940 Act,
which means that it is not limited by the 1940 Act with respect to the
proportion of its assets which may be invested in securities of a single issuer
(although certain diversification requirements are imposed by the Internal
Revenue Code of 1986, as amended).
Islamic Shari'ah Investment Risk.
It is possible that the restrictions placed on investments, in
particular the prohibition on interest bearing investments and the cost of
donations by the Portfolio of parts of dividends which are attributable to
interest related activities, may result in the Portfolio performing less well
than portfolios with similar investment objectives which are not subject to
Islamic Shari'ah restrictions.
Investments in the Portfolio are neither insured nor guaranteed by the
U.S. Government. Shares of beneficial interest of the Portfolio are not deposits
of or obligations of, or guaranteed by, Brown Brothers Harriman & Co. or any
other bank, and the shares of beneficial interest are not insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board or any other federal,
state or other governmental agency.
ITEM 6. MANAGEMENT, ORGANIZATION AND CAPITAL STRUCTURE
Investment Manager and Investment Adviser
The Investment Manager is Brown Brothers Harriman & Co., Private
Bankers, 59 Wall Street, New York, NY 10005, a New York limited partnership
established in 1818. The firm is subject to examination and regulation by the
Superintendent of Banks of the State of New York and by the Department of
Banking of the Commonwealth of Pennsylvania. The firm is also subject to
supervision and examination by the Commissioner of Banks of the Commonwealth of
Massachusetts.
Brown Brothers Harriman & Co. provides portfolio management services to
the Portfolio. Subject to the general supervision of the Portfolio's Trustees
and based upon advice given by Wafra Investment Advisory Group, Inc. (the
"Investment Adviser"), Brown Brothers Harriman & Co. makes the day-to-day
investment decisions for the Portfolio, places the purchase and sale orders for
portfolio transactions, and generally manages the Portfolio's investments. Brown
Brothers Harriman & Co. provides a broad range of investment management services
for customers in the United States and abroad. At December 31, 1998, it managed
total assets of approximately $32 billion.
The Portfolio is managed on a day to day basis by a team of individuals
including Mr. John A. Nielsen, Mr. Jeffrey A. Schoenfeld, Mr. Young Chin, Mr.
Vasken H. Setrakian and Mr. Gerald Lavish. Mr. Nielsen holds a B.A. from
Bucknell University, a M.B.A. from Columbia University and is a Chartered
Financial Analyst. He joined Brown Brothers Harriman & Co. in 1968. Mr.
Schoenfeld holds a B.A. from University of California, Berkeley and a M.B.A.
from the Wharton School of the University of Pennsylvania. He joined Brown
Brothers Harriman & Co. in 1984. Mr. Chin holds a B.A. and a M.B.A from
University of Chicago. He joined Brown Brothers Harriman & Co. in 1999. Mr.
Setrakian holds a B.E. from American University of Beirut and a M.B.A. from
Harvard University. He joined Brown Brothers Harriman & Co. in 1980. Mr. Lavish
holds a B.S. from Columbia University and a M.B.A. from New York University. He
joined Brown Brothers Harriman & Co. in 1998.
<PAGE>
The Investment Adviser of the Portfolio is Wafra Investment Advisory
Group, Inc., 345 Park Avenue, New York, NY 10154, a U.S. registered investment
adviser. Founded in 1985, the Investment Adviser, with its principal place of
business in New York, together with its affiliate companies, manages in excess
of $3 billion, specialising in global fund management, securities portfolio
management, direct equity investment, real estate investment and private asset
management to major financial institutions from the Gulf as well as other
companies and high net worth individuals. The Investment Adviser acts as U.S.
investment adviser for numerous investment funds and managed accounts, including
other Islamic funds and products.
The Investment Adviser will provide investment advisory services to the
Portfolio and the Investment Manager. For performing such investment advisory
services, the Investment Adviser receives such compensation from the Investment
Manager as is from time to time agreed upon.
For the services provided and the expenses borne pursuant to the
Investment Management Agreement and the Investment Advisory Agreement, the
Investment Manager and the Investment Adviser jointly will receive from the
Portfolio as full compensation therefor an aggregate fee at an annual rate equal
to 0.40% of the Portfolio's average daily net assets. This fee will be computed
based on net assets at 4:00 P.M. New York time on each day the New York Stock
Exchange is open for trading, will be paid monthly during the succeeding
calendar month and will be shared between the Investment Manager and the
Investment Adviser as from time to time may be agreed upon by the Investment
Manager and the Investment Adviser.
ITEM 7. INVESTOR INFORMATION
The net asset value of the Portfolio is determined each day the New
York Stock Exchange is open for regular trading. This determination is made once
each business day as of 4:00 p.m. New York time.
The Portfolio determines the value of each security held by the
Portfolio with advice from the Investment Manager and Investment Adviser as to
the broadest and most representative market for such securities. Any security
for which the primary market is on a securities exchange is valued at the last
sale price on such exchange on the valuation day or, if no sale occurred on that
day, at the most recent quoted bid price on that day. Such securities as well as
other securities for which the primary market is believed to be over-the-counter
are valued at the most recent quoted bid price provided by one or more principal
market makers. Securities or other assets for which market prices are not
readily available will be valued at their fair value as determined in good faith
in accordance with the procedures adopted by the Trustees with the advice of the
Investment Manager and Investment Adviser.
Beneficial interests in the Portfolio are issued solely in private
placement transactions. Investments in the Portfolio may only be made by other
investment companies, insurance company separate accounts, common or commingled
trust funds, or similar organizations or entities which are "accredited
investors." This Registration Statement does not constitute an offer to sell, or
the solicitation of an offer to buy, any "security" within the meaning of the
Securities Act of 1933 (the "1933 Act").
An investment in the Portfolio may be made without a sales load. All
investments are made at net asset value next determined after an order is
received in "good order" by the Portfolio.
<PAGE>
There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times as
is reasonably practicable in order to enhance the yield on its assets,
investments must be made in federal funds (i.e., monies credited to the
custodian of the Portfolio's account by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
An investor in the Portfolio may reduce all or any portion of its
investment at the net asset value next determined after a request in "good
order" is furnished by the investor to the Portfolio. The proceeds of a
reduction will be paid by the Portfolio in federal funds within five Portfolio
business days after the reduction is effected.
The right of any investor to receive payment with respect to any
reduction may be suspended or the payment of the proceeds therefrom postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on the New York Stock Exchange is restricted
or, if an emergency exists.
The Portfolio reserves the right under certain circumstances, such as
accommodating requests for substantial withdrawals or liquidations, to pay
distributions in kind to investors (i.e., to distribute portfolio securities as
opposed to cash). If securities are distributed, an investor could incur
brokerage, tax or other charges in converting the securities to cash. In
addition, distribution in kind may result in a less diversified portfolio of
investments or adversely affect the liquidity of the Portfolio.
ITEM 8. DISTRIBUTION ARRANGEMENTS.
Not applicable.
<PAGE>
PART B
ITEM 10. COVER PAGE.
Not applicable.
TABLE OF CONTENTS. PAGE
Portfolio History . . . . . . . . . . . . . . . . . . B-1
Description of Portfolio and Its Investments and Risks B-1
Management of the Portfolio . . . . . . . . . . . . . B-4
Control Persons and Principal Holders . . . . . . . . B-5
Investment Advisory and Other Services . . . . . . . B-5
Expense Payment Agreement B-7
Brokerage Allocation and Other Practices . . . . . . B-8
Capital Stock and Other Securities . . . . . . . . . B-9
Purchase, Redemption and Pricing of
Securities Being Offered . . . . . . . . . . . . . . B-10
Tax Status . . . . . . . . . . . . . . . . . . . . . B-11
Underwriters . . . . . . . . . . . . . . . . . . . . B-12
Calculations of Performance Data . . . . . . . . . . B-12
Financial Statements . . . . . . . . . . . . . . . . B-12
ITEM 11. PORTFOLIO HISTORY.
Not applicable.
ITEM 12. DESCRIPTION OF PORTFOLIO AND ITS INVESTMENTS AND RISKS.
The investment objective of the Dow Jones Islamic Market Index
Portfolio (the "Portfolio") is to to seek long-term capital gains by matching
the performance of the Dow Jones Islamic Market Index (SM) (the "Index") - a
globally diversified compilation of equity securities considered by Dow Jones'
Shari'ah Supervisory Board to be in compliance with Shari'ah principles.
At the Portfolio's inception, the Shari'ah Supervisory Board consists
of:
Shaykh Abdul Sattar Abu Ghuddah, Senior advisor to Albaraka Investment Co. of
Syria Saudi Arabia and Syria
Shaykh Justice Muhammed Shaykh Usmani has been a member of the
Usmani, Pakistan Supreme Court of Pakistan since 1982.
He is Deputy Chairman of the Islamic Fiqh
Academy, Jeddah, and chairman or
members of more than a dozen Shari'ah
supervisory boards.
Shaykh Yaquby, Bahrain Shaykh Mizam Yaquby is a renowned Shari'ah
scholar and advisor to numerous Islamic
banks and companies, including Abu Dhabi
Islamic Bank, Islamic Investment Company of
the Gulf, Bahrain and the Arab Islamic Bank,
Bahrain. He Pursued traditional Islamic
studies in Mecca, India and Morocco under
the guidance of eminent Islamic scholars,
including Shaykh Abdullah Al-Farisi and
Shaykh Muhammad Salah Al-Abbasi. He holds a
B.A.in Economics and Comparative Religion
from McGill University, Toronto. He is a
Ph.D.candidate in Islamic Law at the
University of Wales. Shaykh Yaquby has
published several
books on Islam law and is a frequent speaker
at Islamic conferences.
Shaykh Dr. Mohamed Ali Eligari, Dr. Mohamed Ali Elgari is the director of
Saudi Arabia the Center for Research in Islamic Economics
at King Abdulaziz University in Jeddah. He
is also a member of the OIC Fiqh Council.Dr.
Elgari serves as a consultant to Islamic
banks and has served on the consulting
committee that counseled the Government of
Pakistan on the Islamization of its banking
system. Dr. Elgari holds a Ph.D.in Economics
from the University of California.
<PAGE>
Shaykh Yusuf Tala DeLorenzo, Shaykh Yusuf Talal DeLorenzo is currently
United States a Shari'ah consultant/advisor and
translator/researcher for the
institution of Islamic Banking,
London, and PCS Inc., Reston, VA. He
holds an M.A. in Islamic Studies from
Jami'ah al Ulum al Islamiyah (Karachi)
and is a doctoral candidate at the
Hartford Seminary. Shaykh DeLorenzo
produced the first systematic academic
translation in English of legal
rulings issued by Shari'ah advisory
boards on the operations of Islamic ba
Rulings on the Operations of Islamic
Banks." He has also authored original
research in Islamic studies, including
Islamic banking and law, in English,
Arabic and Urdu.
Periodic Review
The Index is reviewed quarterly and annually by the Shari'ah Supervisory
Board and by Dow Jones for consideration of exclusion or inclusion of
components. In addition, the Index is reviewed on an on-going basis to
contemplate changes as a result of extraordinary events (e.g. delisting,
bankruptcy, merger, takeover, etc.).
The following discussion supplements the information regarding the
investment objective of the Portfolio and the policies to be employed to achieve
this objective as set forth above and in Part A.
EQUITY INVESTMENTS
Equity investments may or may not pay dividends and may or may not
carry voting rights. Common stock occupies the most junior position in a
company's capital structure. Convertible securities entitle the holder to
exchange the securities for a specified number of shares of common stock,
usually of the same company, at specified prices within a certain period of time
and to receive interest or dividends until the holder elects to convert. The
provisions of any convertible security determine its ranking in a company's
capital structure. In the case of subordinated convertible debentures, the
holder's claims on assets and earnings are subordinated to the claims of other
creditors, and are senior to the claims of preferred and common shareholders. In
the case of convertible preferred stock, the holder's claims on assets and
earnings are subordinated to the claims of all creditors and are senior to the
claims of common shareholders.
FOREIGN EXCHANGE CONTRACTS
Foreign exchange contracts are made with currency dealers, usually large
commercial banks and financial institutions. Although foreign exchange rates are
volatile, foreign exchange markets are generally liquid with the equivalent of
approximately $500 billion traded worldwide on a typical day.
<PAGE>
OTHER INVESTMENT TECHNIQUES
Cash is held for the Portfolio in demand deposit accounts with Brown
Brothers Harriman & Co. as the Portfolio's custodian bank (the "Custodian").
RESTRICTED SECURITIES. Securities that have legal or contractual
restrictions on their resale may be acquired for the Portfolio. The price paid
for these securities, or received upon resale, may be lower than the price paid
or received for similar securities with a more liquid market. Accordingly, the
valuation of these securities reflects any limitation on their liquidity. (See
"Investment Restrictions".)
WHEN-ISSUED AND DELAYED DELIVERY SECURITIES. Securities may be purchased
for the Portfolio on a when-issued or delayed delivery basis. For example,
delivery and payment may take place a month or more after the date of the
transaction. The purchase price and the interest rate payable on the securities,
if any, are fixed on the transaction date. The securities so purchased are
subject to market fluctuation and no income accrues to the Portfolio until
delivery and payment take place. At the time the commitment to purchase
securities on a when-issued or delayed delivery basis is made, the transaction
is recorded and thereafter the value of such securities is reflected each day in
determining the Portfolio's net asset value. The Portfolio maintains with the
Custodian a separate account with a segregated portfolio of securities in an
amount at least equal to these commitments. At the time of its acquisition, a
when-issued or delayed delivery security may be valued at less than the purchase
price. Commitments for such when-issued or delayed delivery securities are made
only when there is an intention of actually acquiring the securities. On
delivery dates for such transactions, such obligations are met from maturities
or sales of securities and/or from cash flow. If the right to acquire a when-
issued or delayed delivery security is disposed of prior to its acquisition, the
Portfolio could, as with the disposition of any other portfolio obligation,
incur a gain or loss due to market fluctuation. When-issued or delayed delivery
commitments for the Portfolio may not be entered into if such commitments exceed
in the aggregate 15% of the market value of its total assets, less liabilities
other than the obligations created by when-issued or delayed delivery
commitments.
<PAGE>
INVESTMENT COMPANY SECURITIES. Subject to applicable statutory and
regulatory limitations, the assets of the Portfolio may be invested in shares of
other investment companies. Under the 1940 Act, assets of the Portfolio may be
invested in shares of other investment companies in connection with a merger,
consolidation, acquisition or reorganization or if immediately after such
investment (i) 10% or less of the market value of the Portfolio's total assets
could be so invested, (ii) 5% or less of the market value of the Portfolio's
total assets would be invested in the shares of any one such company, and (iii)
3% or less of the total outstanding voting stock of any other investment company
would be owned by the Portfolio. As a shareholder of another investment company,
the Portfolio would bear, along with other shareholders, its pro rata portion of
the other investment company's expenses, including advisory fees. These expenses
would be in addition to the advisory and other expenses that the Portfolio bears
directly in connection with its own operations.
ADDITIONAL INVESTMENT INFORMATION
In response to adverse market, economic, political or other conditions, the
Portfolio may make temporary investments that are not consistent with its
investment objective and principal investment strategies. Such investments may
prevent the Portfolio from achieving its investment objective.
INVESTMENT RESTRICTIONS
The Portfolio is operated under the following investment restrictions which
are deemed fundamental policies and may be changed only with the approval of the
holders of a "majority of the outstanding voting securities" as defined in the
Investment Company Act of 1940, as amended (the "1940 Act"), of the Portfolio.
As used in this Part B, the term "majority of the outstanding voting securities"
as defined in the 1940 Act currently means the vote of (i) 67% or more of the
voting securities present at a meeting, if the holders of more than 50% of the
outstanding voting securities are present in person or represented by proxy; or
(ii) more than 50% of the outstanding voting securities, whichever is less.
The Portfolio may not:
(1) borrow money or mortgage or hypothecate its assets except that in an
amount not to exceed 1/3 of the current value of its net assets and in a manner
not to contravene Islamic Shari'ah principles, it may borrow money as a
temporary measure for extraordinary or emergency purposes, and except that it
may pledge, mortgage or hypothecate not more than 1/3 of such assets to secure
such borrowings (it is intended that money will be borrowed only from banks and
only either to accommodate requests for the redemption of Fund shares or the
withdrawal of part or all of the Fund's interest in the Portfolio, as the case
may be, while effecting an orderly liquidation of portfolio securities or to
maintain liquidity in the event of an unanticipated failure to complete a
portfolio security transaction or other similar situations), and except that
assets may be pledged to secure letters of credit solely for the purpose of
participating in a captive insurance company sponsored by the Investment Company
Institute
(2) earn interest on its capital;
(3) purchase any security which is not included in the Dow Jones
Islamic Market Index (SM);
(4) hold uninvested cash in interest bearing deposits or invest such
uninvested cash in a manner that would not be in compliance with Shari'ah
principles;
(5) acquire the securities of one issuer if upon such purchase the value of
the Portfolio's holdings of such securities would exceed 10% of its net assets;
(6) invest in fixed income investments;
(7) underwrite securities issued by other persons except insofar as it may
technically be deemed an underwriter under the Securities Act of 1933, as
amended (the "1933 Act") in selling a portfolio security;
(8) purchase or sell real estate (including limited partnership interests
but excluding securities secured by real estate or interests therein), interests
in oil, gas or mineral leases, commodities or commodity contracts in the
ordinary course of business (the freedom of action to hold and to sell real
estate acquired as a result of the ownership of securities is reserved);
(9) concentrate its investments in any particular industry, but if it is
deemed appropriate for the achievement of its investment objective, up to 25% of
its assets, at market value at the time of each investment, may be invested in
any one industry;
(10) issue any senior security (as that term is defined in the 1940 Act) if
such issuance is specifically prohibited by the 1940 Act or the rules and
regulations promulgated thereunder.
<PAGE>
NON-FUNDAMENTAL RESTRICTIONS. The Portfolio may not as a matter of
operating policy: (i) purchase securities of any investment company if such
purchase at the time thereof would cause more than 10% of its total assets
(taken at the greater of cost or market value) to be invested in the securities
of such issuers or would cause more than 3% of the outstanding voting securities
of any such issuer to be held for it; (iii) knowingly invest in securities which
are subject to legal or contractual restrictions on resale if, as a result
thereof, more than 10% of its net assets (taken at market value) would be so
invested; (iv) enter into forward contracts and write, purchase or sell any put
or call option or any combination thereof, provided that this shall not prevent
the purchase, ownership, holding or sale of warrants where the grantor of the
warrants is the issuer of the underlying securities; purchase any security or
evidence of interest therein on margin; or (v) make short sales of securities or
maintain a short position, unless at all times when a short position is open it
owns an equal amount of such securities or 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, and unless
not more than 10% of its net assets (taken at market value) is represented by
such securities, or securities convertible into or exchangeable for such
securities, at any one time (it is the present intention of management to make
such sales only for the purpose of deferring realization of gain or loss for
federal income tax purposes; such sales would not be made of securities subject
to outstanding options).
These policies are not fundamental and may be changed without investor
approval.
PERCENTAGE RESTRICTIONS. If a percentage restriction on investment or
utilization of assets set forth above or referred to in Part A is adhered to at
the time an investment is made or assets are so utilized, a later change in
percentage resulting from changes in the value of the portfolio securities of a
portfolio security is not considered a violation of policy. If investment
restrictions relating to any particular investment practice or policy are
inconsistent between the Portfolio and an investor, the Portfolio will adhere to
the more restrictive limitation.
ITEM 13. MANAGEMENT OF THE PORTFOLIO.
The Portfolio's Trustees, in addition to supervising the actions of the
Investment Adviser, Investment Manager and the Portfolio's administrator (the
"Administrator"), as set forth below, decide upon matters of general policy with
respect to the Portfolio. The Portfolio's Trustees receive no compensation for
their services.
Because of the services rendered to the Portfolio by the Investment
Adviser, Investment Manager and the Administrator, the Portfolio requires no
employees, and its officers receive no compensation from the Portfolio.
The Trustees and executive officers of the Portfolio, their business
addresses, and principal occupation during the past five years (although their
titles may have varied during the period) are:
TRUSTEES OF THE PORTFOLIO
RICHARD L. CARPENTER -- Trustee; Trustee of U.S. Money Market Portfolio,
U.S. Small Company Portfolio and International Equity Portfolio; Retired;
Director of Internal Investments, Public School Employees' Retirement System
(prior to December 1995). His business address is 12664 Lazy Acres Court, Nevada
City, CA 95959.
CLIFFORD A. CLARK -- Trustee; Trustee of U.S. Money Market Portfolio, U.S.
Small Company Portfolio and International Equity Portfolio; Retired; Director of
Schmid, Inc. (prior to July 1993); Managing Director of the Smith-Denison
Foundation . His business address is 42 Clowes Drive, Falmouth, MA 02540.
J. ANGUS IVORY -- Trustee; Director of Brown Brothers Harriman Ltd.,
subsidiary of Brown Brothers Harriman & Co.; Director of Old Daily Saddlery;
Advisor, RAF Central Fund; Committee Member, St. Thomas Hospital Pain Clinic
(since 1999)
<PAGE>
OFFICERS OF THE PORTFOLIO
PHILIP W. COOLIDGE -- President; Chief Executive Officer and President of
Signature Financial Group, Inc. ("SFG"), 59 Wall Street Distributors, Inc. ("59
Wall Street Distributors") and 59 Wall Street Administrators, Inc. ("59 Wall
Street Administrators").
JOHN R. ELDER - Treasurer; Vice President of SFG (since April 1995);
Treasurer of Phoenix Family of Mutual Funds (prior to April 1995).
LINWOOD C. DOWNS - Assistant Treasurer; Senior Vice President of SFG;
Senior Vice President and Treasurer of SFG; Treasurer of 59 Wall Street
Distributors and 59 Wall Street Administrators.
LINDA T. GIBSON -- Secretary; Senior Vice President and Secretary, SFG;
Secretary of 59 Wall Street Distributors and 59 Wall Street Administrators.
SUSAN JAKUBOSKI -- Assistant Treasurer and Assistant Secretary of the
Portfolio; Assistant Secretary, Assistant Treasurer and Vice President of
Signature Financial Group (Cayman) Limited (since August 1994); Fund Compliance
Administrator of Concord Financial Group, Inc. (from November 1990 to August
1994).
MOLLY S. MUGLER -- Assistant Secretary; Vice President and Assistant
Secretary of SFG; Assistant Secretary of 59 Wall Street Distributors and 59 Wall
Street Administrators.
CHRISTINE A. DRAPEAU -- Assistant Secretary; Vice President of SFG (since
January 1996); Paralegal and Compliance Officer, various financial companies
(July 1992 to January 1996); Graduate Student, Bentley College (prior to
December 1994).
-------------------------
The address of each officer of the Portfolio is 21 Milk Street, Boston,
Massachusetts 02109. Messrs. Coolidge, Elder and Downs, and Mss. Gibson,
Jakuboski, Mugler and Drapeau also hold similar positions with other investment
companies for which affiliates of 59 Wall Street Distributors serves as the
principal underwriter.
No Trustee of the Portfolio is an "interested person" of the Portfolio as
that term is defined in the 1940 Act.
By virtue of the responsibilities assumed by the Investment Adviser,
Investment Manager and the Administrator, the Portfolio requires no employees
other than its officers, and none of its officers devote full time to the
affairs of the Portfolio or receive any compensation from the Portfolio.
ITEM 14. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
As of July 31, 1999, Wafra/BBH & Co.-Dow Jones Islamic Market Index Fund
(Cayman) owned 100% of the outstanding beneficial interests in the Portfolio.
Wafra/BBH & Co.-Dow Jones Islamic Market Index Fund (Cayman) has informed
the Portfolio that whenever it is requested to vote on matters pertaining to the
Portfolio (other than a vote by the Portfolio to continue the operation of the
Portfolio upon the withdrawal of another investor in the Portfolio), it will
hold a meeting of its shareholders and will cast its vote as instructed by those
shareholders.
ITEM 15. INVESTMENT ADVISORY AND OTHER SERVICES.
Under the Investment Management Agreement with the Portfolio, subject to
the general supervision of the Portfolio's Trustees and in conformance with the
stated policies of the Portfolio, Brown Brothers Harriman & Co. (the "Investment
Manager") provides investment management services to the Portfolio. The
Investment Manager will make all investment decisions for the Portfolio based
upon the advice given by Wafra Investment Advisory Group, Inc. (the "Investment
Adviser") but subject to the overall direction and control of the Trustees of
the Portfolio.
The investment management services of Brown Brothers Harriman & Co. to the
Portfolio are not exclusive under the terms of the Investment Management
Agreement. Brown Brothers Harriman & Co. is free to and does render investment
management services to others, including other registered investment companies.
The Investment Management Agreement between Brown Brothers Harriman & Co.
and the Portfolio is dated March 5, 1999 and remains in effect for two years
from such date and thereafter, but only as long as the agreement is specifically
approved at least (see "Investment Adviser") annually (i) by a vote of the
holders of a "majority of the outstanding voting securities as defined in the
1940 Act" of the Portfolio, or by the Portfolio's Trustees, and (ii) by a vote
of a majority of the Trustees of the Portfolio who are not parties to the
Investment Advisory Agreement or "interested persons" (as defined in the 1940
Act) of the Portfolio ("Independent Trustees"), cast in person at a meeting
called for the purpose of voting on such approval. The Investment Management
Agreement was most recently approved by the Independent Trustees on August 10,
1999. The Investment Management Agreement terminates automatically if assigned
and is terminable at any time without penalty by a vote of a majority of the
Trustees of the Portfolio or by a vote of the holders of a "majority of the
outstanding voting securities as defined in the 1940 Act" of the Portfolio on
three months' written notice to Brown Brothers Harriman & Co. and by Brown
Brothers Harriman & Co. on three months' written notice to the Portfolio.
The Glass-Steagall Act prohibits certain financial institutions from
engaging in the business of underwriting, selling or distributing securities and
from sponsoring, organizing or controlling a registered open-end investment
company continuously engaged in the issuance of its shares. There is presently
no controlling precedent prohibiting financial institutions such as Brown
Brothers Harriman & Co. from performing investment management or administrative
functions. If Brown Brothers Harriman & Co. were to terminate its Investment
Management Agreement with the Portfolio, or were prohibited from acting in such
capacity, it is expected that the Trustees of the Portfolio would recommend to
the investors that they approve a new investment manager agreement for the
Portfolio with another qualified manager.
Under its Investment Advisory Agreement with the Portfolio, subject to the
general supervision of the Portfolio's Trustees and in conformance with the
stated policies of the Portfolio, Wafra Investment Advisory Group, Inc. (the
"Investment Adviser") provides investment advisory services to the Portfolio.
The investment advisory services of the Investment Adviser to the Portfolio
are not exclusive under the terms of the Investment Advisory Agreement. The
Investment Adviser is free to and does render investment advisory services to
others, including other registered investment companies.
The Investment Advisory Agreement between Wafra Investment Advisory Group,
Inc. and the Portfolio is dated March 5, 1999 and remains in effect for two
years from such date and thereafter, but only as long as the agreement is
specifically approved at least annually in the same manner as the Investment
Management Agreement. The Investment Advisory Agreement was most recently
approved by the Independent Trustees on August 10, 1999. The Investment Advisory
Agreement terminates automatically if assigned and is terminable at any time
without penalty by a vote of a majority of the Trustees of the Portfolio or by a
vote of the holders of a "majority of the outstanding voting securities as
defined in the 1940 Act" of the Portfolio on 60 days' written notice to Brown
Brothers Harriman & Co. and by Brown Brothers Harriman & Co. on 90 days' written
notice to the Portfolio.
<PAGE>
ADMINISTRATOR. Brown Brothers Harriman Trust Company acts as the
Administrator of the Portfolio (the "Administrator"). Brown Brothers Harriman
Trust Company is a wholly-owned subsidiary of Brown Brothers Harriman & Co.
Brown Brothers Harriman Trust Company, in its capacity as Administrator,
administers all aspects of the Portfolio's operations subject to the supervision
of the Trustees except as set forth above under "Investment Adviser" and
"Investment Manager". In connection with its responsibilities as Administrator
and at its own expense, Brown Brothers Harriman Trust Company (i) provides the
Portfolio with the services of persons competent to perform such supervisory,
administrative and clerical functions as are necessary in order to provide
effective administration of the Portfolio, including the maintenance of certain
books and records, receiving and processing requests for increases and decreases
in the beneficial interests in the Portfolio, notification to the Investment
Adviser of available funds for investment, reconciliation of account information
and balances between the Custodian and the Investment Adviser, and processing,
investigating and responding to investor inquiries; (ii) oversees the
performance of administrative and professional services to the Portfolio by
others, including the Custodian; (iii) provides the Portfolio with adequate
office space and communications and other facilities; and (iv) prepares and/or
arranges for the preparation, but does not pay for, the periodic updating of the
Portfolio's registration statement for filing with the Securities and Exchange
Commission (the "SEC"), and the preparation of tax returns for the Portfolio and
reports to investors and the SEC.
For the services rendered to the Portfolio and related expenses borne by
Brown Brothers Harriman Trust Company as Administrator of the Portfolio, Brown
Brothers Harriman Trust Company receives from the Portfolio a fee, computed
daily and paid monthly, at an annual rate equal to 0.05% of the average daily
net assets of the Portfolio that are not in excess of $50 million and at an
annual rate equal to 0.01% of the average daily net assets of the Portfolio in
excess of $50 million. The Administrator shall receive a minimum annual fee from
the Portfolio equal to $20,000.
