File No. 811-8876
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 4 [X]
SENIOR DEBT PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
The Bank of Nova Scotia Building
P.O. Box 501, George Town, Grand Cayman
CAYMAN ISLANDS, BRITISH WEST INDIES
(Address of Principal Executive Offices)
(809) 949-2001
Registrant's Telephone Number, including Area Code
Alan R. Dynner
24 FEDERAL STREET, BOSTON, MASSACHUSETTS 02110
(Name and Address of Agent for Service)
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Throughout this Registration Statement, information concerning Senior Debt
Portfolio (the "Portfolio") is incorporated by reference from the Registration
Statement on Form N-2 of Eaton Vance Prime Rate Reserves (File No. 33-25731
under the Securities Act of 1933 (the "1933 Act")) (the "Amendment"), which was
filed electronically with the Securities and Exchange Commission on April 24,
1997 (Accession No. 0000950156-97-000405). The Amendment contains the prospectus
and statement of additional information ("SAI") of Eaton Vance Prime Rate
Reserves (the "Feeder Fund"), which invests substantially all of its assets in
the Portfolio.
PART A
Responses to Items 1, 2, 3.2, and 4 through 7 of Part A have been omitted
pursuant to Paragraph 3 of Instruction G of the General Instructions to Form
N-2.
ITEM 3. FEE TABLE AND SYNOPSIS
Not Applicable.
ITEM 8. GENERAL DESCRIPTION OF THE REGISTRANT
(1) The Portfolio is a closed-end, non-diversified management investment
company which was organized as a trust under the laws of the State of New York
on May 1, 1992. Interests in the Portfolio are issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Portfolio may be
made only by U.S. and foreign investment companies, common or commingled trust
funds, organizations or trusts described in Sections 401(a) or 501(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), or similar organizations
or entities that are "accredited investors" within the meaning of Regulation D
under the 1933 Act. This Registration Statement, as amended, does not constitute
an offer to sell, or the solicitation of an offer to buy, any "security" within
the meaning of the 1933 Act.
(2) - (4) Registrant incorporates by reference information concerning the
Portfolio's investment objective and investment practices from "The Fund's
Investment Objective" and "Investment Policies and Risks" in the Feeder Fund
prospectus.
(5) Investments in the Portfolio may not be transferred. However, the
Portfolio may from time to time make tender offers at net asset value for the
purchase of a portion of its interests. The price will be established at the
close of business on the last day the tender offer is open. The Trustees
presently intend each quarter to consider the making of such tender offers.
However, there are no assurances that the Board of Trustees will, in fact,
decide to undertake the making of such a tender offer. The Portfolio will make
tender offers, if any, to all investors in the Portfolio on the same terms,
which practice may affect the size of the Portfolio's offers. Subject to the
Portfolio's investment restriction with respect to borrowings, the Portfolio may
borrow money or issue debt obligations to finance its repurchase obligations
pursuant to any such tender offers. See "Investment Restrictions" under Item 17
in Part B.
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Although the Trustees believe that tender offers generally would be
beneficial to the Portfolio's investors, the acquisition of interests by the
Portfolio will decrease the total assets of the Portfolio and therefore have the
possible effect of increasing the Portfolio's expense ratio. Furthermore, if the
Portfolio borrows to finance the making of tender offers, interest on such
borrowing will reduce the Portfolio's net investment income.
There are circumstances under which the purchase of interests in a tender
offer, even if approved by the Board and made to investors, may not be effected
by the Portfolio. These circumstances would arise if, in the judgment of the
Trustees, (i) the Portfolio would not be able to liquidate assets in an orderly
manner in light of existing market conditions and/or such liquidation would have
an adverse effect on the net asset value of the Portfolio to the detriment of
some Portfolio investors; (ii) the Portfolio's income would be taxed at the
investor level because the investor would fail to qualify as a regulated
investment company under the Code; or (iii) there exists (a) a limitation
imposed by federal or state authorities on the extension of credit by lenders
that affects the Portfolio, the Borrowers of Loans in which the Portfolio holds
Loan Interests or the Intermediate Participants, (b) a banking moratorium
declared by Federal or state authorities or any suspension of payments by banks
in the United States, (c) a legal action or proceeding instituted or threatened
which materially adversely affects the Portfolio, (d) a legal action or
proceeding instituted or threatened which challenges such purchase, (e) an
international or national calamity, such as commencement of war or armed
hostilities, which directly or indirectly involves the United States, or (f) an
event or condition not listed herein which would materially adversely affect the
Portfolio if the tendered interests are purchased.
If the Portfolio must liquidate portfolio securities in order to meet its
tender obligations, the Portfolio, and therefore an investor in the Portfolio,
may realize gains and losses. Such gains may be realized on securities held for
less than three months. Because less than 30% of the Portfolio's annual gross
income may be derived from the sale or disposition of securities held less than
three months (in order for an investor in the Portfolio to retain its tax status
as a regulated investment company), such gains could reduce the ability of the
Portfolio to sell other securities held for less than three months that the
Portfolio may wish to sell in the ordinary course of its portfolio management,
which may adversely affect the Portfolio's yield.
Each tender offer will be made and investors notified in accordance with
the applicable requirements of the Securities Exchange Act of 1934, as amended,
and the Investment Company Act of 1940, as amended (the "1940 Act"), by
publication or mailing or both. Each offering document will contain such
information as is prescribed by such laws and the rules and regulations
promulgated thereunder. The Portfolio will pay all costs and expenses associated
with the making of any such tender offers by the Portfolio.
(6) Not applicable.
ITEM 9. MANAGEMENT
(1)(a) - (c) Registrant incorporates by reference information concerning
the Portfolio's management from "Management of the Fund and the Portfolio" in
the Feeder Fund prospectus.
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(1)(d) ADMINISTRATOR. IBT Trust Company (Cayman), Ltd., The Bank of Nova
Scotia Building, P.O. Box 501, George Town, Grand Cayman, Cayman Islands,
British West Indies, maintains the Portfolio's principal office and certain of
its records and provides administrative assistance in connection with meetings
of the Portfolio's Trustees and interestholders, for which services the
Portfolio pays $1,500 per annum.
(1)(e) TRANSFER AGENT. IBT Fund Services (Canada) Inc., 1 First Canadian
Place, King Street West, Suite 2800, P.O. Box 231, Toronto, Ontario, Canada M5X
1C8, a subsidiary of Investors Bank & Trust, serves as transfer agent and
dividend-paying agent of the Portfolio and computes the daily net asset value of
interests in the Portfolio.
CUSTODIAN. Investors Bank & Trust Company, 89 South Street, Boston,
Massachusetts 02111, acts as custodian for the Portfolio.
(1)(f) The Portfolio is responsible for all of its expenses not expressly
stated to be payable by the other party under the Advisory Agreement,
Administration Agreement or Placement Agent Agreement.
(1)(g) Not applicable.
(2) Not applicable.
(3) CONTROL PERSONS. As of April 4, 1997, Eaton Vance Prime Rate Reserves
and EV Classic Senior Floating-Rate Fund controlled the Portfolio by virtue of
owning approximately 50.9% and 48.1%, respectively, of the outstanding voting
interests in the Portfolio. Eaton Vance Prime Rate Reserves and EV Classic
Senior Floating-Rate Fund are each closed-end, management investment companies.
ITEM 10. CAPITAL STOCK, LONG-TERM DEBT, AND OTHER SECURITIES
(1)(a) - (f) Registrant incorporates by reference information concerning
interests in the Portfolio from "Organization of the Fund and the Portfolio" in
the Feeder Fund prospectus and "Other Information" in the Feeder Fund SAI. An
interest in the Portfolio has no preemptive or conversion rights and is fully
paid and nonassessable by the Portfolio, except as described under "Organization
of the Fund and the Portfolio" in the Feeder Fund prospectus.
The Portfolio's net asset value is determined each day on which the New
York Stock Exchange (the "Exchange") is open for trading ("Portfolio Business
Day"). This determination is made each Portfolio Business Day as of the close of
regular trading on the Exchange (currently 4:00 p.m., New York time) (the
"Portfolio Valuation Time").
Each investor in the Portfolio may add to or reduce its investment in the
Portfolio on each Portfolio Business Day as of the Portfolio Valuation Time. The
value of each investor's interest in the Portfolio will be determined by
multiplying the net asset value of the Portfolio by the percentage, determined
on the prior Portfolio Business Day, which represented that investor's share of
the aggregate interests in the Portfolio on such prior day. Any additions or
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withdrawals (which would be made pursuant to Portfolio tender offers) for
the current Portfolio Business Day will then be recorded. Each investor's
percentage of the aggregate interests in the Portfolio will then be recomputed
as a percentage equal to a fraction (i) the numerator of which is the value of
such investor's investment in the Portfolio as of the Portfolio Valuation Time
on the prior Portfolio Business Day plus or minus, as the case may be, the
amount of any additions to or withdrawals from the investor's investment in the
Portfolio on the current Portfolio Business Day and (ii) the denominator of
which is the aggregate net asset value of the Portfolio as of the Portfolio
Valuation Time on the prior Portfolio Business Day plus or minus, as the case
may be, the amount of the net additions to or withdrawals from the aggregate
investment in the Portfolio on the current Portfolio Business Day by all
investors in the Portfolio. The percentage so determined will then be applied to
determine the value of the investor's interest in the Portfolio for the current
Portfolio Business Day.
(2) and (3) Not applicable.
(4) The Portfolio will allocate at least annually among its investors its
net investment income, net realized capital gains, and any other items of
income, gain, loss, deduction or credit. The Portfolio's net investment income
consists of all income accrued on the Portfolio's assets, less all actual and
accrued expenses of the Portfolio, determined in accordance with generally
accepted accounting principles.
Under the anticipated method of operation of the Portfolio, the Portfolio
will not be subject to any federal income tax. See Item 22 in Part B. However,
each investor in the Portfolio will take into account its allocable share of the
Portfolio's ordinary income and capital gain in determining its federal income
tax liability. The determination of each such share will be made in accordance
with the governing instruments of the Portfolio, which are intended to comply
with the requirements of the Code and the regulations promulgated thereunder.
It is intended that the Portfolio's assets and income will be managed in
such a way that an investor in the Portfolio that seeks to qualify as a
regulated investment company ("RIC") under the Code will be able to satisfy the
requirements for such qualification.
(5) See Item 28 of Part C of this Registration Statement.
(6) Not applicable.
ITEM 11. DEFAULTS AND ARREARS ON SENIOR SECURITIES
Not applicable.
ITEM 12. LEGAL PROCEEDINGS
Not applicable.
ITEM 13. TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION
Not applicable.
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PART B
ITEM 14. COVER PAGE
Not applicable.