The Administration Agreement between the Portfolio and Brown Brothers
Harriman Trust Company (dated March 5, 1999) will remain in effect for
successive annual periods, but only so long as the agreement is specifically
approved at least annually in the same manner as the Investment Management. The
agreement will terminate automatically if assigned by either party thereto and
is terminable by the Portfolio at any time without penalty by a vote of a
majority of the Trustees of the Portfolio, or by a vote of the holders of a
"majority of the outstanding voting securities as defined in the 1940 Act" of
the Portfolio. The Portfolio's Administration Agreement is terminable by the
Trustees of the Portfolio or by investors in the Portfolio on 60 days' written
notice to Brown Brothers Harriman Trust Company. The agreement is terminable by
the Administrator on 90 days' written notice to the Portfolio.
PLACEMENT AGENT
The Portfolio has not retained the services of a principal underwriter or
distributor, since interests in the Portfolio are offered solely in private
placement transactions. 59 Wall Street Distributors, Inc. ("59 Wall Street
Distributors"), acting as agent for the Portfolio, serves as the placement agent
of interests in the Portfolio. 59 Wall Street Distributors receives no
compensation for serving as placement agent.
EXPENSE PAYMENT AGREEMENT
Under an agreement dated August 10, 1999, Brown Brothers Harriman Trust
Company pays the expenses of the Portfolio, other than fees paid to Brown
Brothers Harriman Trust Company under the Portfolio's Administration Agreement
and other than expense relating to the organization of the Portfolio. In return,
Brown Brothers Harriman Trust Company receives a fee from the Portfolio such
that after such payment the aggregate expenses of the Portfolio do not exceed an
agreed upon annual rate, currently 0.57% of the average daily net assets of the
Portfolio. Such fees are computed daily and paid monthly.
CUSTODIAN
Brown Brothers Harriman & Co., 59 Wall Street, New York, NY 10005, is the
Custodian for the Portfolio.
As Custodian, Brown Brothers Harriman & Co. is responsible for maintaining
books and records of portfolio transactions and holding the Portfolio's
securities and cash pursuant to a custodian agreement with the Portfolio. Cash
is held for the Portfolio in demand deposit accounts at the Custodian. Subject
to the supervision of the Administrator, the Custodian maintains the accounting
and portfolio transaction records for the Portfolio and each day computes the
net asset value and net income of the Portfolio.
INDEPENDENT AUDITORS
Deloitte & Touche LLP are the independent auditors of the Portfolio.
<PAGE>
ITEM 16. BROKERAGE ALLOCATION AND OTHER PRACTICES.
The Portfolio is managed actively in pursuit of its investment
objective. Securities are not traded for short-term profits but, when
circumstances warrant, securities are sold without regard to the length of time
held. A 100% annual turnover rate would occur, for example, if all portfolio
Securities (excluding short-term obligations) were replaced once in a period of
one year. The amount of brokerage commissions and taxes on realized capital
gains to be borne by the investors tend to increase as the level of portfolio
activity increases.
In effecting securities transactions the Investment Manager seeks to
obtain the best price and execution of orders. In selecting a broker, the
Investment Manager considers a number of factors, including: the broker's
ability to execute orders without disturbing the market price; the broker's
reliability for prompt, accurate confirmations and on-time delivery of
securities; the broker's financial condition and responsibility; the research
and other information provided by the broker; and the commissions charged.
Accordingly, the commissions charged by any such broker may be greater than the
amount another firm might charge if the Investment Manager determines in good
faith that the amount of such commissions is reasonable in relation to the value
of the brokerage services and research information provided by such broker.
The Investment Manager may direct a portion of the Portfolio's
securities transactions to certain unaffiliated brokers which in turn use a
portion of the commissions they receive from the Portfolio to pay other
unaffiliated service providers on behalf of the Portfolio for services provided
for which the Portfolio would otherwise be obligated to pay. Such commissions
paid by the Portfolio are at the same rate paid to other brokers for effecting
similar transactions in listed equity securities.
Research services provided by brokers to which Brown Brothers Harriman
& Co. has allocated brokerage business in the past include economic statistics
and forecasting services, industry and company analyses, portfolio strategy
services, quantitative data, and consulting services from economists and
political analysts. Research services furnished by brokers are used for the
benefit of all the Investment Manager's clients and not solely or necessarily
for the benefit of the Portfolio. The Investment Manager believes that the value
of research services received is not determinable and such research does not
significantly reduce its expenses. The Portfolio does not reduce the fee paid to
the Investment Manager and Investment Adviser by any amount that might be
attributable to the value of such services.
Portfolio securities are not purchased from or sold to the
Administrator, Investment Manager, Investment Adviser or any "affiliated person"
(as defined in the 1940 Act) of the Administrator, Investment Manager or
Investment Adviser when such entities are acting as principals, except to the
extent permitted by law.
A committee, comprised of officers and partners of Brown Brothers
Harriman & Co. who are portfolio managers of some of Brown Brothers Harriman &
Co.'s managed accounts (the "Managed Accounts"), evaluates semi-annually the
nature and quality of the brokerage and research services provided by brokers,
and, based on this evaluation, establishes a list and projected ranking of
preferred brokers for use in determining the relative amounts of commissions to
be allocated to such brokers. However, in any semi-annual period, brokers not on
the list may be used, and the relative amounts of brokerage commissions paid to
the brokers on the list may vary substantially from the projected rankings.
The Trustees of the Portfolio review regularly the reasonableness of
commissions and other transaction costs incurred for the Portfolio in light of
facts and circumstances deemed relevant from time to time and, in that
connection, receive reports from the Investment Manager and published data
concerning transaction costs incurred by institutional investors generally.
Over-the-counter purchases and sales are transacted directly with
principal market makers, except in those circumstances in which, in the judgment
of the Investment Manager, better prices and execution of orders can otherwise
be obtained. If the Portfolio effects a closing transaction with respect to a
futures or option contract, such transaction normally would be executed by the
same broker-dealer who executed the opening transaction. The writing of options
by the Portfolio may be subject to limitations established by each of the
exchanges governing the maximum number of options in each class which may be
written by a single investor or group of investors acting in concert, regardless
of whether the options are written on the same or different exchanges or are
held or written in one or more accounts or through one or more brokers. The
number of options which the Portfolio may write may be affected by options
written by the Investment Manager for other investment advisory clients. An
exchange may order the liquidation of positions found to be in excess of these
limits, and it may impose certain other sanctions.
On those occasions when Brown Brothers Harriman & Co. deems the
purchase or sale of a security to be in the best interests of the Portfolio as
well as other customers, Brown Brothers Harriman & Co., to the extent permitted
by applicable laws and regulations, may, but is not obligated to, aggregate the
securities to be sold or purchased for the Portfolio with those to be sold or
purchased for other customers in order to obtain best execution, including lower
brokerage commissions, if appropriate. In such event, allocation of the
securities so purchased or sold as well as any expenses incurred in the
transaction are made by Brown Brothers Harriman & Co. in the manner it considers
to be most equitable and consistent with its fiduciary obligations to its
customers, including the Portfolio. In some instances, this procedure might
adversely affect the Portfolio.
ITEM 17. CAPITAL STOCK AND OTHER SECURITIES.
The Portfolio is organized as a trust under the laws of the State of
New York. Under the Declaration of Trust, the Trustees are authorized to issue
beneficial interests in the Portfolio. Investors are entitled to participate pro
rata in distributions of taxable income, loss, gain and credit of the Portfolio.
Upon liquidation or dissolution of the Portfolio, investors are entitled to
share pro rata in the Portfolio's net assets available for distribution to its
investors. Investments in the Portfolio have no preference, preemptive,
conversion or similar rights and are fully paid and nonassessable, except as set
forth below. Investments in the Portfolio may not be transferred. Certificates
representing an investor's beneficial interest in the Portfolio are issued only
upon the written request of an investor.
Each investor is entitled to a vote in proportion to the amount of its
investment in the Portfolio. Investors in the Portfolio do not have cumulative
voting rights, and investors holding more than 50% of the aggregate beneficial
interest in the Portfolio may elect all of the Trustees if they choose to do so
and in such event the other investors in the Portfolio would not be able to
elect any Trustee. The Portfolio is not required and has no current intention to
hold annual meetings of investors but the Portfolio will hold special meetings
of investors when in the judgment of the Portfolio's Trustees it is necessary or
desirable to submit matters for an investor vote. Changes in fundamental
policies will be submitted to investors for approval. No material amendment may
be made to the Portfolio's Declaration of Trust without the affirmative majority
vote of investors (with the vote of each being in proportion to the amount of
its investment). Investors have under certain circumstances (e.g., upon
application and submission of certain specified documents to the Trustees by a
specified percentage of the outstanding interests in the Portfolio) the right to
communicate with other investors in connection with requesting a meeting of
investors for the purpose of removing one or more Trustees. Investors also have
the right to remove one or more Trustees without a meeting by a declaration in
writing by a specified percentage of the outstanding interests in the Portfolio.
Upon liquidation of the Portfolio, investors would be entitled to share pro rata
in the net assets of the Portfolio available for distribution to investors.
The end of the Portfolio's fiscal year is December 31.
Under the anticipated method of operation of the Portfolio, the
Portfolio will not be subject to any income tax. However, each investor in the
Portfolio will be taxable on its share (as determined in accordance with the
governing instruments of the Portfolio) of the Portfolio's ordinary income and
capital gain in determining its income tax liability. The determination of such
share will be made in accordance with the Internal Revenue Code of 1986, as
amended (the "Code"), and regulations promulgated thereunder.
It is intended that the Portfolio's assets, income and distributions
will be managed in such a way that an investor in the Portfolio will be able to
satisfy the requirements of Subchapter M of the Code, assuming that the investor
invested all of its assets in the Portfolio.
Investor inquiries may be directed to 59 Wall Street Distributors, Inc,
21 Milk Street, Boston, MA 02109, 1-800-625-5759.
The Portfolio may enter into a merger or consolidation, or sell all or
substantially all of its assets, if approved by the vote of two thirds of its
investors (with the vote of each being in proportion to its percentage of the
beneficial interests in the Portfolio), except that if the Trustees recommend
such sale of assets, the approval by vote of a majority of the investors (with
the vote of each being in proportion to its percentage of the beneficial
interests of the Portfolio) will be sufficient. The Portfolio may also be
terminated (i) upon liquidation and distribution of its assets if approved by
the vote of two thirds of its investors (with the vote of each being in
proportion to the amount of its investment) or (ii) by the Trustees by written
notice to its investors.
Investors in the Portfolio will be held personally liable for its
obligations and liabilities, subject, however, to indemnification by the
Portfolio in the event that there is imposed upon an investor a greater portion
of the liabilities and obligations of the Portfolio than its proportionate
beneficial interest in the Portfolio. The Declaration of Trust also provides
that the Portfolio shall maintain appropriate insurance (for example, fidelity
bonding and errors and omissions insurance) for the protection of the Portfolio,
its investors, Trustees, officers, employees and agents covering possible tort
and other liabilities. Thus, the risk of an investor incurring financial loss on
account of investor liability is limited to circumstances in which both
inadequate insurance existed and the Portfolio itself was unable to meet its
obligations.
<PAGE>
The Portfolio's Declaration of Trust further provides that obligations
of the Portfolio are not binding upon the Trustees individually but only upon
the property of the Portfolio and that the Trustees will not be liable for any
action or failure to act, but nothing in the Declaration of Trust protects a
Trustee against any liability to which he would otherwise be subject by reason
of wilful misfeasance, bad faith, gross negligence, or reckless disregard of the
duties involved in the conduct of his office.
ITEM 18. PURCHASE, REDEMPTION AND PRICING OF SECURITIES.
Beneficial interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may only
be made by other investment companies, insurance company separate accounts,
common or commingled trust funds, or similar organizations or entities which are
"accredited investors" as defined in Rule 501 under the 1933 Act. This
Registration Statement does not constitute an offer to sell, or the solicitation
of an offer to buy, any "security" within the meaning of the 1933 Act.
An investment in the Portfolio may be made without a sales load. All
investments are made at net asset value next determined after an order is
received in "good order" by the Portfolio. The net asset value of the Portfolio
is determined once on each business day.
There is no minimum initial or subsequent investment in the Portfolio.
However, because the Portfolio intends to be as fully invested at all times as
is reasonably practicable in order to enhance the yield on its assets,
investments must be made in federal funds (i.e., monies credited to the account
of the Custodian by a Federal Reserve Bank).
The Portfolio reserves the right to cease accepting investments at any
time or to reject any investment order.
Each investor in the Portfolio may add to or reduce its investment in
the Portfolio on each day the New York Stock Exchange is open for regular
trading. At 4:00 P.M., New York time on each such business day, the value of
each investor's beneficial interest in the Portfolio is determined by
multiplying the net asset value of the Portfolio by the percentage, effective
for that day, which represents that investor's share of the aggregate beneficial
interests in the Portfolio. Any additions or withdrawals, which are to be
effected on that day, are then effected. The investor's percentage of the
aggregate beneficial interests in the Portfolio is then recomputed as the
percentage equal to the fraction (i) the numerator of which is the value of such
investor's investment in the Portfolio as of 4:00 P.M New York time on such day
plus or minus, as the case may be, the amount of any additions to or withdrawals
from the investor's investment in the Portfolio effected on such day, and (ii)
the denominator of which is the aggregate net asset value of the Portfolio as of
4:00 P.M. New York time, on such day plus or minus, as the case may be, the
amount of the net additions to or withdrawals from the aggregate investments in
the Portfolio by all investors in the Portfolio. The percentage so determined is
then applied to determine the value of the investor's interest in the Portfolio
as of 4:00 P.M., New York time on the following business day of the Portfolio.
The net income and capital gains and losses, if any, of the Portfolio
are determined at 4:00 p.m., New York time on each business day. Net income for
days other than business days is determined as of 4:00 p.m., New York time on
the immediately preceding business day. All the net income, as defined below,
and capital gains and losses, if any, so determined are allocated pro rata among
the investors in the Portfolio at the time of such determination.
For this purpose the "net income" of the Portfolio (from the time of
the immediately preceding determination thereof) consists of (i) accrued
interest, accretion of discount and amortization of premium less (ii) all actual
and accrued expenses of the Portfolio (including the fees payable to the
Investment Adviser, Investment Manager and Administrator of the Portfolio).
The value of investments listed on a domestic securities exchange is
based on the last sale prices as of the regular close of the New York Stock
Exchange (which is currently 4:00 P.M New York time) or, in the absence of
recorded sales, at the average of readily available closing bid and asked prices
on such Exchange.
Unlisted securities are valued at the average of the quoted bid and
asked prices in the over-the-counter market. The value of each security for
which readily available market quotations exist is based on a decision as to the
broadest and most representative market for such security.
Securities or other assets for which market quotations are not readily
available are valued at fair value in accordance with procedures established by
and under the general supervision and responsibility of the Portfolio's
Trustees. Such procedures include the use of independent pricing services, which
use prices based upon yields or prices of securities of comparable quality,
coupon, maturity and type; indications as to values from dealers; and general
market conditions. Short-term investments which mature in 60 days or less are
valued at amortized cost if their original maturity was 60 days or less, or by
amortizing their value on the 61st day prior to maturity, if their original
maturity when acquired was more than 60 days, unless this is determined not to
represent fair value by the Trustees of the Portfolio.
If the Portfolio determines that it would be detrimental to the best
interest of the remaining investors in the Portfolio to make payment wholly or
partly in cash, payment of the redemption price may be made in whole or in part
by a distribution in kind of securities from the Portfolio, in lieu of cash, in
conformity with the applicable rules of the Securities and Exchange Commission
(the "SEC"). If interests are redeemed in kind, the redeeming investor might
incur transaction costs in converting the assets into cash. The method of
valuing portfolio securities is described above and such valuation will be made
as of the same time the redemption price is determined.
An investor in the Portfolio may reduce all or any portion of its
investment at the net asset value next determined after a request in "good
order" is furnished by the investor to the Portfolio. The proceeds of a
reduction will be paid by the Portfolio in federal funds normally on the next
Portfolio Business Day after the reduction is effected, but in any event within
seven days. Investments in the Portfolio may not be transferred.
The right of any investor to receive payment with respect to any
reduction may be suspended or the payment of the proceeds therefrom postponed
during any period in which the New York Stock Exchange is closed (other than
weekends or holidays) or trading on the New York Stock Exchange is restricted
or, to the extent otherwise permitted by the 1940 Act if an emergency exists.
The Portfolio reserves the right under certain circumstances, such as
accommodating requests for substantial withdrawals or liquidations, to pay
distributions in kind to investors (i.e., to distribute portfolio securities as
opposed to cash). If securities are distributed, an investor could incur
brokerage, tax or other charges in converting the securities to cash. In
addition, distribution in kind may result in a less diversified portfolio of
investments or adversely affect the liquidity of the Portfolio.
ITEM 19. TAX STATUS.
The Portfolio is organized as a New York trust. The Portfolio is not
subject to any income or franchise tax in the State of New York or the
Commonwealth of Massachusetts. However each investor in the Portfolio will be
taxable on its share (as determined in accordance with the governing instruments
of the Portfolio) of the Portfolio's ordinary income and capital gain in
determining its income tax liability. The determination of such share will be
made in accordance with the Internal Revenue Code of 1986, as amended (the
"Code"), and regulations promulgated thereunder.
Although, as described above, the Portfolio will not be subject to
federal income tax, it will file appropriate income tax returns.
It is intended that the Portfolio's assets will be managed in such a
way that an investor in the Portfolio will be able to satisfy the requirements
of Subchapter M of the Code.
Gains or losses on sales of securities by the Portfolio will be treated
as long-term capital gains or losses if the securities have been held by it for
more than one year except in certain cases where, if applicable, the Portfolio
acquires a put or writes a call thereon. Other gains or losses on the sale of
securities will be short-term capital gains or losses.
<PAGE>
FOREIGN TAXES. The Portfolio may be subject to foreign withholding
taxes with respect to income received from sources within foreign countries.
OTHER TAXATION. The investment by an investor in the Portfolio does not
cause the investor to be liable for any income or franchise tax in the State of
New York. Investors are advised to consult their own tax advisers with respect
to the particular tax consequences to them of an investment in the Portfolio.
ITEM 20. UNDERWRITERS.
The placement agent for the Portfolio is 59 Wall Street Distributors,
Inc., which receives no compensation for serving in this capacity. Other
investment companies, insurance company separate accounts, common and commingled
trust funds and similar organizations and entities may continuously invest in
the Portfolio acted as placement agent for the Portfolio under the same terms
and conditions as set forth herein.
ITEM 21. CALCULATIONS OF PERFORMANCE DATA.
Not applicable.
ITEM 22. FINANCIAL STATEMENTS.
The Portfolio's Statement of Assets and Liabilities dated July 31, 1999
has been included.
<PAGE>
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
FINANCIAL STATEMENTS
July 31, 1999
(unaudited)
In the opinion of the mangement of the Fund, these financial statements
reflect all adjustments which are necessary to a fair statement of results for
the period presented.
<PAGE>
Dow Jones Islamic Market Index Portolio
Portfolio of Investments
(unaudited)
(expressed in U.S. dollars)
- ----------------------------------------------------------------------------
Shares Security Value
COMMON STOCKS (99.3%)
AUSTRALIA (0.9%)
1,910 ORICA LTD 10,198
3,210 BROKEN HILL PROPRIETARY LTD 35,510
3,120 CSR LTD ORD 8,613
5,140 NORTH LIMITED 11,573
1,540 RIO TINTO LIMITED 27,551
3,180 SANTOS LIMITED ORD 10,471
1,760 WOODSIDE PETROLEUM LTD 12,686
450 BRAMBLES INDS LTD 11,928
BELGIUM (0.2%)
290 UCB SA 12,395
30 PETROFINA SA NPV 12,389
BERMUDA (0.1%)
5,000 CHEUNG KONG INFRA HLDGS 10,307
CANADA (1.8%)
520 ALCAN ALUMINIUM LTD 15,673
910 NORANDA INC 11,962
290 SUNCOR ENERGY INC 11,821
490 TELEGLOBE INC 10,849
380 BCT TELUS COUMM A SHS NON VOTING 8,287
350 NEWBRIDGE NETWORKS CORP 9,294
1,200 NORTEL NETWORKS CORP 106,552
180 MAGNA INTL CL A 9,859
500 MACMILLAN BLOEDEL LTD 8,664
960 IMPERIAL OIL LTD 19,183
940 PETRO CANADA 13,854
810 BARRICK GOLD CORPORATION 15,030
250 CANADIAN NATIONAL RAILWAY F/PD 16,804
370 ALBERTA ENERGY LTD 11,361
CAYMAN ISLANDS (0.1%)
310 TRANSOCEAN OFFSHORE 9,513
FRANCE (3.2%)
180 ST GOBAIN 32,643
120 AIR LIQUIDE (L') 19,502
270 DASSAULT SYSTEMS SA 9,822
380 ALCATEL 58,464
120 REXEL SA 9,989
60 CASTORAMA DUBOIS INVESTISMENT 15,278
340 SCHNEIDER ELECTRIC SA 20,789
120 CAP GEMINI SA 20,414
500 SOC NATL ELF AQUITAINE 85,592
120 L'OREAL 77,932
30 ESSILOR INTL 9,790
150 VALEO 11,346
330 MICHELIN CL B REGD 13,381
1,000 VIVENDI SA 78,584
GERMANY (0.6%)
150 HENKEL KGAA PFD 10,512
120 ADIDAS SALOMON AG 10,785
1,410 BAYER AG 60,433
210 BEIRESDORF AG BEARER 13,930
GREECE (0.2%)
1,110 HELLENIC TELECOM ORGAN /GRD/ 23,352
110 TITAN CEMENT ORDINARY 11,028
HONG KONG (0.8%)
23,200 CABLE & WIRELESS HKT LTD 54,551
4,000 HENDERSON LAND DEVELOPMENT 22,624
8,000 WHEELOCK AND CO LTD 10,874
5,000 CLP HOLDINGS LIMITED 22,740
4,000 HONG KONG ELECTRIC 12,626
ITALY (1.5%)
1,560 EDISON SPA 13,436
4,670 TELECOM ITALIA SPA NON CONV 25,482
9,030 SEAT PAGINE GIALLE SPA 12,647
13,330 TELECOM ITALIA MOBILE SPA 77,156
9,840 TELECOM ITALIA SPA 97,382
JAPAN (9.6%)
1,000 DAIWA HOUSE IND CO. 10,518
1,000 KANDENKO CO 6,192
1,000 KINDEN CORP 10,552
2,000 SEKISUI HOUSE 22,500
1,000 TOTO 7,465
2,000 KYOWA HAKKO KOGYO 12,558
500 FANUC CO 29,521
100 HIROSE ELECTRIC 11,250
100 KEYENCE CORP 19,448
100 MABUCHI MOTOR CO 9,977
1,000 MATSUSHITA ELECTRIC WORKS 9,288
1,000 OMRON CORP 16,657
1,000 TOKYO ELECTRON 71,513
1,000 AJINOMOTO CO INC 12,323
2,000 DAI NIPPON PRINTING 34,099
2,000 TOPPAN PRINTING CO 23,896
1,000 EBARA CORP 12,053
5,000 ISHIKAWAJIMA HARIMA HEAVY IND 8,808
2,000 KOMATSU LTD 12,558
1,000 MORI SEIKI CO. 15,087
100 SMC 12,297
1,000 TOYODA AUTO LOOM 18,532
1,000 SUMITOMO ELECTRIC 12,593
1,000 CANON SALES 16,186
1,000 KOKUYO CO 17,085
3,000 GENERAL SEKIYU KK 9,942
2,000 TONEN CORP 14,477
1,000 BANYU PHARMACEUTICAL CO 19,622
1,000 DAIICHI PHARMACEUTICAL 16,701
1,000 EISAI CO LTD 21,279
1,000 KAO CORP 27,820
1,000 SHISEIDO CO 13,823
1,000 TAISHO PHARMACEUTICAL 38,809
1,000 YAMANOUCHI PHARMACEUTICAL CO LTD 46,309
2,000 CANON INC 63,315
2,000 DENSO CORP 44,652
2,000 HONDA MOTOR CO 86,687
7,000 TOYOTA MOTOR CORP 246,631
550 TOYOTA MOTOR CORP ADR 38,500
1,000 BRIDGESTONE CORPORATION 30,785
1,000 ONWARD KASHIYAMA 12,070
1,000 WACOAL CORP 10,570
2,000 FUKUYAMA TRANSPORTING 11,861
3,000 NIPPON EXPRESS CO. 20,276
1,000 YAMATO TRANSPORT
200 ADVANTEST CORP 25,465
3,000 ASAHI CHEMICAL INDUSTRIES 15,044
1,000 FUJISAWA PHARM CO 18,881
1,000 KOMORI CORPORATION 21,803
2,000 TAKEDA CHEMICAL INDUSTRIES 108,490
MEXICO (0.2%)
1,590 APASCO SA DE CV 8,880
5,070 KIMBERLY CLARK (SER A) 17,988
NETHERLANDS (2.1%)
610 AKZO NOBEL NV 26,073
950 TNT POST GROEP NV /NLG/ 22,920
390 STORK NV 9,597
550 BUHRMANN NV MAASTRICHT 11,180
3,890 ROYAL DUTCH PETROLEUM 243,056
NETHERLANDS ANTILLES (0.4%)
1,000 SCHLUMBERGER LTD 60,563
NEW ZEALAND (0.1%)
8,690 CARTER HOLT HARVEY LTD 10,855
NORWAY (0.3%)
820 NORSK HYDRO AS 32,032
340 NORSKE SKOGINDUSTIER A 13,560
------
45,598
PORTUGAL (0.1%)
60 TELECEL COMUNI PES /PTE/ 7,681
SINGAPORE (0.4%)
31,440 SINGAPORE TELECOMM 53,630
SOUTH AFRICA (0.4%)
470 ANGLO AMERICAN PLATINUM CORP 11,150
240 ANGLOGOLD LTD 10,243
940 DE BEERS CENTENARY LINK UNITS 23,399
1,710 SASOL LTD 12,709
SPAIN (0.4%)
1,120 AUTOPISTAS C.E.S.A. 12,438
1,810 ENDESA SA 35,593
1,500 CEPSA /COMPANIA ESPANOLA/ BEARER 18,006
SWEDEN (0.6%)
470 SANDVIK AB A FREE 11,618
900 EUROPOLITAN HOLDINGS AB 8,384
1,260 HENNES & MAURITZ B 32,835
500 ASSI DOMAN 8,372
370 MO OCH DOMJO AB SER B 10,363
500 SVENSKA CELLULOSA SER B FREE 14,491
SWITZERLAND (0.1%)
220 CIBA SPEC CHEM HLDG REGD /CHF/ 16,582
UNITED KINGDOM (8.2%)
1,780 BLUE CIRCLE INDUSTRIES ORD 12,686
650 RMC GROUP ORD 11,377
3,330 ASTRAZENECA GROUP PLC 123,914
920 BOC GROUP ORD 19,026
1,040 RAILTRACK GROUP PLC 19,114
10,260 SMITHKLINE BEECHAM PLC 126,376
940 THAMES WATER PLC ORD SHARES 14,473
11,950 BRITISH TELECOM ORD 208,199
1,320 TI GROUP PLC 9,894
7,280 INVENSYS PLC 39,408
17,890 BP AMOCO PLC 349,961
1,640 BOOTS CO ORD 20,081
3,460 SMITH & NEPHEW PLC 10,150
18,380 SHELL TRANSPORT & TRADING REGD 149,985
6,380 BG PLC .01133 38,362
1,230 BRITISH ENERGY PLC 10,426
1,260 POWERGEN PLC 1998 SHARES 12,232
910 SEVERN TRENT PLC 13,443
1,730 HAYS PLC 18,477
UNITED STATES (67.0%)
830 UNITED TECHNOLOGIES CORP 55,351
2,490 HOME DEPOT INC 158,893
190 JOHNSON CTLS INC 13,027
680 TELLABS INC 41,863
170 WRIGLEY /WILLIAM/ JR CO 13,547
240 LAFARGE CORP 7,425
510 NEWELL RUBBERMAID INC 22,058
160 SEALED AIR CORP 10,280
380 SHERWIN WILLIAMS 10,260
160 USG CORPORATION-COMMON 8,590
220 VULCAN MATERIALS 9,680
2,570 ABBOTT LABORATORIES 110,349
950 ALLIEDSIGNAL INC 61,453
520 BAXTER INTL INC 35,718
380 DOW CHEMICAL CO 47,120
1,910 DU PONT (EI) DE NEMOURS 137,639
360 ENGELHARD CORP 8,033
4,000 MERCK & CO. 270,750
690 MINNESOTA MINING & MANUFACTURING 60,677
350 PPG INDUSTRIES INC 20,869
400 ROHM & HAAS CO. 17,050
270 UNION CARBIDE CORP 12,960
190 NUCOR CORP 9,215
300 USX-US STL GROUP 7,781
480 ALLEGHENY TELEDYNE CORP 10,290
280 AMERN CORP 10,920
1,910 DELPHI AUTOMOTIVE SYSTEMS 34,380
370 DIAMOND OFFSHORE DRILLING INC 11,840
840 ELECTRONIC DATA SYS CORP 50,663
200 GALILEO INTL INC 10,238
850 HALLIBURTON CO 39,206
580 IMS HEALTH INC 16,168
310 INGRAM MICRO INC CL A 8,816
170 LEAR CORP 8,118
5,190 LUCENT TECHNOLOGIES INC 337,674
420 PIONEER HI BRED INT'L INC 16,328
350 ROCKWELL INTERNATIONAL CORP 20,584
530 SEMPRA ENERGY 11,759
420 SOLECTRON CORP 27,064
790 SPRINT CORP PCS GROUP 47,894
190 STRYKER CORP 11,590
1,850 AMERITECH CORP 135,513
5,410 AT&T CORP 280,982
3,210 BELLSOUTH CORP 154,080
3,330 SBC COMMUNICATIONS INC 190,434
260 BED BATH & BEYOND INC 8,824
670 3COM CORP 16,164
390 AMERICAN PWR CONVERSION CORP 8,093
560 CIRCUIT CITY STORES INC 26,460
430 CORNING INCORPORATED 30,100
760 EMERSON ELECTRIC CORP 45,363
200 GRAINGER W W INC 9,450
280 LINEAR TECHNOLOGY CORP 17,185
250 MAXIM INTEGRATED PRODUCTS 16,016
1,030 MOTOROLA INC 93,988
200 PE CORPORATION PE BIOSYSTEMS GRP 11,213
240 SIGMA ALDRICH CORP 8,070
340 TANDY CORP 17,446
1,400 TYCO INTL LTD 136,763
170 WHIRLPOOL CORP 12,187
5,660 INTEL CORP 390,540
1,200 ARCHER DANIELS MIDLAND 16,800
4,180 COCA COLA CO COM 252,106
2,520 PEPSICO INC 98,595
360 STARBUCKS CORP 8,370
730 INTERNATIONAL PAPER CO 37,321
220 MEAD CORP 9,020
440 DOVER CORP 17,380
320 INGERSOLL RAND 20,580
260 DANAHER CORP 14,836
200 DOW JONES & CO 9,975
450 PAYCHECX INC 12,628
650 APPLIED MATERIALS INC 46,759
230 BIOMET INC 8,366
220 COOPER INDS INC. 12,073
190 FLUOR CORP 7,612
440 ILLINOIS TOOL WORKS 32,698
450 LEGGETT & PLATT INC 11,531
240 PARKER-HANNIFIN 11,325
670 MASCO CORP 19,933
390 LIMITED INC 17,818
660 LOWES COMPANIES 34,815
180 MAYTAG CORPORATION 12,533
200 BLOCK /H & R/ INC 10,925
700 BOSTON SCIENTIFIC CORP 28,394
300 BROWNING FERRIS INDS 13,463
1,480 CHOICEPOINT INC 98,235
320 DUN & BRANDSTREET CORP DEL 10,160
750 FIRST DATA CORP 37,172
1,530 SPRINT CORPORATION 79,082
810 STAPLES INC 23,389
130 PHELPS DODGE CORP 7,711
420 BMC SOFTWARE INC 22,628
5,450 CISCO SYSTEMS INC 338,581
2,940 COMPAQ COMPUTER CORP 70,560
290 COMPUTER SCIENCES CORP 18,669
250 FISERV INC 7,453
290 GATEWAY INC 22,094
1,730 HEWLETT PACKARD CO 181,109
520 MCKESSON HBOC INC 16,153
8,690 MICROSOFT CORP 745,711
630 NOVELL INC 16,223
700 OFFICE DEPOT INC 13,125
2,480 ORACLE SYSTEMS CORP 94,395
1,320 SUN MICROSYSTEMS INC 89,595
240 SUNGARD DATA 6,870
220 AVERY DENNISON CORPORATION 13,503
920 KIMBERLY CLARK CORP 56,120
200 AMERADA HESS 11,838
230 ASHLAND INC 8,740
560 ATLANTIC RICHFIELD CO. 50,435
680 BAKER HUGHES 23,673
370 BURLINGTON RES INC 16,349
1,110 CHEVRON CORP 101,288
4,110 EXXON MOBIL CORP 326,231
200 KERR MCGEE CORP 10,300
1,320 MOBIL CORP 134,970
490 PHILLIPS PETROLEUM CO 25,143
950 TEXACO INC 59,197
580 USX-MARATHON GROUP 17,618
2,220 AMERICAN HOME PRODUCTS 113,220
880 AMGEN INC 67,650
460 AVON PRODS INC 20,930
480 BECTON DICKINSON & CO 13,170
270 BIOGEN INC 18,579
3,350 BRISTOL-MYERS SQUIBB CO 222,775
250 ECOLAB INC 10,656
1,880 ELI LILLY & CO 123,375
530 GUIDANT CORP 31,038
2,260 JOHNSON & JOHNSON 208,203
1,000 MEDTRONIC INC 72,063
10,760 PFIZER INC 365,168
2,230 PROCTOR & GAMBLE CO 201,815
2,500 SCHERING PLOUGH 122,500
370 UNITED HEALTH CARE 22,570
1,400 WARNER LAMBERT 92,400
190 CONSOLIDATED NATURAL GAS 11,899
310 AUTOZONE INC 7,653
490 CARDINAL HEALTH 33,443
390 FEDERATED DEPARTMENT STORES 20,012
230 JONES APPAREL GROUP INC 7,561
290 KOHLS CORP 22,058
570 TJX COMPANIES INC 18,846
500 TOYS R US 8,125
150 EATON CORP 14,841
1,950 FORD MOTOR CO. 94,819
330 GOODYEAR TIRE & RUBR CO 17,449
150 REYNOLDS METALS CO 8,494
230 CINTAS CORP 14,749
510 NIKE INC CL B 26,520
280 V F CORPORATION 11,060
430 CSX CORP 20,828
540 FDX CORP 24,199
280 NORDSTROM INC 8,803
450 UNION PACIFIC CORP 24,441
160 COLUMBIA ENERGY GROUP 9,520
400 CONSOLIDATED EDISON INC. 17,400
630 DUKE ENERGY CO 33,351
460 EL PASO ENERGY CORP 16,474
600 ENRON CORP 51,113
320 FPL GROUP 17,260
310 KEYSPAN CORP 8,603
400 NO STATES POWER 9,000
410 UNICOM CORP 16,093
360 ALTERA CORP 13,050
880 BURLINGTON NORTH SANTA FE CORP 28,160
660 COMPUWARE CORP 18,315
4,330 DELL COMPUTER CORP 176,989
130 DST SYSTEMS INC 8,629
190 EASTMAN CHEMICAL 9,821
3,180 MCI WORLDCOM INC 262,350
510 PEOPLESOFT INC 6,949
320 PP & L RESOURCES 9,260
360 TOSCO CORP 9,495
870 U S WEST INC 49,862
640 ALCOA INC 38,320
75 GARTNER GROUP INC CL B 1,622
230 QUINTILES TRANSNATIONAL 8,740
250 STANLEY WORKS 6,985
-----------
9,882,421
-----------
TOTAL INVESTMENTS 99.2% 14,640,458
CASH AND OTHER ASSETS IN EXCESS OF LIABILITIES 0.8% 121,365
_____________________
NET ASSETS 100.0% 14,761,823
=========================================================================
- --------------------------------------------------------------------------------
See Notes to Financial Statements
<PAGE>
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
July 31, 1999
(unaudited)
<TABLE>
<S> <C>
ASSETS:
Investments in securities, at value (identified cost $14,875,614) $ 14,640,458
Cash 572,102
Receivables for:
Investments sold 501,961
Dividends 6,282
--------------------
Total Assets 15,720,803
--------------------
LIABILITIES:
Payables for:
Investments purchased 951,776
Expense Payment Fee 7,204
--------------------
Total Liabilities 958,980
--------------------
--------------------
NET ASSETS $ 14,761,823
====================
Net Assets Consist of:
Paid-in capital $ 14,996,860
Net unrealized depreciation (235,037)
--------------------
--------------------
Net Assets $ 14,761,823
====================
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
STATEMENT OF OPERATIONS
July 31, 1999
(unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME
Income:
Dividends (net of withholding taxes of $633) $ 8,268
_____________
Total Income 8,268
_____________
Expenses:
Expense reimbursement fee 7,204
_____________
Total Expenses 7,204
_____________
Net investment income: 1,064
_____________
NET REALIZED AND UNREALIZED LOSS
Net realized loss on investments and foreign exchange transactions (4,404)
Net change in unrealized depreciation on investments and foreign exchange translations (235,037)
_____________
Net Realized and Unrealized Loss (239,441)
_____________
Net Decrease in Net Assets Resulting from Operations (238,377)
====================
<FN>
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<S> <C>
For the
month ended
July 31, 1999
(unaudited)
INCREASE (DECREASE) IN NET ASSETS:
Operations:
Net investment income $ 1,064
Net realized loss on investments and foreign exchange transactions (4,404)
Net change in unrealized depreciation on investments and foreign currency translations (235,037)
_____________
Net decrease in net assets resulting from operations (238,377)
_____________
Total Contributions 15,000,200
_____________
Total increase in net assets 14,761,823
NET ASSETS:
Beginning of year 0
_____________
End of year $ 14,761,823
<FN>
======================
See Notes to Financial Statements.
</FN>
</TABLE>
<PAGE>
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected per share data and ratios for a share outstanding throughout
each year
For the
month ended
July 31, 1999
(unaudited)
____________
Net asset value, beginning of period $100.00
Income from investment operations:
Net investment income 0.01
Net realized and unrealized gain (1.60)
=======================
Net asset value, end of period $ 98.41
=======================
Total return (1.59)%
Ratios/Supplemental data:
Net assets, end of period (000's omitted) $14,762
Expenses as a percentage of
average net assets 0.57%
Ratio of net investment income to
average net assets 0.08%
Portfolio turnover rate 0%
_________________________________________________
1 Annualized.
See Notes to Financial Statements.
<PAGE>
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENTS
(expressed in U.S. dollars)
(unaudited)
1. Organization and Significant Accounting Policies. Dow Jones Islamic
Market Index Portfolio (the "Portfolio") was organized as a trust under the laws
of the State of New York on March 5, 1999. The Portfolio commenced operations on
July 1, 1999. The Declaration of Trust permits the Trustees to create an
unlimited number of beneficial interests in the Portfolio.
The Portfolio's financial statements are prepared in accordance with
accounting principles generally accepted in the United States of America, which
require management to make certain estimates and assumptions at the date of the
financial statements and are based, in part, on the following accounting
policies. Actual results could differ from those estimates.
A. Valuation of Investments. (1) The value of investments
listed on either a domestic or foreign securities exchange is based on
the last sale price on that exchange prior to the time when assets are
valued, or in the absence of recorded sales, at the average of readily
available closing bid and asked prices on such exchange; (2) unlisted
securities are valued at the average of the quoted bid and asked prices
in the over-the-counter market; (3) securities or other assets for
which market quotations are not readily available are valued at fair
value in accordance with procedures established by and under the
general supervision and responsibility of the Portfolio's Trustees.
Such procedures include the use of independent pricing services, which
use prices based upon yields or prices of securities of comparable
quality, coupon, maturity and type; indications as to the value from
dealers; and general market conditions; (4) all assets and liabilities
initially expressed in foreign currencies will be converted into U.S.
dollars at the prevailing rates of exchange available at the time of
valuation; and (5) trading in securities on most foreign exchanges and
over-the-counter markets is normally completed before the close of the
New York Stock Exchange and may also take place on days on which the
New York Stock Exchange is closed. If events materially affecting the
value of foreign securities occur between the time when the exchange on
which they are traded closes and the time when the Portfolio's net
assets are calculated, such securities will be valued at fair value in
accordance with procedures established by and under the general
supervision of the Portfolio's Trustees.
B. Foreign Currency Translations. The accounting records of the Portfolio
are maintained in U.S. dollars. Foreign currency amounts are translated into
U.S. dollars at the current rate of exchange of such currency against the U.S.
dollar to determine the value of investments, assets and liabilities. Purchases
and sales of securities, and income and expenses are translated at the
prevailing rate of exchange on the respective dates of such transactions. The
Portfolio does not isolates that portion of realized gain or loss on investments
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of such investments. Reported
net realized and unrealized gains and losses arise from the sales of portfolio
securities, sales of foreign currencies, currency gains or losses realized
between the trade and settlement dates on securities transactions, and the
difference between the amounts of dividends, interest and foreign withholding
taxes recorded on the Portfolio's books and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized appreciation or depreciation
on foreign currency translations arise from changes in the value of the assets
and liabilities, excluding investments in securities, at fiscal year end,
arising from changes in the exchange rate.
C. Accounting for Investments. Security transactions are accounted for on
the trade date. Realized gains and losses on security transactions are
determined on the identified cost method. Dividend income and other
distributions from portfolio securities are recorded on the ex-dividend date.
Dividend income is recorded net of foreign taxes withheld where recovery of such
taxes is not assured. Interest income is accrued daily.
<PAGE>
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
NOTES TO FINANCIAL STATEMENT (continued)
(expressed in U.S. dollars)
(unaudited)
D. Federal Income Taxes. The Portfolio will be treated as a partnership for
federal income tax purposes. As such, each investor in the Portfolio will be
subject to taxation on its share of the Portfolio's ordinary income and capital
gains. It is intended that the Portfolio's assets will be managed in such a way
that an investor in the Portfolio will be able to comply with the provisions of
the Internal Revenue Code applicable to regulated investment companies.
Accordingly, no provision for federal income taxes is necessary.
2. Transactions with Affiliates.
Investment Management and Advisory Fee. The Portfolio has an investment
management agreement with Brown Brothers Harriman & Co. (the "Manager"). The
Portfolio has an investment advisory agreement with Wafra Investment Advisory
Group, Inc. (the "Adviser"). The Manager and the Adviser jointly receive from
the portfolio calculated daily and paid monthly at an annual rate equivalent to
0.40% of the Portfolio's average daily net assets.
Administrative Fee. The Portfolio has an administrative agreement with
Brown Brothers Harriman Trust Company (Cayman) Limited (the "Administrator") for
which it pays the Administrator a fee calculated daily and paid monthly at an
annual rate equivalent to 0.05% of the Portfolio's average daily net assets that
are not in excess of $50 million and at an annual rate equivalent to 0.01% on
the Portfolio's average daily net assets in excess of $50 million.
Expense Reimbursement Fee. Brown Brothers Harriman Trust Company (Cayman)
Limited pays certain expenses of the Portfolio and receives a fee from the
Portfolio, computed and paid monthly, such that after such fee the aggregate
expenses will not exceed 0.57% of the Portfolio's average daily net assets. For
the month ended July 31, 1999, Brown Brothers Harriman Trust Company (Cayman)
Limited incurred $95,776, including $4,968 in investment management/advisory
fees and $632 in administration fees, in expenses on behalf of the Portfolio.
The expense reimbursement agreement will terminate when the aggregate amount of
fees received by Brown Brothers Harriman Trust Co. (Cayman) Limited thereunder
equals the aggregate amount of expenses paid by Brown Brother Harriman Trust
Company (Cayman) Limited thereunder.
3. Investment Transactions. For the month ended July 31, 1999, the cost
of purchases and the proceeds of sales of investment securities other than
short-term investments were $14,875,614 and $0, respectively.
<PAGE>
PART C
ITEM 23. EXHIBITS.
1 Declaration of Trust of the Registrant (1)
2 By-Laws of the Registrant(1)
5 Form of Investment Advisory Agreement between the Registrant and Wafra
Investment Advisory Group, Inc.(1)
5(i) Form of Investment Management Agreement between the Registrant and Brown
Brothers Harriman & Co.(1)
8 Custodian Contract between the Registrant and Brown Brothers Harriman (1)
8(i) Form of Amendment to Custodian Contract between the Registrant and
Brown Brothers Harriman & Co.(1)
9(a) Form of Administration Agreement between the Registrant and Brown Brothers
Harriman Trust Company(1)
13 Form of Investment representation letters of initial investors(1)
- ----------------
(1) Filed herewith.
ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.
Not applicable.
<PAGE>
ITEM 25. INDEMNIFICATION.
Reference is hereby made to Article V of the Registrant's Declaration of
Trust, filed as an Exhibit herewith.
The Trustees and officers of the Registrant are insured under an errors and
omissions liability insurance policy. The Registrant and its officers are also
insured under the fidelity bond required by Rule 17g-1 under the Investment
Company Act of 1940, as amended.
ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.
The Registrant's investment adviser, Wafra Investment Advisory Group, Inc.,
a U.S. registered investment adviser, acts as investment adviser for numerous
investment funds and managed accounts, including other Islamic funds and
products.
To the knowledge of the Registrant, none of the principals or officers of
Wafra Investment Advisory Group, Inc. is engaged in any other business,
profession, vocation or employment of a substantial nature.
ITEM 27. PRINCIPAL UNDERWRITERS.
Not applicable.
ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.
All accounts, books and other documents required to be maintained by
Section 31(a) of the Investment Company Act of 1940, as amended, and the Rules
thereunder are maintained at the offices of:
Dow Jones Islamic Market Index Portfolio
Butterfield House
Fort Street/P.O. Box 2330
George Town, Grand Cayman
Cayman Islands, B.W.I.
Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 10005
(investment manager)
Brown Brothers Harriman Trust Company
63 Wall Street
New York, NY 10005
(administrator)
59 Wall Street Distributors, Inc.
21 Milk Street
Boston, MA 02109
(placement agent)
Brown Brothers Harriman & Co.
59 Wall Street
New York, NY 10005
(custodian)
ITEM 29. MANAGEMENT SERVICES.
Not applicable.
ITEM 30. UNDERTAKINGS.
Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, Dow
Jones Islamic Market Index Portfolio has duly caused this registration statement
on Form N-1A to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Boston, Massachusetts on the day of [ ] August, 1999.
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
By: /s/Philip W. Coolidge
Philip W. Coolidge
President
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION OF EXHIBIT
EX-99.B1 Declaration of Trust of Registrant.
EX-99.B2 Bylaws of Registrant.
EX-99.B5(a) Form of Investment Advisory Agreement between the
Registrant and Wafra Investment Advisory Group, Inc.
EX-99B5(b) Form of Investment Management Agreement between the
Registrant and Brown Brothers Harriman & Co.
EX-99.B8(a) Custodian Contract between the Registrant and Brown
Brothers Harriman & Co.
EX-99.B8(b) Form of Foreign Custody Manager Delegation Agreement.
EX-99.B9(a) Form of Administration Agreement between the Registrant
and Brown Brothers Harriman Trust Company.
EX-99.B9(b) Form of Expense Payment Agreement between the Registrant
and Brown Brothers Harriman Trust Company.
EX-99.B13(a)-
EX-99.B13(b) Forms of investment representation letters.
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
DECLARATION OF TRUST
Dated as of March 5, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I The Trust 1
Section 1.1 Name ................................. 1
Section 1.2 Definitions .......................... 1
ARTICLE II -- Trustees.............................. 3
--------
Section 2.1 Number and Qualification ............. 3
Section 2.2 Term and Election .................... 3
Section 2.3 Resignation, Removal and Retirement .. 4
Section 2.4 Vacancies ............................ 4
Section 2.5 Meetings ............................. 4
Section 2.6 Officers; Chairman of the Board ...... 5
Section 2.7 By-Laws .............................. 5
ARTICLE III -- Powers of Trustees ................... 5
------------------
Section 3.1 General .............................. 5
Section 3.2 Investments .......................... 6
Section 3.3 Legal Title .......................... 6
Section 3.4 Sale and Increases of Interests .......7
Section 3.5 Decreases and Redemptions of Interests 7
Section 3.6 Delegation; Committees ................7
Section 3.7 Collection and Payment ................7
Section 3.8 Expenses ..............................7
Section 3.9 Miscellaneous Powers ..................8
Section 3.10 Further Powers ........................8
ARTICLE IV. Investment Management and Administration and Placement
Agent Arrangements ........................................................8
Section 4.1 Investment Management and Other Arrangements 8
Section 4.2 Parties to Contract ..........................9
ARTICLE V. Liability of Holders; Limitations of Liability of Trustees,
Officers, etc......... 10
Section 5.1 Liability of Holders; Indemnification..........10
<PAGE>
PAGE
Section 5.2 Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors
to Third Parties.................... 10
Section 5.3 Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors
to Trust, Holders, etc.................................10
Section 5.4 Mandatory Indemnification .............................10
Section 5.5 No Bond Required of Trustees ..........................11
Section 5.6 No Duty of Investigation; Notice in Trust
Instruments, etc ..................................... 11
Section 5.7 Reliance on Experts, etc ..............................12
ARTICLE VI Interests........................................................12
Section 6.1 Interests .............................................12
Section 6.2 Non-Transferability ...................................12
Section 6.3 Register of Interests .................................12
Section 6.4 Series Designation ....................................12
ARTICLE VII Increases, Decreases And Redemptions of Interests 15
-------------------------------------------------
ARTICLE VIII Determination of Book Capital Account Balances,
and Distributions............................................................15
Section 8.1 Book Capital Account Balances......................... 15
Section 8.2 Allocations and Distributions to Holders ..............16
Section 8.3 Power to Modify Foregoing Procedures ..................16
ARTICLE IX Holders......................................................... 16
Section 9.1 Rights of Holders .....................................16
Section 9.2 Meetings of Holders ...................................16
Section 9.3 Notice of Meetings ....................................17
Section 9.4 Record Date for Meetings, Distributions, etc. 17
Section 9.5 Proxies, etc...........................................17
Section 9.6 Reports................................................17
Section 9.7 Inspection of Records .................................18
Section 9.8 Holder Action by Written Consent ......................18
Section 9.9 Notices ...............................................18
<PAGE>
PAGE
ARTICLE X Duration; Termination; Amendment; Mergers; Etc. 18
----------------------------------------------
Section 10.1 Duration .............................................18
Section 10.2 Termination ..........................................19
Section 10.3 Dissolution ..........................................20
Section 10.4 Amendment Procedure ..................................20
Section 10.5 Merger, Consolidation and Sale of Assets .............21
Section 10.6 Incorporation.........................................21
Section 10.7 Continuation of Relationship and Business in
Different Form........................................21
ARTICLE XI Miscellaneous ...................................................22
-------------
Section 11.1 Certificate of Designation; Agent for
Service of Process....................................22
Section 11.2 Governing Law ........................................22
Section 11.3 Counterparts .........................................22
Section 11.4 Reliance by Third Parties ............................22
Section 11.5 Provisions in Conflict With Law or Regulations 22
<PAGE>
DECLARATION OF TRUST
OF
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
This DECLARATION OF TRUST of the Dow Jones Islamic Market
Index Portfolio is made as of the 5th day of March, 1999 by the parties
signatory hereto, as Trustees (as defined in Section 1.2 hereof).
W I T N E S S E T H:
WHEREAS, the Trustees desire to form a trust fund under the
law of the State of New York for the investment and reinvestment of its assets;
and
WHEREAS, it is proposed that the trust assets be composed of
money and property contributed thereto by the holders of interests in the trust
entitled to ownership rights in the trust;
NOW, THEREFORE, the Trustees hereby declare that they will
hold in trust all money and property contributed to the trust fund and will
manage and dispose of the same for the benefit of the holders of interests in
the Trust and subject to the provisions hereof, to wit:
ARTICLE I
The Trust
1.1. Name. The name of the trust created hereby (the "Trust") shall be the
Dow Jones Islamic Market Index Portfolio and so far as may be practicable the
Trustees shall conduct the Trust's activities, execute all documents and sue or
be sued under that name, which name (and the word "Trust" wherever hereinafter
used) shall refer to the Trustees as Trustees, and not individually, and shall
not refer to the officers, employees, agents or independent contractors of the
Trust or holders of interests in the Trust.
1.2. Definitions. As used in this Declaration, the following terms shall
have the following meanings:
The term "Interested Person" shall have the meaning given it
in the 1940 Act.
"Book Capital Account" shall mean, for any Holder at any time,
the Book Capital Account of the Holder for such day, determined in accordance
with Section 8.1 hereof.
"Code" shall mean the United States Internal Revenue Code of
1986, as amended from time to time, as well as any non-superseded provisions of
the Internal Revenue Code of 1954, as amended (or any corresponding provision or
provisions of succeeding law).
"Commission" shall mean the United States Securities and Exchange
Commission.
"Declaration" shall mean this Declaration of Trust as amended from time to
time. References in this Declaration to "Declaration", "hereof", "herein" and
"hereunder" shall be deemed to refer to this Declaration rather than the article
or section in which any such word appears.
"Fiscal Year" shall mean an annual period determined by the
Trustees which ends on December 31 of each year or on such other day as is
permitted or required by the Code.
"Holders" shall mean as of any particular time all holders of record of
Interests in the Trust.
"Institutional Investor(s)" shall mean any regulated
investment company, segregated asset account, foreign investment company, common
trust fund, group trust or other investment arrangement, whether organized
within or without the United States of America, other than an individual, S
corporation, partnership or grantor trust beneficially owned by any individual,
S corporation or partnership.
"Interest(s)" shall mean the interest of a Holder in the
Trust, including all rights, powers and privileges accorded to Holders by this
Declaration, which interest may be expressed as a percentage, determined by
calculating, at such times and on such basis as the Trustees shall from time to
time determine, the ratio of each Holder's Book Capital Account balance to the
total of all Holders' Book Capital Account balances. Reference herein to a
specified percentage of, or fraction of, Interests, means Holders whose combined
Book Capital Account balances represent such specified percentage or fraction of
the combined Book Capital Account balances of all, or a specified group of,
Holders.
"Investment Manager and Administrator" shall mean any party
furnishing services to the Trust pursuant to any investment management or
administration contract described in Section 4.1 hereof.
"Majority Interests Vote" shall mean the vote, at a meeting of
Holders, of (A) 67% or more of the Interests present or represented at such
meeting, if Holders of more than 50% of all Interests are present or represented
by proxy, or (B) more than 50% of all Interests, whichever is less.
"Person" shall mean and include individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
"Redemption" shall mean the complete withdrawal of an Interest
of a Holder the result of which is to reduce the Book Capital Account balance of
that Holder to zero, and the term "redeem" shall mean to effect a Redemption.
"Trustees" shall mean each signatory to this Declaration, so
long as such signatory shall continue in office in accordance with the terms
hereof, and all other individuals who at the time in question have been duly
elected or appointed and have qualified as Trustees in accordance with the
provisions hereof and are then in office, and reference in this Declaration to a
Trustee or Trustees shall refer to such individual or individuals in their
capacity as Trustees hereunder.
"Trust Property" shall mean as of any particular time any and
all property, real or personal, tangible or intangible, which at such time is
owned or held by or for the account of the Trust or the Trustees.
The "1940 Act" shall mean the United States Investment Company
Act of 1940, as amended from time to time, and the rules and regulations
thereunder.
ARTICLE II
Trustees
2.1. Number and Qualification. The number of Trustees shall be
fixed from time to time by action of the Trustees taken as provided in Section
2.5 hereof; provided, however, that the number of Trustees so fixed shall in no
event be less than three or more than 15. Any vacancy created by an increase in
the number of Trustees may be filled by the appointment of an individual having
the qualifications described in this Section 2.1 made by action of the Trustees
taken as provided in Section 2.5 hereof. Any such appointment shall not become
effective, however, until the individual named in the written instrument of
appointment shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of this Declaration. No reduction in the number
of Trustees shall have the effect of removing any Trustee from office. Whenever
a vacancy occurs, until such vacancy is filled as provided in Section 2.4
hereof, the Trustees continuing in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Declaration. A Trustee shall be an individual
at least 21 years of age who is not under legal disability.
2.2. Term and Election. Each Trustee named herein, or elected
or appointed prior to the first meeting of Holders, shall (except in the event
of resignations, retirements, removals or vacancies pursuant to Section 2.3 or
Section 2.4 hereof) hold office until a successor to such Trustee has been
elected at such meeting and has qualified to serve as Trustee, as required under
the 1940 Act. Subject to the provisions of Section 16(a) of the 1940 Act and
except as provided in Section 2.3 hereof, each Trustee shall hold office during
the lifetime of the Trust and until its termination as hereinafter provided.
2.3. Resignation, Removal and Retirement. Any Trustee may
resign his or her trust (without need for prior or subsequent accounting) by an
instrument in writing executed by such Trustee and delivered or mailed to the
Chairman, if any, the President or the Secretary of the Trust and such
resignation shall be effective upon such delivery, or at a later date according
to the terms of the instrument. Any Trustee may be removed by the affirmative
vote of Holders of two-thirds of the Interests or (provided the aggregate number
of Trustees, after such removal and after giving effect to any appointment made
to fill the vacancy created by such removal, shall not be less than the number
required by Section 2.1 hereof) with cause, by the action of two-thirds of the
remaining Trustees. Removal with cause includes, but is not limited to, the
removal of a Trustee due to physical or mental incapacity or failure to comply
with such written policies as from time to time may be adopted by at least
two-thirds of the Trustees with respect to the conduct of the Trustees and
attendance at meetings. Any Trustee who has attained a mandatory retirement age,
if any, established pursuant to any written policy adopted from time to time by
at least two-thirds of the Trustees shall, automatically and without action by
such Trustee or the remaining Trustees, be deemed to have retired in accordance
with the terms of such policy, effective as of the date determined in accordance
with such policy. Any Trustee who has become incapacitated by illness or injury
as determined by a majority of the other Trustees, may be retired by written
instrument executed by a majority of the other Trustees, specifying the date of
such Trustee's retirement. Upon the resignation, retirement or removal of a
Trustee, or a Trustee otherwise ceasing to be a Trustee, such resigning,
retired, removed or former Trustee shall execute and deliver such documents as
the remaining Trustees shall require for the purpose of conveying to the Trust
or the remaining Trustees any Trust Property held in the name of such resigning,
retired, removed or former Trustee. Upon the death of any Trustee or upon
removal, retirement or resignation due to any Trustee's incapacity to serve as
Trustee, the legal representative of such deceased, removed, retired or
resigning Trustee shall execute and deliver on behalf of such deceased, removed,
retired or resigning Trustee such documents as the remaining Trustees shall
require for the purpose set forth in the preceding sentence.