ITEM 15. TABLE OF CONTENTS
Page
General Information and History.......................................B-1
Investment Objective and Policies.....................................B-1
Management............................................................B-1
Control Persons and Principal Holders of Securities...................B-1
Investment Advisory and Other Services................................B-2
Brokerage Allocation and Other Practices..............................B-2
Tax Status............................................................B-2
Financial Statements..................................................B-4
ITEM 16. GENERAL INFORMATION AND HISTORY
Not applicable.
Item 17. INVESTMENT OBJECTIVE AND POLICIES
Part A contains additional information about the investment objective and
policies of the Portfolio. This Part B should be read in conjunction with Part
A. Capitalized terms used in this Part B and not otherwise defined have the
meanings given them in Part A.
(1) - (3) Registrant incorporates by reference additional information
concerning the investment policies of the Portfolio as well as information
concerning the investment restrictions of the Portfolio from "Additional
Information about Investment Policies" and "Investment Restrictions" in the
Feeder Fund SAI.
(4) The Portfolio's portfolio turnover rates for the fiscal years ended
December 31, 1995 and 1996 were 39% and 75%, respectively.
ITEM 18. MANAGEMENT
Registrant incorporates by reference additional information concerning the
management of the Portfolio from "Trustees and Officers" in the Feeder Fund SAI.
ITEM 19. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
(1) and (2) As of April 4, 1997, the Feeder Fund and EV Classic Senior
Floating-Rate Fund (the "Classic Fund") owned approximately 50.9% and 48.1%,
respectively, of the value of the outstanding interests in the Portfolio. The
Feeder Fund's and Classic Fund's principal business address is 24 Federal
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Street, Boston, Massachusetts 02110. Because the Feeder Fund controls the
Portfolio, it may take actions without the approval of any other investor. The
Feeder Fund and the Classic Fund have informed the Portfolio that whenever they
are requested to vote on matters pertaining to the fundamental policies of the
Portfolio, they will hold a meeting of shareholders and will cast their votes as
instructed by their shareholders. It is anticipated that any other investor in
the Portfolio which is an investment company registered under the 1940 Act would
follow the same or a similar practice. The Feeder Fund and the Classic Fund are
each closed-end management investment companies organized as business trusts
under the laws of the Commonwealth of Massachusetts.
(3) As of March 31, 1997, the Trustees and officers of the Portfolio, as a
group, did not own any interests in the Portfolio.
Item 20. INVESTMENT ADVISORY AND OTHER SERVICES
Registrant incorporates by reference information concerning investment
advisory and other services provided to the Portfolio from "Investment Advisory
and Other Services", "Custodian" and "Auditors " in the Feeder Fund SAI.
ITEM 21. BROKERAGE ALLOCATION AND OTHER PRACTICES
Registrant incorporates by reference information concerning the brokerage
practices of the Portfolio from "Portfolio Trading" in the Feeder Fund SAI.
Item 22. TAX STATUS
The Portfolio has received a revenue ruling from the Internal Revenue
Service that, provided the Portfolio is operated at all times during its
existence in accordance with certain organizational and operational documents,
the Portfolio should be classified as a partnership under the Code, and it
should not be a "publicly traded partnership" within the meaning of Section 7704
of the Code. Consequently, the Portfolio does not expect that it will be
required to pay any federal income tax, and an investor will be required to take
into account in determining its federal income tax liability its share of the
Portfolio's income, gains, losses, deductions and credits.
Under Subchapter K of the Code, a partnership is considered to be either an
aggregate of its members or a separate entity, depending upon the factual and
legal context in which the question arises. Under the aggregate approach, each
partner is treated as an owner of an undivided interest in partnership assets
and operations. Under the entity approach, the partnership is treated as a
separate entity in which partners have no direct interest in partnership assets
and operations. The Portfolio believes that, in the case of an investor in the
Portfolio that seeks to qualify as a RIC under the Code, the aggregate approach
should apply, and each such investor should accordingly be deemed to own a
proportionate share of each of the assets of the Portfolio and to be entitled to
the gross income of the Portfolio attributable to that share. Tax counsel has
advised the Portfolio that such an investor should be treated as the owner of a
proportionate share of the Portfolio's assets and income for purposes of all
requirements of Sections 851(b), 852(b)(5), 853(a) and 854 of the Code. Further,
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the Portfolio believes that each investor in the Portfolio that seeks to
qualify as a RIC should be deemed to hold its proportionate share of the
Portfolio's assets for the period the Portfolio has held the assets or for the
period the investor has been a partner in the Portfolio, for purposes of
Subchapter K of the Code, whichever is shorter. Investors should consult their
tax advisers regarding whether the entity or the aggregate approach applies to
their investment in the Portfolio in light of their particular tax status and
any special tax rules applicable to them.
In order to enable an investor in the Portfolio (that is otherwise
eligible) to qualify as a RIC under the Code, the Portfolio intends to satisfy
the requirements of Subchapter M of the Code relating to sources of income and
diversification of assets as if they were applicable to the Portfolio and to
permit withdrawals in a manner that will enable an investor that is a RIC to
comply with the distribution requirements applicable to RICs (including those
under Sections 852 and 4982 of the Code). The Portfolio will allocate at least
annually among its investors such investor's distributive share of the
Portfolio's net investment income, net realized capital gains, and any other
items of income, gain, loss, deduction or credit in a manner intended to comply
with the Code and applicable Treasury regulations. Tax counsel has advised the
Portfolio that the Portfolio's allocations of taxable income and loss should
have "economic effect" under applicable Treasury regulations.
To the extent cash proceeds of any withdrawal exceed an investor's adjusted
basis of his interest in the Portfolio, the investor will generally realize a
gain for federal income tax purposes. If, upon a complete withdrawal (repurchase
of the entire interest), an investor receives only liquid proceeds (and/or
unrealized receivables) and the investor's adjusted basis of his interest
exceeds the liquid proceeds of such withdrawal, the investor will generally
realize a loss for federal income tax purposes. In addition, on a distribution
to an investor from the Portfolio (whether pursuant to a partial or complete
withdrawal or otherwise), (1) income or gain will be recognized if the
distribution is in liquidation of the investor's entire interest in the
Portfolio and includes a disproportionate share of any unrealized receivables
held by the Portfolio and (2) gain or loss may be recognized on a distribution
to an investor that contributed property to the Portfolio. The tax consequences
of a withdrawal of property (instead of or in addition to liquid proceeds) will
be different and will depend on the specific factual circumstances. An
investor's adjusted basis of an interest in the Portfolio will be the aggregate
prices paid therefor (including the adjusted basis of contributed property and
any gain recognized on the contribution thereof), increased by the amounts of
such investor's distributive share of items of income (including interest income
exempt from federal income tax) and realized net gain of the Portfolio, and
reduced, but not below zero, by (i) the amounts of such investor's distributive
share of items of Portfolio loss, and (ii) the amount of any cash distributions
(including distributions of interest income exempt from federal income tax and
cash distributions on withdrawals from the Portfolio) and the basis to the
investor of any property received by such investor other than in liquidation,
and (iii) the investor's distributive share of the Portfolio's nondeductible
expenditures not properly chargeable to capital account. Increases or decreases
in an investor's share of the Portfolio's liabilities may also result in
corresponding increases or decreases in such adjusted basis. Cash distributions
in excess of a holder's adjusted basis in the holder's interest in the Portfolio
immediately prior thereto generally will result in the recognition of gain to
such holder in the amount of such excess.
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The Portfolio may be subject to foreign withholding taxes with respect to
income on certain loans to foreign Borrowers. These taxes may be reduced or
eliminated under the terms of an applicable U.S. income tax treaty. The
anticipated extent of the Portfolio's investment in foreign securities is such
that it is not expected that an investor that is a RIC will be eligible to pass
through to its shareholders foreign taxes paid by the Portfolio and allocated to
the investor, so that shareholders of such a RIC will not be entitled to foreign
tax credits or deductions for foreign taxes paid by the Portfolio and allocated
to the RIC. Certain foreign exchange gains and losses realized by the Portfolio
and allocated to the RIC will be treated as ordinary income and losses. Certain
uses of foreign currency and investment by the Portfolio in the stock of certain
"passive foreign investment companies" may be limited or a tax election may be
made, if available, in order to enable an investor that is a RIC to preserve its
qualification as a RIC or to avoid imposition of a tax on such an investor.
An entity that is treated as a partnership under the Code, such as the
Portfolio, is generally treated as a partnership under state and local tax laws,
but certain states may have different entity classification criteria and may
therefore reach a different conclusion. Entities that are classified as
partnerships are not treated as taxable entities under most state and local tax
laws, and the income of a partnership is considered to be income of partners
both in timing and in character. The laws of the various states and local taxing
authorities vary with respect to the taxation of such interest income, as well
as to the status of a partnership interest under state and local tax laws, and
each holder of an interest in the Portfolio is advised to consult his own tax
adviser.
The foregoing discussion does not address the special tax rules applicable
to certain classes of investors, such as tax-exempt entities, insurance
companies and financial institutions. Investors should consult their own tax
advisers with respect to special tax rules that may apply in their particular
situations, as well as the state, local or foreign tax consequences of investing
in the Portfolio.
ITEM 23. FINANCIAL STATEMENTS
The following audited financial statements of the Portfolio are
incorporated by reference into this Part B and have been so incorporated in
reliance upon the report of Deloitte & Touche, independent certified public
accountants, as experts in accounting and auditing.
Portfolio of Investments as of December 31, 1996
Statement of Assets and Liabilities as of December 31, 1996
Statement of Operations for the fiscal year ended December 31, 1996
Statement of Cash Flows for the fiscal year ended December 31, 1996
Statement of Changes in Net Assets for the fiscal year ended December
31, 1996 and for the period from the start of business, February 22,
1995 to December 31, 1995
Supplementary Data for the fiscal year ended December 31, 1996
and for the period from the start of business, February 22, 1995,
to December 31, 1995
Notes to Financial Statements
Independent Auditors' Report
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For purposes of the EDGAR filing of this amendment to the Portfolio's
registration statement, the Portfolio incorporates by reference the above
audited financial statements, as previously filed electronically with the
Commission (Accession Number 0000950156-97-000170).
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PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(1) FINANCIAL STATEMENTS:
The financial statements called for by this item are incorporated by
reference in Part B and listed in Item 23 hereof.
(2) EXHIBITS:
(a) Amended and Restated Declaration of Trust dated as of November 21,
1994, filed as Exhibit (a) to Amendment No. 3 and incorporated herein
by reference.
(b) By-Laws adopted May 1, 1992 filed as Exhibit (b) to Amendment No. 3
and incorporated herein by reference.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g) Investment Advisory Agreement between the Registrant and Boston
Management and Research dated February 22, 1995 filed as Exhibit (g)
to Amendment No. 3 and incorporated herein by reference.