2.4. Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of the death, resignation, retirement,
adjudicated incompetence or other incapacity to perform the duties of the
office, or removal, of a Trustee. No such vacancy shall operate to annul this
Declaration or to revoke any existing agency created pursuant to the terms of
this Declaration. In the case of a vacancy, Holders of at least a majority of
the Interests entitled to vote, acting at any meeting of Holders held in
accordance with Section 9.2 hereof, or, to the extent permitted by the 1940 Act,
a majority vote of the Trustees continuing in office acting by written
instrument or instruments, may fill such vacancy, and any Trustee so elected by
the Trustees or the Holders shall hold office as provided in this Declaration.
2.5. Meetings. Meetings of the Trustees shall be held from
time to time upon the call of the Chairman, if any, the President, the
Secretary, an Assistant Secretary or any two Trustees. Regular meetings of the
Trustees may be held without call or notice at a time and place fixed by the
By-Laws or by resolution of the Trustees. Notice of any other meeting shall be
mailed or otherwise given not less than 24 hours before the meeting but may be
waived in writing by any Trustee either before or after such meeting. The
attendance of a Trustee at a meeting shall constitute a waiver of notice of such
meeting except in the situation in which a Trustee attends a meeting for the
express purpose of objecting to the transaction of any business on the ground
that the meeting was not lawfully called or convened. The Trustees may act with
or without a meeting. A quorum for all meetings of the Trustees shall be a
majority of the Trustees. Unless provided otherwise in this Declaration, any
action of the Trustees may be taken at a meeting by vote of a majority of the
Trustees present (a quorum being present) or without a meeting by written
consent of a majority of the Trustees.
Any committee of the Trustees, including an executive committee, if any,
may act with or without a meeting. A quorum for all meetings of any such
committee shall be a majority of the members thereof. Unless provided otherwise
in this Declaration, any action of any such committee may be taken at a meeting
by vote of a majority of the members present (a quorum being present) or without
a meeting by written consent of a majority of the members.
With respect to actions of the Trustees and any committee of
the Trustees, Trustees who are Interested Persons of the Trust or otherwise
interested in any action to be taken may be counted for quorum purposes under
this Section 2.5 and shall be entitled to vote to the extent permitted by the
1940 Act.
All or any one or more Trustees may participate in a meeting
of the Trustees or any committee thereof by means of a conference telephone or
similar communications equipment by means of which all individuals participating
in the meeting can hear each other and participation in a meeting by means of
such communications equipment shall constitute presence in person at such
meeting.
2.6. Officers; Chairman of the Board. The Trustees shall, from time to
time, elect a President, a Secretary and a Treasurer. The Trustees may elect or
appoint, from time to time, a Chairman of the Board who shall preside at all
meetings of the Trustees and carry out such other duties as the Trustees may
designate. The Trustees may elect or appoint or authorize the President to
appoint such other officers, agents or independent contractors with such powers
as the Trustees may deem to be advisable. The Chairman, if any, shall be and
each other officer may, but need not, be a Trustee.
2.7. By-Laws. The Trustees may adopt and, from time to time, amend or
repeal By-Laws for the conduct of the business of the Trust.
ARTICLE III
Powers of Trustees
3.1. General. The Trustees shall have exclusive and absolute control over
the Trust Property and over the business of the Trust to the same extent as if
the Trustees were the sole owners of the Trust Property and such business in
their own right, but with such powers of delegation as may be permitted by this
Declaration. The Trustees may perform such acts as in their sole discretion they
deem proper for conducting the business of the Trust. The enumeration of or
failure to mention any specific power herein shall not be construed as limiting
such exclusive and absolute control. The powers of the Trustees may be exercised
without order of or resort to any court.
3.2. Investments. The Trustees shall have power to:
(a) conduct, operate and carry on the business of an investment company;
(b) subscribe for, invest in, reinvest in, purchase or otherwise acquire,
hold, pledge, sell, assign, transfer, exchange, distribute or otherwise deal in
or dispose of United States and foreign currencies and related instruments
including common stock, negotiable or non-negotiable instruments, obligations,
repurchase agreements, reverse repurchase agreements, and other securities,
including, without limitation, those issued by corporations or other business
entities organized under the laws of the United States or under any foreign
laws; and to exercise any and all rights, powers and privileges of ownership or
interest in respect of any and all such investments of any kind and description,
including, without limitation, the right to consent and otherwise act with
respect thereto, with power to designate one or more Persons to exercise any of
such rights, powers and privileges in respect of any of such investments; and
the Trustees shall be deemed to have the foregoing powers with respect to any
additional instruments in which the Trustees may determine to invest.
The Trustees shall not be limited to investing in obligations
maturing before the possible termination of the Trust, nor shall the Trustees be
limited by any law limiting the investments which may be made by fiduciaries.
3.3. Legal Title. Legal title to all Trust Property shall be vested in the
Trustees as joint tenants except that the Trustees shall have the power to cause
legal title to any Trust Property to be held by or in the name of one or more of
the Trustees, or in the name of the Trust, or in the name or nominee name of any
other Person on behalf of the Trust, on such terms as the Trustees may
determine.
The right, title and interest of the Trustees in the Trust Property shall
vest automatically in each individual who may hereafter become a Trustee upon
his due election and qualification. Upon the resignation, removal or death of a
Trustee, such resigning, removed or deceased Trustee shall automatically cease
to have any right, title or interest in any Trust Property, and the right, title
and interest of such resigning, removed or deceased Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
3.4. Sale and Increases of Interests. The Trustees, in their discretion,
may, from time to time, without a vote of the Holders, permit any Institutional
Investor to purchase an Interest, or increase its Interest, for such type of
consideration, including cash or property, at such time or times (including,
without limitation, each business day), and on such terms as the Trustees may
deem best, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. Individuals, S corporations, partnerships and
grantor trusts that are beneficially owned by any individual, S corporation or
partnership may not purchase Interests. A Holder which has redeemed its Interest
may not be permitted to purchase an Interest until the later of 60 calendar days
after the date of such Redemption or the first day of the Fiscal Year next
succeeding the Fiscal Year during which such Redemption occurred.
3.5 Decreases and Redemptions of Interests. Subject to Article VII hereof,
the Trustees, in their discretion, may, from time to time, without a vote of the
Holders, permit a Holder to redeem its Interest, or decrease its Interest, for
either cash or property, at such time or times (including, without limitation,
each business day), and on such terms as the Trustees may deem best.
3.6. Delegation; Committees. The Trustees shall have power, consistent with
their continuing exclusive and absolute control over the Trust Property and over
the business of the Trust, to delegate from time to time to such of their number
or to officers, employees, agents or independent contractors of the Trust the
doing of such things and the execution of such instruments in either the name of
the Trust or the names of the Trustees or otherwise as the Trustees may deem
expedient.
3.7. Collection and Payment. The Trustees shall have power to collect all
property due to the Trust; and to pay all claims, including taxes, against the
Trust Property; to prosecute, defend, compromise or abandon any claims relating
to the Trust or the Trust Property; to foreclose any security interest securing
any obligation, by virtue of which any property is owed to the Trust; and to
enter into releases, agreements and other instruments.
3.8. Expenses. The Trustees shall have power to incur and pay any expenses
which in the opinion of the Trustees are necessary or incidental to carry out
any of the purposes of this Declaration, and to pay reasonable compensation from
the Trust Property to themselves as Trustees. The Trustees shall fix the
compensation of all officers, employees and Trustees. The Trustees may pay
themselves such compensation for special services, including legal and brokerage
services, as they in good faith may deem reasonable, and reimbursement for
expenses reasonably incurred by themselves on behalf of the Trust.
3.9. Miscellaneous Powers. The Trustees shall have power to:
(a) employ or contract with such Persons as the Trustees may deem appropriate
for the transaction of the business of the Trust and terminate such employees or
contractual relationships as they consider appropriate; (b) enter into joint
ventures, partnerships and any other combinations or associations; (c) purchase,
and pay for out of Trust Property, insurance policies insuring the Investment
Manager and Administrator, placement agent, Holders, Trustees, officers,
employees, agents or independent contractors of the Trust against all claims
arising by reason of holding any such position or by reason of any action taken
or omitted by any such Person in such capacity, whether or not the Trust would
have the power to indemnify such Person against such liability; (d) establish
pension, profit-sharing and other retirement, incentive and benefit plans for
the Trustees, officers, employees or agents of the Trust; (e) make donations,
irrespective of benefit to the Trust, for charitable, religious, educational,
scientific, civic or similar purposes; (f) to the extent permitted by law,
indemnify any Person with whom the Trust has dealings, including the Investment
Manager and Administrator, placement agent, Holders, Trustees, officers,
employees, agents or independent contractors of the Trust, to such extent as the
Trustees shall determine; (g) guarantee indebtedness or contractual obligations
of others; (h) determine and change the Fiscal Year of the Trust and the method
by which its accounts shall be kept; and (i) adopt a seal for the Trust, but the
absence of such a seal shall not impair the validity of any instrument executed
on behalf of the Trust.
3.10. Further Powers. The Trustees shall have power to conduct
the business of the Trust and carry on its operations in any and all of its
branches and maintain offices, whether within or without the State of New York,
in any and all states of the United States of America, in the District of
Columbia, and in any and all commonwealths, territories, dependencies, colonies,
possessions, agencies or instrumentalities of the United States of America and
of foreign governments, and to do all such other things and execute all such
instruments as they deem necessary, proper, appropriate or desirable in order to
promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Trust which is made by the Trustees in good faith shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in favor
of a grant of power to the Trustees. The Trustees shall not be required to
obtain any court order in order to deal with Trust Property.
ARTICLE IV
Investment Management and Administration
and Placement Agent Arrangements
4.1. Investment Management and Other Arrangements. The
Trustees may in their discretion, from time to time, enter into investment
management and administration contracts or placement agent agreements whereby
the other party to such contract or agreement shall undertake to furnish the
Trustees such investment management and administration, placement agent and/or
other services as the Trustees shall, from time to time, consider appropriate or
desirable and all upon such terms and conditions as the Trustees may in their
sole discretion determine. Notwithstanding any provision of this Declaration,
the Trustees may authorize any Investment Manager and Administrator (subject to
such general or specific instructions as the Trustees may, from time to time,
adopt) to effect purchases, sales, loans or exchanges of Trust Property on
behalf of the Trustees or may authorize any officer, employee or Trustee to
effect such purchases, sales, loans or exchanges pursuant to recommendations of
any such Investment Manager and Administrator (all without any further action by
the Trustees). Any such purchase, sale, loan or exchange shall be deemed to have
been authorized by the Trustees.
4.2. Parties to Contract. Any contract of the character
described in Section 4.1 hereof or in the By-Laws of the Trust may be entered
into with any corporation, firm, trust or association, although one or more of
the Trustees or officers of the Trust may be an officer, director, Trustee,
shareholder or member of such other party to the contract, and no such contract
shall be invalidated or rendered voidable by reason of the existence of any such
relationship, nor shall any individual holding such relationship be liable
merely by reason of such relationship for any loss or expense to the Trust under
or by reason of any such contract or accountable for any profit realized
directly or indirectly therefrom, provided that the contract when entered into
was reasonable and fair and not inconsistent with the provisions of this Article
IV or the By-Laws of the Trust. The same Person may be the other party to one or
more contracts entered into pursuant to Section 4.1 hereof or the B Laws of the
Trust, and any individual may be financially interested or otherwise affiliated
with Persons who are parties to any or all of the contracts mentioned in this
Section 4.2 or in the By-Laws of the Trust.
<PAGE>
ARTICLE V
Liability of Holders; Limitations of
Liability of Trustees, Officers, etc.
5.1. Liability of Holders; Indemnification. Each Holder shall
be jointly and severally liable (with rights of contribution inter se in
proportion to their respective Interests in the Trust) for the liabilities and
obligations of the Trust in the event that the Trust fails to satisfy such
liabilities and obligations; provided, however, that, to the extent assets are
available in the Trust, the Trust shall indemnify and hold each Holder harmless
from and against any claim or liability to which such Holder may become subject
by reason of being or having been a Holder to the extent that such claim or
liability imposes on the Holder an obligation or liability which, when compared
to the obligations and liabilities imposed on other Holders, is greater than
such Holder's Interest (proportionate share), and shall reimburse such Holder
for all legal and other expenses reasonably incurred by such Holder in
connection with any such claim or liability. The rights accruing to a Holder
under this Section 5.1 shall not exclude any other right to which such Holder
may be lawfully entitled, nor shall anything contained herein restrict the right
of the Trust to indemnify or reimburse a Holder in any appropriate situation
even though not specifically provided herein. Notwithstanding the
indemnification procedure described above, it is intended that each Holder shall
remain jointly and severally liable to the Trust's creditors as a legal matter.
5.2. Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors to Third Parties. No Trustee,
officer, employee, agent or independent contractor (except in the case of an
agent or independent contractor to the extent expressly provided by written
contract) of the Trust shall be subject to any personal liability whatsoever to
any Person, other than the Trust or the Holders, in connection with Trust
Property or the affairs of the Trust; and all such Persons shall look solely to
the Trust Property for satisfaction of claims of any nature against a Trustee,
officer, employee, agent or independent contractor (except in the case of an
agent or independent contractor to the extent expressly provided by written
contract) of the Trust arising in connection with the affairs of the Trust.
5.3. Limitations of Liability of Trustees, Officers,
Employees, Agents, Independent Contractors to Trust, Holders, etc. No Trustee,
officer, employee, agent or independent contractor (except in the case of an
agent or independent contractor to the extent expressly provided by written
contract) of the Trust shall be liable to the Trust or the Holders for any
action or failure to act (including, without limitation, the failure to compel
in any way any former or acting Trustee to redress any breach of trust) except
for such Person's own bad faith, willful misfeasance, gross negligence or
reckless disregard of such Person's duties.
5.4. Mandatory Indemnification. The Trust shall indemnify, to
the fullest extent permitted by law (including the 1940 Act), each Trustee,
officer, employee, agent or independent contractor (except in the case of an
agent or independent contractor to the extent expressly provided by written
contract) of the Trust (including any Person who serves at the Trust's request
as a director, officer or trustee of another organization in which the Trust has
any interest as a shareholder, creditor or otherwise) against all liabilities
and expenses (including amounts paid in satisfaction of judgments, in
compromise, as fines and penalties, and as counsel fees) reasonably incurred by
such Person in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which such Person may be
involved or with which such Person may be threatened, while in office or
thereafter, by reason of such Person being or having been such a Trustee,
officer, employee, agent or independent contractor, except with respect to any
matter as to which such Person shall have been adjudicated to have acted in bad
faith, willful misfeasance, gross negligence or reckless disregard of such
Person's duties; provided, however, that as to any matter disposed of by a
compromise payment by such Person, pursuant to a consent decree or otherwise, no
indemnification either for such payment or for any other expenses shall be
provided unless there has been a determination that such Person did not engage
in willful misfeasance, bad faith, gross negligence or reckless disregard of the
duties involved in the conduct of such Person's office by the court or other
body approving the settlement or other disposition or by a reasonable
determination, based upon a review of readily available facts (as opposed to a
full trial-type inquiry), that such Person did not engage in such conduct by
written opinion from independent legal counsel approved by the Trustees. The
rights accruing to any Person under these provisions shall not exclude any other
right to which such Person may be lawfully entitled; provided that no Person may
satisfy any right of indemnity or reimbursement granted in this Section 5.4 or
in Section 5.2 hereof or to which such Person may be otherwise entitled except
out of the Trust Property. The Trustees may make advance payments in connection
with indemnification under this Section 5.4, provided that the indemnified
Person shall have given a written undertaking to reimburse the Trust in the
event it is subsequently determined that such Person is not entitled to such
indemnification.
5.5. No Bond Required of Trustees. No Trustee shall, as such, be obligated
to give any bond or surety or other security for the performance of any of such
Trustee's duties hereunder.
5.6. No Duty of Investigation; Notice in Trust Instruments,
etc. No purchaser, lender or other Person dealing with any Trustee, officer,
employee, agent or independent contractor of the Trust shall be bound to make
any inquiry concerning the validity of any transaction purporting to be made by
such Trustee, officer, employee, agent or independent contractor or be liable
for the application of money or property paid, loaned or delivered to or on the
order of such Trustee, officer, employee, agent or independent contractor. Every
obligation, contract, instrument, certificate or other interest or undertaking
of the Trust, and every other act or thing whatsoever executed in connection
with the Trust shall be conclusively taken to have been executed or done by the
executors thereof only in their capacity as Trustees, officers, employees,
agents or independent contractors of the Trust. Every written obligation,
contract, instrument, certificate or other interest or undertaking of the Trust
made or sold by any Trustee, officer, employee, agent or independent contractor
of the Trust, in such capacity, shall contain an appropriate recital to the
effect that the Trustee, officer, employee, agent or independent contractor of
the Trust shall not personally be bound by or liable thereunder, nor shall
resort be had to their private property for the satisfaction of any obligation
or claim thereunder, and appropriate references shall be made therein to the
Declaration, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to impose
personal liability on any Trustee, officer, employee, agent or independent
contractor of the Trust. Subject to the provisions of the 1940 Act, the Trust
may maintain insurance for the protection of the Trust Property, the Holders,
and the Trustees, officers, employees, agents and independent contractors of the
Trust in such amount as the Trustees shall deem adequate to cover possible tort
liability, and such other insurance as the Trustees in their sole judgment shall
deem advisable.
5.7. Reliance on Experts, etc. Each Trustee, officer,
employee, agent or independent contractor of the Trust shall, in the performance
of such Person's duties, be fully and completely justified and protected with
regard to any act or any failure to act resulting from reliance in good faith
upon the books of account or other records of the Trust (whether or not the
Trust would have the power to indemnify such Persons against such liability),
upon an opinion of counsel, or upon reports made to the Trust by any of its
officers or employees or by any Investment Manager and Administrator,
accountant, appraiser or other experts or consultants selected with reasonable
care by the Trustees, officers or employees of the Trust, regardless of whether
such counsel or expert may also be a Trustee.
ARTICLE VI
Interests
6.1. Interests. The beneficial interest in the Trust Property shall consist
of non-transferable Interests. The Interests shall be personal property giving
only the rights in this Declaration specifically set forth. The value of an
Interest shall be equal to the Book Capital Account balance of the Holder of the
Interest.
6.2. Non-Transferability. A Holder may not transfer, sell or exchange its
Interest.
6.3. Register of Interests. A register shall be kept at the Trust under the
direction of the Trustees which shall contain the name, address and Book Capital
Account balance of each Holder. Such register shall be conclusive as to the
identity of the Holders. No Holder shall be entitled to receive payment of any
distribution, nor to have notice given to it as herein provided, until it has
given its address to such officer or agent of the Trust as is keeping such
register for entry thereon.
6.4. Series Designation. The Trust may be divided into series, the number
and relative rights, privileges and preferences of which shall be established
and designated by the Trustees, in their discretion, in accordance with the
terms of this Section 6.4. The Trustees may from time to time exercise their
power to authorize the division of the Trust into one or more series by
establishing and designating one or more series of Interests upon and subject to
the following provisions:
(a) All Interests shall be identical except that there may be such
variations as shall be fixed and determined by the Trustees between different
series as to the right of withdrawal and the price, terms and manner of
withdrawal, and special and relative rights as to income allocations and on
liquidation.
(b) The number of authorized Interests and the number of Interests of each
series that may be issued shall be unlimited. The Trustees may classify or
reclassify any unissued Interests or any Interests previously issued and
reacquired of any series into one or more series that may be established and
designated from time to time. The Trustees may reissue for such consideration
and on such terms as they may determine, or cancel any Interests of any series
reacquired by the Trust at their discretion from time to time.
(c) All consideration received by the Trust for the issue of Interests of a
particular series, together with all assets in which such consideration is
invested or reinvested, all income, earnings, profits, and proceeds thereof,
including any proceeds derived from the sale, exchange or liquidation of such
assets, and any funds or payments derived from any reinvestment of such proceeds
in whatever form the same may be, shall irrevocably belong to that series for
all purposes, subject only to the rights of creditors of such series, and shall
be so recorded upon the books of account of the Trust. In the event that there
are any assets, income, earnings, profits, and proceeds thereof, funds, or
payments which are not readily identifiable as belonging to any particular
series, the Trustees shall allocate them among any one or more of the series
established and designated from time to time in such manner and on such basis as
they, in their sole discretion, deem fair and equitable. Each such allocation by
the Trustees shall be conclusive and binding upon the Holders of all series for
all purposes. No Holder of any particular series shall have any claim on or
right to any assets belonging to any other series in which it does not hold an
Interest.
(d) The assets belonging to each particular series shall be charged with
the liabilities of the Trust in respect of that series and all expenses, costs,
charges and reserves attributable to that series, and any general liabilities,
expenses, costs, charges or reserves of the Trust which are not readily
identifiable as belonging to any particular series shall be allocated and
charged by the Trustees to and among any one or more of the series established
and designated from time to time in such manner and on such basis as the
Trustees in their sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees shall be
conclusive and binding upon the Holders of all series for all purposes. Under no
circumstances shall the assets allocated or belonging to any particular series
be charged with liabilities attributable to any other series. All Persons who
have extended credit which has been allocated to a particular series, or who
have a claim or contract which has been allocated to any particular series,
shall look only to the assets of that particular series for payment of such
credit, claim or contract.
(e) The power of the Trustees to invest and reinvest the Trust Property
allocated or belonging to any particular series shall be governed by Section 3.2
hereof unless otherwise provided in the instrument of the Trustees establishing
such series which is hereinafter described.
(f) Each Interest in a series shall represent an Interest in the net assets
allocated or belonging to such series only, and such Interest shall not extend
to the assets of the Trust generally. Distributions and allocations of a
particular series may be paid with such frequency as the Trustees may determine,
which may be made daily or otherwise, pursuant to a standing resolution or
resolutions adopted only once or with such frequency as the Trustees may
determine, to the Holders of that series only, from such of the income, accrued
or realized, from the assets belonging to that series, as the Trustees may
determine, after providing for actual and accrued liabilities belonging to that
series. All distributions and allocations of a particular series shall be
distributed pro rata to the Holders of that series in proportion to the size of
their Interest in that series held by such Holders at the date and time of
record established for the payments of such distributions and allocation.
Interests of any particular series of the Trust may be withdrawn solely out of
Trust Property allocated or belonging to that series. Upon liquidation or
termination of a series of the Trust, Holders of such series shall be entitled
to receive a pro rata share of the net assets of such series only.
(g) Notwithstanding any provision hereof to the contrary, on any matter
submitted to a vote of the Holders, all interests then entitled to vote shall be
voted by individual series, except that (i) when required by the 1940 Act to
vote in the aggregate, Interests shall not be voted by individual series, and
(ii) when the Trustees have determined that the matter affects only the
Interests of one or more series, only Holders of such series shall be entitled
to vote thereon.
(h) The establishment and designation of any series shall be effective upon
the execution by a majority of the then Trustees of an instrument setting forth
such establishment and designation and the relative rights and preferences of
such series, or as otherwise provided in such instrument. At any time that there
are no Interests outstanding of any particular series previously established and
designated, the Trustees may by an instrument executed by a majority of their
number abolish that series and the establishment and designation thereof. Each
instrument referred to in this paragraph shall have the status of an amendment
to this Declaration.
The Trustees also acting pursuant to the last paragraph of
Section 10.4 of the Declaration, hereby amend in its entirety paragraph (a) of
Section 10.4 of the Trust's Declaration of Trust as follows:
(a) This Declaration may be amended by the vote of Holders of more than 50%
of all Interests at any meeting of Holders or by an instrument in writing
without a meeting, executed by a majority of the Trustees and consented to by
the Holders of more than 50% of all Interests. Notwithstanding any other
provision hereof, this Declaration may be amended by an instrument in writing
executed by a majority of the Trustees, and without the vote or consent of
Holders, for any one or more of the following purposes: (i) to change the name
of the Trust, (ii) to supply any omission, or to cure, correct or supplement any
ambiguous, defective or inconsistent provision hereof, (iii) to conform this
Declaration to the requirements of applicable federal law or regulations or the
requirements of the applicable provisions of the Code, (iv) to change the state
or other jurisdiction designated herein as the state or other jurisdiction whose
law shall be the governing law hereof, (v) to effect such changes herein as the
Trustees find to be necessary or appropriate (A) to permit the filing of this
Declaration under the law of such state or other jurisdiction applicable to
trusts or voluntary associations, (B) to permit the Trust to elect to be treated
as a "regulated investment company" under the applicable provisions of the Code,
(C) to permit the Trust to comply with fiscal or other statutory or official
requirements of any government authority, (D) to permit the transfer of
Interests (or to permit the transfer of any other beneficial interest in or
share of the Trust, however denominated), or (E) to create separate series of
Interests as provided in Section 6.4, and (vi) in conjunction with any amendment
contemplated by the foregoing clause (iv) or the foregoing clause (v) to make
any and all such further changes or modifications to this Declaration as the
Trustees find to be necessary or appropriate, any finding of the Trustees
referred to in the foregoing clause (v) or the foregoing clause (vi) to be
conclusively evidenced by the execution of any such amendment by a majority of
the Trustees; provided, however, that unless effected in compliance with the
provisions of Section 10.4(b) hereof, no amendment otherwise authorized by this
sentence may be made which would reduce the amount payable with respect to any
Interest upon liquidation of the Trust and; provided, further, that the Trustees
shall not be liable for failing to make any amendment permitted by this Section
10.4(a).
ARTICLE VII
Increases, Decreases And Redemptions of Interests
Subject to applicable law, to the provisions of this
Declaration and to such restrictions as may from time to time be adopted by the
Trustees, each Holder shall have the right to vary its investment in the Trust
at any time without limitation by increasing (through a capital contribution) or
decreasing (through a capital withdrawal) or by a Redemption of its Interest. An
increase in the investment of a Holder in the Trust shall be reflected as an
increase in the Book Capital Account balance of that Holder and a decrease in
the investment of a Holder in the Trust or the Redemption of the Interest of a
Holder shall be reflected as a decrease in the Book Capital Account balance of
that Holder. The Trust shall, upon appropriate and adequate notice from any
Holder increase, decrease or redeem such Holder's Interest for an amount
determined by the application of a formula adopted for such purpose by
resolution of the Trustees; provided that (a) the amount received by the Holder
upon any such decrease or Redemption shall not exceed the decrease in the
Holder's Book Capital Account balance effected by such decrease or Redemption of
its Interest, and (b) if so authorized by the Trustees, the Trust may, at any
time and from time to time, charge fees for effecting any such decrease or
Redemption, at such rates as the Trustees may establish, and may, at any time
and from time to time, suspend such right of decrease or Redemption. The
procedures for effecting decreases or Redemptions shall be as determined by the
Trustees from time to time.
ARTICLE VIII
Determination of Book Capital Account
Balances and Distributions
8.1. Book Capital Account Balances. The Book Capital Account balance of
each Holder shall be determined on such days and at such time or times as the
Trustees may determine. The Trustees shall adopt resolutions setting forth the
method of determining the Book Capital Account balance of each Holder. The power
and duty to make calculations pursuant to such resolutions may be delegated by
the Trustees to the Investment Manager and Administrator, custodian, or such
other Person as the Trustees may determine. Upon the Redemption of an Interest,
the Holder of that Interest shall be entitled to receive the balance of its Book
Capital Account. A Holder may not transfer, sell or exchange its Book Capital
Account balance.
8.2. Allocations and Distributions to Holders. The Trustees
shall, in compliance with the Code, the 1940 Act and generally accepted
accounting principles, establish the procedures by which the Trust shall make
(i) the allocation of unrealized gains and losses, taxable income and tax loss,
and profit and loss, or any item or items thereof, to each Holder, (ii) the
payment of distributions, if any, to Holders, and (iii) upon liquidation, the
final distribution of items of taxable income and expense. Such procedures shall
be set forth in writing and be furnished to the Trust's accountants. The
Trustees may amend the procedures adopted pursuant to this Section 8.2 from time
to time. The Trustees may retain from the net profits such amount as they may
deem necessary to pay the liabilities and expenses of the Trust, to meet
obligations of the Trust, and as they may deem desirable to use in the conduct
of the affairs of the Trust or to retain for future requirements or extensions
of the business.
8.3. Power to Modify Foregoing Procedures. Notwithstanding any
of the foregoing provisions of this Article VIII, the Trustees may prescribe, in
their absolute discretion, such other bases and times for determining the net
income of the Trust, the allocation of income of the Trust, the Book Capital
Account balance of each Holder, or the payment of distributions to the Holders
as they may deem necessary or desirable to enable the Trust to comply with any
provision of the 1940 Act or any order of exemption issued by the Commission or
with the Code.
ARTICLE IX
Holders
9.1. Rights of Holders. The ownership of the Trust Property and the right
to conduct any business described herein are vested exclusively in the Trustees,
and the Holders shall have no right or title therein other than the beneficial
interest conferred by their Interests and they shall have no power or right to
call for any partition or division of any Trust Property.
9.2. Meetings of Holders. Meetings of Holders may be called at
any time by a majority of the Trustees and shall be called by any Trustee upon
written request of Holders holding, in the aggregate, not less than 10% of the
Interests, such request specifying the purpose or purposes for which such
meeting is to be called. Any such meeting shall be held within or without the
State of New York and within or without the United States of America on such day
and at such time as the Trustees shall designate. Holders of one-third of the
Interests, present in person or by proxy, shall constitute a quorum for the
transaction of any business, except as may otherwise be required by the 1940
Act, other applicable law, this Declaration or the By-Laws of the Trust. If a
quorum is present at a meeting, an affirmative vote of the Holders present, in
person or by proxy, holding more than 50% of the total Interests of the Holders
present, either in person or by proxy, at such meeting constitutes the action of
the Holders, unless a greater number of affirmative votes is required by the
1940 Act, other applicable law, this Declaration or the By-Laws of the Trust.
All or any one of more Holders may participate in a meeting of Holders by means
of a conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other and participation
in a meeting by means of such communications equipment shall constitute presence
in person at such meeting.
9.3. Notice of Meetings. Notice of each meeting of Holders, stating the
time, place and purposes of the meeting, shall be given by the Trustees by mail
to each Holder, at its registered address, mailed at least 10 days and not more
than 60 days before the meeting. Notice of any meeting may be waived in writing
by any Holder either before or after such meeting. The attendance of a Holder at
a meeting shall constitute a waiver of notice of such meeting except in the
situation in which a Holder attends a meeting for the express purpose of
objecting to the transaction of any business on the ground that the meeting was
not lawfully called or convened. At any meeting, any business properly before
the meeting may be considered whether or not stated in the notice of the
meeting. Any adjourned meeting may be held as adjourned without further notice.
9.4. Record Date for Meetings, Distributions, etc. For the purpose of
determining the Holders who are entitled to notice of and to vote at any
meeting, or to participate in any distribution, or for the purpose of any other
action, the Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Holders or the payment of any distribution
or the taking of any other action, as the case may be, as a record date for the
determination of the Persons to be treated as Holders for such purpose.
9.5. Proxies, etc. At any meeting of Holders, any Holder
entitled to vote thereat may vote by proxy, provided that no proxy shall be
voted at any meeting unless it shall have been placed on file with the
Secretary, or with such other officer or agent of the Trust as the Secretary may
direct, for verification prior to the time at which such vote is to be taken. A
proxy may be revoked by a Holder at any time before it has been exercised by
placing on file with the Secretary, or with such other officer or agent of the
Trust as the Secretary may direct, a later dated proxy or written revocation.
Pursuant to a resolution of a majority of the Trustees, proxies may be solicited
in the name of the Trust or of one or more Trustees or of one or more officers
of the Trust. Only Holders on the record date shall be entitled to vote. Each
such Holder shall be entitled to a vote proportionate to its Interest. When an
Interest is held jointly by several Persons, any one of them may vote at any
meeting in person or by proxy in respect of such Interest, but if more than one
of them is present at such meeting in person or by proxy, and such joint owners
or their proxies so present disagree as to any vote to be cast, such vote shall
not be received in respect of such Interest. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger.
9.6. Reports. The Trustees shall cause to be prepared and furnished to each
Holder, at least annually as of the end of each Fiscal Year, a report of
operations containing a balance sheet and a statement of income of the Trust
prepared in conformity with generally accepted accounting principles and an
opinion of an independent public accountant on such financial statements. The
Trustees shall, in addition, furnish to each Holder at least semi-annually
interim reports of operations containing an unaudited balance sheet as of the
end of such period and an unaudited statement of income for the period from the
beginning of the then-current Fiscal Year to the end of such period.
9.7. Inspection of Records. The records of the Trust shall be open to
inspection by Holders during normal business hours for any purpose not harmful
to the Trust.
9.8. Holder Action by Written Consent. Any action which may be taken by
Holders may be taken without a meeting if Holders holding more than 50% of all
Interests entitled to vote (or such larger proportion thereof as shall be
required by any express provision of this Declaration) consent to the action in
writing and the written consents are filed with the records of the meetings of
Holders. Such consents shall be treated for all purposes as a vote taken at a
meeting of Holders.
Each such written consent shall be executed by or on behalf of the Holder
delivering such consent and shall bear the date of such execution. No such
written consent shall be effective to take the action referred to therein
unless, within one year of the earliest dated consent, written consents executed
by a sufficient number of Holders to take such action are filed with the records
of the meetings of Holders.
9.9. Notices. Any and all communications, including any and all notices to
which any Holder may be entitled, shall be deemed duly served or given if
mailed, postage prepaid, addressed to a Holder at its last known address as
recorded on the register of the Trust.
ARTICLE X
Duration; Termination;
Amendment; Mergers; Etc.
10.1. Duration. Subject to possible termination or dissolution in
accordance with the provisions of Section 10.2 and Section 10.3 hereof,
respectively, the Trust created hereby shall continue until the expiration of 20
years after the death of the last survivor of the initial Trustees named herein
and the following named persons:
<TABLE>
<S> <C> <C>
Date of
Name Address Birth
Nicole Catherine Rumery 18 Rio Vista Street 12/21/91
North Billerica, MA 01862
Nelson Stewart Ruble 65 Duck Pond Road 04/10/91
Glen Cove, NY 11542
Shelby Sara Wyetzner 8 Oak Brook Lane 10/18/90
Merrick, NY 11566
Amanda Jehan Sher Coolidge 483 Pleasant Street, No. 9 08/16/89
Belmont, MA 02178
Emilie Blair Ruble 65 Duck Pond Road 02/24/89
Glen Cove, NY 11542
Brian Patrick Lyons 152-48 Jewel Avenue 01/20/89
Flushing, NY 11367
Caroline Bolger Cima 11 Beechwood Lane 12/23/88
Scarsdale, NY 10583
Katherine Driscoll Cima 11 Beechwood Lane 04/05/92
Scarsdale, NY 10583
</TABLE>
10.2. Termination.
(a) The Trust may be terminated
(i) by the affirmative vote of Holders of not less than two-thirds of
all Interests at any meeting of Holders or by an instrument in writing without
a meeting, executed by a majority of the Trustees and consented to by
Holders of not less than two-thirds of all Interests, or
(ii) by the Trustees by written notice to the Holders. Upon any such
termination,
(i) the Trust shall carry on no business except for the purpose of winding
up its affairs;
(ii) the Trustees shall proceed to wind up the affairs of the Trust and all
of the powers of the Trustees under this Declaration shall continue until the
affairs of the Trust have been wound up, including the power to fulfill or
discharge the contracts of the Trust, collect the assets of the Trust, sell,
convey, assign, exchange or otherwise dispose of all or any part of the Trust
Property to one or more Persons at public or private sale for consideration
which may consist in whole or in part of cash, securities or other property of
any kind, discharge or pay the liabilities of the Trust, and do all other acts
appropriate to liquidate the business of the Trust; provided that any sale,
conveyance, assignment, exchange or other disposition of all or substantially
all the Trust Property shall require approval of the principal terms of the
transaction and the nature and amount of the consideration by the vote of
Holders holding more than 50% of all Interests; and
(iii) after paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees shall
distribute the remaining Trust Property, in cash or in kind or partly each,
among the Holders according to their respective rights as set forth in the
procedures established pursuant to Section 8.2 hereof.
(b) Upon termination of the Trust and distribution to the Holders as herein
provided, a majority of the Trustees shall execute and file with the records of
the Trust an instrument in writing setting forth the fact of such termination
and distribution. Upon termination of the Trust, the Trustees shall thereupon be
discharged from all further liabilities and duties hereunder, and the rights and
interests of all Holders shall thereupon cease.
10.3. Dissolution. Upon the bankruptcy of any Holder, or upon the
Redemption of any Interest, the Trust shall be dissolved effective 120 days
after the event. However, the Holders (other than such bankrupt or redeeming
Holder) may, by a unanimous affirmative vote at any meeting of such Holders or
by an instrument in writing without a meeting executed by a majority of the
Trustees and consented to by all such Holders, agree to continue the business of
the Trust even if there has been such a dissolution.
10.4. Amendment Procedure.
(a) This Declaration may be amended by the vote of Holders of more than 50%
of all Interests at any meeting of Holders or by an instrument in writing
without a meeting, executed by a majority of the Trustees and consented to by
the Holders of more than 50% of all Interests. Notwithstanding any other
provision hereof, this Declaration may be amended by an instrument in writing
executed by a majority of the Trustees, and without the vote or consent of
Holders, for any one or more of the following purposes: (i) to change the name
of the Trust, (ii) to supply any omission, or to cure, correct or supplement any
ambiguous, defective or inconsistent provision hereof, (iii) to conform this
Declaration to the requirements of applicable federal law or regulations or the
requirements of the applicable provisions of the Code, (iv) to change the state
or other jurisdiction designated herein as the state or other jurisdiction whose
law shall be the governing law hereof, (v) to effect such changes herein as the
Trustees find to be necessary or appropriate (A) to permit the filing of this
Declaration under the law of such state or other jurisdiction applicable to
trusts or voluntary associations, (B) to permit the Trust to elect to be treated
as a "regulated investment company" under the applicable provisions of the Code,
or (C) to permit the transfer of Interests (or to permit the transfer of any
other beneficial interest in or share of the Trust, however denominated), and
(vi) in conjunction with any amendment contemplated by the foregoing clause (iv)
or the foregoing clause (v) to make any and all such further changes or
modifications to this Declaration as the Trustees find to be necessary or
appropriate, any finding of the Trustees referred to in the foregoing clause (v)
or the foregoing clause (vi) to be conclusively evidenced by the execution of
any such amendment by a majority of the Trustees; provided, however, that unless
effected in compliance with the provisions of Section 10.4(b) hereof, no
amendment otherwise authorized by this sentence may be made which would reduce
the amount payable with respect to any Interest upon liquidation of the Trust
and; provided, further, that the Trustees shall not be liable for failing to
make any amendment permitted by this Section 10.4(a).
(b) No amendment may be made under Section 10.4(a) hereof which would
change any rights with respect to any Interest by reducing the amount payable
thereon upon liquidation of the Trust or by diminishing or eliminating any
voting rights pertaining thereto, except with the vote or consent of Holders of
two-thirds of all Interests.
(c) A certification in recordable form executed by a majority of the
Trustees setting forth an amendment and reciting that it was duly adopted by the
Holders or by the Trustees as aforesaid or a copy of the Declaration, as
amended, in recordable form, and executed by a majority of the Trustees, shall
be conclusive evidence of such amendment when filed with the records of the
Trust.
Notwithstanding any other provision hereof, until such time as Interests
are first sold, this Declaration may be terminated or amended in any respect by
the affirmative vote of a majority of the Trustees at any meeting of Trustees or
by an instrument executed by a majority of the Trustees.
10.5. Merger, Consolidation and Sale of Assets. The Trust may merge or
consolidate with any other corporation, association, trust or other organization
or may sell, lease or exchange all or substantially all of the Trust Property,
including good will, upon such terms and conditions and for such consideration
when and as authorized at any meeting of Holders called for such purpose by the
affirmative vote of Holders of not less than two-thirds of all Interests, or by
an instrument in writing without a meeting, consented to by Holders of not less
than two-thirds of all Interests, and any such merger, consolidation, sale,
lease or exchange shall be deemed for all purposes to have been accomplished
under and pursuant to the statutes of the State of New York.
10.6. Incorporation. Upon a Majority Interests Vote, the
Trustees may cause to be organized or assist in organizing a corporation or
corporations under the law of any jurisdiction or a trust, partnership,
association or other organization to take over the Trust Property or to carry on
any business in which the Trust directly or indirectly has any interest, and to
sell, convey and transfer the Trust Property to any such corporation, trust,
partnership, association or other organization in exchange for the equity
interests thereof or otherwise, and to lend money to, subscribe for the equity
interests of, and enter into any contract with any such corporation, trust,
partnership, association or other organization, or any corporation, trust,
partnership, association or other organization in which the Trust holds or is
about to acquire equity interests. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law. Nothing contained herein shall be construed as
requiring approval of the Holders for the Trustees to organize or assist in
organizing one or more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the Trust
Property to one or more of such organizations or entities.
10.7 Continuation of Relationship and Business in Different
Form. The Trustees may continue the fiduciary relationship created by this
Declaration and may continue to carry on any business in which the Trust
directly or indirectly has any interest, pursuant to an instrument or
instruments to be entered into by the Trustees with one or more third parties,
which instrument or instruments shall be separate and distinct from, and in
complete replacement of, this Declaration; provided, however, that (i) none of
the rights of the Holders shall thereby be diminished or eliminated including,
without limitation, the amount payable to a Holder upon liquidation and any
voting rights of a Holder, and (ii) the powers and responsibilities of the
Trustees shall not thereby be increased. Any such action by the Trustees shall
be conclusively evidenced by the execution of such instrument or instruments by
a majority of the Trustees, such instrument or instruments to be filed with the
records of the Trust. Upon such execution of such instrument or instruments,
this Declaration shall be of no further force and effect and all aspects of the
fiduciary relationship created by this Declaration shall be governed solely by
the terms and provisions of such instrument or instruments. Nothing contained
herein shall be construed as requiring approval of the Holders.
ARTICLE XI
Miscellaneous
11.1. Certificate of Designation; Agent for Service of
Process. The Trust shall file, with the Department of State of the State of New
York, a
11.2. Governing Law. This Declaration is executed by the Trustees and
delivered in the State of New York and with reference to the law thereof, and
the rights of all parties and the validity and construction of every provision
hereof shall be subject to and construed in accordance with the law of the State
of New York and reference shall be specifically made to the trust law of the
State of New York as to the construction of matters not specifically covered
herein or as to which an ambiguity exists.
11.3. Counterparts. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and such
counterparts, together, shall constitute one and the same instrument, which
shall be sufficiently evidenced by any one such original counterpart.
11.4. Reliance by Third Parties. Any certificate executed by
an individual who, according to the records of the Trust or of any recording
office in which this Declaration may be recorded, appears to be a Trustee
hereunder, certifying to: (a) the number or identity of Trustees or Holders, (b)
the due authorization of the execution of any instrument or writing, (c) the
form of any vote passed at a meeting of Trustees or Holders, (d) the fact that
the number of Trustees or Holders present at any meeting or executing any
written instrument satisfies the requirements of this Declaration, (e) the form
of any By-Laws adopted by or the identity of any officer elected by the
Trustees, or (f) the existence of any fact or facts which in any manner relate
to the affairs of the Trust, shall be conclusive evidence as to the matters so
certified in favor of any Person dealing with the Trustees.
11.5. Provisions in Conflict With Law or Regulations.
(a) The provisions of this Declaration are severable, and if the Trustees
shall determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, or with other applicable law and regulations, the
conflicting provision shall be deemed never to have constituted a part of this
Declaration; provided, however, that such determination shall not affect any of
the remaining provisions of this Declaration or render invalid or improper any
action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provision in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this
instrument as of the day and year first above written.
/s/ Richard L. Carpenter
Richard L. Carpenter, Trustee
/s/ Clifford A. Clark
Clifford A. Clark, Trustee
/s/ J. Angus Ivory
J. Angus Ivory, Trustee
WS5709A
BY-LAWS
As Adopted March 5, 1999
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I -- Meetings of Holders 1
-------------------
Section 1.1 Fixing Record Dates 1
Section 1.2 Records at Holder Meetings 1
Section 1.3 Inspectors of Election 1
Section 1.4 Proxies; Voting 2
ARTICLE II - Trustees 2
Section 2.1 Regular Meetings 2
Section 2.2 Special Meetings 2
Section 2.3 Notice 2
Section 2.4 Chairman; Records 2
ARTICLE III - Officers 3
Section 3.1 Officers of the Trust 3
Section 3.2 Election and Tenure 3
Section 3.3 Removal of Officers 3
Section 3.4 Bonds and Surety 3
Section 3.5 Chairman, President and Vice Presidents 3
Section 3.6 Secretary 4
Section 3.7 Treasurer 4
Section 3.8 Other Officers and Duties 4
ARTICLE IV - Miscellaneous 5
Section 4.1 Depositories 5
Section 4.2 Execution of Papers 5
Section 4.3 Seal 5
Section 4.4 Indemnification 5
Section 4.5 Distribution Disbursing Agents and the
Like 5
PAGE
ARTICLE V -- Regulations; Amendment of By-Laws 6
-----------------------------
Section 5.1 Regulations 6
Section 5.2 Amendment and Repeal of By-Laws 6
<PAGE>
BY-LAWS
OF
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
These By-Laws are made and adopted pursuant to Section 2.7 of the
Declaration of Trust establishing Dow Jones Islamic Market Index Portfolio (the
"Trust"), dated as of March 5, 1999, as from time to time amended (the
"Declaration"). All words and terms capitalized in these By-Laws shall have the
meaning or meanings set forth for such words or terms in the Declaration.
ARTICLE I
Meetings of Holders
Section 1.1. Fixing Record Dates. If the Trustees do not,
prior to any meeting of the Holders, fix a record date, then the date of
mailing notice of the meeting shall be the record date.
Section 1.2. Records at Holder Meetings. At each meeting of
the Holders there shall be open for inspection, by the Holders, Trustees and
officers, the minutes of the last previous meeting of Holders of the Trust and
a list of the Holders of the Trust, certified to be true and correct by the
Secretary or other proper agent of the Trust, as of the record date of the
meeting. Such list of Holders shall contain the name of each Holder in
alphabetical order and the address and Interest owned by such Holder on such
record date.
Section 1.3. Inspectors of Election. In advance of any meeting
of the Holders, the Trustees may appoint Inspectors of Election to act at the
meeting or any adjournment thereof. If Inspectors of Election are not so
appointed, the chairman, if any, of any meeting of the Holders may, and on the
request of any Holder or his proxy shall, appoint Inspectors of Election. The
number of Inspectors of Election shall be either one or three. If appointed at
the meeting on the request of one or more Holders or proxies, a Majority
Interests Vote shall determine whether one or three Inspectors of Election are
to be appointed, but failure to allow such determination by the Holders shall
not affect the validity of the appointment of Inspectors of Election. In case
any individual appointed as an Inspector of Election fails to appear or fails or
refuses to so act, the vacancy may be filled by appointment made by the Trustees
in advance of the convening of the meeting or at the meeting by the individual
acting as chairman of the meeting. The Inspectors of Election, if any, shall
determine the Interest owned by each Holder, the Interests represented at the
meeting, the existence of a quorum, the authenticity, validity and effect of
proxies, shall receive votes, ballots or consents, shall hear and determine all
challenges and questions in any way arising in connection with the right to
vote, shall count and tabulate all votes or consents, shall determine the
results, and shall do such other acts as may be proper to conduct the election
or vote with fairness to all Holders. If there are three Inspectors of Election,
the decision, act or certificate of a majority is effective in all respects as
the decision, act or certificate of all. On request of the chairman, if any, of
the meeting, or of any Holder or his proxy, the Inspectors of Election shall
make a report in writing of any challenge or question or matter determined by
them and shall execute a certificate of any facts found by them.
Section 1.4. Proxies; Voting. No proxy shall be valid after one year from
the date of its execution, unless a longer period is expressly stated in such
proxy.
ARTICLE II
Trustees
Section 2.1. Regular Meetings. The Trustees shall hold an annual and more
frequent regular meetings for the transaction of any business which may come
before such meeting. Regular meetings of the Trustees may be held without call
or notice at such place or places and times as the Trustees may provide from
time to time.
Section 2.2. Special Meetings. Special Meetings of the Trustees shall be
held upon the call of the Chairman, if any, the President, the Secretary or any
two Trustees, at such time, on such day and at such place, as shall be
designated in the notice of the meeting.
Section 2.3. Notice. Notice of a meeting shall be given by
mail or by telegram (which term shall include a cablegram) or delivered
personally. If notice is given by mail, it shall be mailed not later than 48
hours preceding the meeting and if given by telegram, telecopier or personally,
such notice shall be sent or delivery made not later than 24 hours preceding the
meeting. Notice by telephone shall constitute personal delivery for these
purposes. Notice of a meeting of Trustees may be waived before or after any
meeting by signed written waiver. Neither the business to be transacted at, nor
the purpose of, any meeting of the Board of Trustees need be stated in the
notice or waiver of notice of such meeting, and no notice need be given of
action proposed to be taken by written consent. The attendance of a Trustee at a
meeting shall constitute a waiver of notice of such meeting except where a
Trustee attends a meeting for the express purpose of objecting, at the
commencement of such meeting, to the transaction of any business on the ground
that the meeting has not been lawfully called or convened.
Section 2.4. Chairman; Records. The Chairman, if any, shall act as Chairman
at all meetings of the Trustees; in his absence the President shall act as
chairman; and, in the absence of the Chairman of the Board and the President,
the Trustees present shall elect one of their number to act as temporary
chairman. The results of all actions taken at a meeting of the Trustees, or by
written consent of the Trustees, shall be recorded by the Secretary.
ARTICLE III
Officers
Section 3.1. Officers of the Trust. The Trustee, but no other officer of
the Trust, including the President, need be a Trustee.
Section 3.2. Election and Tenure. At the initial organization meeting of
the Trustees, the Trustees shall elect the Chairman, if any, the President, the
Secretary, the Treasurer and such other officers as the Trustees shall deem
necessary or appropriate in order to carry out the business of the Trust. The
officers shall hold office until their successors have been duly elected and
qualified. The Trustees may fill any vacancy in office or add any additional
officer at any time.
Section 3.3. Removal of Officers. Any officer may be removed at any time,
with or without cause, by action of a majority of the Trustees. This provision
shall not prevent the making of a contract of employment for a definite term
with any officer and shall have no effect upon any cause of action which any
officer may have as a result of removal in breach of a contract of employment.
Any officer may resign at any time by notice in writing signed by such officer
and delivered or mailed to the Chairman, if any, the President or the Secretary,
and such resignation shall take effect immediately, or at a later date according
to the terms of such notice in writing.
Section 3.4. Bonds and Surety. Any officer may be required by the Trustees
to be bonded for the faithful performance of his duties in such amount and with
such sureties as the Trustees may determine.
Section 3.5. Chairman, President and Vice Presidents. The
Chairman, if any, shall, if present, preside at all meetings of the Holders and
of the Trustees and shall exercise and perform such other powers and duties as
may be from time to time assigned to him by the Trustees. Subject to such
supervisory powers, if any, as may be given by the Trustees to the Chairman, if
any, the President shall be the chief executive officer of the Trust and,
subject to the control of the Trustees, shall have general supervision,
direction and control of the business of the Trust and of its employees and
shall exercise such general powers of management as are usually vested in the
office of President of a corporation. In the absence of the Chairman, if any,
the President shall preside at all meetings of the Holders and, in the absence
of the Chairman, the President shall preside at all meetings of the Trustees.
Subject to the direction of the Trustees, the President shall have the power, in
the name and on behalf of the Trust, to execute any and all loan documents,
contracts, agreements, deeds, mortgages and other instruments in writing, and to
employ and discharge employees and agents of the Trust. Unless otherwise
directed by the Trustees, the President shall have full authority and power to
attend, to act and to vote, on behalf of the Trust, at any meeting of any
business organization in which the Trust holds an interest, or to confer such
powers upon any other person, by executing any proxies duly authorizing such
person. The President shall have such further authorities and duties as the
Trustees shall from time to time determine. In the absence or disability of the
President, the Vice Presidents in order of their rank or the Vice President
designated by the Trustees, shall perform all of the duties of the President,
and when so acting shall have all the powers of and be subject to all of the
restrictions upon the President. Subject to the direction of the President, each
Vice President shall have the power in the name and on behalf of the Trust to
execute any and all loan documents, contracts, agreements, deeds, mortgages and
other instruments in writing, and, in addition, shall have such other duties and
powers as shall be designated from time to time by the Trustees or by the
President.
Section 3.6. Secretary. The Secretary shall keep the minutes
of all meetings of, and record all votes of, Holders, Trustees and the Executive
Committee, if any. The results of all actions taken at a meeting of the
Trustees, or by written consent of the Trustees, shall be recorded by the
Secretary. The Secretary shall be custodian of the seal of the Trust, if any,
and (and any other person so authorized by the Trustees) shall affix the seal
or, if permitted, a facsimile thereof, to any instrument executed by the Trust
which would be sealed by a New York corporation executing the same or a similar
instrument and shall attest the seal and the signature or signatures of the
officer or officers executing such instrument on behalf of the Trust. The
Secretary shall also perform any other duties commonly incident to such office
in a New York corporation, and shall have such other authorities and duties as
the Trustees shall from time to time determine.
Section 3.7. Treasurer. Except as otherwise directed by the
Trustees, the Treasurer shall be responsible for the general supervision of the
Trust's funds and property and for the general supervision of the Trust's
custodian, and shall have and exercise, under the supervision of the Trustees
and of the President, all powers and duties normally incident to his office. The
Treasurer may endorse for deposit or collection all notes, checks and other
instruments payable to the Trust or to its order and shall deposit all funds of
the Trust as may be ordered by the Trustees or the President. The Treasurer
shall keep accurate account of the books of the Trust's transactions which shall
be the property of the Trust, and which together with all other property of the
Trust in his possession, shall be subject at all times to the inspection and
control of the Trustees or by any one or more Trustees. Unless the Trustees
shall otherwise determine, the Treasurer shall be the principal accounting
officer of the Trust and shall also be the principal financial officer of the
Trust. The Treasurer shall have such other duties and authorities as the
Trustees shall from time to time determine. Notwithstanding anything to the
contrary herein contained, the Trustees may authorize the Investment Manager and
Administrator to maintain bank accounts and deposit and disburse funds on behalf
of the Trust.
Section 3.8. Other Officers and Duties. The Trustees may elect such other
officers and assistant officers as they shall from time to time determine to be
necessary or desirable in order to conduct the business of the Trust. Assistant
officers shall act generally in the absence of the officer whom they assist and
shall assist that officer in the duties of his office. Each officer, employee
and agent of the Trust shall have such other duties and authorities as may be
conferred upon him by the Trustees or delegated to him by the President.
ARTICLE IV
Miscellaneous
Section 4.1. Depositories. The funds of the Trust shall be deposited in
such depositories as the Trustees shall designate and shall be drawn out on
checks, drafts or other orders signed by such officer, officers, agent or agents
(including the Investment Manager and Administrator) as the Trustees may from
time to time authorize.
Section 4.2. Execution of Papers. Except as the Trustees may generally or
in particular cases authorize, all deeds, leases, transfers, contracts, bonds,
notes, checks, drafts, and other obligations made, accepted or endorsed by the
Trust shall be executed by the President, any Vice President, or the Treasurer,
or by whomever else shall be designated for that purpose by the Trustees, and
need not bear the seal of the Trust.
Section 4.3. Seal. The seal of the Trust, if any, may be affixed to any
document, and the seal and its attestation may be lithographed, engraved or
otherwise printed on any document with the same force and effect as if it had
been imprinted and attested manually in the same manner and with the same effect
as if done by a New York corporation.
Section 4.4. Indemnification. Insofar as the conditional
advancing of indemnification monies under Section 5.4 of the Declaration for
actions based upon the 1940 Act may be concerned, such payments will be made
only on the following conditions: (i) the advances must be limited to amounts
used, or to be used, for the preparation or presentation of a defense to the
action, including costs connected with the preparation of a settlement; (ii)
advances may be made only upon receipt of a written promise by, or on behalf of,
the recipient to repay the amount of the advance which exceeds the amount to
which it is ultimately determined that he is entitled to receive from the Trust
by reason of indemnification; and (iii) (a) such promise must be secured by a
surety bond, other suitable insurance or an equivalent form of security which
assures that any repayment may be obtained by the Trust without delay or
litigation, which bond, insurance or other form of security must be provided by
the recipient of the advance, or (b) a majority of a quorum of the Trust's
disinterested, non-party Trustees, or an independent legal counsel in a written
opinion, shall determine, based upon a review of readily available facts, that
the recipient of the advance ultimately will be found entitled to
indemnification.
Section 4.5. Distribution Disbursing Agents and the Like. The Trustees
shall have the power to employ and compensate such distribution disbursing
agents, warrant agents and agents for the reinvestment of distributions as they
shall deem necessary or desirable. Any of such agents shall have such power and
authority as is delegated to any of them by the Trustees.
ARTICLE V
Regulations; Amendment of By-Laws
Section 5.1. Regulations. The Trustees may make such additional rules and
regulations, not inconsistent with these By-Laws, as they may deem expedient
concerning the sale and purchase of Interests of the Trust.
Section 5.2. Amendment and Repeal of By-Laws. In accordance with Section
2.7 of the Declaration, the Trustees shall have the power to alter, amend or
repeal the By-Laws or adopt new By-Laws at any time. Action by the Trustees with
respect to the By-Laws shall be taken by an affirmative vote of a majority of
the Trustees. The Trustees shall in no event adopt By-Laws which are in conflict
with the Declaration.