(h) Placement Agent Agreement with Eaton Vance Distributors, Inc. dated
November 1, 1996, filed herewith.
(i) The Securities and Exchange Commission has granted the Registrant an
exemptive order that permits the Registrant to enter into deferred
compensation arrangements with its independent Trustees. See IN THE
MATTER OF CAPITAL EXCHANGE FUND, INC., Release No. IC-20671 (November
1, 1994).
(j) Custodian Agreement with Investors Bank & Trust Company dated February
14, 1997 filed herewith.
(k) (1) Accounting and Interestholder Services Agreement with IBT Fund
Services (Canada) Inc. dated December 30, 1994, filed as Exhibit
(k)(1) to Amendment No. 2 and incorporated herein by reference.
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(2) Administration Agreement with IBT Trust Company (Cayman) Ltd.
dated October 23, 1995 filed as Exhibit (k)(2) to Amendment No. 3 and
incorporated herein by reference.
(l) Not applicable.
(m) Not applicable.
(n) Not applicable.
(o) Not applicable.
(p) Investment representation letter of Boston Management and Research
dated October 25, 1994 filed as Exhibit (p) to Amendment No. 3 and
incorporated herein by reference.
(q) Not applicable.
(r) Not applicable.
ITEM 25. MARKETING ARRANGEMENTS
Not applicable.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Not applicable.
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL
None.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
(1) (2)
Number of
TITLE OF CLASS RECORD HOLDERS
Interests As of April 4, 1997
4
ITEM 29. INDEMNIFICATION
Article V of the Registrant's Amended and Restated Declaration of Trust
contains indemnification provisions for Trustees and officers. The Trustees and
officers of the Registrant and the personnel of the Registrant's investment
adviser are insured under an errors and omissions liability insurance policy.
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The Placement Agent Agreement also provides for reciprocal indemnity of the
placement agent, on the one hand, and the Trustees and officers, on the other.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISER
To the knowledge of the Portfolio, none of the trustees or officers of the
Portfolio's investment adviser, except as set forth on its Form ADV as filed
with the Securities and Exchange Commission, is engaged in any other business,
profession, vocation or employment of a substantial nature, except that certain
trustees and officers also hold various positions with and engage in business
for affiliates of the investment adviser.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
All applicable accounts, books and documents required to be maintained by
the Registrant by Section 31(a) of the 1940 Act, as amended, and the Rules
promulgated thereunder are in the possession and custody of the Registrant's
custodian, Investors Bank & Trust Company, 89 South Street, Boston, MA 02111,
with the exception of certain corporate documents and portfolio trading
documents that are in the possession and custody of the Registrant's investment
adviser, Boston Management and Research Management, 24 Federal Street, Boston,
MA 02110. Certain corporate documents are also maintained by IBT Trust Company
(Cayman) Ltd., The Bank of Nova Scotia Building, P.O. Box 501, George Town,
Grand Cayman, Cayman Islands, British West Indies, and certain investor account
and Portfolio accounting records are held by IBT Fund Services (Canada) Inc., 1
First Canadian Place, King Street West, Suite 2800, P.O. Box 231, Toronto,
Ontario, Canada M5X 1C8. The Registrant is informed that all applicable
accounts, books and documents required to be maintained by registered investment
advisers are in the custody and possession of Registrant's investment adviser.
ITEM 32. MANAGEMENT SERVICES
None.
ITEM 33. UNDERTAKINGS
Not applicable.
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SIGNATURES
Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant has duly caused this Amendment to the Registration Statement on Form
N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, in
Hamilton, Bermuda on the 14th day of February, 1997.
SENIOR DEBT PORTFOLIO
By: /S/ JAMES B. HAWKES
------------------------------
James B. Hawkes
President
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EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION OF EXHIBIT
(h) Placement Agent Agreement with Eaton Vance Distributors, Inc. dated
November 1, 1996
(j) Custodian Agreement with Investors Bank & Trust Company dated February
14, 1997.
PLACEMENT AGENT AGREEMENT
November 1, 1996
Eaton Vance Distributors, Inc.
24 Federal Street
Boston, Massachusetts 02110
Gentlemen:
This is to confirm that, in consideration of the agreements hereinafter
contained, the undersigned, Senior Debt Portfolio (the "Trust"), a closed-end
non-diversified management investment company registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), organized as a New York trust,
has agreed that Eaton Vance Distributors, Inc. ("EVD"), formerly named EV
Distributors, Inc., shall be the placement agent (the "Placement Agent") of
Interests in the Trust ("Trust Interests").
1. SERVICES AS PLACEMENT AGENT.
1.1 EVD will act as Placement Agent of the Trust Interests covered by
the Trust's registration statement then in effect under the 1940 Act. In acting
as Placement Agent under this Placement Agent Agreement, neither EVD nor its
employees or any agents thereof shall make any offer or sale of Trust Interests
in a manner which would require the Trust Interests to be registered under the
Securities Act of 1933, as amended (the "1933 Act").
1.2 All activities by EVD and its agents and employees as Placement
Agent of Trust Interests shall comply with all applicable laws, rules and
regulations, including, without limitation, all rules and regulations adopted
pursuant to the 1940 Act by the Securities and Exchange Commission (the
"Commission").
1.3 Nothing herein shall be construed to require the Trust to accept
any offer to purchase any Trust Interests, all of which shall be subject to
approval by the Board of Trustees.
1.4 The Trust shall furnish from time to time for use in connection
with the sale of Trust Interests such information with respect to the Trust and
Trust Interests as EVD may reasonably request. The Trust shall also furnish EVD
upon request with: (a) unaudited semiannual statements of the Trust's books and
accounts prepared by the Trust, and (b) from time to time such additional
information regarding the Trust's financial or regulatory condition as EVD may
reasonably request.
1.5 The Trust represents to EVD that all registration statements filed
by the Trust with the Commission under the 1940 Act with respect to Trust
Interests have been prepared in conformity with the requirements of such statute
and the rules and regulations of the Commission thereunder. As used in this
Agreement the term "registration statement" shall mean any registration
statement filed with the Commission as modified by any amendments thereto that
at any time shall have been filed with the Commission by or on behalf of the
Trust. The Trust represents and warrants to EVD that any registration statement
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will contain all statements required to be stated therein in conformity with
both such statute and the rules and regulations of the Commission; that all
statements of fact contained in any registration statement will be true and
correct in all material respects at the time of filing of such registration
statement or amendment thereto; and that no registration statement will include
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading
to a purchaser of Trust Interests. The Trust may but shall not be obligated to
propose from time to time such amendment to any registration statement as in the
light of future developments may, in the opinion of the Trust's counsel, be
necessary or advisable. If the Trust shall not propose such amendment and/or
supplement within fifteen days after receipt by the Trust of a written request
from EVD to do so, EVD may, at its option, terminate this Agreement. The Trust
shall not file any amendment to any registration statement without giving EVD
reasonable notice thereof in advance; provided, however, that nothing contained
in this Agreement shall in any way limit the Trust's right to file at any time
such amendment to any registration statement as the Trust may deem advisable,
such right being in all respects absolute and unconditional.
1.6 The Trust agrees to indemnify, defend and hold EVD, its several
officers and directors, and any person who controls EVD within the meaning of
Section 15 of the 1933 Act or Section 20 of the Securities and Exchange Act of
1934 (the "1934 Act") (for purposes of this paragraph 1.6, collectively,
"Covered Persons") free and harmless from and against any and all claims,
demands, liabilities and expenses (including the cost of investigating or
defending such claims, demands or liabilities and any counsel fees incurred in
connection therewith) which any Covered Person may incur under the 1933 Act, the
1934 Act, common law or otherwise, arising out of or based on any untrue
statement of a material fact contained in any registration statement, private
placement memorandum or other offering material ("Offering Material") or arising
out of or based on any omission to state a material fact required to be stated
in any Offering Material or necessary to make the statements in any Offering
Material not misleading; provided, however, that the Trust's agreement to
indemnify Covered Persons shall not be deemed to cover any claims, demands,
liabilities or expenses arising out of any financial and other statements as are
furnished in writing to the Trust by EVD in its capacity as Placement Agent for
use in the answers to any items of any registration statement or in any
statements made in any Offering Material, or arising out of or based on any
omission or alleged omission to state a material fact in connection with the
giving of such information required to be stated in such answers or necessary to
make the answers not misleading; and further provided that the Trust's agreement
to indemnify EVD and the Trust's representations and warranties hereinbefore set
forth in this paragraph 1.6 shall not be deemed to cover any liability to the
Trust or its investors to which a Covered Person would otherwise be subject by
reason of willful misfeasance, bad faith or gross negligence in the performance
of its duties, or by reason of a Covered Person's reckless disregard of its
obligations and duties under this Agreement. The Trust should be notified of any
action brought against a Covered Person, such notification to be given by a
writing addressed to the Trust, 24 Federal Street Boston, Massachusetts 02110,
with a copy to the Administrator of the Trust, Eaton Vance Management, at the
same address, promptly after the summons or other first legal process shall have
been duly and completely served upon such Covered Person. The failure to so
notify the Trust of any such action shall not relieve the Trust from any
liability except to the extent the Trust shall have been prejudiced by such
failure, or from any liability that the Trust may have to the Covered Person
against whom such action is brought by reason of any such untrue statement or
omission, otherwise than on account of the Trust's indemnity agreement contained
in this paragraph. The Trust will be entitled to assume the defense of any suit
brought to enforce any such claim, demand or liability, but in such case such
defense shall be conducted by counsel of good standing chosen by the Trust and
<PAGE>
approved by EVD, which approval shall not be unreasonably withheld. In the
event the Trust elects to assume the defense of any such suit and retain counsel
of good standing approved by EVD, the defendant or defendants in such suit shall
bear the fees and expenses of any additional counsel retained by any of them;
but in case the Trust does not elect to assume the defense of any such suit or
in case EVD reasonably does not approve of counsel chosen by the Trust, the
Trust will reimburse the Covered Person named as defendant in such suit, for the
fees and expenses of any counsel retained by EVD or it. The Trust's
indemnification agreement contained in this paragraph and the Trust's
representations and warranties in this Agreement shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
Covered Persons, and shall survive the delivery of any Trust Interests. This
agreement of indemnity will inure exclusively to Covered Persons and their
successors. The Trust agrees to notify EVD promptly of the commencement of any
litigation or proceedings against the Trust or any of its officers or Trustees
in connection with the issue and sale of any Trust Interests.