The Declaration refers to the Trustees as Trustees, but not as
individuals or personally; and no Trustee, officer, employee or agent of the
Trust shall be held to any personal liability, nor shall resort be had to their
private property for the satisfaction of any obligation or claim or otherwise in
connection with the affairs of the Trust.
WS5710
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
INVESTMENT ADVISORY AGREEMENT
AGREEMENT, dated March 5, 1999, between DOW JONES ISLAMIC MARKET INDEX
PORTFOLIO, a New York trust, (the "Portfolio"), and WAFRA INVESTMENT ADVISORY
GROUP, INC., a New York limited partnership (the "Adviser"),
WHEREAS, the Portfolio intends to register under the Investment Company
Act of 1940, as amended (the "1940 Act") as an open-end management investment
company;
WHEREAS, the Portfolio has entered into an investment management
agreement (the "Investment Management Agreement") with Brown Brothers Harriman &
Co. (the "Manager") dated March 5, 1999.
WHEREAS, the Portfolio desires to retain the Adviser to render
investment advisory services, and the Adviser is willing to render such
services;
NOW, THEREFORE,
WITNESSETH:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Portfolio hereby appoints the Adviser to act as investment adviser
to the Portfolio for the period and on the terms set forth in this Agreement.
The Adviser accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. Subject to the general supervision of the Board of Trustees of the
Portfolio, the Adviser shall advise the investment operations of the Portfolio
and the composition of the Portfolio's portfolio of securities and investments,
including cash, the purchase, retention and disposition thereof and agreements
relating thereto, in accordance with the Portfolio's investment objective and
policies as stated in the Registration Statement on Form N-1A (as defined in
paragraph 3 of this Agreement) and subject to the following understandings:
(a) the Adviser shall furnish a continuous investment program for the
Portfolio and shall determine from time to time what investments or securities
will be purchased, retained, sold or lent by the Portfolio, and what portion of
the assets will be invested or held uninvested as cash;
(b) the Adviser shall use the same skill and care in the management of the
Portfolio as it uses in the administration of other accounts for which it has
investment responsibility as agent;
(c) the Adviser, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Portfolio's Declaration of
Trust and By-Laws and the Registration Statement on Form N-1A of the Portfolio
and with the instructions and directions of the Trustees of the Portfolio and
will conform to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations including, without limitation,
the regulations and rulings of the New York State Banking Department;
(d) the Adviser shall determine the securities to be purchased, sold or
lent by the Portfolio; the Adviser shall determine whether or not the Portfolio
shall enter into repurchase or reverse repurchase agreements, contracts
providing for the making or acceptance of a cash settlement based upon changes
in the value of an index of securities, or put or call option contracts, with
respect to the Portfolio's portfolio of securities and investments;
(e) the Adviser shall maintain books and records with respect to the
Portfolio's securities transactions and shall render to the Portfolio's Trustees
such periodic and special reports as the Trustees may reasonably request; and
(f) the investment advisory services of the Adviser to the Portfolio under
this Agreement are not to be deemed exclusive, and the Adviser shall be free to
render similar services to others.
3. The Portfolio has delivered copies of each of the following documents to
the Adviser and will promptly notify and deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Portfolio, dated March 5, 1999 (such
Declaration of Trust, as presently in effect and as amended from time to time,
is herein called the "Declaration of Trust");
(b) By-Laws of the Portfolio (such By-Laws, as presently in effect and as
amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees of the Portfolio authorizing the
appointment of the Adviser and approving the form of this Agreement;
(d) Registration Statement under the 194O Act, as amended, on Form N-1A
(the "Registration Statement") as filed with the Securities and Exchange
Commission (the "Commission"); and
(e) Notification of Registration of the Portfolio under the 1940 Act on
Form N-8A as filed with the Commission.
4. The Adviser shall keep the Portfolio's books and records required to be
maintained by it pursuant to paragraph 2(e). In compliance with the requirements
of Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that all records
which it maintains for the Portfolio are the property of the Portfolio and
further agrees to surrender promptly to the Portfolio any such records upon the
Portfolio's request. The Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. During the term of this Agreement the Adviser will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities and investments purchased for the Portfolio (including
taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement and the Investment Management Agreement, the Adviser and the Manager
jointly will receive from the Portfolio as full compensation therefor an
aggregate fee at an annual rate equal to 0.40% of the Portfolio's average daily
net assets. This fee will be computed based on net assets at 4:00 P.M. New York
time on each day the New York Stock Exchange is open for trading, will be paid
monthly during the succeeding calendar month and will be shared between the
Adviser and the Manager as from time to time may be agreed upon by the Adviser
and the Manager.
7. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Portfolio in connection with the matters
to which this Agreement relates, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from wilful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for two years from the date
of its execution and thereafter, but only so long as its continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a majority
of all the Trustees of the Portfolio or by,"vote of a majority of the
outstanding voting securities" of the Portfolio on 60 days' written notice to
the Adviser, or by the Adviser at any time, without the payment of any penalty,
on 90 days' written notice to the Portfolio. This Agreement will automatically
and immediately terminate in the event of its "assignment".
9. The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or authorized
by the Trustees of the Portfolio from time to time, have no authority to act for
or represent the Portfolio in any way or otherwise be deemed an agent of the
Portfolio.
10. This Agreement may be amended by mutual consent, but the consent of
the Portfolio must be approved (a) by vote of a majority of those Trustees of
the Portfolio who are not parties to this Agreement or "interested persons" of
any such party, cast in person at a meeting called for the purpose of voting on
such amendment, and (b) by "vote of a majority of the outstanding voting
securities" of the Portfolio.
11. As used in this Agreement, the terms "assignment", "interested persons"
and "vote of a majority of the outstanding voting securities" shall have the
meanings assigned to them respectively in the 1940 Act.
12. Notices of any kind to be given to the Adviser by the Portfolio shall
be in writing and shall be duly given if mailed or delivered to the Adviser at
[ADDRESS] Attn: Treasurer, or at such other address or to such other individual
as shall be specified by the Adviser to the Portfolio. Notices of any kind to be
given to the Portfolio by the Adviser shall be in writing and shall be duly
given if mailed or delivered to the Portfolio at Dow Jones Islamic Market Index
Portfolio, 21 Milk Street, Boston, MA 02109, or at such other address or to such
other individual as shall be specified by the Portfolio to the Adviser.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers or Partners designated below on the day and year
first above written.
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
By
WAFRA INVESTMENT ADVISORY GROUP, INC.
By
WS5768
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, dated March 5, 1999, between DOW JONES ISLAMIC MARKET INDEX
PORTFOLIO, a New York trust, (the "Portfolio"), and BROWN BROTHERS HARRIMAN &
CO., a New York limited partnership (the "Manager"),
WHEREAS, the Portfolio intends to register under the Investment Company
Act of 1940, as amended (the "1940 Act") as an open-end management investment
company;
WHEREAS, the Portfolio has entered into an investment advisory
agreement (the "Investment Advisory Agreement") with Wafra Investment Advisory
Group, Inc. (the "Adviser") dated March 5, 1999.
WHEREAS, the Portfolio desires to retain the Manager to render
investment management services, and the Manager is willing to render such
services;
NOW, THEREFORE,
WITNESSETH:
that in consideration of the premises and mutual promises hereinafter set forth,
the parties hereto agree as follows:
1. The Portfolio hereby appoints the Manager to act as investment manager
to the Portfolio for the period and on the terms set forth in this Agreement.
The Manager accepts such appointment and agrees to render the services herein
set forth, for the compensation herein provided.
2. Subject to the general supervision of the Board of Trustees of the
Portfolio and based on the advice of the Adviser, the Manager shall manage the
investment operations of the Portfolio and the composition of the Portfolio's
portfolio of securities and investments, including cash, the purchase, retention
and disposition thereof and agreements relating thereto, in accordance with the
Portfolio's investment objective and policies as stated in the Registration
Statement on Form N-1A (as defined in paragraph 3 of this Agreement) and subject
to the following understandings:
(a) the Manager shall furnish a continuous investment program for the
Portfolio and, based upon the advice of the Adviser, shall determine from time
to time what investments or securities will be purchased, retained, sold or lent
by the Portfolio, and what portion of the assets will be invested or held
uninvested as cash;
(b) the Manager shall use the same skill and care in the management of the
Portfolio as it uses in the administration of other accounts for which it has
investment responsibility as agent;
(c) the Manager, in the performance of its duties and obligations under
this Agreement, shall act in conformity with the Portfolio's Declaration of
Trust and By-Laws and the Registration Statement on Form N-1A of the Portfolio
and with the instructions and directions of the Trustees of the Portfolio and
will conform to and comply with the requirements of the 1940 Act and all other
applicable federal and state laws and regulations including, without limitation,
the regulations and rulings of the New York State Banking Department;
(d) the Manager, based upon the advice of the Adviser, shall determine
the securities to be purchased, sold or lent by the Portfolio and as agent for
the Portfolio will effect portfolio transactions pursuant to its determinations
either directly with the issuer or with any broker and/or dealer in such
securities; in placing orders with brokers and or dealers the Manager intends to
seek best price and execution for purchases and sales; the Manager shall
determine whether or not the Portfolio shall enter into repurchase or reverse
repurchase agreements, contracts providing for the making or acceptance of a
cash settlement based upon changes in the value of an index of securities, or
put or call option contracts, with respect to the Portfolio's portfolio of
securities and investments.
On occasions when the Manager deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other customers, the
Manager, may, to the extent permitted by applicable laws and regulations, but
shall not be obligated to, aggregate the securities to be so sold or purchased
in order to obtain the best execution and lower brokerage commissions, if any.
In such event, allocation of the securities so purchased or sold, as well as the
expenses incurred in the transaction, will be made by the Manager in the manner
it considers to be the most equitable and consistent with its fiduciary
obligations to the Fund and to such other customers;
(e) the Manager shall maintain books and records with respect to the
Portfolio's securities transactions and shall render to the Portfolio's Trustees
such periodic and special reports as the Trustees may reasonably request; and
(f) the investment management services of the Manager to the Portfolio
under this Agreement are not to be deemed exclusive, and the Manager shall be
free to render similar services to others.
3. The Portfolio has delivered copies of each of the following documents to
the Manager and will promptly notify and deliver to it all future amendments and
supplements, if any:
(a) Declaration of Trust of the Portfolio, dated March 5, 1999 (such
Declaration of Trust, as presently in effect and as amended from time to time,
is herein called the "Declaration of Trust");
(b) By-Laws of the Portfolio (such By-Laws, as presently in effect and
as amended from time to time, are herein called the "By-Laws");
(c) Certified resolutions of the Trustees of the Portfolio authorizing
the appointment of the Manager and approving the form of this Agreement;
(d) Registration Statement under the 194O Act, as amended, on Form N-1A
(the "Registration Statement") as filed with the Securities and Exchange
Commission (the "Commission"); and
(e) Notification of Registration of the Portfolio under the 1940 Act on
Form N-8A as filed with the Commission.
4. The Manager shall keep the Portfolio's books and records required to be
maintained by it pursuant to paragraph 2(e). In compliance with the requirements
of Rule 31a-3 under the 1940 Act, the Manager hereby agrees that all records
which it maintains for the Portfolio are the property of the Portfolio and
further agrees to surrender promptly to the Portfolio any such records upon the
Portfolio's request. The Manager further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act any such records required to be
maintained by Rule 31a-1 under the 1940 Act.
5. During the term of this Agreement the Manager will pay all expenses
incurred by it in connection with its activities under this Agreement other than
the cost of securities and investments purchased for the Portfolio (including
taxes and brokerage commissions, if any).
6. For the services provided and the expenses borne pursuant to this
Agreement and the Investment Advisory Agreement, the Manager and the Adviser
jointly will receive from the Portfolio as full compensation therefor an
aggregate fee at an annual rate equal to 0.40% of the Portfolio's average daily
net assets. This fee will be computed based on net assets at 4:00 P.M. New York
time on each day the New York Stock Exchange is open for trading, will be paid
monthly during the succeeding calendar month and will be shared between the
Manager and the Adviser as from time to time may be agreed upon by the Manager
and the Adviser.
7. The Manager shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Portfolio in connection with the matters
to which this Agreement relates, except a loss resulting from a breach of
fiduciary duty with respect to the receipt of compensation for services (in
which case any award of damages shall be limited to the period and the amount
set forth in Section 36(b)(3) of the 1940 Act) or a loss resulting from wilful
misfeasance, bad faith or gross negligence on its part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
8. This Agreement shall continue in effect for two years from the date
of its execution and thereafter, but only so long as its continuance is
specifically approved at least annually in conformity with the requirements of
the 1940 Act; provided, however, that this Agreement may be terminated by the
Portfolio at any time, without the payment of any penalty, by vote of a majority
of all the Trustees of the Portfolio or by,"vote of a majority of the
outstanding voting securities" of the Portfolio on 60 days' written notice to
the Manager, or by the Manager at any time, without the payment of any penalty,
on 90 days' written notice to the Portfolio. This Agreement will automatically
and immediately terminate in the event of its "assignment".
9. The Manager shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided herein or authorized
by the Trustees of the Portfolio from time to time, have no authority to act for
or represent the Portfolio in any way or otherwise be deemed an agent of the
Portfolio.
10. This Agreement may be amended by mutual consent, but the consent of the
Portfolio must be approved (a) by vote of a majority of those Trustees of the
Portfolio who are not parties to this Agreement or "interested persons" of any
such party, cast in person at a meeting called for the purpose of voting on such
amendment, and (b) by "vote of a majority of the outstanding voting securities"
of the Portfolio.
11. As used in this Agreement, the terms "assignment", "interested
persons" and "vote of a majority of the outstanding voting securities" shall
have the meanings assigned to them respectively in the 1940 Act.
12. Notices of any kind to be given to the Manager by the Portfolio shall
be in writing and shall be duly given if mailed or delivered to the Manager at
59 Wall Street, New York, New York 10005, Attention: Treasurer, or at such other
address or to such other individual as shall be specified by the Manager to the
Portfolio. Notices of any kind to be given to the Portfolio by the Manager shall
be in writing and shall be duly given if mailed or delivered to the Portfolio at
Dow Jones Islamic Market Index Portfolio, 21 Milk Street, Boston, MA 02109, or
at such other address or to such other individual as shall be specified by the
Portfolio to the Manager.
13. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers or Partners designated below on the day and year
first above written.
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
By
BROWN BROTHERS HARRIMAN & CO.
By
WS5769
CUSTODIAN AGREEMENT
THIS AGREEMENT, dated as of June 25, 1999, between the trustees (each a
"Trustee" and collectively, the "Trustees") of the DOW JONES ISLAMIC MARKET
INDEX PORTFOLIO, an open-ended New York trust (which may or may not be
registered with the Securities and Exchange Commission in the United States),
(the Portfolio), and BROWN BROTHERS HARRIMAN & CO., a limited partnership formed
under the laws of the State of New York (BBH&Co. or the Custodian),
W I T N E S S E T H:
WHEREAS, WAFRA/BBH & CO. - DOW JONES ISLAMIC MARKET INDEX FUND (CAYMAN)
(the "Fund") is organized as a limited liability exempted company under the
Companies Law (1998 Revisions) of the Cayman Islands.
WHEREAS, the Trustees of the Portfolio wish to employ BBH&Co. to act as
custodian for the Portfolio and to provide related services, all as provided
herein, and BBH&Co. is willing to accept such employment, subject to the terms
and conditions herein set forth; NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained, the Trustees and BBH&Co. hereby
agree, as follows:
1. Appointment of Custodian. The Trustees hereby appoint BBH&Co. as the
Portfolio's custodian, and BBH&Co. hereby accepts such appointment. All
Investments of the Portfolio delivered to the Custodian or its agents or
Subcustodians shall be dealt with as provided in this Agreement. The duties of
the Custodian with respect to the Portfolio's Investments shall be only as set
forth expressly in this Agreement which duties are generally comprised of
safekeeping and various administrative duties that will be performed in
accordance with Instructions and as reasonably required to effect Instructions.
2. Representations, Warranties and Covenants of the Trustees. The Trustees
hereby represent, warrants and covenants each of the following:
2.1 This Agreement has been, and at the time of delivery of each
Instruction such Instruction will have been, duly authorized, executed and
delivered by the Trustee or a duly authorized Investment Manager or Investment
Advisor. This Agreement does not violate any Applicable Law or conflict with or
constitute a default under the Portfolio's prospectus or other organic document,
agreement, judgment, order or decree to which the Portfolio is a party or by
which it or its Investments is bound.
2.2 By providing an Instruction with respect to the first acquisition of an
Investment in a jurisdiction other than the United States of America, the
Trustees shall be deemed to have confirmed to the Custodian that a duly
appointed Investment Manager or Investment Advisor has (a) assessed and accepted
all material Country or Sovereign Risks and accepted responsibility for their
occurrence, (b) made all determinations required to be made by the Portfolio
under applicable laws or regulations, and (iii) appropriately and adequately
disclosed to its beneficiaries, other investors and all persons who have rights
in or to such Investments, all material investment risks, including those
relating to the custody and settlement infrastructure or the servicing of
securities in such jurisdiction.
2.3 The Trustees shall safeguard and shall solely be responsible for the
safekeeping of any testkeys, identification codes, passwords, other security
devices or statements of account with which the Custodian provides it. In
furtherance and not limitation of the foregoing, in the event the Trustees or a
duly appointed Investment Manager or Investment Advisor utilizes any on-line
service offered by the Custodian, the Trustee and the Custodian shall be fully
responsible for the security of each party's connecting terminal, access thereto
and the proper and authorized use thereof and the initiation and application of
continuing effective safeguards in respect thereof. Additionally, if the Trustee
or duly appointed Investment Manager or Investment Advisor uses any on-line or
similar communications service made available by the Custodian, the Trustees
shall be solely responsible for ensuring the security of its access to the
service and for the use of the service, and shall only attempt to access the
service and the Custodian's computer systems as directed by the Custodian. If
the Custodian provides any computer software to the Trustees or a duly appointed
Investment Manager or Investment Advisor relating to the services described in
this Agreement, they will only use the software for the purposes for which the
Custodian provided the software to them, and will abide by the license agreement
accompanying the software and any other security policies which the Custodian
provides to them.
3. Representation and Warranty of BBH&Co. BBH&Co. hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered by
BBH&Co. and does not and will not violate any Applicable Law or conflict with or
constitute a default under BBH&Co.'s limited partnership agreement or any
agreement, instrument, judgment, order or decree to which BBH&Co. is a party or
by which it is bound.
4. Instructions. Unless otherwise explicitly indicated herein, the
Custodian shall perform its duties pursuant to Instructions. As used herein, the
term Instruction shall mean a directive initiated by the Trustees or other
Authorized Persons which may include a Partner, officer or authorized employee
of: (i) Wafra Investment Advisory Group, Inc. (the "Investment Advisor), or (i)
Brown Brothers Harriman & Co. (the "Investment Manager"), or Brown Brothers
Harriman Trust Company (the "Administrator") which directive shall conform to
the requirements of this Section 4.
4.1 Authorized Persons. For purposes hereof, an Authorized Person shall be
a person or entity authorized to give Instructions for or on behalf of the
Portfolio by written notices to the Custodian or otherwise in accordance with
procedures delivered to and acknowledged by the Custodian, including without
limitation the Investment Advisor, Investment Manager or Administrator. The
Custodian may treat any Authorized Person as having full authority to issue
Instructions hereunder unless the notice of authorization contains explicit
limitations as to said authority. The Custodian shall be entitled to rely upon
the authority of Authorized Persons until it receives appropriate written notice
from the Trustees to the contrary.
4.2 Form of Instruction. Each Instruction shall be transmitted by such
secured or authenticated electro-mechanical means as the Custodian shall make
available from time to time unless the Trustee shall elect to transmit such
Instruction in accordance with Subsections 4.2.1 through 4.2.3 of this Section.
4.2.1 Trustee Designated Secured-Transmission Method. Instructions may be
transmitted through a secured or tested electro-mechanical means identified by
the Trustees or by an Authorized Person entitled to give Instruction and
acknowledged and accepted by the Custodian; it being understood that such
acknowledgment shall authorize the Custodian to receive and process such means
of delivery but shall not represent a judgment by the Custodian as to the
reasonableness or security of the method determined by the Authorized Person.
4.2.2 Written Instructions. Instructions may be transmitted in a writing
that bears the manual signature of Authorized Persons.
4.2.3 Other Forms of Instruction. Instructions may also be transmitted by
another means determined by the Trustee or Authorized Persons and acknowledged
and accepted by the Custodian (subject to the same limits as to acknowledgements
as is contained in Subsection 4.2.1, above) including Instructions given orally
or by SWIFT, telex or telefax (whether tested or untested).
When an Instruction is given by means established under Subsections 4.2.1
through 4.2.3, it shall be the responsibility of the Custodian to use reasonable
care to adhere to any security or other procedures established in writing
between the Custodian and the Authorized Person with respect to such means of
Instruction, but such Authorized Person shall be solely responsible for
determining that the particular means chosen is reasonable under the
circumstances. Oral Instructions shall be binding upon the Custodian only if and
when the Custodian takes action with respect thereto. With respect to telefax
instructions, the parties agree and acknowledge that receipt of legible
instructions cannot be assured, that the Custodian cannot verify that authorized
signatures on telefax instructions are original or properly affixed, and that
the Custodian shall not be liable for losses or expenses incurred through
actions taken in reliance on inaccurately stated, illegible or unauthorized
telefax instructions. The provisions of Section 4A of the Uniform Commercial
Code shall apply to Funds Transfers performed in accordance with Instructions.
In the event that a Funds Transfer Services Agreement is executed between the
Trustees or an Authorized Person and the Custodian, such an agreement shall
comprise a designation of form of a means of delivering Instructions for
purposes of this Section 4.2.
4.3 Completeness and Contents of Instructions. The Authorized Person shall
be responsible for assuring the adequacy and accuracy of Instructions.
Particularly, upon any acquisition or disposition or other dealing in the
Portfolio's Investments and upon any delivery and transfer of any Investment or
moneys, the person initiating such Instruction shall give the Custodian an
Instruction with appropriate detail, including, without limitation:
4.3.1 The transaction date and the date and location of settlement;
4.3.2 The specification of the type of transaction;
4.3.4 A description of the Investments or moneys in question, including, as
appropriate, quantity, price per unit, amount of money to be received or
delivered and currency information. Where an Instruction is communicated by
electronic means, or otherwise where an Instruction contains an identifying
number such as a CUSIP, SEDOL or ISIN number, the Custodian shall be entitled to
rely on such number as controlling notwithstanding any inconsistency contained
in such Instruction, particularly with respect to Investment description;
4.3.5 The name of the broker or similar entity concerned with execution of
the transaction.
If the Custodian shall determine that an Instruction is either unclear or
incomplete, the Custodian may give prompt notice of such determination to the
Authorized Person, and the Authorized Person shall thereupon amend or otherwise
reform such Instruction. In such event, the Custodian shall have no obligation
to take any action in response to the Instruction initially delivered until the
redelivery of an amended or reformed Instruction
4.4 Timeliness of Instructions. In giving an Instruction, each Authorized
Person shall take into consideration delays which may occur due to the
involvement of a Subcustodian or agent, differences in time zones, and other
factors particular to a given market, exchange or issuer. When the Custodian has
established specific timing requirements or deadlines with respect to particular
classes of Instruction, or when an Instruction is received by the Custodian at
such a time that it could not reasonably be expected to have acted on such
instruction due to time zone differences or other factors beyond its reasonable
control, the execution of any Instruction received by the Custodian after such
deadline or at such time (including any modification or revocation of a previous
Instruction) shall be at the risk of the Portfolio.
5. Safekeeping of Portfolio Assets. The Custodian shall hold Investments
delivered to it or Subcustodians for the Portfolio in accordance with the
provisions of this Section. The Custodian shall not be responsible for (a) the
safekeeping of Investments not delivered or that are not caused to be issued to
it or its Subcustodians; or, (b) pre-existing faults or defects in Investments
that are delivered to the Custodian, or its Subcustodians. The Custodian is
hereby authorized to hold with itself or a Subcustodian, and to record in one or
more accounts, all Investments delivered to and accepted by the Custodian, any
Subcustodian or their respective agents pursuant to an Instruction or in
consequence of any corporate action. The Custodian shall hold Investments for
the account of the Portfolio and shall segregate Investments from assets
belonging to the Custodian and shall cause its Subcustodians to segregate
Investments from assets belonging to the Subcustodian in an account held for the
Portfolio or in an account maintained by the Subcustodian generally for
non-proprietary assets of the Custodian.
5.1 Use of Securities Depositories. The Custodian may deposit and
maintain Investments in any Securities Depository, either directly or through
one or more Subcustodians appointed by the Custodian. Investments held in a
Securities Depository shall be held (a) subject to the agreement, rules,
statement of terms and conditions or other document or conditions effective
between the Securities Depository and the Custodian or the Subcustodian, as the
case may be, and (b) in an account for the Portfolio or in bulk segregation in
an account maintained for the non-proprietary assets of the entity holding such
Investments in the Depository. If market practice or the rules and regulations
of the Securities Depository prevent the Custodian, the Subcustodian or (any
agent of either) from holding its client assets in such a separate account, the
Custodian, the Subcustodian or other agent shall as appropriate segregate such
Investments for benefit of the Portfolio or for benefit of clients of the
Custodian generally on its own books.
5.2 Certificated Assets. Investments which are certificated may be held in
registered or bearer form: (a) in the Custodian's vault; (b) in the vault of a
Subcustodian or agent of the Custodian or a Subcustodian; or (c) in an account
maintained by the Custodian, Subcustodian or agent at a Securities Depository;
all in accordance with customary market practice in the jurisdiction in which
any Investments are held.
5.3 Registered Assets. Investments which are registered may be registered
in the name of the Custodian, a Subcustodian, or in the name of the Portfolio or
a nominee for any of the foregoing, and may be held in any manner set forth in
paragraph 5.2 above with or without any identification of fiduciary capacity in
such registration.
5.4 Book Entry Assets. Investments which are represented by book-entry may
be so held in an account maintained by the Book-Entry Agent on behalf of the
Custodian, a Subcustodian or another agent of the Custodian, or a Securities
Depository.
5.5 Replacement of Lost Investments. In the event of a loss of Investments
for which the Custodian is responsible under the terms of this Agreement, the
Custodian shall replace such Investment, or in the event that such replacement
cannot be effected, the Custodian shall pay to the Portfolio the fair market
value of such Investment based on the last available price as of the close of
business in the relevant market on the date that a claim was first made to the
Custodian with respect to such loss, or, if less, such other amount as shall be
agreed by the parties as the date for settlement.
6. Administrative Duties of the Custodian. The Custodian shall perform the
following administrative duties with respect to Investments of the Portfolio.
6.1 Purchase of Investments. Pursuant to Instruction, Investments
purchased for the account of the Portfolio shall be paid for (a) against
delivery thereof to the Custodian or a Subcustodian, as the case may be, either
directly or through a Clearing Corporation or a Securities Depository (in
accordance with the rules of such Securities Depository or such Clearing
Corporation), or (b) otherwise in accordance with an Instruction, Applicable
Law, generally accepted trade practices, or the terms of the instrument
representing such Investment.
6.2 Sale of Investments. Pursuant to Instruction, Investments sold for
the account of the Portfolio shall be delivered (a) against payment therefor in
cash, by check or by bank wire transfer, (b) by credit to the account of the
Custodian or the applicable Subcustodian, as the case may be, with a Clearing
Corporation or a Securities Depository (in accordance with the rules of such
Securities Depository or such Clearing Corporation), or (c) otherwise in
accordance with an Instruction, Applicable Law, generally accepted trade
practices, or the terms of the instrument representing such Investment.
6.3 Delivery in Connection with Borrowings of the Portfolio or other
Collateral and Margin Requirements. Pursuant to Instruction, the Custodian may
deliver Investments or cash of the Portfolio in connection with borrowings and
other collateral and margin requirements.
6.4 Futures and Options. If, pursuant to an Instruction, the Custodian
shall become a party to an agreement with the Portfolio and a futures commission
merchant regarding margin (Tri-Party Agreement), the Custodian shall (a) receive
and retain, to the extent the same are provided to the Custodian, confirmations
or other documents evidencing the purchase or sale exchange-traded futures
contracts and commodity options, (b) when required by such Tri-Party Agreement,
deposit and maintain in an account opened pursuant to such Agreement (Margin
Account), segregated either physically or by book-entry in a Securities
Depository for the benefit of any futures commission merchant, such Investments
as the shall have designated as initial, maintenance or variation "margin"
deposits or other collateral intended to secure the Portfolio's performance of
its obligations under the terms of any exchange-traded futures contracts and
commodity options; and (c) thereafter pay, release or transfer Investments into
or out of the margin account in accordance with the provisions of the such
Agreement. Alternatively, the Custodian may deliver Investments, in accordance
with an Instruction, to a futures commission merchant for purposes of margin
requirements in accordance with Rule 17f-6. The Custodian shall in no event be
responsible for the acts and omissions of any futures commission merchant to
whom Investments are delivered pursuant to this Section; for the sufficiency of
Investments held in any Margin Account; or, for the performance of any terms of
any exchange-traded futures contracts and commodity options.
6.5 Contractual Obligations and Similar Investments. From time to time,
the Portfolio's Investments may include Investments that are not ownership
interests as may be represented by certificate (whether registered or bearer),
by entry in a Securities Depository or by book entry agent, registrar or similar
agent for recording ownership interests in the relevant Investment. If the
Portfolio shall at any time acquire such Investments, including without
limitation deposit obligations, loan participations, repurchase agreements and
derivative arrangements, the Custodian shall (a) receive and retain, to the
extent the same are provided to the Custodian, confirmations or other documents
evidencing the arrangement; and (b) perform on the Portfolio's account in
accordance with the terms of the applicable arrangement, but only to the extent
directed to do so by Instruction. The Custodian shall have no responsibility for
agreements running to the Portfolio as to which it is not a party other than to
retain, to the extent the same are provided to the Custodian, documents or
copies of documents evidencing the arrangement and, in accordance with
Instruction, to include such arrangements in reports made to the Trustees.
6.6 Exchange of Securities. Unless otherwise directed by Instruction, the
Custodian shall: (a) exchange securities held for the account of the Portfolio
for other securities in connection with any reorganization, recapitalization,
conversion, split-up, change of par value of shares or similar event, and (b)
deposit any such securities in accordance with the terms of any reorganization
or protective plan.
6.7 Surrender of Securities. Unless otherwise directed by Instruction, the
Custodian may surrender securities: (a) in temporary form for definitive
securities; (b) for transfer into the name of an entity allowable under Section
5.3; and (c) for a different number of certificates or instruments representing
the same number of shares or the same principal amount of indebtedness.
6.8 Rights, Warrants, Etc. Pursuant to Instruction, the Custodian shall (a)
deliver warrants, puts, calls, rights or similar securities to the issuer or
trustee thereof, or to any agent of such issuer or trustee, for purposes of
exercising such rights or selling such securities, and (b) deposit securities in
response to any invitation for the tender thereof.
6.9 Mandatory Corporate Actions. Unless otherwise directed by Instruction,
the Custodian shall: (a) comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions or similar rights of securities ownership
affecting securities held on the Portfolio's account and promptly notify the
Trustees of such action, and (b) collect all stock dividends, rights and other
items of like nature with respect to such securities.
6.10 Income Collection. Unless otherwise directed by Instruction, the
Custodian shall collect any amount due and payable to the Portfolio with respect
to Investments and promptly credit the amount collected to a Principal or Agency
Account; provided, however, that the Custodian shall not be responsible for: (a)
the collection of amounts due and payable with respect to Investments that are
in default, or (b) the collection of cash or share entitlements with respect to
Investments that are not registered in the name of the Custodian or its
Subcustodians. The Custodian is hereby authorized to endorse and deliver any
instrument required to be so endorsed and delivered to effect collection of any
amount due and payable to the Portfolio with respect to Investments.
6.11 Ownership Certificates and Disclosure of the Portfolio's Interest. The
Custodian is hereby authorized to execute on behalf of the Portfolio ownership
certificates, affidavits or other disclosure required under Applicable Law or
established market practice in connection with the receipt of income, capital
gains or other payments by the Portfolio with respect to Investments, or in
connection with the sale, purchase or ownership of Investments. 6.12 Proxy
Materials. The Custodian shall deliver, or cause to be delivered, to the
Investment Manager proxy forms, notices of meeting, and any other notices or
announcements materially affecting or relating to Investments received by the
Custodian or any nominee. 6.13. Taxes. The Custodian shall, where applicable,
assist the Portfolio in the reclamation of taxes withheld on dividends and
interest payments received by the Portfolio. In the performance of its duties
with respect to tax withholding and reclamation, the Custodian shall be entitled
to rely on the advice of counsel and upon information and advice regarding the
Portfolio's tax status that is received from or on behalf of the Portfolio
without duty of separate inquiry. 6.14 Other Dealings. The Custodian shall
otherwise act as directed by Instruction, including without limitation effecting
the free payments of moneys or the free delivery of securities, provided that
such Instruction shall indicate the purpose of such payment or delivery and that
the Custodian shall record the party to whom such payment or delivery is made.
The Custodian shall attend to all nondiscretionary details in connection
with the sale or purchase or other administration of Investments, except as
otherwise directed by an Instruction, and may make payments to itself or others
for minor expenses of administering Investments under this Agreement; provided
that the Trustees shall have the right to request an accounting with respect to
such expenses. In fulfilling the duties set forth in Sections 6.6 through 6.10
above, the Custodian shall provide to the Trustees or Investment Manager or
Investment Advisor or Administrator all material information pertaining to a
corporate action which the Custodian actually receives; provided that the
Custodian shall not be responsible for the completeness or accuracy of such
information. Any advance credit of cash or shares expected to be received as a
result of any corporate action shall be subject to actual collection and may,
when the Custodian deems collection unlikely, be reversed by the Custodian.
The Custodian may at any time or times in its discretion appoint (and
may at any time remove) agents (other than Subcustodians) to carry out some or
all of the administrative provisions of this Agreement (Agents), provided,
however, that the appointment of such agent shall not relieve the Custodian of
its administrative obligations under this Agreement.
7. Cash Accounts, Deposits and Money Movements. Subject to the terms and
conditions set forth in this Section 7, the Trustees hereby authorize the
Custodian to open and maintain, with itself or with Subcustodians, cash accounts
in United States Dollars, in such other currencies as are the currencies of the
countries in which the Portfolio maintains Investments or in such other
currencies as the Portfolio shall from time to time request by Instruction.
7.1 Types of Cash Accounts. Cash accounts opened on the books of the
Custodian (Principal Accounts) shall be opened in the name of the Portfolio.
Such accounts collectively shall be a deposit obligation of the Custodian and
shall be subject to the terms of this Section 7 and the general liability
provisions contained in Section 9. Cash accounts opened on the books of a
Subcustodian may be opened in the name of the Portfolio or the Custodian or in
the name of the Custodian for its customers generally (Agency Accounts). Such
deposits shall be obligations of the Subcustodian and shall be treated as an
Investment of the Portfolio. Accordingly, the Custodian shall be responsible for
exercising reasonable care in the administration of such accounts but shall not
be liable for their repayment in the event such Subcustodian, by reason of its
bankruptcy, insolvency or otherwise, fails to make repayment.
7.2 Payments and Credits with Respect to the Cash Accounts. The
Custodian shall make payments from or deposits to any of said accounts in the
course of carrying out its administrative duties, including but not limited to
income collection with respect to the Portfolio's Investments, and otherwise in
accordance with Instructions. The Custodian and its Subcustodians shall be
required to credit amounts to the cash accounts only when moneys are actually
received in cleared funds in accordance with banking practice in the country and
currency of deposit. Any credit made to any Principal or Agency Account before
actual receipt of cleared funds shall be provisional and may be reversed by the
Custodian in the event such payment is not actually collected. Unless otherwise
specifically agreed in writing by the Custodian or any Subcustodian, all
deposits shall be payable only at the branch of the Custodian or Subcustodian
where the deposit is made or carried.
7.3 Currency and Related Risks. The Fund bears risks of holding or
transacting in any currency. The Custodian shall not be liable for any loss or
damage arising from the applicability of any law or regulation now or hereafter
in effect, or from the occurrence of any event, which may delay or affect the
transferability, convertibility or availability of any currency in the country
(a) in which such Principal or Agency Accounts are maintained or (b) in which
such currency is issued, and in no event shall the Custodian be obligated to
make payment of a deposit denominated in a currency during the period during
which its transferability, convertibility or availability has been affected by
any such law, regulation or event. Without limiting the generality of the
foregoing, neither the Custodian nor any Subcustodian shall be required to repay
any deposit made at a foreign branch of either the Custodian or Subcustodian if
such branch cannot repay the deposit due to a cause for which the Custodian
would not be responsible in accordance with the terms of Section 9 of this
Agreement unless the Custodian or such Subcustodian expressly agrees in writing
to repay the deposit under such circumstances. All currency transactions in any
account opened pursuant to this Agreement are subject to exchange control
regulations of the United States and of the country where such currency is the
lawful currency or where the account is maintained. Any taxes, costs, charges or
fees imposed on the convertibility of a currency held by the Portfolio shall be
for the account of the Portfolio.
7.4 Foreign Exchange Transactions. The Custodian shall, subject to the
terms of this Section, settle foreign exchange transactions (including
contracts, futures, options and options on futures) on behalf and for the
account of the Portfolio with such currency brokers or banking institutions,
including Subcustodians, as may be directed pursuant to Instructions. The
Custodian may act as principal in any foreign exchange transaction with the
Portfolio in accordance with Section 7.4.2 of this Agreement. The obligations of
the Custodian in respect of all foreign exchange transactions (whether or not
the Custodian shall act as principal in such transaction) shall be contingent on
the free, unencumbered transferability of the currency transacted on the actual
settlement date of the transaction.
7.4.1 Third Party Foreign Exchange Transactions. The Custodian shall
process foreign exchange transactions (including without limitation contracts,
futures, options, and options on futures), where any third party acts as
principal counterparty to the Portfolio on the same basis it performs duties as
agent for the Portfolio with respect to any other of the Portfolio's
Investments. Accordingly the Custodian shall only be responsible for delivering
or receiving currency on behalf of the Portfolio in respect of such contracts
pursuant to Instructions. The Custodian shall not be responsible for the failure
of any counterparty (including any Subcustodian) in such agency transaction to
perform its obligations thereunder. The Custodian (a) shall transmit cash and
Instructions to and from the currency broker or banking institution with which a
foreign exchange contract or option has been executed pursuant hereto, (b) may
make free outgoing payments of cash in the form of Dollars or foreign currency
without receiving confirmation of a foreign exchange contract or option or
confirmation that the countervalue currency completing the foreign exchange
contract has been delivered or received or that the option has been delivered or
received, and (c) shall hold all confirmations, certificates and other documents
and agreements received by the Custodian and evidencing or relating to such
foreign exchange transactions in safekeeping. The Portfolio accepts full
responsibility for its use of third-party foreign exchange dealers and for
execution of said foreign exchange contracts and options and understands that
the Portfolio shall be responsible for any and all costs and interest charges
which may be incurred by the Portfolio or the Custodian as a result of the
failure or delay of third parties to deliver foreign exchange.
7.5 Delays. If no event of Force Majeure shall have occurred and be
continuing and in the event that a delay shall have been caused by the fraud,
willful misconduct or gross negligence of the Custodian in carrying out an
Instruction to credit or transfer cash, the Custodian shall be liable to the
Fund: (a) with respect to Principal Accounts, for interest to be calculated at
the rate customarily paid on such deposit and currency by the Custodian on
overnight deposits at the time the delay occurs for the period from the day when
the transfer should have been effected until the day it is in fact effected;
and, (b) with respect to Agency Accounts, for interest to be calculated at the
rate customarily paid on such deposit and currency by the Subcustodian on
overnight deposits at the time the delay occurs for the period from the day when
the transfer should have been effected until the day it is in fact effected. The
Custodian shall not be liable for delays in carrying out such Instructions to
transfer cash which are not due to the Custodian's own fraud, willful misconduct
or gross negligence.
7.6 Advances. If, for any reason in the conduct of its safekeeping duties
pursuant to Section 5 hereof or its administration of the Portfolio's assets
pursuant to Section 6 hereof, the Custodian or any Subcustodian advances monies
to facilitate settlement or otherwise for benefit of the Portfolio (whether or
not any Principal or Agency Account shall be overdrawn either during, or at the
end of, any Business Day), the Trustee hereby do:
7.6.1 acknowledge that the Portfolio shall have no right or title to
any Investments purchased with such Advance save a right to receive such
Investments upon: (a) the debit of the Principal or Agency Account; or, (b) if
such debit would produce an overdraft in such account, other reimbursement of
the associated Advance;
7.6.2 grant to the Custodian a security interest in all Investments; and,
7.6.3 agree that the Custodian may secure the resulting Advance by
perfecting a security interest in all Investments under Applicable Law.
Neither the Custodian nor any Subcustodian shall be obligated to advance
monies to the Portfolio, and in the event that such Advance occurs, any
transaction giving rise to an Advance shall be for the account and risk of the
Portfolio and shall not be deemed to be a transaction undertaken by the
Custodian for its own account and risk. If such Advance shall have been made by
a Subcustodian or any other person, the Custodian may assign the security
interest and any other rights granted to the Custodian hereunder to such
Subcustodian or other person. If the Portfolio shall fail to repay when due the
principal balance of an Advance and accrued and unpaid interest thereon, the
Custodian or its assignee, as the case may be, shall be entitled to utilize the
available cash balance in any Agency or Principal Account and to dispose of any
Investments to the extent necessary to recover payment of all principal of, and
interest on, such Advance in full. The Custodian may assign any rights it has
hereunder to a Subcustodian or third party. Any security interest in Investments
taken hereunder shall be treated as financial assets credited to securities
accounts under Articles 8 and 9 of the Uniform Commercial Code (1997).
Accordingly, the Custodian shall have the rights and benefits of a secured
creditor that is a securities intermediary under such Articles 8 and 9. 7.7
Integrated Account. For purposes hereof, deposits maintained in all Principal
Accounts (whether or not denominated in Dollars) shall collectively constitute a
single and indivisible current account with respect to the Portfolio's
obligations to the Custodian, or its assignee, and balances in such Principal
Accounts shall be available for satisfaction of the Portfolio's obligations
under this Section 7. The Custodian shall further have a right of offset against
the balances in any Agency Account maintained hereunder to the extent that the
aggregate of all Principal Accounts is overdrawn.
8. Subcustodians and Securities Depositories. Subject to the provisions
hereinafter set forth in this Section 8, the Trustee hereby authorizes the
Custodian to utilize Securities Depositories to act on behalf of the Portfolio
and to appoint from time to time and to utilize Subcustodians. With respect to
securities and funds held by a Subcustodian, either directly or indirectly
(including by a Securities Depository or Clearing Corporation), notwithstanding
any provisions of this Agreement to the contrary, payment for securities
purchased and delivery of securities sold may be made prior to receipt of
securities or payment, respectively, and securities or payment may be received
in a form, in accordance with (a) governmental regulations, (b) rules of
Securities Depositories and clearing agencies, (c) generally accepted trade
practice in the applicable local market, (d) the terms and characteristics of
the particular Investment, or (e) the terms of Instructions. 8.1 Domestic
Subcustodians and Securities Depositories. The Custodian may deposit and/or
maintain, either directly or through one or more agents appointed by the
Custodian, Investments of the Portfolio in any Securities Depository in the
United States, including The Depository Trust Company, provided such Depository
meets applicable requirements of the Federal Reserve Bank or of the Securities
and Exchange Commission. The Custodian may, at any time and from time to time,
appoint any bank as defined in Section 2(a)(5) of the 1940 Act meeting the
requirements of a custodian under Section 17(f) of the 1940 Act and the rules
and regulations thereunder, to act on behalf of the Portfolio as a Subcustodian
for purposes of holding Investments of the Portfolio in the United States. 8.2
Foreign Subcustodians and Securities Depositories. The Custodian may deposit
and/or maintain non-U.S. Investments of the Portfolio in any non-U.S. Securities
Depository provided such Securities Depository meets the requirements of an
"eligible foreign custodian" under Rule 17f-5 promulgated under the 1940 Act, or
any successor rule or regulation ("Rule 17f-5") or which by order of the
Securities and Exchange Commission is exempted therefrom. Additionally, the
Custodian may, at any time and from time to time, appoint (a) any bank, trust
company or other entity meeting the requirements of an Eligible Foreign
Custodian under Rule 17f-5 or which by order of the Securities and Exchange
Commission is exempted therefrom, or (b) any bank as defined in Section 2(a)(5)
of the 1940 Act meeting the requirements of a custodian under Section 17(f) of
the 1940 Act and the rules and regulations thereunder, to act on behalf of the
Fund as a Subcustodian for purposes of holding Investments of the Portfolio
outside the United States. Such appointment of foreign Subcustodians shall be
subject to approval of the Trustee in accordance with Subsections 8.2.1 and
8.2.2.
8.2.1 Board Approval of Foreign Subcustodians. Unless and except to the
extent that review of certain matters concerning the appointment of
Subcustodians shall have been delegated to the Custodian pursuant to Subsection
8.2.2, the Custodian shall, prior to the appointment of any Subcustodian for
purposes of holding Investments of the Portfolio outside the United States,
obtain written confirmation of the approval of the Trustees with respect to (a)
the identity of a Subcustodian, (b) the country or countries in which, and the
Securities Depositories, if any, through which, any proposed Subcustodian is
authorized to hold Investments of the Portfolio, and (c) the Subcustodian
agreement which shall govern such appointment. Each such duly approved country,
Subcustodian and Securities Depository shall be listed on Appendix A attached
hereto as the same may from time to time be amended.
8.2.2 Delegation of Board Review of Subcustodians. From time to time, the
Custodian may offer to perform, and the Trustee may accept to perform, that the
Custodian perform certain reviews of Subcustodians and of Subcustodian Contracts
as delegate of the Fund's Trustees. In such event, the Custodian's duties and
obligations with respect to this delegated review will be performed in
accordance with the terms of a separate Foreign Custody Manager Delegation
Agreement between the Trustees and the Custodian.
8.3 Responsibility for Subcustodians. With respect to securities and funds
held by a Subcustodian, either directly or indirectly (including by a Foreign
Depository, Securities System or foreign clearing agency), including demand
deposit and interest bearing deposits, currencies or other deposits and foreign
exchange contracts as referred to herein, the Custodian shall be liable to the
Trustee if and only to the extent that such Subcustodian is liable to the
Custodian and the Custodian recovers under the applicable subcustodian
agreement.
8.4 New Countries. The Investment Manager shall be responsible for
informing the Custodian sufficiently in advance of a proposed investment which
is to be held in a country in which no Subcustodian is authorized to act in
order that the Custodian shall, if it deems appropriate to do so, have
sufficient time to establish a subcustodial arrangement in accordance herewith.
In the event, however, the Custodian is unable to establish such arrangements
prior to the time such investment is to be acquired, the Custodian is authorized
to designate at its discretion a local safekeeping agent, and the use of such
local safekeeping agent shall be at the sole risk of the Portfolio, and
accordingly the Custodian shall be responsible for the actions of such agent if
and only to the extent the Custodian shall have recovered from such agent for
any damages caused the Portfolio by such agent.
9. Responsibility of the Custodian. In performing its duties and
obligations hereunder, the Custodian shall use reasonable care under the facts
and circumstances prevailing in the market where performance is effected.
Subject to the specific provisions of this Section, the Custodian shall be
liable for any direct damage incurred by the Portfolio in consequence of the
Custodian's fraud, willful misconduct or gross negligence . In no event shall
the Custodian be liable hereunder for any special, indirect, punitive or
consequential damages arising out of, pursuant to or in connection with this
Agreement even if the Custodian has been advised of the possibility of such
damages. It is agreed that the Custodian shall have no duty to assess the risks
inherent in the Portfolio's Investments or to provide investment advice with
respect to such Investments and that the Portfolio as principal shall bear any
risks attendant to particular Investments such as failure of counterparty or
issuer. 9.1 Limitations of Performance. The Custodian shall not be responsible
under this Agreement for any failure to perform its duties, and shall not liable
hereunder for any loss or damage in association with such failure to perform,
for or in consequence of the following causes:
9.1.1 Force Majeure. Force Majeure shall mean any circumstance or event
which is beyond the reasonable control of the Custodian, a Subcustodian or any
agent of the Custodian or a Subcustodian and which adversely affects the
performance by the Custodian of its obligations hereunder, by the Subcustodian
of its obligations under its Subcustody Agreement or by any other agent of the
Custodian or the Subcustodian, including any event caused by, arising out of or
involving (a) an act of God, (b) accident, fire, water damage or explosion, (c)
any computer, system or other equipment failure or malfunction caused by any
computer virus or the malfunction or failure of any communications medium, (d)
any interruption of the power supply or other utility service, (e) any strike or
other work stoppage, whether partial or total, (f) any delay or disruption
resulting from or reflecting the occurrence of any Sovereign Risk, (g) any
disruption of, or suspension of trading in, the securities, commodities or
foreign exchange markets, whether or not resulting from or reflecting the
occurrence of any Sovereign Risk, (h) any encumbrance on the transferability of
a currency or a currency position on the actual settlement date of a foreign
exchange transaction, whether or not resulting from or reflecting the occurrence
of any Sovereign Risk, or (i) any other cause similarly beyond the reasonable
control of the Custodian.
9.1.2 Country Risk. Country Risk shall mean, with respect to the
acquisition, ownership, settlement or custody of Investments in a jurisdiction,
all risks relating to, or arising in consequence of, systemic and markets
factors affecting the acquisition, payment for or ownership of Investments
including (a) the prevalence of crime and corruption, (b) the inaccuracy or
unreliability of business and financial information, (c) the instability or
volatility of banking and financial systems, or the absence or inadequacy of an
infrastructure to support such systems, (d) custody and settlement
infrastructure of the market in which such Investments are transacted and held,
(e) the acts, omissions and operation of any Securities Depository, (f) the risk
of the bankruptcy or insolvency of banking agents, counterparties to cash and
securities transactions, registrars or transfer agents, and (g) the existence of
market conditions which prevent the orderly execution or settlement of
transactions or which affect the value of assets.
9.1.3 Sovereign Risk. Sovereign Risk shall mean, in respect of any
jurisdiction, including the United States of America, where Investments is
acquired or held hereunder or under a Subcustody Agreement, (a) any act of war,
terrorism, riot, insurrection or civil commotion, (b) the imposition of any
investment, repatriation or exchange control restrictions by any Governmental
Authority, (c) the confiscation, expropriation or nationalization of any
Investments by any Governmental Authority, whether de facto or de jure, (iv) any
devaluation or revaluation of the currency, (d) the imposition of taxes, levies
or other charges affecting Investments, (vi) any change in the Applicable Law,
or (e) any other economic or political risk incurred or experienced.
9.2. Limitations on Liability. The Custodian shall not be liable for
any loss, claim, damage or other liability arising from the following causes:
9.2.1 Failure of Third Parties. The failure of any third party including:
(a) any issuer of Investments or book-entry or other agent of and issuer; (b)
any counterparty with respect to any Investment, including any issuer of
exchange-traded or other futures, option, derivative or commodities contract;
(c) failure of an Investment Advisor or Investment Manager, Foreign Custody
Manager or other agent of the Portfolio; or (d) failure of other third parties
similarly beyond the control or choice of the Custodian.
9.2.2 Information Sources. The Custodian may rely upon information received
from issuers of Investments or agents of such issuers, information received from
Subcustodians and from other commercially reasonable sources such as commercial
data bases and the like, but shall not be responsible for specific inaccuracies
in such information, provided that the Custodian has relied upon such
information in good faith, or for the failure of any commercially reasonable
information provider.
9.2.3 Reliance on Instruction. Action by the Custodian or the Subcustodian
in accordance with an Instruction, even when such action conflicts with, or is
contrary to any provision of, the Portfolio's declaration of trust, certificate
of incorporation or by-laws, Applicable Law, or actions by the trustees,
directors or shareholders of the Portfolio.
9.2.4 Restricted Securities. The limitations inherent in the rights,
transferability or similar investment characteristics of a given Investment of
the Portfolio.
10. Indemnification. The Trustees, (from the assets of the Portfolio only)
hereby indemnifies the Custodian and each Subcustodian, and their respective
agents, nominees and the partners, employees, officers and directors, and agrees
to hold each of them harmless from and against all claims and liabilities,
including counsel fees and taxes, incurred or assessed against any of them in
connection with the performance of this Agreement and any Instruction not
resulting from the fraud, willful misconduct or gross negligence of the
Custodian. If a Subcustodian or any other person indemnified under the preceding
sentence, gives written notice of claim to the Custodian, the Custodian shall
promptly give written notice to the Portfolio. Not more than thirty days
following the date of such notice, unless the Custodian shall be liable under
Section 8 hereof in respect of such claim, the Portfolio will pay the amount of
such claim or reimburse the Custodian for any payment made by the Custodian in
respect thereof.
11. Reports and Records. The Custodian shall:
11.1 create and maintain records relating to the performance of its
obligations under this Agreement;
11.2 make available to the Trustees, its auditors, agents and employees,
during regular business hours of the Custodian, upon reasonable request and
during normal business hours of the Custodian, all records maintained by the
Custodian pursuant to paragraph (a) above, subject, however, to all reasonable
security requirements of the Custodian then applicable to the records of its
custody customers generally; and
11.3 make available to the Portfolio all Electronic Reports; it being
understood that the Custodian shall not be liable hereunder for the inaccuracy
or incompleteness thereof or for errors in any information included therein.
The Trustee shall examine all records, howsoever produced or transmitted,
promptly upon receipt thereof and notify the Custodian promptly of any
discrepancy or error therein. Unless the Trustees deliver written notice of any
such discrepancy or error within a reasonable time after its receipt thereof,
such records shall be deemed to be true and accurate. It is understood that the
Custodian now obtains and will in the future obtain information on the value of
assets from outside sources which may be utilized in certain reports made
available to the Portfolio. The Custodian deems such sources to be reliable but
it is acknowledged and agreed that the Custodian does not verify nor represent
nor warrant as to the accuracy or completeness of such information and
accordingly shall be without liability in selecting and using such sources and
furnishing such information.
12. Miscellaneous.
12.1 Proxies, etc. The Trustee or Authorized Person will promptly execute
and deliver, upon request, such proxies, powers of attorney or other instruments
as may be necessary or desirable for the Custodian to provide, or to cause any
Subcustodian to provide, custody services.
12.2 Entire Agreement. Except as specifically provided herein, this
Agreement constitutes the entire agreement between the Trustee and the Custodian
with respect to the subject matter hereof. Accordingly, this Agreement
supersedes any custody agreement or other oral or written agreements heretofore
in effect between the Trustee and the Custodian with respect to the custody of
the Portfolio's Investments.
12.3 Waiver and Amendment. No provision of this Agreement may be waived,
amended or modified, and no addendum to this Agreement shall be or become
effective, or be waived, amended or modified, except by an instrument in writing
executed by the party against which enforcement of such waiver, amendment or
modification is sought; provided, however, that an Instruction shall, whether or
not such Instruction shall constitute a waiver, amendment or modification for
purposes hereof, shall be deemed to have been accepted by the Custodian when it
commences actions pursuant thereto or in accordance therewith.
12.4 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH, AND BE GOVERNED BY THE LAWS OF, THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAW OF SUCH STATE. THE PARTIES HERETO
IRREVOCABLY CONSENT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
NEW YORK AND THE FEDERAL COURTS LOCATED IN NEW YORK CITY IN THE BOROUGH OF
MANHATTAN.
12.5 Notices. Notices and other writings contemplated by this Agreement,
other than Instructions, shall be delivered (a) by hand, (b) by first class
registered or certified mail, postage prepaid, return receipt requested, (c) by
a nationally recognized overnight courier or (d) by facsimile transmission,
provided that any notice or other writing sent by facsimile transmission shall
also be mailed, postage prepaid, to the party to whom such notice is addressed.
All such notices shall be addressed, as follows:
If to a Trustee:
Dow Jones Islamic Market Index Portfolio
c/o Brown Brothers Harriman Trust Company
63 Wall Street
New York, NY
Attn: Gerard F. Joyce Jr.
If to the Custodian:
Brown Brothers Harriman & Co.
40 Water Street
Boston, Massachusetts 02109
Attn: Manager, Securities Department
Telephone: (617) 772-1818
Facsimile: (617) 772-2263,
or such other address as the Trustees or the Custodian may have designated
in writing to the other.
12.6 Headings. Paragraph headings included herein are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
12.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original. This Agreement shall
become effective when one or more counterparts have been signed and delivered by
the Trustee and the Custodian.
12.8 Confidentiality. The parties hereto agree that each shall treat
confidentially the terms and conditions of this Agreement and all information
provided by each party to the other regarding its business and operations. All
confidential information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering or obtaining services pursuant
to this Agreement and, except as may be required in carrying out this Agreement,
shall not be disclosed to any third party without the prior consent of such
providing party. The foregoing shall not be applicable to any information that
is publicly available when provided or thereafter becomes publicly available
other than through a breach of this Agreement, or that is required to be
disclosed by or to any bank examiner of the Custodian or any Subcustodian, any
Regulatory Authority, any auditor of the parties hereto, or by judicial or
administrative process or otherwise by Applicable Law. 12.9 Counsel. In
fulfilling its duties hereunder, the Custodian shall be entitled to receive and
act upon the advice of (i) counsel regularly retained by the Custodian in
respect of such matters, (ii) counsel for the Portfolio or (iii) such counsel as
the Portfolio and the Custodian may agree upon, with respect to all matters, and
the Custodian shall be without liability for any action reasonably taken or
omitted pursuant to such advice.
13. Definitions. The following defined terms will have the respective
meanings set forth below.
13.1 Advance shall mean any extension of credit by or through the Custodian
or by or through any Subcustodian and shall include amounts paid to third
parties for account of the Portfolio or in discharge of any expense, tax or
other item payable by the Portfolio.
13.2 Agency Account shall mean any deposit account opened on the books of a
Subcustodian or other banking institution in accordance with Section 7.1.
13.3 Agent shall have the meaning set forth in the last system of Section
6.
13.4 Applicable Law shall mean with respect to each jurisdiction, all (a)
laws, statutes, treaties, regulations, guidelines (or their equivalents); (b)
orders, interpretations licenses and permits; and (c) judgments, decrees,
injunctions writs, orders and similar actions by a court of competent
jurisdiction; compliance with which is required or customarily observed in such
jurisdiction.