1.7 EVD agrees to indemnify, defend and hold the Trust, its several
officers and trustees, and any person who controls the Trust within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act (for purposes of
this paragraph 1.7, collectively, "Covered Persons") free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
costs of investigating or defending such claims, demands, liabilities and any
counsel fees incurred in connection therewith) that Covered Persons may incur
under the 1933 Act, the 1934 Act or common law or otherwise, but only to the
extent that such liability or expense incurred by a Covered Person resulting
from such claims or demands shall arise out of or be based on any untrue
statement of a material fact contained in information furnished in writing by
EVD in its capacity as Placement Agent to the Trust for use in the answers to
any of the items of any registration statement or in any statements in any other
Offering Material or shall arise out of or be based on any omission to state a
material fact in connection with such information furnished in writing by EVD to
the Trust required to be stated in such answers or necessary to make such
information not misleading. EVD shall be notified of any action brought against
a Covered Person, such notification to be given by a writing addressed to EVD at
24 Federal Street, Boston, Massachusetts 02110, promptly after the summons or
other first legal process shall have been duly and completely served upon such
Covered Person. EVD shall have the right of first control of the defense of the
action with counsel of its own choosing satisfactory to the Trust if such action
is based solely on such alleged misstatement or omission on EVD's part, and in
any other event each Covered Person shall have the right to participate in the
defense or preparation of the defense of any such action. The failure to so
notify EVD of any such action shall not relieve EVD from any liability except to
the extent the Trust shall have been prejudiced by such failure, or from any
liability that EVD may have to Covered Persons by reason of any such untrue or
alleged untrue statement, or omission or alleged omission, otherwise than on
account of EVD's indemnity agreement contained in this paragraph.
1.8 No Trust Interests shall be offered by either EVD or the Trust
under any of the provisions of this Agreement and no orders for the purchase or
sale of Trust Interests hereunder shall be accepted by the Trust if and so long
as the effectiveness of the registration statement or any necessary amendments
thereto shall be suspended under any of the provisions of the 1933 Act or the
1940 Act; provided, however, that nothing contained in this paragraph shall in
any way restrict or have an application to or bearing on the Trust's obligation
to redeem Trust Interests from any investor in accordance with the provisions of
the Trust's registration statement or Declaration of Trust, as amended from time
to time.
<PAGE>
1.9 The Trust agrees to advise EVD as soon as reasonably practical by a
notice in writing delivered to EVD or its counsel:
(a) of any request by the Commission for amendments to the registration
statement then in effect or for additional information;
(b) in the event of the issuance by the Commission of any stop order
suspending the effectiveness of the registration statement then in effect or the
initiation by service of process on the Trust of any proceeding for that
purpose;
(c) of the happening of any event that makes untrue any statement of a
material fact made in the registration statement then in effect or that requires
the making of a change in such registration statement in order to make the
statements therein not misleading; and
(d) of all action of the Commission with respect to any amendment to
any registration statement that may from time to time be filed with the
Commission.
For purposes of this paragraph 1.9, informal requests by or acts of the
Staff of the Commission shall not be deemed actions of or requests by the
Commission.
1.10 EVD agrees on behalf of itself and its employees to treat
confidentially and as proprietary information of the Trust all records and other
information not otherwise publicly available relative to the Trust and its
prior, present or potential investors and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably withheld and may not be
withheld where EVD may be exposed to civil or criminal contempt proceedings for
failure to comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the Trust.
2. DURATION AND TERMINATION OF THIS AGREEMENT.
This Agreement shall become effective upon the date of its execution,
and, unless terminated as herein provided, shall remain in full force and effect
through and including February 28, 1997 and shall continue in full force and
effect indefinitely thereafter, but only so long as such continuance after
February 28, 1997 is specifically approved at least annually (i) by the Board of
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of the Trust and (ii) by the vote of a majority of those Trustees of
the Trust who are not interested persons of EVD or the Trust cast in person at a
meeting called for the purpose of voting on such approval.
Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this agreement without the payment of any
penalty, by action of Trustees of the Trust or the Directors of EVD, as the case
may be, and the Trust may, at any time upon such written notice to EVD,
terminate this Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate automatically in the
event of its assignment.
3. REPRESENTATIONS AND WARRANTIES.
EVD and the Trust each hereby represents and warrants to the other that
it has all requisite authority to enter into, execute, deliver and perform its
obligations under this Agreement and that, with respect to it, this Agreement is
legal, valid and binding, and enforceable in accordance with its terms.
<PAGE>
4. LIMITATION OF LIABILITY.
EVD expressly acknowledges the provision in the Declaration of Trust of
the Trust (Sections 5.2 and 5.6) limiting the personal liability of the Trustees
and officers of the Trust, and EVD hereby agrees that it shall have recourse to
the Trust for payment of claims or obligations as between the Trust and EVD
arising out of this Agreement and shall not seek satisfaction from any Trustee
or officer of the Trust.
5. CERTAIN DEFINITIONS.
The terms "assignment" and "interested persons" when used herein shall
have the respective meanings specified in the Investment Company Act of 1940 as
now in effect or as hereafter amended subject, however, to such exemptions as
may be granted by the Securities and Exchange Commission by any rule, regulation
or order. The term "vote of a majority of the outstanding voting securities"
shall mean the vote, at a meeting of Holders, of the lesser of (a) 67 per centum
or more of the Interests in the Trust present or represented by proxy at the
meeting if the Holders of more than 50 per centum of the outstanding Interests
in the Trust are present or represented by proxy at the meeting, or (b) more
than 50 per centum of the outstanding Interests in the Trust. The terms
"Holders" and "Interests" when used herein shall have the respective meanings
specified in the Declaration of Trust of the Trust.
6. CONCERNING APPLICABLE PROVISIONS OF LAW, ETC.
This Agreement shall be subject to all applicable provisions of law,
including the applicable provisions of the 1940 Act and to the extent that any
provisions herein contained conflict with any such applicable provisions of law,
the latter shall control.
The laws of the Commonwealth of Massachusetts shall, except to the
extent that any applicable provisions of federal law shall be controlling,
govern the construction, validity and effect of this Agreement, without
reference to principles of conflicts of law.
If the contract set forth herein is acceptable to you, please so
indicate by executing the enclosed copy of this Agreement and returning the same
to the undersigned, whereupon this Agreement shall constitute a binding contract
between the parties hereto effective at the closing of business on the date
hereof.
Yours very truly,
SENIOR DEBT PORTFOLIO
By: /S/ JAMES B. HAWKES
-------------------------------
President
Accepted:
EATON VANCE DISTRIBUTORS, INC.
By: /S/ WHARTON P. WHITAKER
- -------------------------------------
President
CUSTODIAN AGREEMENT
between
HIGH INCOME PORTFOLIO, et al
and
INVESTORS BANK & TRUST COMPANY
<PAGE>
TABLE OF CONTENTS
1. Definitions..............................................................1-3
2. Employment of Custodian and Property to be Held by it......................3
3. Duties of the Custodian with Respect to Property of the Trust..............4
A. Safekeeping and Holding of Property....................................4
B. Delivery of Securities...............................................4-7
C. Registration of Securities.............................................7
D. Bank Accounts........................................................7-8
E. Payments for Interests, or Increases in Interests, in the Trust........8
F. Investment and Availability of U.S. Federal Funds......................8
G. Collections..........................................................8-9
H. Payment of Trust Monies.............................................9-11
I. Liability for Payment in Advance of Receipt of Securities
Purchased..........................................................11
J. Payments for Reductions or Redemptions of Interests of the Trust......12
K. Appointment of Agents by the Custodian................................12
L. Deposit of Trust Portfolio Securities in Securities Systems........12-14
M. Deposit of Trust Commercial Paper in an Approved Book-Entry System
for Commercial Paper.............................................14-17
N. Segregated Account....................................................17
O. Ownership Certificates for Tax Purposes...............................17
P. Proxies............................................................17-18
Q. Communications Relating to Trust Portfolio Securities.................18
-i-
<PAGE>
R. Exercise of Rights; Tender Offers.................................18-19
S. Depository Receipts...................................................19
T. Interest Bearing Call or Time Deposits................................19
U. Options, Futures Contracts and Foreign Currency Transactions.......20-21
V. Actions Permitted Without Express Authority...........................22
4. Records and Miscellaneous Duties.......................................22-23
5. Opinion of Trust's Independent Public Accountants.........................23
6. Compensation and Expenses of Bank.........................................23
7. Responsibility of Bank.................................................23-24
8. Persons Having Access to Assets of the Trust..............................24
9. Effective Period, Termination and Amendment; Successor Custodian.......25-26
10. Interpretive and Additional Provisions....................................26
11. Notices...................................................................26
12. Massachusetts Law to Apply................................................26
13. Adoption of the Agreement by the Trust....................................27
-ii-
<PAGE>
CUSTODIAN AGREEMENT
This Agreement is made between High Income Portfolio and each of the
investment companies listed on Schedule A attached hereto, each of which has
adopted this Agreement in the manner provided herein and Investors Bank & Trust
Company (hereinafter called "Bank", "Custodian" and "Agent"), a trust company
established under the laws of Massachusetts with a principal place of business
in Boston, Massachusetts.
Whereas, each Trust is registered under the Investment Company Act of 1940
and has appointed the Bank to act as Custodian of its property and to perform
certain duties as its Agent, as more fully hereinafter set forth; and
Whereas, the Bank is willing and able to act as the Trusts' Custodian and
Agent, subject to and in accordance with the provisions hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each Trust and the Bank agree as
follows:
1. DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
(a) "Trust" shall mean the investment company which adopted this Agreement.
(b) "Board" shall mean the board of trustees of a Trust.
(c) "The Depository Trust Company", a clearing agency registered with the
U.S. Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Trust by the Board.
(d) "Participants Trust Company", a clearing agency registered with the
U.S. Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Trust by the Board.
(e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the U.S. Securities and Exchange Commission under Section
17A of the Securities Exchange Act of 1934 which acts as a securities
depository.
(f) "Federal Book-Entry System" shall mean the book-entry system referred
to in Rule 17f-4(b) under the Investment Company Act of 1940 for United States
and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
(g) "Approved Foreign Securities Depository" shall mean a non-U.S.
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for non-U.S. securities.
(h) "Approved Book-Entry System for Commercial Paper" shall mean a system
maintained by the Custodian or by a subcustodian employed pursuant to Section 2
hereof for the holding of commercial paper in book-entry form.
<PAGE>
(i) The Custodian shall be deemed to have received "proper instructions" in
respect of any of the matters referred to in this Agreement upon receipt of
written or facsimile instructions signed by such one or more person or persons
as the Board shall have from time to time authorized to give the particular
class of instructions in question. Different persons may be authorized to give
instructions for different purposes. A certified copy of a resolution of the
Board may be received and accepted by the Custodian as conclusive evidence of
the authority of any such person to act and may be considered as in full force
and effect until receipt of written notice to the contrary. Such instructions
may be general or specific in terms and, where appropriate, may be standing
instructions. Unless the resolution delegating authority to any person or
persons to give a particular class of instructions specifically requires that
the approval of any person, persons or committee shall first have been obtained
before the Custodian may act on instructions of that class, the Custodian shall
be under no obligation to question the right of the person or persons giving
such instructions in so doing. Oral instructions will be considered proper
instructions if the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Trust shall cause all oral instructions to be confirmed in
writing. The Trust authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian. Upon receipt of a
certificate signed by two officers of the Trust as to the authorization by the
President and the Treasurer of the Trust accompanied by a detailed description
of the communication procedures approved by the President and the Treasurer of
the Trust, "proper instructions" may also include communications effected
directly between electromechanical or electronic devices provided that the
President and Treasurer of the Trust and the Custodian are satisfied that such
procedures afford adequate safeguards for the Trust's assets. In performing its
duties generally, and more particularly in connection with the purchase, sale
and exchange of securities made by or for the Trust, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Trust as the same may from time to time be in effect (and
resolutions or proceedings of the holders of interests in the Trust or the
Board), but, nevertheless, except as otherwise expressly provided herein, the
Custodian may assume unless and until notified in writing to the contrary that
so-called proper instructions received by it are not in conflict with or in any
way contrary to any provisions of such governing documents and registration
statement, or resolutions or proceedings of the holders of interests in the
Trust or the Board.
(j) "Trust" shall mean one or all of the Trusts, as the context may
require.
(k) The term "Vote" when used with respect to the Board or the Holders of
Interests in the Trust shall include a vote, resolution, consent, proceeding and
other action taken by the Board or Holders in accordance with the Declaration of
Trust or By-Laws of the Trust.
2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
The Trust hereby appoints and employs the Bank as its Custodian and Agent
in accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Trust agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Trust from time to time, and the cash
consideration received by it from time to time in exchange for an interest in
<PAGE>
the Trust or for an increase in such an interest. The Custodian shall not be
responsible for any property of the Trust held by the Trust and not delivered by
the Trust to the Custodian. The Trust will also deliver to the Bank from time to
time copies of its currently effective declaration of trust, by-laws,
registration statement and placement agent agreement with its placement agent,
together with such resolutions, and other proceedings of the Trust as may be
necessary for or convenient to the Bank in the performance of its duties
hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily responsible for the securities, participation
interests, moneys and other property of the Trust held by such subcustodian. Any
non-U.S. subcustodian shall be a bank or trust company which is an eligible
foreign custodian within the meaning of Rule 17f-5 under the Investment Company
Act of 1940, and the non-U.S. custody arrangements shall be approved by the
Board and shall be in accordance with and subject to the provisions of said
Rule. For the purposes of this Agreement, any property of the Trust held by any
such subcustodian (domestic or foreign) shall be deemed to be held by the
Custodian under the terms of this Agreement.
3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE TRUST
A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep safely
all property of the Trust and on behalf of the Trust shall from time
to time receive delivery of Trust property for safekeeping. The
Custodian shall hold, earmark and segregate on its books and records
for the account of the Trust all property of the Trust, including all
securities, participation interests and other assets of the Trust (1)
physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in
Paragraph K hereof, (3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved Clearing
Agency or in the Federal Book-Entry System or in an Approved Foreign
Securities Depository, each of which from time to time is referred to
herein as a "Securities System", and (4) held by the Custodian or by
any subcustodian referred to in Section 2 hereof and maintained in any
Approved Book-Entry System for Commercial Paper.
B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Trust held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, and
only in the following cases:
1) Upon sale of such securities or participation interests for the
account of the Trust, BUT ONLY against receipt of payment
therefor; if delivery is made in Boston or New York City, payment
therefor shall be made in accordance with generally accepted
clearing house procedures or by use of U.S. Federal Reserve Wire
System procedures; if delivery is made elsewhere payment therefor
shall be in accordance with the then current "street delivery"
custom or in accordance with such procedures agreed to in writing
from time to time by the parties hereto; if the sale is effected
through a Securities System, delivery and payment therefor shall
be made in accordance with the provisions of Paragraph L hereof;
if the sale of commercial paper is to be effected through an
Approved Book-Entry System for Commercial Paper, delivery and
<PAGE>
payment therefor shall be made in accordance with the provisions
of Paragraph M hereof; if the securities are to be sold outside
the United States, delivery of the securities for the account of
the Trust may be made either (a) in advance of receipt of payment
therefor in the absence of specific instructions to do so
provided such actions are consistent with local settlement
practices and customs, subject to the Custodian's standard of
care, or (b) in accordance with procedures agreed to in writing
from time to time by the parties hereto; for the purposes of this
subparagraph, the term "sale" shall include the disposition of a
portfolio security (i) upon the exercise of an option written by
the Trust and (ii) upon the failure by the Trust to make a
successful bid with respect to a portfolio security, the
continued holding of which is contingent upon the making of such
a bid;
2) Upon the receipt of payment in connection with any repurchase
agreement or reverse repurchase agreement relating to such
securities and entered into by the Trust;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Trust;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; PROVIDED that, in any such case, the
cash or other consideration is to be delivered to the Custodian
or any subcustodian employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name
of the Trust or into the name of any nominee of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Paragraph K hereof or into the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof; or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units; PROVIDED that, in any such case, the new securities or
participation interests are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance with
the "street delivery" custom; PROVIDED that the Custodian shall
adopt such procedures as the Trust from time to time shall
approve to ensure their prompt return to the Custodian by the
broker in the event the broker elects not to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion of such securities, or pursuant to
any deposit agreement; PROVIDED that, in any such case, the new
securities and cash, if any, are to be delivered to the Custodian
or any subcustodian employed pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender of
interim receipts or temporary securities for definitive
securities; PROVIDED that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;
<PAGE>
9) For delivery in connection with any loans of securities made by
the Trust (such loans to be made pursuant to the terms of the
Trust's current registration statement), BUT ONLY against receipt
of adequate collateral as agreed upon from time to time by the
Custodian and the Trust, which may be in the form of cash or
obligations issued by the United States government, its agencies
or instrumentalities; except that in connection with any
securities loans for which collateral is to be credited to the
Custodian's account in the book-entry system authorized by the
U.S. Department of Treasury, the Custodian will not be held
liable or responsible for the delivery of securities loaned by
the Trust prior to the receipt of such collateral;
10) For delivery as security in connection with any borrowings by the
Trust requiring a pledge or hypothecation of assets by the Trust
(if then permitted under circumstances described in the current
registration statement of the Trust), provided, that the
securities shall be released only upon payment to the Custodian
of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made,
further securities may be released for that purpose; upon receipt
of proper instructions, the Custodian may pay any such loan upon
redelivery to it of the securities pledged or hypothecated
therefor and upon surrender of the note or notes evidencing the
loan;
11) When required for delivery in connection with any reduction of or
redemption of an interest in the Trust in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any agreement
between the Custodian (or a subcustodian employed pursuant to
Section 2 hereof) and a broker-dealer registered under the
Securities Exchange Act of 1934 and, if necessary, the Trust,
relating to compliance with the rules of The Options Clearing
Corporation or of any registered national securities exchange, or
of any similar organization or organizations, regarding deposit
or escrow or other arrangements in connection with options
transactions by the Trust;
13) For delivery in accordance with the provisions of any agreement
among the Trust, the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures commissions
merchant, relating to compliance with the rules of the Commodity
Futures Trading Commission and/or of any contract market or
commodities exchange or similar organization, regarding futures
margin account deposits or payments in connection with futures
transactions by the Trust;
14) For any other proper corporate purpose, BUT ONLY upon receipt of,
in addition to proper instructions, a certified copy of a
resolution of the Board specifying the securities to be
delivered, setting forth the purpose for which such delivery is
to be made, declaring such purpose to be proper corporate
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
<PAGE>
C. REGISTRATION OF SECURITIES Securities held by the Custodian (other
than bearer securities) for the account of the Trust shall be
registered in the name of the Trust or in the name of any nominee of
the Trust or of any nominee of the Custodian, or in the name or
nominee name of any agent appointed pursuant to Paragraph K hereof, or
in the name or nominee name of any subcustodian employed pursuant to
Section 2 hereof, or in the name or nominee name of The Depository
Trust Company or Participants Trust Company or Approved Clearing
Agency or Federal Book-Entry System or Approved Book-Entry System for
Commercial Paper; provided, that securities are held in an account of
the Custodian or of such agent or of such subcustodian containing only
assets of the Trust or only assets held by the Custodian or such agent
or such subcustodian as a custodian or subcustodian or in a fiduciary
capacity for customers. All certificates for securities accepted by
the Custodian or any such agent or subcustodian on behalf of the Trust
shall be in "street" or other good delivery form or shall be returned
to the selling broker or dealer who shall be advised of the reason
thereof.
D. BANK ACCOUNTS The Custodian shall open and maintain a separate bank
account or accounts in the name of the Trust, subject only to draft or
order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Trust
other than cash maintained by the Trust in a bank account established
and used in accordance with Rule 17f-3 under the Investment Company
Act of 1940. Funds held by the Custodian for the Trust may be
deposited by it to its credit as Custodian in the Banking Department
of the Custodian or in such other banks or trust companies as the
Custodian may in its discretion deem necessary or desirable; provided,
however, that every such bank or trust company shall be qualified to
act as a custodian under the Investment Company Act of 1940 and that
each such bank or trust company and the funds to be deposited with
each such bank or trust company shall be approved in writing by two
officers of the Trust. Such funds shall be deposited by the Custodian
in its capacity as Custodian and shall be subject to withdrawal only
by the Custodian in that capacity.
E. PAYMENT FOR INTERESTS, OR INCREASES IN INTERESTS, IN THE TRUST The
Custodian shall make appropriate arrangements with the Transfer Agent
of the Trust to enable the Custodian to make certain it promptly
receives the cash or other consideration due to the Trust for payment
of interests in the Trust, or increases in such interests, in
accordance with the governing documents and registration statement of
the Trust. The Custodian will provide prompt notification to the Trust
of any receipt by it of such payments.
F. INVESTMENT AND AVAILABILITY OF U.S. FEDERAL FUNDS Upon agreement
between the Trust and the Custodian, the Custodian shall, upon the
receipt of proper instructions, which may be continuing instructions
when deemed appropriate by the parties, invest in such securities and
instruments as may be set forth in such instructions on the same day
as received all federal funds received after a time agreed upon
between the Custodian and the Trust.
<PAGE>
G. COLLECTIONS The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which
the Trust shall be entitled either by law or pursuant to custom in the
securities business, and shall promptly collect all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or agent
thereof and shall credit such income, as collected, to the Trust's
custodian account. The Custodian shall do all things necessary and
proper in connection with such prompt collections and, without
limiting the generality of the foregoing, the Custodian shall
1) Present for payment all coupons and other income items requiring
presentations;
2) Present for payment all securities which may mature or be called,
redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Trust,
checks, drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities System
or in an Approved Book-Entry System for Commercial Paper at the
time funds become available to the Custodian; in the case of
securities maintained in The Depository Trust Company funds shall
be deemed available to the Trust not later than the opening of
business on the first business day after receipt of such funds by
the Custodian. The Custodian shall notify the Trust as soon as
reasonably practicable whenever income due on any security is not
promptly collected. In any case in which the Custodian does not
receive any due and unpaid income after it has made demand for
the same, it shall immediately so notify the Trust in writing,
enclosing copies of any demand letter, any written response
thereto, and memoranda of all oral responses thereto and to
telephonic demands, and await instructions from the Trust; the
Custodian shall in no case have any liability for any nonpayment
of such income provided the Custodian meets the standard of care
set forth in Section 8 hereof. The Custodian shall not be
obligated to take legal action for collection unless and until
reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock
dividends, rights and other items of like nature, and deal with
the same pursuant to proper instructions relative thereto.
H. PAYMENT OF TRUST MONIES Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out monies of the Trust in the following cases
only:
1) Upon the purchase of securities, participation interests,
options, futures contracts, forward contracts and options on
futures contracts purchased for the account of the Trust but only
(a) against the receipt of
(i) such securities registered as provided in Paragraph C hereof
or in proper form for transfer or
<PAGE>
(ii) detailed instructions signed by an officer of the Trust
regarding the participation interests to be purchased or
(iii) written confirmation of the purchase by the Trust of the
options, futures contracts, forward contracts or options on
futures contracts by the Custodian (or by a subcustodian
employed pursuant to Section 2 hereof or by a clearing
corporation of a national securities exchange of which the
Custodian is a member or by any bank, banking institution or
trust company doing business in the United States or abroad
which is qualified under the Investment Company Act of 1940
to act as a custodian and which has been designated by the
Custodian as its agent for this purpose or by the agent
specifically designated in such instructions as representing
the purchasers of a new issue of privately placed
securities); (b) in the case of a purchase effected through
a Securities System, upon receipt of the securities by the
Securities System in accordance with the conditions set
forth in Paragraph L hereof; (c) in the case of a purchase
of commercial paper effected through an Approved Book-Entry
System for Commercial Paper, upon receipt of the paper by
the Custodian or subcustodian in accordance with the
conditions set forth in Paragraph M hereof; (d) in the case
of repurchase agreements entered into between the Trust and
another bank or a broker-dealer, against receipt by the
Custodian of the securities underlying the repurchase
agreement either in certificate form or through an entry
crediting the Custodian's segregated, non-proprietary
account at the Federal Reserve Bank of Boston with such
securities along with written evidence of the agreement by
the bank or broker-dealer to repurchase such securities from
the Trust; or (e) in the case of securities purchased
outside the United States, the Custodian may make payment
therefor either (i) in advance of receipt of such securities
in the absence of specific instructions to do so provided
such actions are consistent with local settlement practices
and customs, subject to the Custodian's standard of care, or
(ii) in accordance with procedures agreed to in writing from
time to time by the parties hereto;
2) When required in connection with the conversion, exchange or
surrender of securities owned by the Trust as set forth in
Paragraph B hereof;
3) When required for the reduction or redemption of an interest in
the Trust in accordance with the provisions of Paragraph J
hereof;
4) For the payment of any expense or liability incurred by the
Trust, including but not limited to the following payments for
the account of the Trust: advisory fees, interest, taxes,
management compensation and expenses, accounting, transfer agent
and legal fees, and other operating expenses of the Trust whether
or not such expenses are to be in whole or part capitalized or
treated as deferred expenses; and
5) For distributions or payments to Holders of Interest of the
Trust.
<PAGE>
6) For any other proper corporate purpose, BUT ONLY upon receipt of,
in addition to proper instructions, a certified copy of a
resolution of the Board, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper corporate purpose, and
naming the person or persons to whom such payment is to be made.
I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED In
any and every case where payment for purchase of securities for the
account of the Trust is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written
instructions signed by two officers of the Trust to so pay in advance,
the Custodian shall be absolutely liable to the Trust for such
securities to the same extent as if the securities had been received
by the Custodian; EXCEPT that in the case of a repurchase agreement
entered into by the Trust with a bank which is a member of the Federal
Reserve System, the Custodian may transfer funds to the account of
such bank prior to the receipt of (i) the securities in certificate
form subject to such repurchase agreement or (ii) written evidence
that the securities subject to such repurchase agreement have been
transferred by book-entry into a segregated non-proprietary account of
the Custodian maintained with the Federal Reserve Bank of Boston or
(iii) the safekeeping receipt, PROVIDED that such securities have in
fact been so TRANSFERRED by book-entry and the written repurchase
agreement is received by the Custodian in due course; AND EXCEPT that
if the securities are to be purchased outside the United States,
payment may be made in accordance with procedures agreed to in writing
from time to time by the parties hereto. Notwithstanding any other
provision in this Agreement to the contrary, where securities are
purchased or sold outside the United States, delivery of securities
for the account of the Trust may be made by the Custodian in advance
of receipt of payment for the securities sold, and the Custodian may
pay for securities in advance of receipt of the securities purchased
for the account of the Trust, in the absence of specific instructions
to do so provided such actions are consistent with local settlement
practices and customs, subject to the Custodian's standard of care.
J. PAYMENTS FOR REDUCTIONS OR REDEMPTIONS OF INTERESTS IN THE TRUST From
such funds as may be available for the purpose, but subject to any
applicable resolutions of the Board and the current procedures of the
Trust, the Custodian shall, upon receipt of written instructions from
the Trust or from the Trust's transfer agent make funds and/or
portfolio securities available for payment to holders of interest in
the Trust which have caused the amount of their interests to be
reduced, or for their interest to be redeemed.
<PAGE>
K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at any time
or times in its discretion appoint (and may at any time remove) any
other bank or trust company (PROVIDED such bank or trust company is
itself qualified under the Investment Company Act of 1940 to act as a
custodian or is itself an eligible foreign custodian within the
meaning of Rule 17f-5 under said Act) as the agent of the Custodian to
carry out such of the duties and functions of the Custodian described
in this Section 3 as the Custodian may from time to time direct;
PROVIDED, however, that the appointment of any such agent shall not
relieve the Custodian of any of its responsibilities or liabilities
hereunder, and as between the Trust and the Custodian the Custodian
shall be fully responsible for the acts and omissions of any such
agent. For the purposes of this Agreement, any property of the Trust
held by any such agent shall be deemed to be held by the Custodian
hereunder.
L. DEPOSIT OF TRUST PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Trust
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and regulations,
and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2 keep securities of the Trust
in a Securities System provided that such securities are maintained in a
non-proprietary account ("Account") of the Custodian or such subcustodian
in the Securities System which shall not include any assets of the
Custodian or such subcustodian or any other person other than assets held
by the Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to securities of the
Trust which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Trust, and the Custodian shall
be fully and completely responsible for maintaining a recordkeeping system
capable of accurately and currently stating the Trust's holdings maintained
in each such Securities System.
<PAGE>
(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Trust only upon (i) receipt of notice or advice
from the Securities System that such securities have been transferred to
the Account, and (ii) the making of an entry on the records of the
Custodian to reflect such payment and transfer for the account of the
Trust; except that when such securities are purchased outside the United
States, payment therefor may be made by the Custodian in advance of receipt
of such notice or advice and the making of such entry in the absence of
specific instructions to do so provided such actions are consistent with
local settlement practices and customs, subject to the Custodian's standard
of care. The Custodian shall transfer securities sold for the account of
the Trust only upon (i) receipt of notice or advice from the Securities
System that payment for such securities has been transferred to the
Account, and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Trust; except that
when such securities are sold outside the United States, transfer thereof
may be made by the Custodian in advance of receipt of such notice or advice
and the making of such entry in the absence of specific instructions to do
so provided such actions are consistent with local settlement practices and
customs, subject to the Custodian's standard of care. Copies of all notices
or advices from the Securities System of transfers of securities for the
account of the Trust shall identify the Trust, be maintained for the Trust
by the Custodian and be promptly provided to the Trust at its request. The
Custodian shall promptly send to the Trust confirmation of each transfer to
or from the account of the Trust in the form of a written advice or notice
of each such transaction, and shall furnish to the Trust copies of daily
transaction sheets reflecting each day's transactions in the Securities
System for the account of the Trust on the next business day.
(d) The Custodian shall promptly send to the Trust any report or other
communication received or obtained by the Custodian relating to the
Securities System's accounting system, system of internal accounting
controls or procedures for safeguarding securities deposited in the
Securities System; the Custodian shall promptly send to the Trust any
report or other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding securities deposited in
any Securities System; and the Custodian shall ensure that any agent
appointed pursuant to Paragraph K hereof or any subcustodian employed
pursuant to Section 2 hereof shall promptly send to the Trust and to the
Custodian any report or other communication relating to such agent's or
subcustodian's internal accounting controls and procedures for safeguarding
securities deposited in any Securities System. The Custodian's books and
records relating to the Trust's participation in each Securities System
will at all times during regular business hours be open to the inspection
of the Trust's authorized officers, employees or agents.
<PAGE>
(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an officer of the Trust that the Board has
approved the use of a particular Securities System; the Custodian shall
also obtain appropriate assurance from the officers of the Trust that the
Board has annually reviewed the continued use by the Trust of each
Securities System, and the Trust shall promptly notify the Custodian if the
use of a Securities System is to be discontinued; at the request of the
Trust, the Custodian will terminate the use of any such Securities System
as promptly as practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the Trust
resulting from use of the Securities System by reason of any negligence,
misfeasance or misconduct of the Custodian or any of its agents or
subcustodians or of any of its or their employees or from any failure of
the Custodian or any such agent or subcustodian to enforce effectively such
rights as it may have against the Securities System or any other person; at
the election of the Trust, it shall be entitled to be subrogated to the
rights of the Custodian with respect to any claim against the Securities
System or any other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Trust has not been
made whole for any such loss or damage.
M. DEPOSIT OF TRUST COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM FOR
COMMERCIAL PAPER Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Trust,
the Custodian may deposit and/or maintain direct issue commercial
paper owned by the Trust in any Approved Book-Entry System for
Commercial Paper, in each case only in accordance with applicable
Securities and Exchange Commission rules, regulations, and no-action
correspondence, and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep commercial paper of the
Trust in an Approved Book-Entry System for Commercial Paper, provided that
such paper is issued in book entry form by the Custodian or subcustodian on
behalf of an issuer with which the Custodian or subcustodian has entered
into a book-entry agreement and provided further that such paper is
maintained in a non-proprietary account ("Account") of the Custodian or
such subcustodian in an Approved Book-Entry System for Commercial Paper
which shall not include any assets of the Custodian or such subcustodian or
any other person other than assets held by the Custodian or such
subcustodian as a fiduciary, custodian, or otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of
the Trust which is maintained in an Approved Book-Entry System for
Commercial Paper shall identify by book-entry each specific issue of
commercial paper purchased by the Trust which is included in the System and
shall at all times during regular business hours be open for inspection by
authorized officers, employees or agents of the Trust. The Custodian shall
be fully and completely responsible for maintaining a recordkeeping system
capable of accurately and currently stating the Trust's holdings of
commercial paper maintained in each such System.
<PAGE>
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Trust only upon contemporaneous (i)
receipt of notice or advice from the issuer that such paper has been
issued, sold and transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such purchase, payment and
transfer for the account of the Trust. The Custodian shall transfer such
commercial paper which is sold or cancel such commercial paper which is
redeemed for the account of the Trust only upon contemporaneous (i) receipt
of notice or advice that payment for such paper has been transferred to the
Account, and (ii) the making of an entry on the records of the Custodian to
reflect such transfer or redemption and payment for the account of the
Trust. Copies of all notices, advices and confirmations of transfers of
commercial paper for the account of the Trust shall identify the Trust, be
maintained for the Trust by the Custodian and be promptly provided to the
Trust at its request. The Custodian shall promptly send to the Trust
confirmation of each transfer to or from the account of the Trust in the
form of a written advice or notice of each such transaction, and shall
furnish to the Trust copies of daily transaction sheets reflecting each
day's transactions in the System for the account of the Trust on the next
business day.
(d) The Custodian shall promptly send to the Trust any report or other
communication received or obtained by the Custodian relating to each
System's accounting system, system of internal accounting controls or
procedures for safeguarding commercial paper deposited in the System; the
Custodian shall promptly send to the Trust any report or other
communication relating to the Custodian's internal accounting controls and
procedures for safeguarding commercial paper deposited in any Approved
Book-Entry System for Commercial Paper; and the Custodian shall ensure that
any agent appointed pursuant to Paragraph K hereof or any subcustodian
employed pursuant to Section 2 hereof shall promptly send to the Trust and
to the Custodian any report or other communication relating to such agent's
or subcustodian's internal accounting controls and procedures for
safeguarding securities deposited in any Approved Book-Entry System for
Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence
of receipt of a certificate of an officer of the Trust that the Board has
approved the use of a particular Approved Book-Entry System for Commercial
Paper; the Custodian shall also obtain appropriate assurance from the
officers of the Trust that the Board has annually reviewed the continued
use by the Trust of each Approved Book-Entry System for Commercial Paper,
and the Trust shall promptly notify the Custodian if the use of an Approved
Book-Entry System for Commercial Paper is to be discontinued; at the
request of the Trust, the Custodian will terminate the use of any such
System as promptly as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System
for Commercial Paper is maintained by the subcustodian) shall issue
physical commercial paper or promissory notes whenever requested to do so
by the Trust or in the event of an electronic system failure which impedes
issuance, transfer or custody of direct issue commercial paper by
book-entry.
<PAGE>
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to the Trust
resulting from use of any Approved Book-Entry System for Commercial Paper
by reason of any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their employees or
from any failure of the Custodian or any such agent or subcustodian to
enforce effectively such rights as it may have against the System, the
issuer of the commercial paper or any other person; at the election of the
Trust, it shall be entitled to be subrogated to the rights of the Custodian
with respect to any claim against the System, the issuer of the commercial
paper or any other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Trust has not been
made whole for any such loss or damage.
N. SEGREGATED ACCOUNT The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or accounts
for and on behalf of the Trust, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Paragraph L hereof, (i) in
accordance with the provisions of any agreement among the Trust, the
Custodian and any registered broker-dealer (or any futures commission
merchant), relating to compliance with the rules of the Options
Clearing Corporation and of any registered national securities
exchange (or of the Commodity Futures Trading Commission or of any
contract market or commodities exchange), or of any similar
organization or organizations, regarding escrow or deposit or other
arrangements in connection with transactions by the Trust, (ii) for
purposes of segregating cash or U.S. Government securities in
connection with options purchased, sold or written by the Trust or
futures contracts or options thereon purchased or sold by the Trust,
(iii) for the purposes of compliance by the Trust with the procedures
required by Investment Company Act Release No. 10666, or any
subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by
registered investment companies and (iv) for other proper purposes,
BUT ONLY, in the case of clause (iv), upon receipt of, in addition to
proper instructions, a certificate signed by two officers of the
Trust, setting forth the purpose such segregated account and declaring
such purpose to be a proper purpose.
O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES The Custodian shall execute
ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of the Trust held by it and in
connection with transfers of securities.
P. PROXIES The Custodian shall, with respect to the securities held by it
hereunder, cause to be promptly delivered to the Trust all forms of
proxies and all notices of meetings and any other notices or
announcements or other written information affecting or relating to
the securities, and upon receipt of proper instructions shall execute
and deliver or cause its nominee to execute and deliver such proxies
<PAGE>
or other authorizations as may be required. Neither the Custodian nor
its nominee shall vote upon any of the securities or execute any proxy
to vote thereon or give any consent or take any other action with
respect thereto (except as otherwise herein provided) unless ordered
to do so by proper instructions.
Q. COMMUNICATIONS RELATING TO TRUST PORTFOLIO SECURITIES The Custodian
shall deliver promptly to the Trust all written information
(including, without limitation, pendency of call and maturities of
securities and participation interests and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Trust and the maturity of futures contracts purchased
or sold by the Trust) received by the Custodian from issuers and other
persons relating to the securities and participation interests being
held for the Trust. With respect to tender or exchange offers, the
Custodian shall deliver promptly to the Trust all written information
received by the Custodian from issuers and other persons relating to
the securities and participation interests whose tender or exchange is
sought and from the party (or his agents) making the tender or
exchange offer.
R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options and the
maturity of futures contracts) affecting or relating to securities and
participation interests held by the Custodian under this Agreement,
the Custodian shall have responsibility for promptly notifying the
Trust of all such offers in accordance with the standard of reasonable
care set forth in Section 8 hereof. For all such offers for which the
Custodian is responsible as provided in this Paragraph R, the Trust
shall have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of proper
instructions, the Custodian shall timely deliver to the issuer or
trustee thereof, or to the agent of either, warrants, puts, calls,
rights or similar securities for the purpose of being exercised or
sold upon proper receipt therefor and upon receipt of assurances
satisfactory to the Custodian that the new securities and cash, if
any, acquired by such action are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof. Upon receipt
of proper instructions, the Custodian shall timely deposit securities
upon invitations for tenders of securities upon proper receipt
therefor and upon receipt of assurances satisfactory to the Custodian
that the consideration to be paid or delivered or the tendered
securities are to be returned to the Custodian or subcustodian
employed pursuant to Section 2 hereof. Notwithstanding any provision
of this Agreement to the contrary, the Custodian shall take all
necessary action, unless otherwise directed to the contrary by proper
instructions, to comply with the terms of all mandatory or compulsory
exchanges, calls, tenders, redemptions, or similar rights of security
ownership, and shall thereafter promptly notify the Trust in writing
of such action.
<PAGE>
S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities
to the depository used by an issuer of American Depository Receipts or
International Depository Receipts (hereinafter collectively referred
to as "ADRs") for such securities, against a written receipt therefor
adequately describing such securities and written evidence
satisfactory to the Custodian that the depository has acknowledged
receipt of instructions to issue with respect to such securities ADRs
in the name of a nominee of the Custodian or in the name or nominee
name of any subcustodian employed pursuant to Section 2 hereof, for
delivery to the Custodian or such subcustodian at such place as the
Custodian or such subcustodian may from time to time designate. The
Custodian shall, upon receipt of proper instructions, surrender ADRs
to the issuer thereof against a written receipt therefor adequately
describing the ADRs surrendered and written evidence satisfactory to
the Custodian that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian or to a subcustodian employed
pursuant to Section 2 hereof.
T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall, upon
receipt of proper instructions, place interest bearing fixed term and
call deposits with the banking department of such banking institution
(other than the Custodian) and in such amounts as the Trust may
designate. Deposits may be denominated in U.S. Dollars or other
currencies. The Custodian shall include in its records with respect to
the assets of the Trust appropriate notation as to the amount and
currency of each such deposit, the accepting banking institution and
other appropriate details and shall retain such forms of advice or
receipt evidencing the deposit, if any, as may be forwarded to the
Custodian by the banking institution. Such deposits shall be deemed
portfolio securities of the Trust for the purposes of this Agreement,
and the Custodian shall be responsible for the collection of income
from such accounts and the transmission of cash to and from such
accounts.
<PAGE>
U. OPTIONS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS
1. OPTIONS The Custodian shall, upon receipt of proper instructions
and in accordance with the provisions of any agreement between the
Custodian, any registered broker-dealer and, if necessary, the Trust,
relating to compliance with the rules of the Options Clearing Corporation
or of any registered national securities exchange or similar organization
or organizations, receive and retain confirmations or other documents, if
any, evidencing the purchase or writing of an option on a security or
securities index or other financial instrument or index by the Trust;
deposit and maintain in a segregated account for the Trust, either
physically or by book-entry in a Securities System, securities subject to a
covered call option written by the Trust; and release and/or transfer such
securities or other assets only in accordance with a notice or other
communication evidencing the expiration, termination or exercise of such
covered option furnished by the Options Clearing Corporation, the
securities or options exchange on which such covered option is traded or
such other organization as may be responsible for handling such options
transactions. The Custodian and the broker-dealer shall be responsible for
the sufficiency of assets held in the Trust's segregated account in
compliance with applicable margin maintenance requirements.
2. FUTURES CONTRACTS The Custodian shall, upon receipt of proper
instructions, receive and retain confirmations and other documents, if any,
evidencing the purchase or sale of a futures contract or an option on a
futures contract by the Trust; deposit and maintain in a segregated
account, for the benefit of any futures commission merchant, assets
designated by the Trust as initial, maintenance or variation "margin"
deposits (including mark-to-market payments) intended to secure the Trust's
performance of its obligations under any futures contracts purchased or
sold or any options on futures contracts written by the Trust, in
accordance with the provisions of any agreement or agreements among the
Trust, the Custodian and such futures commission merchant, designed to
comply with the rules of the Commodity Futures Trading Commission and/or of
any contract market or commodities exchange or similar organization
regarding such margin deposits or payments; and release and/or transfer
assets in such margin accounts only in accordance with any such agreements
or rules. The Custodian and the futures commission merchant shall be
responsible for the sufficiency of assets held in the segregated account in
compliance with the applicable margin maintenance and mark-to-market
payment requirements.
3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall, pursuant to
proper instructions, enter into or cause a subcustodian to enter into
currency exchange contracts or options to purchase and sell non-U.S.
currencies for spot and future delivery on behalf and for the account of
the Trust. Such transactions may be undertaken by the Custodian or
subcustodian with such banking or financial institutions or other currency
brokers, as set forth in proper instructions. Currency exchange
<PAGE>
contracts and options shall be deemed to be portfolio securities of the
Trust; and accordingly, the responsibility of the Custodian therefor shall
be the same as and no greater than the Custodian's responsibility in
respect of other portfolio securities of the Trust. The Custodian shall be
responsible for the transmittal to and receipt of cash from the currency
broker or banking or financial institution with which the contract or
option is made, the maintenance of proper records with respect to the
transaction and the maintenance of any segregated account required in
connection with the transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or banking or financial
institutions with which the Trust deals or for their failure to comply with
the terms of any contract or option. Without limiting the foregoing, it is
agreed that upon receipt of proper instructions and insofar as funds are
made available to the Custodian for the purpose, the Custodian may (if
determined necessary by the Custodian to consummate a particular
transaction on behalf and for the account of the Trust) make free outgoing
payments of cash in the form of U.S. dollars or other currency before
receiving confirmation of a currency exchange contract or confirmation that
the countervalue currency completing the currency exchange contract has
been delivered or received. The Custodian shall not be responsible for any
costs and interest charges which may be incurred by the Trust or the
Custodian as a result of the failure or delay of third parties to deliver
currency exchange; provided that the Custodian shall nevertheless be held
to the standard of care set forth in, and shall be liable to the Trust in
accordance with, the provisions of Section 8.
V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY The Custodian may in its
discretion, without express authority from the Trust:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Agreement, PROVIDED, that all such payments shall be
accounted for by the Custodian to the Treasurer of the Trust and
shall be subject to subsequent approval by an officer of the
Trust;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Trust, checks, drafts
and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Trust
except as otherwise directed by the Trust.
<PAGE>
4. RECORDS AND MISCELLANEOUS DUTIES
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable U.S. federal and state tax laws and any other law or administrative
rules or procedures which may be applicable to the Trust. All books of account
and records maintained by the Bank in connection with the performance of its
duties under this Agreement shall be the property of the Trust, shall at all
times during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Trust, and in the event of
termination of this Agreement shall be delivered to the Trust or to such other
person or persons as shall be designated by the Trust. Disposition of any
account or record after any required period of preservation shall be only in
accordance with specific instructions received from the Trust. At the request of
the Trustees or duly authorized agent of the Trust located outside the United
States, The Bank shall assist generally in the preparation of reports to holders
of interest in the Trust, to the Securities and Exchange Commission, including
Form N-SAR, and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Trust's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Trust, and the Bank shall keep confidential
any information obtained by reason of this Agreement.
5. OPINION OF TRUST'S INDEPENDENT PUBLIC ACCOUNTANTS
The Custodian shall take all reasonable action, as the Trust may from time
to time request, to enable the Trust to obtain from year to year favorable
opinions from the Trust's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Trust's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.
6. COMPENSATION AND EXPENSES OF BANK
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Trust and the
Bank. The Bank shall be entitled to receive from the Trust on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
7. RESPONSIBILITY OF BANK
So long as and to the extent that it is in the exercise of reasonable care,
the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.
<PAGE>
The Bank as Custodian and Agent shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Trust) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth
in Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a non-U.S.
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a non-U.S. banking institution,
a non-U.S. securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Trust to maintain
custody of any securities or cash of the Trust in other than the U.S. and Canada
including, but not limited to, losses resulting from governmental actions and
restrictions, nationalization, expropriation, currency restrictions, acts of
war, civil war or terrorism, insurrection, revolution, military or usurped
powers, nuclear fission, fusion or radiation, earthquake, storm or other
disturbance of nature or acts of God.
If the Trust requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Trust being liable for the payment of money or incurring
liability of some other form, the Trust, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.
<PAGE>
8. PERSONS HAVING ACCESS TO ASSETS OF THE TRUST
(i) No trustee, officer, employee or agent of the Trust shall have
physical access to the assets of the Trust held by the Custodian or be
authorized or permitted to withdraw any investments of the Trust, nor shall
the Custodian deliver any assets of the Trust to any such person. No
officer or director, employee or agent of the Custodian who holds any
similar position with the Trust or the investment adviser or the
administrator of the Trust shall have access to the assets of the Trust.
(ii) Access to assets of the Trust held hereunder shall only be
available to duly authorized officers, employees, representatives or agents
of the Custodian or other persons or entities for whose actions the
Custodian shall be responsible to the extent permitted hereunder, or to the
Trust's independent public accountants in connection with their auditing
duties performed on behalf of the Trust.
(iii) Nothing in this Section 8 shall prohibit any officer, employee
or agent of the Trust or of the investment adviser of the Trust from giving
instructions to the Custodian or executing a certificate so long as it does
not result in delivery of or access to assets of the Trust prohibited by
paragraph (i) of this Section 8.
9. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated by either party after August 31, 2000
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; PROVIDED, that the Trust may at any time by
action of its Board, (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian in the event the
Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Trust, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Trust shall pay
to the Custodian such compensation as may be due as of the date of such
termination (and shall likewise reimburse the Custodian for its costs, expenses
and disbursements).
<PAGE>
This Agreement may be amended at any time by the written agreement of the
parties hereto. If a majority of the non-interested trustees of any of the
Trusts determines that the performance of the Custodian has been unsatisfactory
or adverse to the interests of Trust holders of any Trust or Trusts or that the
terms of the Agreement are no longer consistent with publicly available industry
standards, then the Trust or Trusts shall give written notice to the Custodian
of such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Trusts. If the conditions of the preceding sentence are not met then the Trust
or Trusts may terminate this Agreement on sixty (60) days written notice.
The Board of the Trust shall, forthwith, upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian, a bank or trust
company having the qualifications required by the Investment Company Act of 1940
and the Rules thereunder. The Bank, as Custodian, Agent or otherwise, shall,
upon termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Trust
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Trust to the Trust but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Trust held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.
10. INTERPRETIVE AND ADDITIONAL PROVISIONS
In connection with the operation of this Agreement, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions shall be in a writing signed
by both parties and shall be annexed hereto, PROVIDED that no such interpretive
or additional provisions shall contravene any applicable U.S. federal or state
regulations or any provision of the governing instruments of the Trust. No
interpretive or additional provisions made as provided in the preceding sentence
shall be deemed to be an amendment of this Agreement.
<PAGE>
11. NOTICES
Notices and other writings delivered or mailed postage prepaid to the Trust
addressed to IBT Trust Company (Cayman) Ltd., The Bank of Nova Scotia Building,
George Town, Grand Cayman, Cayman Islands, British West Indies, or to such other
address as the Trust may have designated to the Bank, in writing with a copy to
Eaton Vance Management at 24 Federal Street, Boston, Massachusetts 02110, or to
Investors Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110
with a copy to Eaton Vance Management at 24 Federal Street, Boston,
Massachusetts 02110, shall be deemed to have been properly delivered or given
hereunder to the respective addressees.
12. MASSACHUSETTS LAW TO APPLY
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.
The Custodian expressly acknowledges the provision in the Declaration of
Trust of the Trust (Section 5.2 and 5.6) limiting the personal liability of the
Trustees and officers of the Trust, and the Custodian hereby agrees that it
shall have recourse to the Trust for payment of claims or obligations as between
the Trust and the Custodian arising out of this Agreement and shall not seek
satisfaction from any Trustee or officer of the Trust.
13. ADOPTION OF THE AGREEMENT BY THE TRUST
The Trust represents that its Board has approved this Agreement and has
duly authorized the Trust to adopt this Agreement, such adoption to be evidenced
by a letter agreement between the Trust and the Bank reflecting such adoption,
which letter agreement shall be dated and signed by a duly authorized officer of
the Trust and duly authorized officer of the Bank. This Agreement shall be
deemed to be duly executed and delivered by each of the parties in its name and
behalf by its duly authorized officer as of the date of such letter agreement,
and this Agreement shall be deemed to supersede and terminate, as of the date of
such letter agreement, all prior agreements between the Trust and the Bank
relating to the custody of the Trust's assets.
* * *
<PAGE>
SCHEDULE A
TO CUSTODIAN AGREEMENT
BETWEEN
HIGH INCOME PORTFOLIO et al
AND
INVESTORS BANK & TRUST COMPANY
PARTIES TO THE AGREEMENT
High Income Portfolio
Senior Debt Portfolio
Worldwide Developing Resources Portfolio
<PAGE>
HIGH INCOME PORTFOLIO
SENIOR DEBT PORTFOLIO
WORLDWIDE DEVELOPING RESOURCES PORTFOLIO
February 14, 1997
Each Portfolio hereby adopts and agrees to become a party to the attached
Custodian Agreement with Investors Bank & Trust Company.
HIGH INCOME PORTFOLIO
By: /s/ James B. Hawkes
----------------------------------
James B. Hawkes
Vice President
signed in Hamilton, Bermuda
SENIOR DEBT PORTFOLIO
By: /s/ James B. Hawkes
----------------------------------
James B. Hawkes
President
signed in Hamilton, Bermuda
WORLDWIDE DEVELOPING RESOURCES PORTFOLIO
By: /s/ James B. Hawkes
----------------------------------
James B. Hawkes
President
signed in Hamilton, Bermuda
Accepted and agreed to:
INVESTORS BANK & TRUST COMPANY
By: /s/ Michael F. Rogers
-----------------------------
Title: Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 6
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 2897294
<INVESTMENTS-AT-VALUE> 2891420
<RECEIVABLES> 18371
<ASSETS-OTHER> 108766
<OTHER-ITEMS-ASSETS> 962
<TOTAL-ASSETS> 3019520
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9445
<TOTAL-LIABILITIES> 9445
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 3015948
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 3010074
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 190545
<OTHER-INCOME> 5007
<EXPENSES-NET> 24305
<NET-INVESTMENT-INCOME> 171247
<REALIZED-GAINS-CURRENT> (2510)
<APPREC-INCREASE-CURRENT> (1388)
<NET-CHANGE-FROM-OPS> 167349
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1388736
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 21644
<INTEREST-EXPENSE> 1003
<GROSS-EXPENSE> 24305
<AVERAGE-NET-ASSETS> 2387807
<PER-SHARE-NAV-BEGIN> 0
<PER-SHARE-NII> 0
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 0
<EXPENSE-RATIO> 1.02
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