13.5 Authorized Person shall mean any person or entity authorized to give
Instructions on behalf of the Fund in accordance with Section 4.1.
13.6 Book-entry Agent shall mean an entity acting as agent for the issuer
of Investments for purposes of recording ownership or similar entitlement to
Investments, including without limitation a transfer agent or registrar.
13.7 Clearing Corporation shall mean any entity or system established for
purposes of providing securities settlement and movement and associated
functions for a given market.
13.8 Delegation Agreement shall mean any separate agreement entered into
between the Custodian and the Fund or its authorized representative with respect
to certain matters concerning the appointment and administration of
Subcustodians delegated to the Custodian pursuant to Rule 17f-5.
13.9 Foreign Custody Manager shall mean the Portfolio's foreign custody
manager appointed pursuant to Rule 17f-5 of the 1940 Act (if any).
13.10 Funds Transfer Services Agreement shall mean any separate agreement
entered into between the Custodian and the Trustee or its authorized
representative with respect to certain matters concerning the processing of
payment orders from Principal Accounts of the Portfolio.
13.11 Instruction(s) shall have the meaning assigned in Section 4.
13.12 Investment Advisor and Investment Manager shall mean any person or
entity who is an Authorized Person to give Instructions with respect to the
investment and reinvestment of the Portfolio's Investments.
13.13 Investments shall mean any investment asset of the Portfolio,
including without limitation securities, bonds, notes, and debentures as well as
receivables, derivatives, contractual rights or entitlements and other
intangible assets.
13.14 Margin Account shall have the meaning set forth in Section 6.4
hereof.
13.15 Principal Account shall mean deposit accounts of the Portfolio
carried on the books of BBH&Co. as principal in accordance with Section 7.
13.16 Safekeeping Account shall mean an account established on the books of
the Custodian or any Subcustodian for purposes of segregating the interests of
the Portfolio (or clients of the Custodian or Subcustodian) from the assets of
the Custodian or any Subcustodian.
13.17 Securities Depository shall mean a central or book entry system or
agency established under Applicable Law for purposes of recording the ownership
and/or entitlement to investment securities for a given market.
13.18 Subcustodian shall mean each foreign bank appointed by the Custodian
pursuant to Section 8, but shall not include Securities Depositories.
13.19 Tri-Party Agreement shall have the meaning set forth in Section 6.4
hereof.
13.20 1940 Act shall mean the Investment Company Act of 1940.
14. Compensation. The Trustees agree to pay to the Custodian (a) a fee in
an amount set forth in the fee letter between the Trustee and the Custodian in
effect on the date hereof or as amended from time to time, and (b) all
out-of-pocket expenses incurred by the Custodian, including the fees and
expenses of all Subcustodians, and payable from time to time. Amounts payable by
the Trustees under and pursuant to this Section 14 shall be payable by wire
transfer to the Custodian at BBH&Co. in New York, New York.
15. Termination. This Agreement may be terminated by either party in
accordance with the provisions of this Section. The provisions of this Agreement
and any other rights or obligations incurred or accrued by any party hereto
prior to termination of this Agreement shall survive any termination of this
Agreement.
15.1 Notice and Effect. This Agreement may be terminated by either party by
written notice effective no sooner than seventy-five days following the date
that notice to such effect shall be delivered to other party at its address set
forth in paragraph 12.5 hereof.
15.2 Successor Custodian. In the event of the appointment of a successor
custodian, it is agreed that the Investments of the fund held by the Custodian
or any Subcustodian shall be delivered to the successor custodian in accordance
with reasonable Instructions. The Custodian agrees to cooperate with the Trustee
in the execution of documents and performance of other actions necessary or
desirable in order to facilitate the succession of the new custodian. If no
successor custodian shall be appointed, the Custodian shall in like manner
transfer the Portfolio's Investments in accordance with Instructions.
15.3 Delayed Succession. If no Instruction has been given as of the
effective date of termination, Custodian may at any time on or after such
termination date and upon ten days written notice to the Trustee either (a)
deliver the Investments of the Portfolio held hereunder to the Trustee at the
address designated for receipt of notices hereunder; or (b) deliver any
investments held hereunder to a bank or trust company having a capitalization of
$2M USD equivalent and operating under the Applicable law of the jurisdiction
where such Investments are located, such delivery to be at the risk of the
Portfolio. In the event that Investments or moneys of the Portfolio remain in
the custody of the Custodian or its Subcustodians after the date of termination
owing to the failure of the Trustees to issue Instructions with respect to their
disposition or owing to the fact that such disposition could not be accomplished
in accordance with such Instructions despite diligent efforts of the Custodian,
the Custodian shall be entitled to compensation for its services with respect to
such Investments and moneys during such period as the Custodian or its
Subcustodians retain possession of such items and the provisions of this
Agreement shall remain in full force and effect until disposition in accordance
with this Section is accomplished.
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
duly executed as of the date first above written.
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
By: \S\ Gerard F. Joyce
Gerard F. Joyce, Secretary
By: BROWN BROTHERS HARRIMAN & CO.
By: \S\ Patricia Fuller
Patricia Fuller, Manager
FOREIGN CUSTODY MANAGER DELEGATION AGREEMENT
AGREEMENT made as of this _____ day of ______ 1999 between the Dow
Jones Islamic Market Index Portfolio, an open-ended New York trust registered
with the Securities and Exchange Commission (the "Commission"),under the
Investment Company Act of 1940, as amended, (the "Act"), acting through its
Board of Trustees or its duly appointed representative (the "Portfolio"), and
BROWN BROTHERS HARRIMAN & CO., a New York limited partnership with an office in
Boston, Massachusetts (the "Delegate").
WITNESSETH
WHEREAS the Trustees have appointed the Delegate as custodian (the
"Custodian") of the Portfolio's Assets pursuant to a Custodian Agreement dated
June 25, 1999, (the "Custodian Agreement");
WHEREAS the Portfolio may, from time to time, determine to invest
and maintain some or all Portfolio Assets outside the United States;
WHEREAS the Board of Trustees of the Portfolio (the "Board") wishes to
delegate to the Delegate certain functions with respect to the custody of
Portfolio's Assets outside the United States;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the Trustees and the Delegate agree as follows. Capitalized
terms shall have the meaning indicated in Section 12 unless otherwise indicated
.
1. Maintenance of Portfolio Assets Abroad. The Portfolio, acting
through its Board or its duly authorized representative, hereby instructs
Delegate pursuant to the terms of the Custodian Agreement to place and maintain
the Portfolio's Assets within the countries listed in Schedule 1 attached hereto
(as such Schedule may be amended from time to time in accordance herewith). Such
instruction shall be deemed to include an instruction to use any Compulsory
Securities Depository in any such country and shall represent a Proper
Instruction under the terms of the Custodian Agreement. Countries may be added
to Schedule 1 by written instruction of the Investement Adviser (as defined in
the Custodian Agreement) that is accepted in writing by the Delegate as an
amendment to Schedule 1. With respect to amendments adding countries to Schedule
1, the Trustees acknowledge that - (a) the Delegate shall perform services
hereunder only with respect to the countries where it provides custodial
services to the Fund under the Custodian Agreement; (b) depending on conditions
in the particular country, advance notice may be required before the Delegate
shall be able to perform its duties hereunder in or with respect to such country
(such advance notice to be reasonable in light of the specific facts and
circumstances attendant to performance of duties in such country); and (c)
nothing in this Agreement shall require the Delegate to provide delegated or
custodial services in any country not listed in Schedule 1 until such amended
Schedule 1 has been accepted by the Delegate in accordance herewith.
2. Delegation. Pursuant to the provisions of Rule 17f-5 under the
Act as amended, the Board hereby delegates to the Delegate, and the Delegate
hereby accepts such delegation and agrees to perform, only those duties set
forth in this Agreement concerning the safekeeping of the Portfolio's Assets in
each of the countries set forth in Schedule 1 hereto as amended from time to
time. The Delegate is hereby authorized to take such actions on behalf of or in
the name of the Portfolio as are reasonably required to discharge its duties
under this Agreement, including, without limitation, to cause the Portfolio's
Assets to be placed with a particular Eligible Foreign Custodian in accordance
herewith. The Trustees confirm to the Delegate that the Trustees of the
Portfolio or its Investment Advisor or Investment Manager (as those terms are
defined in the Custodian Agreement) have considered the Sovereign Risk and
prevailing country risk as part of its continuing investment decision process,
including such factors as may be reasonably related to the systemic risk of
maintaining the Portfolio's Assets in a particular country, including, but not
limited to, financial infrastructure, prevailing custody and settlement systems
and practices (including the use of any Compulsory Securities Depository), and
the laws relating to the safekeeping and recovery of the Portfolio's Assets held
in custody pursuant to the terms of the Custodian Agreement.
3. Selection of Eligible Foreign Custodian and Contract Administration. The
Delegate shall perform the following duties with respect to the selection of
Eligible Foreign Custodians and administration of certain contracts governing
the Portfolio's foreign custodial arrangements:
(a) Selection of Eligible Foreign Custodian. The Delegate shall place and
maintain the Portfolio's Assets with an Eligible Foreign Custodian; provided
that the Delegate shall have determined that the Portfolio's Assets will be
subject to reasonable care based on the standards applicable to custodians in
the relevant market after considering all factors relevant to the safekeeping of
such assets including without limitation:
(i) The Eligible Foreign Custodian's practices, procedures, and internal
controls, including, but not limited to, the physical protections available for
certificated securities (if applicable), the controls and procedures for dealing
with any Securities Depository, the method of keeping custodial records, and the
security and data protection practices; (ii) Whether the Eligible Foreign
Custodian has the requisite financial strength to provide reasonable care for
the Portfolio's Assets; (iii) The Eligible Foreign Custodian's general
reputation and standing and, in the case of a Securities Depository, the
depository's operating history and number of participants; and (iv) Whether the
Portfolio will have jurisdiction over and be able to enforce judgments against
the Eligible Foreign Custodian, such as by virtue of the existence of any
offices of such Eligible Foreign Custodian in the United States or such Eligible
Foreign Custodian's appointment of an agent for service of process in the United
States or consent to jurisdiction in the United States.
The Delegate shall be required to make the foregoing determination to the
best of its knowledge and belief based only on information reasonably available
to it.
(b) Contract Administration. In the case of an Eligible Foreign Custodian
that is not a Securities Depository or a U.S. Bank, the Delegate shall cause
that the foreign custody arrangements shall be governed by a written contract
that the Delegate has determined will provide reasonable care for Portfolio
assets based on the standards applicable to custodians in the relevant market.
Each such contract shall, except as set forth in the last paragraph of this
subsection (b), include provisions that provide:
(i) For indemnification or insurance arrangements (or any combination of
the foregoing) such that the Portfolio will be adequately protected against the
risk of loss of assets held in accordance with such contract;
(ii) That the Portfolio's Assets will not be subject to any right, charge,
security interest, lien or claim of any kind in favor of the Eligible Foreign
Custodian or its creditors except a claim of payment for their safe custody or
administration or, in the case of cash deposits, liens or rights in favor of
creditors of such Custodian arising under bankruptcy, insolvency or similar
laws;
(iii) That beneficial ownership of the Portfolio's Assets will be freely
transferable without the payment of money or value other than for safe custody
or administration;
(iv) That adequate records will be maintained identifying the Portfolio's
Assets as belonging to the Portfolio or as being held by a third party for the
benefit of the Portfolio;
(v) That the Portfolio's independent public accountants will be given
access to those records described in (iv) above or confirmation of the contents
of such records; and
(vi) That the Delegate will receive sufficient and timely periodic reports
with respect to the safekeeping of the Portfolio's Assets, including, but not
limited to, notification of any transfer to or from the Portfolio's account or a
third party account containing the Portfolio's Assets.
Such contract may contain, in lieu of any or all of the provisions
specified in this Section 3 (b), such other provisions that the Delegate
determines will provide, in their entirety, the same or a greater level of care
and protection for the Portfolio's Assets as the specified provisions, in their
entirety.
(c) Limitation to Delegated Selection. Notwithstanding anything in this
Agreement to the contrary, the duties under this Section 3 shall apply only to
Eligible Foreign Custodians selected by the Delegate and shall not apply to
Compulsory Securities Depositories or to any Eligible Foreign Custodian that the
Delegate is directed to use pursuant to Section 7.
4. Monitoring. The Delegate shall establish a system to monitor at
reasonable intervals (but at least annually) the appropriateness of maintaining
the Portfolio's Assets with each Eligible Foreign Custodian that has been
selected by the Delegate pursuant to Section 3 of this Agreement. The Delegate
shall monitor the continuing appropriateness of placement of the Portfolio's
Assets in accordance with the criteria established under Section 3(a) of this
Agreement.
The Delegate shall monitor the continuing appropriateness of the contract
governing the Portfolio's arrangements in accordance with the criteria
established under Section 3(b) of this Agreement.
5. Reporting. At least annually and more frequently as mutually
agreed between the parties, the Delegate shall provide to the Board written
reports specifying placement of the Portfolio's Assets with each Eligible
Foreign Custodian selected by the Delegate pursuant to Section 3 of this
Agreement and shall promptly report as to any material changes to such foreign
custody arrangements. Delegate will prepare such a report with respect to any
Eligible Foreign Custodian that the Delegate has been instructed to use pursuant
to Section 7 only to the extent specifically agreed with respect to the
particular situation.
6. Withdrawal of Portfolio's Assets. If the Delegate determines
that an arrangement with a specific Eligible Foreign Custodian selected by the
Delegate under Section 3 of this Agreement no longer meets the requirements of
said Section, Delegate shall withdraw the Portfolio's Assets from the
non-complying arrangement as soon as reasonably practicable; provided, however,
that if in the reasonable judgment of the Delegate, such withdrawal would
require liquidation of any of the Portfolio's Assets or would materially impair
the liquidity, value or other investment characteristics of the Portfolio's
Assets, it shall be the duty of the Delegate to provide information regarding
the particular circumstances and to act only in accordance with Proper
Instructions of the Portfolio or its Investment Advisor with respect to such
liquidation or other withdrawal.
7. Direction as to Eligible Foreign Custodian. Notwithstanding this
Delegation Agreement, the Portfolio, acting through its Board, its Investment
Adviser or its other authorized representative, may direct the Delegate to place
and maintain the Portfolio's Assets with a particular Eligible Foreign
Custodian. In such event, the Delegate shall be entitled to rely on any such
instruction as a Proper Instruction under the terms of the Custodian Agreement
and shall have no duties under this
Delegation Agreement with respect to such arrangement save those that it
may undertake specifically in writing with respect to each particular instance.
8. Standard of Care. In carrying out its duties under this Agreement, the
Delegate agrees to exercise reasonable care, prudence and diligence such as a
person having responsibility for safekeeping the Portfolio's Assets would
exercise.
9. Representations. The Delegate hereby represents and warrants that it is
a U.S. Bank and that this Agreement has been duly authorized, executed and
delivered by the Delegate and is a legal, valid and binding agreement of the
Delegate.
The Portfolio hereby represents and warrants that its Board of Directors
has determined that it is reasonable to rely on the Delegate to perform the
delegated responsibilities provided for herein and that this Agreement has been
duly authorized, executed and delivered by the Portfolio and is a legal, valid
and binding agreement of the Portfolio.
10. Effectiveness; termination. This Agreement shall be effective as of the
date on which this Agreement shall have been accepted by the Delegate, as
indicated by the date set forth below the Delegate's signature. This Agreement
may be terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Such termination shall be
effective on the 30th day following the date on which the non-terminating party
shall receive the foregoing notice. The foregoing to the contrary
notwithstanding, this Agreement shall be deemed to have been terminated
concurrently with the termination of the Custodian Agreement.
11. Notices. Notices and other communications under this Agreement are to
be made in accordance with the arrangements designated for such purpose under
the Custodian Agreement unless otherwise indicated in a writing referencing this
Agreement and executed by both parties.
12. Definitions. Capitalized terms in this agreement have the
following meanings:
a. Compulsory Securities Depository - shall mean a Securities Depository
the use of which is mandatory (i) under applicable law or regulation; (ii)
because securities cannot be withdrawn from the depository; or, (iii) because
maintaining securities outside the Securities Depository is not consistent with
prevailing custodial practices.
b. Eligible Foreign Custodian - shall have the meaning set forth in Rule
17f-5(a)(1) and shall also include a U.S. Bank.
c. Portfolio's Assets - shall mean any of the Portfolio's investments
(including foreign currencies) for which the primary market is outside the
United States, and such cash and cash equivalents as are reasonably necessary to
effect the Portfolio's transactions in such investments.
d. Proper Instructions - shall have the meaning set forth in the Custodian
Agreement.
e. Securities Depository - shall have the meaning set forth in Rule
17f-5(a)(6).
f. Sovereign Risk - shall have the meaning set forth in Section [6.3] of
the Custodian Agreement.
g. U.S. Bank - shall mean a bank which qualifies to serve as a custodian of
assets of investment companies under Section 17(f) of the Act.
13. Governing Law and Jurisdiction. This Agreement shall be construed in
accordance with the laws of the State of New York. The parties hereby submit to
the exclusive jurisdiction of the Federal courts sitting in the State of New
York or the Commonwealth of Massachusetts or of the state courts of either such
State or such Commonwealth.
14. Fees. Delegate shall perform its functions under this agreement for the
compensation determined under the Custodian Agreement.
15. Integration. This Agreement sets forth all of the Delegate's duties
with respect to the selection and monitoring of Eligible Foreign Custodians, the
administration of contracts with Eligible Foreign Custodians, the withdrawal of
assets from Eligible Foreign Custodians and the issuance of reports in
connection with such duties. The terms of the Custodian Agreement shall apply
generally as to matters not expressly covered in this Agreement, including
dealings with the Eligible Foreign Custodians in the course of discharge of the
Delegate's obligations under the Custodian Agreement.
<PAGE>
NOW THEREFORE, the parties have caused this Agreement to be executed by its
duly authorized representatives, effective as of the date first above written.
BROWN BROTHERS HARRIMAN & CO.
By: _______________________________
Name: ____________________
Title: ____________________
Date: ____________________
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
By: _______________________________
Name: ____________________
Title: ____________________
Date: ____________________
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
ADMINISTRATION AGREEMENT
ADMINISTRATION AGREEMENT, dated March 5, 1999, between Dow Jones
Islamic Market Index Portfolio, a New York trust (the "Trust"), and Brown
Brothers Harriman Trust Company, a company organized under the laws of the State
of New York (the "Administrator").
W I T N E S S E T H:
WHEREAS, the Trust is a diversified open-end management investment
company registered under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust has been organized for the purpose of investing its
funds in securities and has retained an investment adviser for this purpose and
desires to avail itself of the facilities available to the Administrator with
respect to the administration of the day to day affairs of the Trust, and the
Administrator is willing to furnish such administrative services on the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the parties agree as follows:
Section 1. The Trust hereby appoints the Administrator to administer all
aspects of the operations of the Trust (except those subject to the supervision
of the investment adviser), subject to the overall supervision of the Trustees
of the Trust for the period and on the terms set forth in this Agreement. The
Administrator hereby accepts such appointment and agrees during such period to
render the services herein described and to assume the obligations set forth
herein, for the compensation herein provided.
Section 2. Subject to the supervision of the Trustees of the Trust, the
Administrator shall administer all aspects of the operations of the Trust
(except those subject to the supervision of the investment adviser) and, in
connection therewith, shall (i) furnish the Trust with adequate office
facilities, utilities, office equipment and related services; (ii) be
responsible for the financial and accounting records required to be maintained
(including those being maintained by the custodian) other than those being
maintained by the investment adviser; (iii) furnish the Trust with ordinary
clerical, bookkeeping and recordkeeping services at such office facilities; (iv)
arrange, but not pay for, the preparation of all required tax returns and
reports to its investors and the Securities and Exchange Commission and the
periodic updating of its registration statement; and (v) oversee the performance
of administrative and professional services to the Trust by others, including
the custodian.
In connection with the services rendered by the Administrator under
this Agreement, the Administrator assumes and will pay all expenses incurred by
the Administrator or by the Trust in connection with administering the ordinary
course of business of the Trust, other than those assumed by the Trust herein.
The Trust assumes and will pay the expenses described below:
(a) the fees and expenses of the investment adviser or expenses otherwise
incurred in connection with the management of the investment and reinvestment of
its assets,
(b) the fees and expenses of Trustees of the Trust who are not affiliated
persons of the Administrator, or of any entity with whom the Administrator has
subcontracted its performance under this Agreement (the "Subadministrator") or
any investment adviser,
(c) the fees and expenses of the custodian which relate to (i) the
custodial function and the recordkeeping connected therewith, (ii) the
maintenance of the required accounting records not being maintained by the
Administrator or the Subadministrator, (iii) the valuation of interests,
including the cost of any pricing service or services which may be retained
pursuant to the authorization of the Trustees of the Trust, and (iv) the
cashiering function in connection with the purchase and withdrawal of interests,
(d) the fees and expenses of any transfer agent, which relate to the
maintenance of each investor account,
(e) the charges and expenses of legal counsel and independent accountants
for the Trust,
(f) brokers' commissions and any issue or transfer taxes chargeable to the
Trust in connection with its securities transactions,
(g) all taxes and corporate fees payable by the Trust to federal, state or
other governmental agencies,
(h) the fees of any trade association of which the Trust may be a member,
(i) the fees and expenses involved in registering and maintaining
registration of the Trust with the Securities and Exchange Commission, including
the preparation and printing of the Trust's registration statements for filing
under federal securities laws for such purposes,
(j) the cost of any liability insurance or fidelity bonds,
(k) allocable communications expenses with respect to investor services and
all expenses of investors' and Trustees' meetings and of preparing, printing and
mailing reports to investors in the amount necessary for distribution to
investors, and
(l) litigation and indemnification expenses and other extraordinary
expenses not incurred in the ordinary course of business of the Trust.
Section 3. As full compensation for the services performed and the
facilities furnished by the Administrator, the Administrator shall receive a fee
from the Trust, computed daily and paid monthly, at an annual rate equal to
0.05% of the average daily net assets of the Trust that are not in excess of $50
million and at an annual rate equal to 0.01% of the average daily net assets of
the Trust in excess of $50 million. The Administrator shall receive a minimum
fee from the Trust of $20,000.
Section 4. The Administrator assumes no responsibility under this Agreement
other than to render the services called for hereunder, and specifically assumes
no responsibilities for investment advice or the investment or reinvestment of
Trust assets.
Section 5. The Administrator shall not be liable for any error of judgment
or for any loss suffered by the Trust in connection with the matters to which
this Agreement relates, except a loss resulting from wilful misfeasance, bad
faith or gross negligence on its part in the performance of its duties or from
reckless disregard by it of its obligations and duties under this Agreement.
Section 6. The Administrator may subcontract for the performance of its
obligations hereunder with any one or more persons; provided, however, that the
Administrator shall not enter into any such subcontract unless the Trustees of
the Trust shall have found the subcontracting party to be qualified to perform
the obligations sought to be subcontracted; and provided, further, that unless
the Trust otherwise expressly agrees in writing, the Administrator shall be as
fully responsible to the Trust for the acts and omissions of any subcontractor
as it would be for its own acts or omissions. If permitted by the
subadministration agreement between the Administrator and the Subadministrator,
the Subadministrator may authorize and permit any of its trustees, officers and
employees who may be elected as officers of the Trust to serve in the capacities
in which they are elected and the Subadministrator will pay the salaries of all
personnel of the Trust who are affiliated with the Subadministrator.
Section 7. This Agreement shall become effective on the date determined by
mutual agreement of the parties. This Agreement shall continue in effect for
successive annual periods, but only so long as its continuance is specifically
approved at least annually in the same manner as an investment advisory contract
under the 1940 Act; provided, however, that this Agreement may be terminated by
the Trust at any time, without the payment of any penalty, by the Trustees of
the Trust or by a vote of a majority of the outstanding voting securities (as
defined in the 1940 Act) of the Trust, upon not less than 60 days' written
notice to the Administrator, or by the Administrator at any time, without the
payment of any penalty, upon not less than 90 days' written notice to the Trust.
This Agreement shall terminate automatically in the event of its assignment (as
defined in the 1940 Act).
Section 8. Nothing in this Agreement shall limit or restrict the right
of any trustee, officer or employee of the Administrator who may also be an
officer or employee of the Trust to engage in any other business or to devote
his time and attention in part to the management or other aspects of any
business, whether of a similar or a dissimilar nature, nor limit or restrict the
right of the Administrator to engage in any other business or to render services
of any kind to any other corporation, firm, individual or association.
Section 9. During the term of this Agreement, the Trust agrees to
furnish the Administrator at its principal office all registration statement,
reports to investors, or other material prepared for distribution to investors,
which refer in any way to the Administrator, prior to use thereof and not to use
such material if the Administrator reasonably objects in writing within five
business days (or such other time as may be mutually agreed) after receipt
thereof. In the event of termination of this Agreement, the Trust will continue
to furnish to the Administrator copies of any of the above-mentioned materials
which refer in any way to the Administrator. The Trust shall furnish or
otherwise make available to the Administrator such other information relating to
the business affairs of the Trust as the Administrator at any time, or from time
to time, reasonably requests in order to discharge its obligations hereunder.
Section 10. This Agreement may be amended only by mutual written
consent.
Section 11. The Trustees have authorized the execution of this
Agreement in their capacity as Trustees and not individually and the
Administrator agrees that neither investors nor the Trustees nor any officer,
employee, representative or agent of the Trust shall be personally liable upon,
nor shall resort be had to their private property for the satisfaction of,
obligations given, executed or delivered on behalf of or by the Trust, that
neither investors nor the Trustees, officers, employees, re resentatives or
agents of the Trust shall be personally liable hereunder, and that the
Administrator shall look solely to the property of the Trust for the
satisfaction of any claim hereunder.
Section 12. Any notice or other communication required to be given pursuant
to this Agreement shall be deemed duly given if delivered or mailed by
registered mail, postage prepaid, (1) to the Administrator at 59 Wall Street,
New York, NY 10005 Attention: Senior Vice President; or (2) to the Portfolio at
Butterfield House, 4th Floor, Fort Street, P.O. Box 2330, George Town, Grand
Cayman, Cayman Islands, B.W.I.
Section 13. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first above
written.
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
By
BROWN BROTHERS HARRIMAN TRUST COMPANY
By
WS5771
August 10, 1999
Dow Jones Islamic Market Index Portfolio
Butterfield House, 4th Floor
Fort Street, P.O. Box 2330
George Town, Grand Cayman
Cayman Islands, B.W.I.
Dear Sirs:
This letter agreement (the "Agreement") confirms the agreement of the
undersigned, Brown Brothers Harriman Trust Company ("BBH"), to pay all of the
operating expenses of Dow Jones Islamic Market Index Portfolio (the
"Portfolio"), as described in the Registration Statement of the Portfolio on
Form N-1A as filed with the Securities and Exchange Commission, as amended,
other than fees paid under the Portfolio's Administration Agreement. All of the
operating expenses paid by BBH pursuant to this Agreement shall be subject to
reimbursement by the Portfolio. To accomplish such reimbursement, the Portfolio
hereby agrees to pay to BBH an expense reimbursement fee from the Portfolio
estimated and accrued daily and paid monthly in an amount such that immediately
after any such payment the aggregate expenses of the Portfolio would not on a
per annum basis exceed 0.57% of the Portfolio's average daily net assets.
This Agreement shall be effective as of July 1, 1999 and may be
terminated by either party upon written notice to the other party.
If the foregoing correctly sets forth our agreement, kindly so confirm
by signing the enclosed counterpart of this letter in the space indicated for
signature on behalf of the Portfolio below.
Very truly yours,
BROWN BROTHERS HARRIMAN TRUST COMPANY
By
Agreed:
DOW JONES ISLAMIC MARKET INDEX PORTFOLIO
By
Signature Financial Group, Inc.
21 Milk Street
Boston, MA 02109
July 31, 1999
Dow Jones Islamic Market Index Portfolio
Butterfield House, 4th Floor
Fort Street, P.O. Box 2330
George Town, Grand Cayman
Cayman Islands, BWI
Ladies and Gentlemen:
With respect to our purchase from you of a beneficial interest in Dow
Jones Islamic Market Index Portfolio (the "Portfolio"), at the purchase price of
$100 (the "Initial Interest Amount"), we hereby advise you that we are
purchasing the Initial Interest Amount with no intention to dispose of it
through withdrawal from the Portfolio.
Very truly yours,
SIGNATURE FINANCIAL GROUP, INC.
By
Name: Philip Coolidge
Title:
Wafra/BBH & Co. -
Dow Jones Islamic Market Index Fund (Cayman)
P.O. Box 513GT
3rd Floor, British American Tower, Dr.
Roy's Drive, George Town
Grand Cayman, Cayman Islands
July 31, 1999
Dow Jones Islamic Market Index Portfolio
Butterfield House, 4th Floor
Fort Street, P.O. Box 2330
George Town, Grand Cayman
Cayman Islands, BWI
Ladies and Gentlemen:
With respect to our purchase from you of a beneficial interest in Dow
Jones Islamic Market Index Portfolio (the "Portfolio"), at the purchase price of
$15,000,100 (the "Initial Interest Amount"), we hereby advise you that we are
purchasing the Initial Interest Amount with no intention to dispose of it
through withdrawal from the Portfolio.
Very truly yours,
Wafra/BBH & Co. -
Dow Jones Islamic Market Index Fund (Cayman)
By
Name:
Title:
