<SEC-DOCUMENT>0000950135-06-006428.txt : 20120827
<SEC-HEADER>0000950135-06-006428.hdr.sgml : 20120827

<ACCEPTANCE-DATETIME>20061024120627

<PRIVATE-TO-PUBLIC>

ACCESSION NUMBER:		0000950135-06-006428

CONFORMED SUBMISSION TYPE:	N-2/A

PUBLIC DOCUMENT COUNT:		15

FILED AS OF DATE:		20061024

DATE AS OF CHANGE:		20070206


FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			Eaton Vance Tax-Managed Diversified Equity Income Fund

		CENTRAL INDEX KEY:			0001340736

		IRS NUMBER:				000000000



	FILING VALUES:

		FORM TYPE:		N-2/A

		SEC ACT:		1933 Act

		SEC FILE NUMBER:	333-129692

		FILM NUMBER:		061159474



	BUSINESS ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110

		BUSINESS PHONE:		617-482-8260



	MAIL ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110



	FORMER COMPANY:	

		FORMER CONFORMED NAME:	Eaton Vance Tax-Managed Premium & Dividend Income Fund

		DATE OF NAME CHANGE:	20051110



	FORMER COMPANY:	

		FORMER CONFORMED NAME:	Eaton Vance Tax-Managed Premium & Income Opportunities Fund

		DATE OF NAME CHANGE:	20051005




FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			Eaton Vance Tax-Managed Diversified Equity Income Fund

		CENTRAL INDEX KEY:			0001340736

		IRS NUMBER:				000000000



	FILING VALUES:

		FORM TYPE:		N-2/A

		SEC ACT:		1940 Act

		SEC FILE NUMBER:	811-21832

		FILM NUMBER:		061159475



	BUSINESS ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110

		BUSINESS PHONE:		617-482-8260



	MAIL ADDRESS:	

		STREET 1:		TWO INTERNATIONAL PLACE

		CITY:			BOSTON

		STATE:			MA

		ZIP:			02110



	FORMER COMPANY:	

		FORMER CONFORMED NAME:	Eaton Vance Tax-Managed Premium & Dividend Income Fund

		DATE OF NAME CHANGE:	20051110



	FORMER COMPANY:	

		FORMER CONFORMED NAME:	Eaton Vance Tax-Managed Premium & Income Opportunities Fund

		DATE OF NAME CHANGE:	20051005



</SEC-HEADER>

<DOCUMENT>
<TYPE>N-2/A
<SEQUENCE>1
<FILENAME>b62570a1nv2za.txt
<DESCRIPTION>EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND
<TEXT>
<PAGE>


    As filed with the Securities and Exchange Commission on October 24, 2006
                                          1933 Act File No. 333-129692
                                          1940 Act File No. 811-21832

                     U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM N-2

                             REGISTRATION STATEMENT
                    UNDER THE SECURITIES ACT OF 1933 [ ]
                        PRE-EFFECTIVE AMENDMENT NO. 1 [X]
                      POST-EFFECTIVE AMENDMENT NO. [ ]

                                     AND/OR

                        REGISTRATION STATEMENT UNDER THE
                     INVESTMENT COMPANY ACT OF 1940 [ ]
                               Amendment No. 1 [X]
                        (CHECK APPROPRIATE BOX OR BOXES)


             EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

     THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
               (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

        REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (617) 482-8260

                                 ALAN R. DYNNER
     THE EATON VANCE BUILDING, 255 STATE STREET, BOSTON, MASSACHUSETTS 02109
                     NAME AND ADDRESS (OF AGENT FOR SERVICE)

                          COPIES OF COMMUNICATIONS TO:

        MARK P. GOSHKO, ESQ.                           SARAH E. COGAN, ESQ.
KIRKPATRICK & LOCKHART NICHOLSON GRAHAM LLP     SIMPSON THACHER & BARTLETT LLP
           75 STATE STREET                            425 LEXINGTON AVENUE
      BOSTON, MASSACHUSETTS 02109                     NEW YORK, NY 10007

         APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable
after the effective date of this Registration Statement.

         If any of the securities being registered on this form are to be
offered on a delayed or continuous basis in reliance on Rule 415 under the
Securities Act of 1933, other than securities offered in connection with a
dividend reinvestment plan, check the following box.[ ]

         It is proposed that this filing will become effective (check
appropriate box):
        [ ] when declared effective pursuant to Section 8(c)

<PAGE>

               CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

<TABLE>
<CAPTION>
                                                                             PROPOSED           PROPOSED
                                                                             MAXIMUM            MAXIMUM
                                                         AMOUNT BEING        OFFERING           AGGREGATE           AMOUNT OF
                                                          REGISTERED       PRICE PER UNIT    OFFERING PRICE      REGISTRATION FEES
        TITLE OF SECURITIES BEING REGISTERED                 (1)               (1)                (1)               (1)(2)(3)
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>               <C>               <C>                 <C>
Common Shares of Beneficial Interest, $0.01 par value      50,000              $20.00          $1,000,000             $117.70
</TABLE>

(1)      Estimated solely for purposes of calculating the registration fee,
         pursuant to Rule 457(o) under the Securities Act of 1933.

(2)      Includes Shares that may be offered to the Underwriters pursuant to an
         option to cover over-allotments.

(3)      A registration fee of $117.70 was previously paid in connection with
         the initial filing filed on November 15, 2005.

                             ---------------------

         THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATES AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>

The information in this Prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.

    PRELIMINARY PROSPECTUS         SUBJECT TO COMPLETION, DATED OCTOBER 24, 2006


(EATON VANCE LOGO)

                      SHARES

           EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND

           COMMON SHARES
           $20.00 PER SHARE


--------------------------------------------------------------------------------

    INVESTMENT OBJECTIVES.  Eaton Vance Tax-Managed Diversified Equity Income
Fund (the "Fund") is a newly organized, diversified, closed-end management
investment company. The Fund's primary investment objective is to provide
current income and gains, with a secondary objective of capital appreciation. In
pursuing its investment objectives, the Fund will evaluate returns on an after-
tax basis, seeking to minimize and defer shareholder federal income taxes.

    PORTFOLIO MANAGEMENT STRATEGIES.  Under normal market conditions, the Fund's
investment program will consist primarily of owning a diversified portfolio of
common stocks. The Fund will seek to earn high levels of tax-advantaged income
and gains by (1) emphasizing investments in stocks that pay dividends that
qualify for favorable federal income tax treatment and (2) writing (selling)
stock index call options with respect to a portion of its common stock portfolio
value. (continued on inside front cover)

    This Prospectus sets forth concisely information you should know before
investing in the shares of the Fund.

    BECAUSE THE FUND IS NEWLY ORGANIZED, ITS COMMON SHARES ("COMMON SHARES")
HAVE NO HISTORY OF PUBLIC TRADING. THE SHARES OF CLOSED-END INVESTMENT COMPANIES
OFTEN TRADE AT A DISCOUNT FROM THEIR NET ASSET VALUE, WHICH MAY INCREASE
INVESTORS' RISK OF LOSS.

--------------------------------------------------------------------------------
INVESTING IN THE FUND'S COMMON SHARES INVOLVES CERTAIN RISKS. SEE "INVESTMENT
OBJECTIVES, POLICIES AND RISKS -- RISK CONSIDERATIONS" BEGINNING ON PAGE 36.

    Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined this
Prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.


<Table>
<Caption>
                                                                        PER SHARE   TOTAL(1)
                                                                        ---------   --------

<S>                                                                     <C>         <C>

Public Offering Price.................................................    $20.00        $
Sales Load(2).........................................................    $ 0.90        $
Estimated Offering Expenses(3)........................................    $ 0.04        $
Proceeds to the Fund..................................................    $19.06        $
</Table>



  (1) The underwriters may also purchase up to an additional            Common
      Shares at the public offering price, less the sales load, within 45 days
      from the date of this Prospectus to cover over-allotments, if any. If such
      option is exercised in full, the total public offering price, sales load,
      estimated offering expenses and proceeds to the Fund will be $     ,
      $     , $     , and $     , respectively.

  (2) Eaton Vance has agreed to pay from its own assets a structuring fee to
      each of Wachovia Capital Markets, LLC, Citigroup Global Markets Inc. and
      UBS Securities LLC. Eaton Vance (not the Fund) may pay certain qualifying
      underwriters a marketing and structuring fee, additional compensation, or
      a sales incentive fee in connection with the offering. See "Underwriting."
      The total compensation received by the underwriters will not exceed 9.0%
      of the total public offering price of the Common Shares offered hereby.

  (3) In addition to the sales load, the Fund will pay offering costs of up to
      $0.04 per share, estimated to total $     , which will reduce the
      "Proceeds to the Fund" (above). Eaton Vance or an affiliate has agreed to
      pay the amount by which the aggregate of all of the Fund's offering costs
      (other than sales loads) exceeds $0.04 per share. Eaton Vance or an
      affiliate has agreed to reimburse all organizational costs.

The underwriters expect to deliver the Common Shares to purchasers on or
                             about           , 2006


--------------------------------------------------------------------------------

 WACHOVIA SECURITIES
                       CITIGROUP
                                             UBS INVESTMENT BANK
                                                                   A.G. EDWARDS

                                  -------------
ROBERT W. BAIRD & CO.                             BANC OF AMERICA SECURITIES LLC
BB&T CAPITAL MARKETS                                         FERRIS, BAKER WATTS
                                                           INCORPORATED
H&R BLOCK FINANCIAL ADVISORS, INC.             J.J.B. HILLIARD, W.L. LYONS, INC.
JANNEY MONTGOMERY SCOTT LLC                              KEYBANC CAPITAL MARKETS
MORGAN KEEGAN & COMPANY, INC.                                  OPPENHEIMER & CO.
RAYMOND JAMES                                                RBC CAPITAL MARKETS
RYAN BECK & CO.                                                    STEPHENS INC.
STIFEL NICOLAUS                                       SUNTRUST ROBINSON HUMPHREY
WEDBUSH MORGAN SECURITIES INC.                            WELLS FARGO SECURITIES

                The date of this prospectus is November   , 2006

<PAGE>

(continued from previous page)

    Call options on broad-based stock indices generally qualify for treatment as
"section 1256 contracts," as defined in the Internal Revenue Code of 1986, as
amended, on which capital gains and losses are generally treated as 60% long-
term and 40% short-term, regardless of holding period.

    INVESTMENT ADVISER AND SUB-ADVISER.  The Fund's investment adviser is Eaton
Vance Management ("Eaton Vance" or the "Adviser"). As of September 30, 2006,
Eaton Vance and its subsidiaries managed approximately $124.1 billion on behalf
of funds, institutional clients and individuals, including approximately $74.9
billion in equity assets. Eaton Vance has engaged Rampart Investment Management
Company, Inc. ("Rampart" or the "Sub-Adviser") as a sub-adviser of the Fund.
Rampart, founded in 1983, specializes in options management and trading for
institutional, high net worth and investment company clients. Rampart managed
approximately $6.6 billion in assets as of September 30, 2006. Eaton Vance will
be responsible for the Fund's overall investment program, structuring and
managing the Fund's common stock portfolio, including dividend capture trading,
tax-loss harvesting and other tax-management techniques, providing consultation
to the Sub-Adviser and supervising the performance of the Sub-Adviser. Rampart
will be responsible for providing advice on and execution of the Fund's options
strategy.

    PORTFOLIO CONTENTS.  Under normal market conditions, the Fund will invest at
least 80% of its total assets in a combination of (1) dividend-paying common
stocks and (2) common stocks the value of which is subject to covered written
index call options. The Fund will invest primarily in common stocks of United
States issuers, but may invest up to 40% of its assets in common stocks of
foreign issuers, including up to 5% of its total assets in securities of issuers
located in emerging markets. The Fund may not invest 25% or more of its total
assets in the securities of issuers in any single industry. The Fund will
emphasize investments in stocks that pay dividends that qualify for federal
income taxation at rates applicable to long-term capital gains, and will seek to
enhance the level of tax-advantaged dividend income it receives by engaging in
dividend capture trading. In a dividend capture trade, the Fund sells a stock on
or shortly after the stock's ex-dividend date and uses the sale proceeds to
purchase one or more other stocks that are expected to pay dividends before the
next dividend payment on the stock being sold. Through this practice, the Fund
may receive more dividend payments over a given time period than if it held a
single stock. By complying with applicable holding period and other requirements
while engaging in dividend capture trading, the Fund may enhance the level of
tax-advantaged dividend income it receives. The use of dividend capture trading
strategies will expose the Fund to increased trading costs and potentially
higher short-term gain or loss.

    The Fund intends to write call options on one or more broad-based stock
indices that the Adviser believes collectively approximate the characteristics
of its common stock portfolio (or that portion of its portfolio against which
options are written) and that present attractive opportunities to earn options
premiums. The Fund intends initially to write call options on the S&P 500
Composite Stock Price Index(R), and may also initially write call options on
other domestic and foreign stock indices. Over time, the indices on which the
Fund writes call options may vary as a result of changes in the availability and
liquidity of various listed index options, changes in stock portfolio holdings,
the Adviser's evaluation of equity market conditions and other factors. Writing
index call options involves a tradeoff between the option premiums received and
reduced participation in potential future stock price appreciation. Due to tax
considerations, the Fund intends to limit the overlap between its stock holdings
(and any subset thereof) and each index on which it has outstanding options
positions to less than 70% on an ongoing basis. The Fund's stock holdings will
normally include stocks not included in the indices on which it writes call
options.

    THE FUND SEEKS TO GENERATE CURRENT EARNINGS FROM DIVIDENDS ON STOCKS HELD
AND FROM OPTION PREMIUMS.  The Fund intends to employ a variety of tax-
management techniques and strategies as described herein, seeking in part to
minimize the Fund's ordinary income (other than qualified dividend income) and
net realized short-term capital gains in excess of net realized long-term
capital losses and Fund expenses. To the extent that the Fund's ordinary income
(other than qualified dividend income) and net realized short-term gains over
net realized long-term losses exceed Fund expenses, dividends with respect to
such amounts when paid to Common Shareholders (as defined below) will be taxable
as ordinary income.

    EXCHANGE LISTING.  The Fund's Common Shares have been approved for listing
on the New York Stock Exchange under the symbol "ETY" subject to notice of
issuance. Because the Fund is newly organized, its Common Shares have no history
of public trading. The shares of closed-end management investment companies
frequently trade at a discount from their net asset value. The returns earned by
holders of the Fund's Common Shares ("Common Shareholders") who purchase their
shares in this offering and sell their shares below net asset value will be
reduced.

    Eaton Vance believes that the Fund may be appropriate for investors seeking
an investment vehicle that combines regular distributions and the potential for
capital appreciation. The Fund may be particularly well suited for taxpaying
investors who can benefit from the minimization and deferral of federal income
taxes that the Fund seeks to provide.

    The Fund's net asset value and distribution rate will vary and may be
affected by numerous factors, including changes in stock prices, dividend rates,
dividend capture trading activity, option premiums and other factors. An
investment in the Fund may not be appropriate for all investors. There is no
assurance that the Fund will achieve its investment objectives.

    Please read and retain this Prospectus for future reference. A Statement of
Additional Information dated            2006 has been filed with the Securities
and Exchange Commission and can be obtained without charge by calling 1-800-225-
6265 or by writing to the Fund. A table of contents to the Statement of
Additional Information is located at page 60 of this Prospectus. This Prospectus
incorporates by reference the entire Statement of Additional

<PAGE>

Information. The Statement of Additional Information is available along with
shareholder reports and other Fund-related materials at the Securities and
Exchange Commission's public reference room in Washington, DC (call 1-202-942-
8090 for information on the operation of the reference room), from the EDGAR
database on the Securities and Exchange Commission's internet site
(http://www.sec.gov), upon payment of copying fees by writing to the Securities
and Exchange Commission's public reference section, Washington, DC 20549-0102;
or by electronic mail at publicinfo@sec.gov. The Fund's address is The Eaton
Vance Building, 255 State Street, Boston, Massachusetts 02109 and its telephone
number is 1-800-225-6265.

    The Fund's shares do not represent a deposit or obligation of, and are not
guaranteed or endorsed by, any bank or other insured depository institution, and
are not federally insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other government agency.

    The Fund is not sponsored, endorsed, sold or promoted by any index sponsor.
No index sponsor has passed on the legality or suitability of, or the accuracy
or adequacy of, descriptions and disclosures relating to the Fund. No index
sponsor has made any representation or warranty, express or implied, to the
Common Shareholders of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly,
or the ability of any index to track general stock market performance. The
indices are determined, composed and calculated by the respective index sponsors
without regard to the Fund or its use of the indices for option writing. The
index sponsors have no obligation to take the needs of the Fund or its Common
Shareholders into consideration in determining, composing or calculating the
indices. No index sponsor is responsible for or has participated in the
determination of the timing of, price of, or number of Common Shares of the Fund
to be issued. No index sponsor has any liability in connection with the
management, administration, marketing or trading of the Fund.

    THE INDEX SPONSORS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE INDICES OR ANY DATA INCLUDED THEREIN. THE INDEX SPONSORS MAKE
NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, THE
COMMON SHAREHOLDERS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDICES IN
THE FUND'S OPTIONS WRITING PROGRAM. IN PUBLISHING THE INDICES, THE INDEX
SPONSORS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE INDICES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL AN INDEX SPONSOR HAVE ANY LIABILITY FOR ANY LOST
PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES,
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

<PAGE>

    You should rely only on the information contained or incorporated by
reference in this Prospectus. The Fund has not, and the underwriters have not,
authorized any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not rely on
it. The Fund is not, and the underwriters are not, making an offer to sell these
securities in any jurisdiction where the offer or sale is not permitted. You
should not assume that the information provided by this Prospectus is accurate
as of any date other than the date on the front of this Prospectus. The Fund's
business, financial condition and results of operations may have changed since
the date of this Prospectus.

                                  -------------

                                TABLE OF CONTENTS


<Table>
<Caption>
                                                                          PAGE
                                                                          ----

<S>                                                                       <C>

Prospectus Summary.....................................................     1
Summary of Fund Expenses...............................................    22
The Fund...............................................................    23
Use of Proceeds........................................................    23
Investment Objectives, Policies and Risks..............................    23
Management of the Fund.................................................    42
Distributions..........................................................    44
Federal Income Tax Matters.............................................    45
Dividend Reinvestment Plan.............................................    49
Description of Capital Structure.......................................    50
Underwriting...........................................................    56
Custodian and Transfer Agent...........................................    59
Legal Opinions.........................................................    59
Reports to Shareholders................................................    59
Independent Registered Public Accounting Firm..........................    59
Additional Information.................................................    59
Table of Contents for the Statement of Additional Information..........    60
The Fund's Privacy Policy..............................................    61
</Table>



--------------------------------------------------------------------------------

    Until           , 2006 (25 days after the date of this Prospectus), all
dealers that buy, sell or trade the Common Shares, whether or not participating
in this offering, may be required to deliver a Prospectus. This requirement is
in addition to the dealers' obligation to deliver a Prospectus when acting as
underwriters and with respect to their unsold allotments or subscriptions.

<PAGE>

                               PROSPECTUS SUMMARY

    This is only a summary. This summary may not contain all of the information
that you should consider before investing in the Eaton Vance Tax-Managed
Diversified Equity Income Fund's common shares ("Common Shares"). You should
review the more detailed information contained in this Prospectus and in the
Statement of Additional Information, especially the information set forth under
the heading "Investment Objectives and Policies" and "Risk Factors."

THE FUND.................  Eaton Vance Tax-Managed Diversified Equity Income
                           Fund (the "Fund") is a newly organized, diversified,
                           closed-end management investment company. The Fund
                           seeks to provide current income and gains, with a
                           secondary objective of capital appreciation.
                           Investments are based on Eaton Vance Management's
                           ("Eaton Vance" or the "Adviser") and Rampart
                           Investment Management Company, Inc.'s ("Rampart" or
                           the "Sub-Adviser") internal research and management.
                           An investment in the Fund may not be appropriate for
                           all investors.

THE OFFERING.............  The Fund is offering            Common Shares of
                           beneficial interest, par value $.01 per share,
                           through a group of underwriters (the "Underwriters")
                           led by Wachovia Capital Markets, LLC, Citigroup
                           Global Markets Inc., UBS Securities LLC and A.G.
                           Edwards & Sons, Inc. The Common Shares of beneficial
                           interest are called "Common Shares." The Underwriters
                           have been granted an option by the Fund to purchase
                           up to an additional            Common Shares solely
                           to cover orders in excess of            Common
                           Shares. The initial public offering price is $20.00
                           per Common Share. The minimum purchase in this
                           offering is 100 Common Shares ($2,000). See
                           "Underwriting." Eaton Vance or an affiliate has
                           agreed to (i) reimburse all organizational costs of
                           the Fund and (ii) pay all offering costs (other than
                           sales load) that exceed $.04 per Common Share.

INVESTMENT OBJECTIVES AND
STRATEGIES...............  The Fund's primary investment objective is to provide
                           current income and gains, with a secondary objective
                           of capital appreciation. In pursuing its investment
                           objectives, the Fund will evaluate returns on an
                           after-tax basis, seeking to minimize and defer
                           shareholder federal income taxes. There can be no
                           assurance that the Fund will achieve its investment
                           objectives.

                           Under normal market conditions, the Fund's investment
                           program will consist primarily of owning a
                           diversified portfolio of common stocks. The Fund will
                           seek to earn high levels of tax-advantaged income and
                           gains by (1) emphasizing investments in stocks that
                           pay dividends that qualify for favorable federal
                           income tax treatment and (2) writing (selling) stock
                           index call options with respect to a portion of its
                           common stock portfolio value. Call options on broad-
                           based stock indices generally will qualify for
                           treatment as "section 1256 contracts" as defined in
                           the Internal Revenue Code of 1986, as amended (the
                           "Code"), on which capital gains and losses are
                           generally treated as 60% long-term and 40% short-
                           term, regardless of holding period.

                           Under normal market conditions, the Fund will invest
                           at least 80% of its total assets in a combination of
                           (1) dividend-paying common stocks and (2) common
                           stocks the value of which is


                                        1

<PAGE>

                           subject to covered written index call options. The
                           Fund will emphasize investments in stocks that pay
                           dividends that qualify for federal income taxation at
                           rates applicable to long-term capital gains, and will
                           seek to enhance the level of tax-advantaged dividend
                           income it receives by engaging in dividend capture
                           trading. In a dividend capture trade, the Fund sells
                           a stock on or shortly after the stock's ex-dividend
                           date and uses the sale proceeds to purchase one or
                           more other stocks that are expected to pay dividends
                           before the next dividend payment on the stock being
                           sold. Through this practice, the Fund may receive
                           more dividend payments over a given time period than
                           if it held a single stock. By complying with
                           applicable holding period and other requirements
                           while engaging in dividend capture trading, the Fund
                           may enhance the level of tax-advantaged dividend
                           income it receives. The use of dividend capture
                           trading strategies will expose the Fund to increased
                           trading costs and potentially higher short-term gain
                           or loss.

                           The Fund will invest primarily in common stocks of
                           United States issuers. The Fund may invest up to 40%
                           of its total assets in securities of foreign issuers,
                           including securities evidenced by American Depositary
                           Receipts ("ADRs"), Global Depositary Receipts
                           ("GDRs") and European Depositary Receipts ("EDRs").
                           The Fund may invest up to 5% of its total assets in
                           securities of emerging market issuers. The Fund
                           expects that its assets will normally be invested
                           across a broad range of industries and market
                           sectors. The Fund may not invest 25% or more of its
                           total assets in the securities of issuers in any
                           single industry. The Fund may invest a portion of its
                           assets in stocks of mid-capitalization companies.
                           Eaton Vance generally considers mid-capitalization
                           companies to be those companies having market
                           capitalizations within the range of capitalizations
                           for the S&P MidCap 400 Index (the "S&P MidCap 400").
                           As of September 30, 2006, the median market
                           capitalization of companies in the S&P MidCap 400 was
                           approximately $2.55 billion.

                           The Fund intends to write call options on one or more
                           broad-based stock indices that the Adviser believes
                           collectively approximate the characteristics of its
                           common stock portfolio (or that portion of its
                           portfolio against which options are written) and that
                           present attractive opportunities to earn options
                           premiums. The Fund intends initially to write call
                           options on the S&P 500 Composite Stock Price Index(R)
                           (the "S&P 500"), and may also initially write call
                           options on other domestic and foreign stock indices.
                           Over time, the indices on which the Fund writes call
                           options may vary as a result of changes in the
                           availability and liquidity of various listed index
                           options, changes in stock portfolio holdings, the
                           Adviser's evaluation of equity market conditions and
                           other factors. Writing index call options involves a
                           tradeoff between the option premiums received and
                           reduced participation in potential future stock price
                           appreciation. Due to tax considerations, the Fund
                           intends to limit the overlap between its stock
                           holdings (and any subset thereof) and each index on
                           which it has outstanding options positions to less
                           than 70% on an ongoing


                                        2

<PAGE>

                           basis. The Fund's stock holdings will normally
                           include stocks not included in the indices on which
                           it writes call options.

                           The Fund generally intends to sell index call options
                           that are exchange-listed and "European style,"
                           meaning that the options may be exercised only on the
                           expiration date of the option. Index options differ
                           from options on individual securities in that index
                           options (i) typically are settled in cash rather than
                           by delivery of securities and (ii) reflect price
                           fluctuations in a group of securities or segments of
                           the securities market rather than price fluctuations
                           in a single security.

                           As the seller of index call options, the Fund will
                           receive cash (the premiums) from option purchasers.
                           The purchaser of an index call option has the right
                           to any appreciation in the value of the applicable
                           index over a fixed price (the exercise price) as of a
                           specified date in the future (the option valuation
                           date). Generally, the Fund intends to sell call
                           options that are slightly "out-of-the-money" (i.e.,
                           the exercise price generally will be slightly above
                           the current level of the applicable index when the
                           option is sold). The Fund may also sell index options
                           that are more substantially "out-of-the-money." Such
                           options that are more substantially "out-of-the-
                           money" provide greater potential for the Fund to
                           realize capital appreciation, but generally would pay
                           a lower premium than options that are slightly "out-
                           of-the-money." In writing index options, the Fund
                           will, in effect, sell the potential appreciation in
                           the value of the applicable index above the exercise
                           price in exchange for the option premium received.
                           If, at expiration, an index call option sold by the
                           Fund is exercised, the Fund will pay the purchaser
                           the difference between the cash value of the
                           applicable index and the exercise price of the
                           option. The premium, the exercise price and the
                           market value of the applicable index will determine
                           the gain or loss realized by the Fund as the seller
                           of the index call option.

                           The Fund's policy that, under normal market
                           conditions, the Fund will invest at least 80% of its
                           total assets in a combination of (1) dividend-paying
                           common stocks and (2) common stocks the value of
                           which is subject to covered written index call
                           options is a non-fundamental policy that may be
                           changed by the Fund's Board of Trustees (the "Board")
                           without Common Shareholder approval following the
                           provision of 60 days' prior written notice to Common
                           Shareholders.

                           In implementing the Fund's investment strategy, the
                           Adviser and Sub-Adviser intend to employ a variety of
                           techniques and strategies designed to minimize and
                           defer the federal income taxes incurred by Common
                           Shareholders in connection with their investment in
                           the Fund as described below.

                           The S&P 500 is an unmanaged index of 500 stocks
                           maintained and published by Standard & Poor's that is
                           market-capitalization weighted and generally
                           representative of the performance of larger stocks
                           traded in the United States.



                                        3

<PAGE>

                           The Fund is not sponsored, endorsed, sold or promoted
                           by any index sponsor. No index sponsor has passed on
                           the legality or suitability of, or the accuracy or
                           adequacy of descriptions and disclosures relating to
                           the Fund. No index sponsor has made any
                           representation or warranty, express or implied, to
                           the Common Shareholders of the Fund or any member of
                           the public regarding the advisability of investing in
                           securities generally or in the Fund particularly, or
                           the ability of any index to track general stock
                           market performance. The indices are determined,
                           composed and calculated by the respective index
                           sponsors without regard to the Fund or its use of the
                           indices for option writing. The index sponsors have
                           no obligation to take the needs of the Fund or its
                           Common Shareholders into consideration in
                           determining, composing or calculating the indices. No
                           index sponsor is responsible for or has participated
                           in the determination of the timing of, price of, or
                           number of Common Shares of the Fund to be issued. No
                           index sponsor has any liability in connection with
                           the management, administration, marketing or trading
                           of the Fund.

                           THE INDEX SPONSORS DO NOT GUARANTEE THE ACCURACY
                           AND/OR UNINTERRUPTED CALCULATION OF THE INDICES OR
                           ANY DATA INCLUDED THEREIN. THE INDEX SPONSORS MAKE NO
                           WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE
                           OBTAINED BY THE FUND, THE COMMON SHAREHOLDERS OR ANY
                           OTHER PERSON OR ENTITY FROM THE USE OF THE INDICES IN
                           THE FUND'S OPTIONS WRITING PROGRAM. IN PUBLISHING THE
                           INDICES, THE INDEX SPONSORS MAKE NO EXPRESS OR
                           IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL
                           WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
                           PARTICULAR PURPOSE OR USE WITH RESPECT TO THE INDICES
                           OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF
                           THE FOREGOING, IN NO EVENT SHALL AN INDEX SPONSOR
                           HAVE ANY LIABILITY FOR ANY LOST PROFITS OR SPECIAL,
                           INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL
                           DAMAGES, EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH
                           DAMAGES.

INVESTMENT SELECTION
STRATEGIES...............  Eaton Vance will be responsible for the Fund's
                           overall investment program, structuring and managing
                           the Fund's common stock portfolio, including dividend
                           capture trading, tax-loss harvesting and other tax-
                           management techniques, providing consultation to the
                           Sub-Adviser and supervising the performance of the
                           Sub-Adviser. The Fund's investments will be actively
                           managed, and securities may be bought or sold on a
                           daily basis. Rampart will be responsible for
                           providing advice on and execution of the Fund's
                           options strategy.

                           A team of Eaton Vance investment professionals is
                           responsible for the overall management of the Fund's
                           investments, including decisions about asset
                           allocation and securities selection. The portfolio
                           managers utilize information provided by, and the
                           expertise of, the Adviser's research staff in making
                           investment decisions. Investment decisions are made
                           primarily on the basis of fundamental research, which
                           involves consideration of the various company-
                           specific and general business, economic and market
                           factors that may influence the future performance of
                           individual companies and equity investments therein.
                           The Adviser will also


                                        4

<PAGE>

                           consider a variety of other factors in constructing
                           and maintaining the Fund's stock portfolio,
                           including, but not limited to, stock dividend yields
                           and payment schedules, overlap between the Fund's
                           stock holdings and the indices on which it has
                           outstanding options positions, realization of tax
                           loss harvesting opportunities and other tax
                           management considerations.

                           The Adviser believes that a strategy of owning a
                           portfolio of common stocks and selling covered call
                           options (a "buy-write strategy") with respect to a
                           portion thereof can provide current income and gains
                           and attractive risk-adjusted returns. The Fund will
                           sell only "covered" call options. An index call
                           option is considered covered if the Fund maintains
                           with its custodian assets determined to be liquid (in
                           accordance with procedures established by the Board)
                           in an amount at least equal to the contract value of
                           the index. An index call option also is covered if
                           the Fund holds a call on the same index as the call
                           written where the exercise price of the call held is
                           (i) equal to or less than the exercise price of the
                           call written, or (ii) greater than the exercise price
                           of the call written, provided the difference is
                           maintained by the Fund in segregated assets
                           determined to be liquid (in accordance with
                           procedures established by the Board). Compared to
                           selling call options on individual stocks, the
                           Adviser believes that selling index call options can
                           achieve better tax and transactional efficiency
                           because listed options on broad-based securities
                           indices generally qualify as "section 1256 contracts"
                           under the Code subject to specialized tax treatment
                           and because the markets for index options are
                           generally deeper and more liquid than options on
                           individual stocks. Although the Fund generally and
                           initially expects to write stock index call options
                           with respect to only a portion of its common stock
                           portfolio value, the Fund may in market circumstances
                           deemed appropriate by the Adviser write covered index
                           call options on up to 100% of the value of its
                           assets.

                           Eaton Vance further believes that a strategy of
                           owning a portfolio of common stocks in conjunction
                           with writing index call options with respect to a
                           portion thereof should generally provide returns that
                           are superior to owning the same stocks without an
                           associated call option writing program under three
                           different stock market scenarios: (1) down-trending
                           equity markets; (2) flat market conditions; and (3)
                           moderately rising equity markets. In the Adviser's
                           opinion, only in more strongly rising equity markets
                           would the buy-write strategy generally be expected to
                           underperform the stock-only portfolio. For these
                           purposes, the Adviser considers more strongly rising
                           equity market conditions to exist whenever the
                           current annual rate of return for United States
                           common stocks (as represented by the S&P 500) exceeds
                           the long-term historical average of stock market
                           returns. The Adviser considers moderately rising
                           equity market conditions to exist whenever current
                           annual returns on United States common stocks are
                           positive, but do not exceed the long-term historical
                           average of stock market returns.



                                        5

<PAGE>

                           To avoid being subject to the "straddle rules" under
                           federal income tax law, the Fund intends to limit the
                           overlap between its stock holdings (and any subset
                           thereof) and each index on which it has outstanding
                           options positions to less than 70% on an ongoing
                           basis. Under the "straddle rules," "offsetting
                           positions with respect to personal property"
                           generally are considered to be straddles. In general,
                           investment positions will be offsetting if there is a
                           substantial diminution in the risk of loss from
                           holding one position by reason of holding one or more
                           other positions. The Fund expects that the index call
                           options it writes will not be considered straddles
                           because its stock holdings will be sufficiently
                           dissimilar from the components of each index on which
                           it has open call options positions under applicable
                           guidance established by the Internal Revenue Service
                           (the "IRS"). Under certain circumstances, however,
                           the Fund may enter into options transactions or
                           certain other investments that may constitute
                           positions in a straddle.

                           The Fund's index option strategy is designed to
                           produce current cash flow from options premiums and
                           to moderate the volatility of the Fund's returns.
                           This index option strategy is of a hedging nature,
                           and is not designed to speculate on equity market
                           performance. The Adviser believes that the Fund's
                           index option strategy will moderate the volatility of
                           the Fund's returns because the option premiums
                           received will help to mitigate the impact of downward
                           price movements in the stocks held by the Fund, while
                           the Fund's obligations under index calls written will
                           constrain the Fund's ability to participate in upward
                           price movements in portfolio stocks.

                           The Fund expects normally to sell index call options
                           on a portion of its common stock portfolio value. The
                           Adviser does not intend to sell index call options
                           representing amounts greater than the value of the
                           Fund's common stock portfolio (i.e., take a "naked"
                           position). The Adviser generally intends to sell
                           index call options that are exchange-listed and
                           "European style," meaning that the options may only
                           be exercised on the expiration date of the option.
                           Exchange-traded index options are typically settled
                           in cash and provide that the holder of the option has
                           the right to receive an amount of cash determined by
                           the excess of the exercise-settlement value of the
                           index over the exercise price of the option. The
                           exercise-settlement value is calculated based on
                           opening sales prices of the component index stocks on
                           the option valuation date, which is the last business
                           day before the expiration date. Generally, the
                           Adviser intends to sell index call options that are
                           slightly "out-of-the-money," meaning that option
                           exercise prices generally will be slightly above the
                           current level of the index at the time the options
                           are written. The Fund may also sell index options
                           that are more substantially "out-of-the-money." Such
                           options that are more substantially "out-of-the-
                           money" provide greater potential for the Fund to
                           realize capital appreciation on its portfolio stocks
                           but generally would pay a lower premium than options
                           that are slightly "out-of-the-money." The Adviser
                           expects initially to follow a primary options
                           strategy of selling


                                        6

<PAGE>

                           index call options with a remaining maturity of
                           between approximately one and three months and
                           maintaining its short call options positions until
                           approximately their option valuation date, at which
                           time replacement call option positions with a
                           remaining maturity within this range are written.

                           In implementing the Fund's investment strategy, the
                           Adviser intends to employ a variety of techniques and
                           strategies designed to minimize and defer the federal
                           income taxes incurred by Common Shareholders in
                           connection with their investment in the Fund. These
                           include: (1) investing in stocks that pay dividends
                           that qualify for federal income taxation at rates
                           applicable to long-term capital gains and complying
                           with the holding period and other requirements for
                           favorable tax treatment; (2) selling index call
                           options that qualify for treatment as "section 1256
                           contracts" under the Code on which capital gains and
                           losses are generally treated as 60% long-term and 40%
                           short-term, regardless of holding period; (3)
                           limiting the overlap between the Fund's stock
                           holdings (and any subset thereof) and each index on
                           which it has outstanding options positions to less
                           than 70% on an ongoing basis so that the Fund's stock
                           holdings and index call options are not subject to
                           the "straddle rules;" (4) engaging in a systematic
                           program of tax-loss harvesting in the Fund's stock
                           portfolio, periodically selling stock positions that
                           have depreciated in value to realize capital losses
                           that can be used to offset capital gains realized by
                           the Fund; and (5) managing the sale of appreciated
                           stock positions so as to minimize the Fund's net
                           realized short-term capital gains in excess of net
                           realized long-term capital losses. When an
                           appreciated security is sold, the Fund intends to
                           select for sale the share lots resulting in the most
                           favorable tax treatment, generally those with holding
                           periods sufficient to qualify for long-term capital
                           gains treatment that have the highest cost basis.

                           As described above, the Fund intends to emphasize
                           investments in stocks that pay dividends that qualify
                           for federal income taxation at rates applicable to
                           long-term capital gains. Under federal income tax law
                           enacted in 2003, the qualified dividend income of
                           individuals and other noncorporate taxpayers is taxed
                           at long-term capital gain tax rates if certain
                           holding period and other requirements are met.
                           Qualified dividends are dividends from domestic
                           corporations and dividends from foreign corporations
                           that meet certain specified criteria. The Fund
                           generally can pass the tax treatment of qualified
                           dividend income it receives through to Common
                           Shareholders. For dividends the Fund receives to
                           qualify for tax-advantaged treatment, the Fund must
                           hold stock paying qualified dividends for more than
                           60 days during the 121-day period beginning 60 days
                           before the ex-dividend date (or more than 90 days
                           during the associated 181-day period, in the case of
                           certain preferred stocks). In addition, the Fund
                           cannot be obligated to make related payments
                           (pursuant to a short sale or otherwise) with respect
                           to positions in any security that is substantially
                           similar or related property with respect to such
                           stock. Similar provisions apply to each Common
                           Shareholder's


                                        7

<PAGE>

                           investment in the Fund. In order for qualified
                           dividend income paid by the Fund to a Common
                           Shareholder to be taxable at long-term capital gains
                           rates, the Common Shareholder must hold his or her
                           Fund shares for more than 60 days during the 121-day
                           period surrounding the ex-dividend date. The
                           provisions of the Code applicable to qualified
                           dividend income are effective through 2010.
                           Thereafter, qualified dividend income will be subject
                           to tax at ordinary income rates unless further
                           legislative action is taken. The Fund's investment
                           program and the tax treatment of Fund distributions
                           may be affected by IRS interpretations of the Code
                           and future changes in tax laws and regulations,
                           including changes resulting from the "sunset"
                           provisions described above that would have the effect
                           of repealing the favorable treatment of qualified
                           dividend income and reimposing the higher tax rates
                           applicable to ordinary income in 2011 unless further
                           legislative action is taken.

                           The Fund may seek to enhance the level of tax-
                           advantaged dividend income it receives by engaging in
                           dividend capture trading. In a dividend capture
                           trade, the Fund sells a stock on or shortly after the
                           stock's ex-dividend date and uses the sale proceeds
                           to purchase one or more other stocks that are
                           expected to pay dividends before the next dividend
                           payment on the stock being sold. Through this
                           practice, the Fund may receive more dividend payments
                           over a given time period than if it held a single
                           stock. In order for dividends received by the Fund to
                           qualify for favorable tax treatment, the Fund must
                           comply with the holding period and other requirements
                           set forth in the preceding paragraph. By complying
                           with applicable holding period and other requirements
                           while engaging in dividend capture trading, the Fund
                           may be able to enhance the level of tax-advantaged
                           dividend income it receives because it will receive
                           more dividend payments qualifying for favorable
                           treatment during the same time period than if it
                           simply held its portfolio stocks. The use of dividend
                           capture trading strategies will expose the Fund to
                           increased trading costs and potentially higher short-
                           term gain or loss.

                           Options on broad-based equity indices that trade on a
                           national securities exchange registered with the
                           Securities and Exchange Commission (the "SEC") or a
                           domestic board of trade designated as a contract
                           market by the Commodity Futures Trading Commission
                           generally qualify for treatment as "section 1256
                           contracts" under the Code. Options on broad-based
                           equity indices that trade on other exchanges, boards
                           of trade or markets designated by the United States
                           Secretary of Treasury also qualify for treatment as
                           "section 1256 contracts" under the Code. Because only
                           a small number of exchanges, boards and markets
                           outside the United States have to date received the
                           necessary designation, most foreign-traded stock
                           index options do not currently qualify for treatment
                           as "section 1256 contracts" under the Code. To the
                           extent that the Fund writes options on indices based
                           upon foreign stocks, the Fund generally intends to
                           sell options on broad-based foreign country and/or
                           regional stock indices that are listed for trading in
                           the United States or which otherwise qualify as


                                        8

<PAGE>

                           "section 1256 contracts" under the Code. Options on
                           foreign indices that are listed for trading in the
                           United States or which otherwise qualify as "section
                           1256 contracts" under the Code may trade in
                           substantially lower volumes and with substantially
                           wider bid-ask spreads than other options contracts on
                           the same or similar indices that trade on other
                           markets outside the United States. To implement its
                           options program most effectively, the Fund may sell
                           index options that do not qualify as "section 1256
                           contracts" under the Code. Gain or loss on index
                           options not qualifying as "section 1256 contracts"
                           under the Code would be realized upon disposition,
                           lapse or settlement of the positions, and would be
                           treated as short-term gain or loss.

                           The foregoing policies relating to investments in
                           common stocks and options writing are the Fund's
                           primary investment policies. In addition to its
                           primary investment policies, the Fund may invest to a
                           limited extent in other types of securities and
                           engage in certain other investment practices. In
                           addition to writing index call options, the Fund may
                           write call options on up to 20% of the value of its
                           total assets on futures contracts based upon broad-
                           based securities indices. The Fund's use of such
                           options on index futures would be substantially
                           similar to its use of options directly on indices.
                           The Fund may also invest up to 20% of its total
                           assets in derivative instruments acquired for
                           hedging, risk management and investment purposes (to
                           gain exposure to securities, securities markets,
                           market indices and/or currencies consistent with its
                           investment objectives and policies), provided that no
                           more than 10% of the Fund's total assets may be
                           invested in such derivative instruments acquired for
                           non-hedging purposes. The loss on derivative
                           instruments (other than purchased options) may
                           substantially exceed an investment in these
                           instruments. To seek to protect against price
                           declines in securities holdings with large
                           accumulated gains, the Fund may use various hedging
                           techniques (such as the purchase and sale of futures
                           contracts on stocks and stock indices and options
                           thereon, equity swaps, covered short sales, forward
                           sales of stocks and the purchase and sale of forward
                           currency exchange contracts and currency futures). By
                           using these techniques rather than selling
                           appreciated securities, the Fund can, within certain
                           limitations, reduce its exposure to price declines in
                           the securities without currently realizing
                           substantial capital gains under current federal tax
                           law. Derivative instruments may also be used by the
                           Fund to enhance returns or as a substitute for the
                           purchase or sale of securities. As a general matter,
                           dividends received on hedged stock positions are
                           characterized as ordinary income and are not eligible
                           for favorable tax treatment. Dividends received on
                           securities with respect to which the Fund is
                           obligated to make related payments (pursuant to short
                           sales or otherwise) will be treated as fully taxable
                           ordinary income (i.e., income other than tax-
                           advantaged dividends). In addition, use of
                           derivatives may give rise to short-term capital gains
                           and other income that would not qualify for favorable
                           tax treatment. See "Federal Income Tax Matters" and
                           "Investment objectives and polices."



                                        9

<PAGE>

LISTING..................  The Fund's Common Shares have been approved for
                           listing on the New York Stock Exchange under the
                           symbol "ETY" subject to notice of issuance.

INVESTMENT ADVISER,
ADMINISTRATOR AND SUB-
ADVISER..................  Eaton Vance, a wholly owned subsidiary of Eaton Vance
                           Corp., is the Fund's investment adviser and
                           administrator. The Adviser and its subsidiaries
                           managed approximately $124.1 billion on behalf of
                           funds, institutional clients and individuals as of
                           September 30, 2006, including approximately $74.9
                           billion in equity assets. Eaton Vance has also
                           engaged Rampart as a sub-adviser. Rampart, founded in
                           1983, specializes in options management and trading
                           for institutional, high net worth and investment
                           company clients. Rampart managed approximately $6.6
                           billion in assets as of September 30, 2006. Eaton
                           Vance will be responsible for the Fund's overall
                           investment program, structuring and managing the
                           Fund's common stock portfolio, including dividend
                           capture trading, tax-loss harvesting and other tax-
                           management techniques, providing consultation to the
                           Sub-Adviser and supervising the performance of the
                           Sub-Adviser. Rampart will be responsible for
                           providing advice on and execution of the Fund's
                           options strategy. See "Management of the Fund."

DISTRIBUTIONS............  Commencing with the Fund's first distribution, the
                           Fund intends to make regular quarterly distributions
                           to Common Shareholders sourced from the Fund's cash
                           available for distribution. "Cash available for
                           distribution" will consist of the Fund's dividends
                           and interest income after payment of Fund expenses,
                           net option premiums, and net realized and unrealized
                           gains on stock investments. The Fund's distribution
                           rate may be adjusted from time to time. The Board may
                           modify this distribution policy at any time without
                           obtaining the approval of Common Shareholders. The
                           initial distribution is expected to be declared
                           approximately 75 days and paid approximately 90 to
                           120 days after the completion of this offering,
                           depending on market conditions.

                           The Fund's annual distributions will likely differ
                           from annual net investment income. The investment
                           income of the Fund will consist of all dividend and
                           interest income accrued on portfolio investments,
                           short-term capital gain (including short-term gains
                           on option positions and gains on the sale of
                           portfolio investments held for one year or less) in
                           excess of long-term capital loss and income from
                           certain hedging transactions, less all expenses of
                           the Fund. Expenses of the Fund will be accrued each
                           day. To the extent that the Fund's net investment
                           income for any year exceeds the total quarterly
                           distributions paid during the year, the Fund will
                           make a special distribution at or near year-end of
                           such excess amount as may be required. Over time, all
                           of the Fund's investment company taxable income will
                           be distributed.

                           At least annually, the Fund intends to distribute any
                           net capital gain (which is the excess of net long-
                           term capital gain over net short-term capital loss)
                           or, alternatively, to retain all or a portion of the
                           year's net capital gain and pay federal income tax on
                           the retained gain. As provided under federal tax law,
                           Common


                                       10

<PAGE>

                           Shareholders of record as of the end of the Fund's
                           taxable year will include their attributable share of
                           the retained gain in their income for the year as a
                           long-term capital gain, and will be entitled to a tax
                           credit or refund for the tax deemed paid on their
                           behalf by the Fund. The Fund may treat the cash value
                           of tax credit and refund amounts in connection with
                           retained capital gains as a substitute for equivalent
                           cash distributions.

                           If the Fund's total quarterly distributions in any
                           year exceed the amount of its net investment income
                           for the year, any such excess would be characterized
                           as a return of capital for federal income tax
                           purposes to the extent not designated as a capital
                           gain dividend. Distributions in any year may include
                           a substantial return of capital component. Under the
                           Investment Company Act of 1940, as amended (the "1940
                           Act"), for any distribution that includes amounts
                           from sources other than net income, the Fund is
                           required to provide Common Shareholders a written
                           statement regarding the components of such
                           distribution. Such a statement will be provided at
                           the time of any distribution believed to include any
                           such amounts.

                           To permit the Fund to maintain more stable
                           distributions, distribution rates will be based on
                           projected annual cash available for distribution. As
                           a result, the distributions paid by the Fund for any
                           particular quarter may be more or less than the
                           amount of cash available for distribution from that
                           quarterly period. In certain circumstances, the Fund
                           may be required to sell a portion of its investment
                           portfolio to fund distributions. Distributions will
                           reduce the Common Shares' net asset value.

                           The Fund has applied for an order from the Securities
                           and Exchange Commission granting it an exemption from
                           Section 19(b) of the 1940 Act and Rule 19b-1
                           thereunder to permit the Fund to include realized
                           long-term capital gains as a part of its regular
                           distributions to Common Shareholders more frequently
                           than would otherwise be permitted by the 1940 Act
                           (generally once per taxable year). In the event that
                           such an exemptive order is obtained, the Fund will
                           consider increasing the frequency of its regular
                           distributions from quarterly to monthly. There is no
                           assurance that the Securities and Exchange Commission
                           will grant the Fund's request for such exemptive
                           order. However, if the Fund fails to receive the
                           requested relief and the Fund is unable to include
                           realized capital gains in regular distributions more
                           frequently than would otherwise be permitted by the
                           1940 Act, the Adviser does not believe that the
                           distribution policy, as set forth above, will
                           otherwise be adversely affected.

                           Common Shareholders may automatically reinvest some
                           or all of their distributions in additional Common
                           Shares under the Fund's dividend reinvestment plan.
                           See "Distributions" and "Dividend Reinvestment Plan."

DIVIDEND REINVESTMENT
PLAN.....................  The Fund has established a dividend reinvestment plan
                           (the "Plan"). Under the Plan, unless a Common
                           Shareholder elects to receive distributions in cash,
                           all distributions will be


                                       11

<PAGE>

                           automatically reinvested in additional Common Shares,
                           either purchased in the open market or newly issued
                           by the Fund if the Common Shares are trading at or
                           above their net asset value. Common Shareholders who
                           intend to hold their Common Shares through a broker
                           or nominee should contact such broker or nominee
                           regarding the Plan. See "Dividend Reinvestment Plan."

CLOSED-END STRUCTURE.....  Closed-end funds differ from traditional, open-end
                           management investment companies (commonly referred to
                           as "mutual funds") in that closed-end funds generally
                           list their shares for trading on a securities
                           exchange and do not redeem their shares at the option
                           of the shareholder. By comparison, mutual funds issue
                           securities that are redeemable at net asset value at
                           the option of the shareholder and typically engage in
                           a continuous offering of their shares.

                           Shares of closed-end funds frequently trade at a
                           discount from their net asset value. In recognition
                           of this possibility and that any such discount may
                           not be in the interest of Common Shareholders, the
                           Fund's Board, in consultation with Eaton Vance, from
                           time to time may review possible actions to reduce
                           any such discount. The Board might consider open
                           market repurchases or tender offers for Common Shares
                           at net asset value. There can be no assurance that
                           the Board will decide to undertake any of these
                           actions or that, if undertaken, such actions would
                           result in the Common Shares trading at a price equal
                           to or close to net asset value per Common Share. The
                           Board might also consider the conversion of the Fund
                           to an open-end mutual fund. The Board believes,
                           however, that the closed-end structure is desirable,
                           given the Fund's investment objectives and policies.
                           Investors should assume, therefore, that it is highly
                           unlikely that the Board would vote to convert the
                           Fund to an open-end investment company.

SPECIAL RISK
CONSIDERATIONS...........  The following describes various principal risks of
                           investing in the Fund. A more detailed description of
                           these and other risks of investing in the Fund are
                           described under "Investment Objectives, Policies and
                           Risks -- Risk Considerations" in this Prospectus and
                           under "Additional Investment Information and
                           Restrictions" in the Fund's Statement of Additional
                           Information.

                           NO OPERATING HISTORY.  The Fund is a newly organized,
                           diversified closed-end investment company with no
                           history of operations and is designed for long-term
                           investors and not as a trading vehicle.

                           INVESTMENT AND MARKET RISK.  An investment in Common
                           Shares is subject to investment risk, including the
                           possible loss of the entire principal amount
                           invested. An investment in Common Shares represents
                           an indirect investment in the securities owned by the
                           Fund, which are generally traded on a securities
                           exchange or in the over-the-counter markets. The
                           value of these securities, like other market
                           investments, may move up or down, sometimes rapidly
                           and unpredictably. Because the Fund normally intends
                           to sell stock index call options on a portion of its
                           common stock portfolio value, the Fund's appreciation
                           potential from equity market performance will be more
                           limited than if the Fund did not engage in selling
                           stock


                                       12

<PAGE>

                           index call options. The Common Shares at any point in
                           time may be worth less than the original investment,
                           even after taking into account any reinvestment of
                           distributions.

                           ISSUER RISK.  The value of securities held by the
                           Fund may decline for a number of reasons that
                           directly relate to the issuer, such as management
                           performance, financial leverage and reduced demand
                           for the issuer's goods and services.

                           EQUITY RISK.  Under normal market conditions, the
                           Fund's investment program will consist primarily of
                           owning a diversified portfolio of common stocks.
                           Therefore, a principal risk of investing in the Fund
                           is equity risk. Equity risk is the risk that the
                           value of securities held by the Fund will fluctuate
                           or fall due to general market or economic conditions,
                           perceptions regarding the industries in which the
                           issuers of securities held by the Fund participate,
                           and the particular circumstances and performance of
                           companies whose securities the Fund holds. Although
                           common stocks have historically generated higher
                           average returns than fixed-income securities over the
                           long term, common stocks also have experienced
                           significantly more volatility in returns. An adverse
                           event, such as an unfavorable earnings report, may
                           depress the value of equity securities of an issuer
                           held by the Fund; the price of common stock of an
                           issuer may be particularly sensitive to general
                           movements in the stock market; or a drop in the stock
                           market may depress the price of most or all of the
                           common stocks held by the Fund. In addition, common
                           stock of an issuer in the Fund's portfolio may
                           decline in price if the issuer fails to make
                           anticipated dividend payments because, among other
                           possible reasons, the issuer of the security
                           experiences a decline in its financial condition.
                           Common stocks in which the Fund will invest are
                           structurally subordinated to preferred stocks, bonds
                           and other debt instruments in a company's capital
                           structure, in terms of priority to corporate income,
                           and therefore will be subject to greater dividend
                           risk than preferred stocks or debt instruments of
                           such issuers. Finally, common stock prices may be
                           sensitive to rising interest rates, as the costs of
                           capital rise and borrowing costs increase.

                           RISKS OF INVESTING IN MID-CAP COMPANIES.  The Fund
                           may make investments in stocks of companies whose
                           market capitalization is considered middle sized or
                           "mid-cap." Mid-cap companies often are newer or less
                           established companies than larger capitalization
                           companies. Investments in mid-cap companies carry
                           additional risks because earnings of these companies
                           tend to be less predictable; they often have limited
                           product lines, markets, distribution channels or
                           financial resources; and the management of such
                           companies may be dependent upon one or a few key
                           people. The market movements of equity securities of
                           mid-cap companies may be more abrupt or erratic than
                           the market movements of equity securities of larger,
                           more established companies or the stock market in
                           general. Historically, mid-cap companies have
                           sometimes gone through extended periods when they did
                           not perform as well as larger companies. In addition,
                           equity securities of mid-cap


                                       13

<PAGE>

                           companies generally are less liquid than those of
                           larger companies. This means that the Fund could have
                           greater difficulty selling such securities at the
                           time and price that the Fund would like.

                           RISK OF SELLING INDEX CALL OPTIONS.  Under normal
                           market conditions, a portion of the Fund's common
                           stock portfolio value will be subject to written
                           index call options. The purchaser of an index call
                           option has the right to any appreciation in the value
                           of the index over the exercise price of the call
                           option as of the valuation date of the option.
                           Because their exercise is settled in cash, sellers of
                           index call options such as the Fund cannot provide in
                           advance for their potential settlement obligations by
                           acquiring and holding the underlying securities. The
                           Fund intends to mitigate the risks of its options
                           activities by writing options on one or more broad-
                           based stock indices that the Adviser believes
                           collectively approximate the characteristics of the
                           Fund's common stock portfolio (or that portion of its
                           portfolio against which options are written). The
                           Fund will not, however, hold stocks that fully
                           replicate the indices on which it writes call
                           options. Due to tax considerations, the Fund intends
                           to limit the overlap between its stock holdings (and
                           any subset thereof) and each index on which it has
                           outstanding options positions to less than 70% on an
                           ongoing basis. The Fund's stock holdings will
                           normally include stocks not included in the indices
                           on which it writes call options. Consequently, the
                           Fund bears the risk that the performance of its stock
                           portfolio will vary from the performance of the
                           indices on which it writes call options. For example,
                           the Fund will suffer a loss if the S&P 500
                           appreciates substantially above the exercise price of
                           S&P 500 call options written by the Fund while the
                           securities held by the Fund in the aggregate fail to
                           appreciate as much or decline in value over the life
                           of the written option. Index options written by the
                           Fund will be priced on a daily basis. Their value
                           will be affected primarily by changes in the prices
                           and dividend rates of the underlying common stocks in
                           such index, changes in actual or perceived volatility
                           of such index and the remaining time to the options'
                           expiration. The trading price of index call options
                           will also be affected by liquidity considerations and
                           the balance of purchase and sale orders.

                           A decision as to whether, when and how to use options
                           involves the exercise of skill and judgment, and even
                           a well-conceived and well-executed options program
                           may be adversely affected by market behavior or
                           unexpected events. As the writer of index call
                           options, the Fund will forgo, during the option's
                           life, the opportunity to profit from increases in the
                           value of the applicable index above the sum of the
                           option premium received and the exercise price of the
                           call option, but retains the risk of loss, minus the
                           option premium received, should the value of the
                           applicable index decline. When a call option is
                           exercised, the Fund will be required to deliver an
                           amount of cash determined by the excess of the value
                           of the applicable index at contract termination over
                           the exercise price of the option. Thus, the exercise
                           of index call options sold by the Fund may require
                           the Fund to sell portfolio securities to generate
                           cash at inopportune times or for unattractive prices.



                                       14

<PAGE>

                           To the extent that the Fund writes options on indices
                           based upon foreign stocks, the Fund generally intends
                           to sell options on broad-based foreign country and/or
                           regional stock indices that are listed for trading in
                           the United States or which otherwise qualify as
                           "section 1256 contracts" under the Code. Options on
                           foreign indices that are listed for trading in the
                           United States or which otherwise qualify as "section
                           1256 contracts" under the Code may trade in
                           substantially lower volumes and with substantially
                           wider bid-ask spreads than other options contracts on
                           the same or similar indices that trade on other
                           markets outside the United States. To implement its
                           options program most effectively, the Fund may sell
                           index options that do not qualify as "section 1256
                           contracts" under the Code. Gain or loss on index
                           options not qualifying as "section 1256 contracts"
                           under the Code would be realized upon disposition,
                           lapse or settlement of the positions and would be
                           treated as short-term gain or loss.

                           The trading price of options may be adversely
                           affected if the market for such options becomes less
                           liquid or smaller. The Fund may close out a call
                           option by buying the option instead of letting it
                           expire or be exercised. There can be no assurance
                           that a liquid market will exist when the Fund seeks
                           to close out a call option position by buying the
                           option. Reasons for the absence of a liquid secondary
                           market on an exchange include the following: (i)
                           there may be insufficient trading interest in certain
                           options; (ii) restrictions may be imposed by an
                           exchange on opening transactions or closing
                           transactions or both; (iii) trading halts,
                           suspensions or other restrictions may be imposed with
                           respect to particular classes or series of options;
                           (iv) unusual or unforeseen circumstances may
                           interrupt normal operations on an exchange; (v) the
                           facilities of an exchange or the Options Clearing
                           Corporation (the "OCC") may not at all times be
                           adequate to handle current trading volume; or (vi)
                           one or more exchanges could, for economic or other
                           reasons, decide or be compelled to discontinue the
                           trading of options (or a particular class or series
                           of options) at some future date. If trading were
                           discontinued, the secondary market on that exchange
                           (or in that class or series of options) would cease
                           to exist. However, outstanding options on that
                           exchange that had been issued by the OCC as a result
                           of trades on that exchange would continue to be
                           exercisable in accordance with their terms.

                           The hours of trading for options may not conform to
                           the hours during which common stocks held by the Fund
                           are traded. To the extent that the options markets
                           close before the markets for securities, significant
                           price and rate movements can take place in the
                           securities markets that would not be reflected
                           concurrently in the options markets. Index call
                           options are marked to market daily and their value is
                           affected by changes in the value and dividend rates
                           of the securities represented in the underlying
                           index, changes in interest rates, changes in the
                           actual or perceived volatility of the associated
                           index and the remaining time to the options'
                           expiration, as well as trading conditions in the
                           options market.



                                       15

<PAGE>

                           TAX RISK.  Reference is made to "Federal Income Tax
                           Matters" for an explanation of the federal income tax
                           consequences and attendant risks of investing in the
                           Fund. Although the Fund seeks to minimize and defer
                           the federal income taxes incurred by Common
                           Shareholders in connection with their investment in
                           the Fund, there can be no assurance that it will be
                           successful in this regard. The tax treatment and
                           characterization of the Fund's distributions may
                           change over time due to changes in the Fund's mix of
                           investment returns and changes in the federal tax
                           laws, regulations and administrative and judicial
                           interpretations. The provisions of the Code
                           applicable to qualified dividend income are set to
                           expire at the close of 2010. Thereafter, the Fund's
                           distributions to Common Shareholders of qualified
                           dividend income will be subject to tax at the higher
                           rates that apply to ordinary income unless further
                           legislative action is taken. There can be no
                           assurances that after 2010 such qualified dividends
                           will be available to the Fund and its Common
                           Shareholders. The Fund's investment program and the
                           tax treatment of Fund distributions may be affected
                           by IRS interpretations of the Code and future changes
                           in tax laws and regulations, including changes
                           resulting from the "sunset" provisions described
                           above that would have the effect of repealing the
                           favorable treatment of qualified dividend income and
                           reimposing the higher tax rates applicable to
                           ordinary income beginning in 2011 unless further
                           legislative action is taken. Distributions paid on
                           the Common Shares may be characterized variously as
                           non-qualified dividends (taxable at ordinary income
                           rates), qualified dividends (generally taxable at
                           long-term capital gains rates), capital gains
                           dividends (taxable at long-term capital gains rates)
                           or return of capital (generally not currently
                           taxable). The ultimate tax characterization of the
                           Fund's distributions made in a calendar year may not
                           finally be determined until after the end of that
                           calendar year. Distributions to a Common Shareholder
                           that are return of capital will be tax free to the
                           amount of the Common Shareholder's current tax basis
                           in his or her Common Shares, with any distribution
                           amounts exceeding such basis treated as capital gain
                           on a deemed sale of Common Shares. Common
                           Shareholders are required to reduce their tax basis
                           in Common Shares by the amount of tax-free return of
                           capital distributions received, thereby increasing
                           the amount of capital gain (or decreasing the amount
                           of capital loss) to be recognized upon a later
                           disposition of the Common Shares. In order for Fund
                           distributions of qualified dividend income to be
                           taxable at favorable long-term capital gains rates, a
                           Common Shareholder must meet certain prescribed
                           holding period and other requirements with respect to
                           his or her Common Shares. If positions held by the
                           Fund were treated as "straddles" for federal income
                           tax purposes, dividends on such positions would not
                           constitute qualified dividend income subject to
                           favorable income tax treatment. Gain or loss on
                           positions in a straddle are subject to special (and
                           generally disadvantageous) rules as described under
                           "Federal Income Tax Matters."



                                       16

<PAGE>

                           DISTRIBUTION RISK.  The quarterly distributions
                           Common Shareholders will receive from the Fund will
                           be sourced from the Fund's dividends and interest
                           income after payment of Fund expenses, net option
                           premiums, and net realized and unrealized gains on
                           stock investments. The Fund's cash available for
                           distribution may vary widely over the short- and
                           long-term. Dividends on common stocks are not fixed
                           but are declared at the discretion of the issuer's
                           board of directors. The Fund's dividend income will
                           be substantially influenced by the activity level and
                           success of its dividend capture trading program. If
                           stock market volatility and/or stock prices decline,
                           the level of premiums from writing index call options
                           and the amounts available for distribution from the
                           Fund's options activity will likely decrease as well.
                           Payments to close written call options will reduce
                           amounts available for distribution from call option
                           premiums received. Net realized and unrealized gains
                           on the Fund's stock investments will be determined
                           primarily by the direction and movement of the United
                           States stock market and the particular stocks held.
                           There can be no assurance that quarterly
                           distributions paid by the Fund to the Common
                           Shareholders will be maintained at initial levels or
                           increase over time.

                           FOREIGN SECURITY RISK.  The value of foreign
                           securities is affected by changes in currency rates,
                           foreign tax laws (including withholding tax),
                           government policies (in this country or abroad),
                           relations between nations and trading, settlement,
                           custodial and other operational risks. In addition,
                           the costs of investing abroad (such as foreign
                           brokerage costs, custodial expenses and other fees)
                           are generally higher than in the United States, and
                           foreign securities markets may be less liquid, more
                           volatile and less subject to governmental supervision
                           than markets in the United States. Foreign
                           investments also could be affected by other factors
                           not present in the United States, including
                           expropriation of assets, armed conflict, confiscatory
                           taxation, lack of uniform accounting and auditing
                           standards, less publicly available financial and
                           other information and potential difficulties in
                           enforcing contractual obligations or repatriating
                           capital invested in foreign countries. As an
                           alternative to holding foreign-traded securities, the
                           Fund may invest in dollar-denominated securities of
                           foreign companies that trade on United States
                           exchanges or in the United States over-the-counter
                           market (including depositary receipts, which evidence
                           ownership in underlying foreign securities). Since
                           the Fund may invest in securities denominated or
                           quoted in currencies other than the United States
                           dollar, the Fund may be affected by changes in
                           foreign currency exchange rates (and exchange control
                           regulations) which affect the value of investments
                           held by the Fund and the accrued income and
                           appreciation or depreciation of the investments in
                           United States dollars. Changes in foreign currency
                           exchange rates relative to the United States dollar
                           will affect the United States dollar value of the
                           Fund's assets denominated in that currency and the
                           Fund's return on such assets as well as any temporary
                           uninvested reserves in bank deposits in foreign
                           currencies. In addition, the


                                       17

<PAGE>

                           Fund will incur costs in connection with conversions
                           between various currencies.

                           Because foreign companies may not be subject to
                           accounting, auditing and financial reporting
                           standards, practices and requirements comparable to
                           those applicable to United States companies, there
                           may be less or less reliable publicly available
                           information about a foreign company than about a
                           domestic company. There is generally less government
                           supervision and regulation of securities exchanges,
                           broker-dealers and listed companies than in the
                           United States. Mail service between the United States
                           and foreign countries may be slower or less reliable
                           than within the United States, thus increasing the
                           risk of delayed settlements of portfolio transactions
                           for, or loss of certificates of, portfolio
                           securities. Payment for securities before delivery
                           may be required. In addition, with respect to certain
                           foreign countries, there is the possibility of
                           expropriation or confiscatory taxation, political or
                           social instability, or diplomatic developments that
                           could adversely affect investments in those
                           countries. Moreover, individual foreign economies may
                           differ favorably or unfavorably from the United
                           States economy in such respects as growth of gross
                           national product, rate of inflation, capital
                           reinvestment, resource self-sufficiency and balance
                           of payments position. Foreign securities markets,
                           while growing in volume and sophistication, are
                           generally not as developed as those in the United
                           States, and securities of some foreign issuers
                           (particularly those located in developing countries)
                           may be less liquid and more volatile than securities
                           of comparable United States companies. The risks of
                           foreign investments described above apply to an even
                           greater extent to investments in emerging markets.

                           EMERGING MARKET SECURITY RISK.  The Fund may invest
                           up to 5% of its total assets in securities of issuers
                           located in emerging markets. The risks of foreign
                           investments described above apply to an even greater
                           extent to investments in emerging markets. The
                           securities markets of emerging countries are
                           generally smaller, less developed, less liquid, and
                           more volatile than the securities markets of the
                           United States and developed foreign markets.
                           Disclosure and regulatory standards in many respects
                           are less stringent than in the United States and
                           developed foreign markets. There also may be a lower
                           level of monitoring and regulation of securities
                           markets in emerging market countries and the
                           activities of investors in such markets and
                           enforcement of existing regulations may be limited.
                           Many emerging countries have experienced substantial,
                           and in some periods extremely high, rates of
                           inflation for many years. Inflation and rapid
                           fluctuations in inflation rates have had and may
                           continue to have very negative effects on the
                           economies and securities markets of certain emerging
                           countries. Economies in emerging markets generally
                           are heavily dependent upon international trade and,
                           accordingly, have been and may continue to be
                           affected adversely by trade barriers, exchange
                           controls, managed adjustments in relative currency
                           values, and other protectionist measures imposed or
                           negotiated by the countries with which they trade.
                           The economies of these countries also


                                       18

<PAGE>

                           have been and may continue to be adversely affected
                           by economic conditions in the countries in which they
                           trade. The economies of countries with emerging
                           markets may also be predominantly based on only a few
                           industries or dependent on revenues from particular
                           commodities. In addition, custodial services and
                           other costs relating to investment in foreign markets
                           may be more expensive in emerging markets than in
                           many developed foreign markets, which could reduce
                           the Fund's income from such securities.

                           In many cases, governments of emerging countries
                           continue to exercise significant control over their
                           economies, and government actions relative to the
                           economy, as well as economic developments generally,
                           may affect the Fund's investments in those countries.
                           In addition, there is a heightened possibility of
                           expropriation or confiscatory taxation, imposition of
                           withholding taxes on dividend and interest payments,
                           or other similar developments that could affect
                           investments in those countries. There can be no
                           assurance that adverse political changes will not
                           cause the Fund to suffer a loss of any or all of its
                           investments.

                           INTEREST RATE RISK.  The premiums from writing index
                           call options and amounts available for distribution
                           from the Fund's options activity may decrease in
                           declining interest rate environments. The value of
                           the Fund's common stock investments may also be
                           influenced by changes in interest rates. Higher
                           yielding stocks and stocks of issuers whose
                           businesses are substantially affected by changes in
                           interest rates may be particularly sensitive to
                           interest rate risk.

                           DERIVATIVES RISK.  In addition to writing index call
                           options, the risks of which are described above, the
                           Fund may invest up to 20% of its total assets in
                           other derivative investments acquired for hedging,
                           risk management and investment purposes, provided
                           that no more than 10% of the Fund's total assets may
                           be invested in such derivative instruments acquired
                           for non-hedging purposes. Derivative transactions
                           including options on securities and securities
                           indices and other transactions in which the Fund may
                           engage (such as futures contracts and options
                           thereon, swaps and short sales) may subject the Fund
                           to increased risk of principal loss due to unexpected
                           movements in stock prices, changes in stock
                           volatility levels and interest rates, and imperfect
                           correlations between the Fund's securities holdings
                           and indices upon which derivative transactions are
                           based. Derivatives can be illiquid, may
                           disproportionately increase losses, and may have a
                           potentially large impact on the Fund's performance.
                           The loss on derivative instruments (other than
                           purchased options) may substantially exceed an
                           investment in these instruments. The Fund also will
                           be subject to credit risk with respect to the
                           counterparties to any over-the-counter derivatives
                           contracts entered into by the Fund. If a counterparty
                           becomes bankrupt or otherwise fails to perform its
                           obligations under a derivative contract due to
                           financial difficulties, the Fund may experience
                           significant delays in obtaining any recovery under
                           the derivative contract in a bankruptcy or other
                           reorganization proceeding. The Fund may


                                       19

<PAGE>

                           obtain only a limited recovery or no recovery in such
                           circumstances. Derivatives may disproportionately
                           increase losses and have a potentially large negative
                           impact on the Fund's performance.

                           LIQUIDITY RISK.  The Fund may invest up to 15% of its
                           total assets in securities for which there is no
                           readily available trading market or which are
                           otherwise illiquid. The Fund may not be able readily
                           to dispose of such securities at prices that
                           approximate those at which the Fund could sell such
                           securities if they were more widely traded and, as a
                           result of such illiquidity, the Fund may have to sell
                           other investments or engage in borrowing transactions
                           if necessary to raise cash to meet its obligations.
                           In addition, the limited liquidity could affect the
                           market price of the securities, thereby adversely
                           affecting the Fund's net asset value, and at times
                           may make the disposition of securities impracticable.

                           INFLATION RISK.  Inflation risk is the risk that the
                           purchasing power of assets or income from investments
                           will be worth less in the future as inflation
                           decreases the value of money. As inflation increases,
                           the real value of the Common Shares and distributions
                           thereon can decline.

                           MARKET PRICE OF COMMON SHARES.  The Fund's share
                           price will fluctuate and, at the time of sale, shares
                           may be worth more or less than the original
                           investment or the Fund's then current net asset
                           value. The Fund cannot predict whether its shares
                           will trade at a price at, above or below its net
                           asset value. Shares of closed-end funds frequently
                           trade at a discount to net asset value.

                           FINANCIAL LEVERAGE RISK.  Although the Fund has no
                           current intention to do so, the Fund is authorized
                           and reserves the flexibility to utilize leverage
                           through the issuance of preferred shares and/or
                           borrowings, including the issuance of debt
                           securities. In the event that the Fund determines in
                           the future to utilize investment leverage, there can
                           be no assurance that such a leveraging strategy will
                           be successful during any period in which it is
                           employed. Leverage creates risks for Common
                           Shareholders, including the likelihood of greater
                           volatility of net asset value and market price of the
                           Common Shares and the risk that fluctuations in
                           distribution rates on any preferred shares or
                           fluctuations in borrowing costs may affect the return
                           to Common Shareholders. To the extent the returns
                           derived from securities purchased with proceeds
                           received from leverage exceeds the cost of leverage,
                           the Fund's distributions may be greater than if
                           leverage had not been used. Conversely, if the
                           returns from the securities purchased with such
                           proceeds are not sufficient to cover the cost of
                           leverage, the amount available for distribution to
                           Common Shareholders will be less than if leverage had
                           not been used. In the latter case, Eaton Vance, in
                           its best judgment, may nevertheless determine to
                           maintain the Fund's leveraged position if it deems
                           such action to be appropriate. The costs of an
                           offering of preferred shares and/or a borrowing
                           program would be borne by Common Shareholders and
                           consequently would result in a reduction of the net
                           asset value of Common Shares. In addition, the fee
                           paid to Eaton Vance will be calculated on the basis
                           of the


                                       20

<PAGE>

                           Fund's average daily gross assets, including proceeds
                           from the issuance of preferred shares and/or
                           borrowings, so the fee will be higher when leverage
                           is utilized. In this regard, holders of preferred
                           shares do not bear the investment advisory fee.
                           Rather, Common Shareholders bear the portion of the
                           investment advisory fee attributable to the assets
                           purchased with the proceeds of the preferred shares
                           offering.

                           MANAGEMENT RISK.  The Fund is subject to management
                           risk because it is an actively managed portfolio.
                           Eaton Vance, Rampart and the individual portfolio
                           managers invest the assets of the Fund as they deem
                           appropriate in implementing the Fund's investment
                           strategy. Accordingly, the success of the Fund
                           depends upon the investment skills and analytical
                           abilities of Eaton Vance, Rampart and the individual
                           portfolio managers to develop and actively implement
                           investment strategies that achieve the Fund's
                           investment objectives. There is no assurance that
                           Eaton Vance, Rampart and the individual portfolio
                           managers will be successful in developing and
                           implementing the Fund's investment strategy.
                           Subjective decisions made by Eaton Vance, Rampart and
                           the individual portfolio managers may cause the Fund
                           to incur losses or to miss profit opportunities on
                           which it could otherwise have capitalized.

                           MARKET DISRUPTION.  The aftermath of the war in Iraq
                           and the continuing occupation of Iraq, instability in
                           the Middle East and terrorist attacks in the U.S. and
                           around the world have resulted in market volatility
                           and may have long-term effects on the U.S. and
                           worldwide financial markets and may cause further
                           economic uncertainties in the U.S. and worldwide. The
                           Fund does not know how long the securities markets
                           will continue to be affected by these events and
                           cannot predict the effects of the occupation or
                           similar events in the future on the U.S. economy and
                           securities markets. Given the risks described above,
                           an investment in the Common Shares may not be
                           appropriate for all investors. You should carefully
                           consider your ability to assume these risks before
                           making an investment in the Fund.

                           ANTI-TAKEOVER PROVISIONS.  The Fund's Agreement and
                           Declaration of Trust includes provisions that could
                           limit the ability of other persons or entities to
                           acquire control of the Fund or to change the
                           composition of its Board. These provisions may
                           deprive Common Shareholders of opportunities to sell
                           their Common Shares at a premium over the then
                           current market price of the Common Shares. See "Risk
                           Factors" and "Description of Capital
                           Structure -- Anti-Takeover Provisions in the
                           Agreement and Declaration of Trust."



                                       21

<PAGE>

                            SUMMARY OF FUND EXPENSES

    The purpose of the table below is to help you understand all fees and
expenses that you, as a Common Shareholder, would bear directly or indirectly.
See "Management of the Fund."


<Table>
<S>                                                                  <C>

SHAREHOLDER TRANSACTION EXPENSES
  Sales load paid by you (as a percentage of offering price).......  4.50%
  Expenses borne by Common Shareholders............................  0.20%(1)(2)
  Dividend reinvestment plan fees..................................  None(3)
</Table>




<Table>
<Caption>
                                                                   PERCENTAGE OF
                                                                     NET ASSETS
                                                                  ATTRIBUTABLE TO
                                                                   COMMON SHARES
                                                                  ---------------

<S>                                                               <C>

ANNUAL EXPENSES
  Management fees...............................................        1.00%
  Other expenses................................................        0.20%(4)
                                                                        ----
  Total annual expenses.........................................        1.20%
                                                                        ====

</Table>


    The Other expenses, and correspondingly the Total annual expenses, shown in
the table are based on estimated amounts for the Fund's first year of operations
and assume that the Fund issues approximately 12,500,000 Common Shares. If the
Fund issues fewer Common Shares, these expenses generally would increase. See
"Management of the Fund" and "Dividend Reinvestment Plan."

EXAMPLE

    The following example illustrates the expenses that you would pay on a
$1,000 investment in Common Shares (including the sales load of $45 and
estimated offering expenses of this offering of $2), assuming (i) total annual
expenses of 1.20% of net assets attributable to Common Shares and (ii) a 5%
annual return*:


<Table>
<Caption>
1 YEAR                      3 YEARS                     5 YEARS                      10 YEARS
------                      -------                     -------                      --------

<S>                         <C>                         <C>                          <C>

  $59                         $83                         $110                         $186
</Table>


    THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE HIGHER OR LOWER.

     *   The example assumes that the estimated Other expenses set forth in the
         Annual Expenses table are accurate, and that all dividends and
         distributions are reinvested at net asset value. Actual expenses may be
         greater or less than those assumed. Moreover, the Fund's actual rate of
         return may be greater or less than the hypothetical 5% return shown in
         the example.

    (1) Eaton Vance or an affiliate has agreed to reimburse all organizational
        costs and pay all offering costs (other than sales loads) that exceed
        $0.04 per Common Share (0.20% of the offering price).

    (2) Eaton Vance has agreed to pay from its own assets a structuring fee to
        each of Wachovia Capital Markets, LLC, Citigroup Global Markets Inc. and
        UBS Securities LLC. Eaton Vance may pay certain qualifying underwriters
        a marketing and structuring fee, additional compensation, or a sales
        incentive fee in connection with the offering. See "Underwriting."

    (3) You will be charged a $5.00 service charge and pay brokerage charges if
        you direct the plan agent to sell your Common Shares held in a dividend
        reinvestment account.

    (4) Estimated expenses based on the current fiscal year.



                                       22

<PAGE>

                                    THE FUND

    Eaton Vance Tax-Managed Diversified Equity Income Fund (the "Fund") is a
newly organized, diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940 Act"
or the "Investment Company Act"). The Fund was organized as a Massachusetts
business trust on October 5, 2005 pursuant to a Declaration of Trust governed by
the laws of The Commonwealth of Massachusetts and has no operating history. The
Fund's principal office is located at The Eaton Vance Building, 255 State
Street, Boston, Massachusetts 02109, and its telephone number is 1-800-225-6265.

    This Prospectus relates to the initial public offering of the Fund's Common
Shares of beneficial interest, $0.01 par value (the "Common Shares"). See
"Underwriting."

                                 USE OF PROCEEDS

    The net proceeds of this offering of Common Shares will be approximately
$           (or $           assuming exercise of the Underwriters' overallotment
option in full), which, after payment of the estimated offering expenses, will
be invested in accordance with the Fund's investment objectives and policies as
soon as practicable, but, in no event, assuming normal market conditions, later
than three months after the receipt thereof. Pending such investment, the
proceeds may be invested in high-quality, short-term debt securities, cash
and/or cash equivalents. Eaton Vance or an affiliate has agreed to (i) reimburse
all organizational costs of the Fund and (ii) pay all offering costs of the Fund
(other than sales load) that exceed $.04 per Common Share.

                    INVESTMENT OBJECTIVES, POLICIES AND RISKS

INVESTMENT OBJECTIVES

    The Fund's primary investment objective is to provide current income and
gains, with a secondary objective of capital appreciation. In pursuing its
investment objectives, the Fund will evaluate returns on an after-tax basis,
seeking to minimize and defer shareholder federal income taxes. There can be no
assurance that the Fund will achieve its investment objectives.

    Under normal market conditions, the Fund's investment program will consist
primarily of owning a diversified portfolio of common stocks. The Fund will seek
to earn high levels of tax-advantaged income and gains by (1) emphasizing
investments in stocks that pay dividends that qualify for favorable federal
income tax treatment and (2) writing (selling) stock index call options with
respect to a portion of its common stock portfolio value. Call options on broad-
based stock indices generally qualify for treatment as "section 1256 contracts"
as defined in the Internal Revenue Code of 1986, as amended (the "Code"), on
which capital gains and losses are generally treated as 60% long-term and 40%
short-term, regardless of holding period.

PRIMARY INVESTMENT POLICIES

    GENERAL COMPOSITION OF THE FUND.  Under normal market conditions, the Fund
will invest at least 80% of its total assets in a combination of (1) dividend-
paying common stocks and (2) common stocks the value of which is subject to
covered written index call options. The Fund will emphasize investments in
stocks that pay dividends that qualify for federal income taxation at rates
applicable to long-term capital gains, and will seek to enhance the level of
tax-advantaged dividend income it receives by engaging in dividend capture
trading. In a dividend capture trade, the Fund sells a stock on or shortly after
the stock's ex-dividend date and uses the sale proceeds to purchase one or more
other stocks that are expected to pay dividends before the next dividend payment
on the stock being sold. Through this practice, the Fund may receive more
dividend payments over a given time period than if it held a single stock. By
complying with applicable holding period and other requirements while engaging
in dividend capture trading, the Fund


                                       23

<PAGE>

may enhance the level of tax-advantaged dividend income it receives. The use of
dividend capture trading strategies will expose the Fund to increased trading
costs and potentially higher short-term gain or loss.

    The Fund will invest primarily in common stocks of United States issuers.
The Fund may invest up to 40% of its total assets in securities of foreign
issuers, including securities evidenced by American Depositary Receipts
("ADRs"), Global Depositary Receipts ("GDRs") and European Depositary Receipts
("EDRs"). The Fund may invest up to 5% of its total assets in securities of
emerging market issuers. The Fund expects that its assets will normally be
invested across a broad range of industries and market sectors. The Fund may not
invest 25% or more of its total assets in the securities of issuers in any
single industry. The Fund may invest a portion of its assets in stocks of mid-
capitalization companies. Eaton Vance generally considers mid-capitalization
companies to be those companies having market capitalizations within the range
of capitalizations for the S&P MidCap 400 Index (the "S&P MidCap 400"). As of
September 30, 2006, the median market capitalization of companies in the S&P
MidCap 400 was approximately $2.55 billion.

    The Fund intends to write call options on one or more broad-based stock
indices that the Adviser believes collectively approximate the characteristics
of its common stock portfolio (or that portion of its portfolio against which
options are written) and that present attractive opportunities to earn options
premiums. The Fund intends initially to write call options on the S&P 500
Composite Stock Price Index(R) (the "S&P 500"), and may also initially write
call options on other domestic and foreign stock indices. Over time, the indices
on which the Fund writes call options may vary as a result of changes in the
availability and liquidity of various listed index options, changes in stock
portfolio holdings, the Adviser's evaluation of equity market conditions and
other factors. Writing index call options involves a tradeoff between the option
premiums received and reduced participation in potential future stock price
appreciation. Due to tax considerations, the Fund intends to limit the overlap
between its stock holdings (and any subset thereof) and each index on which it
has outstanding options positions to less than 70% on an ongoing basis. The
Fund's stock holdings will normally include stocks not included in the indices
on which it writes call options.

    The Fund generally intends to sell stock index call options that are
exchange-listed and "European style," meaning that the options may be exercised
only on the expiration date of the option. Index options differ from options on
individual securities in that index options (i) typically are settled in cash
rather than by delivery of securities and (ii) reflect price fluctuations in a
group of securities or segments of the securities market rather than price
fluctuations in a single security.

    As the seller of index call options, the Fund will receive cash (the
premiums) from option purchasers. The purchaser of an index call option has the
right to any appreciation in the value of the applicable index over a fixed
price (the exercise price) as of a specified date in the future (the option
valuation date). Generally, the Fund intends to sell call options that are
slightly "out-of-the-money" (i.e., the exercise price generally will be slightly
above the current level of the applicable index when the option is sold). The
Fund may also sell index options that are more substantially "out-of-the-money."
Such options that are more substantially "out-of-the-money" provide greater
potential for the Fund to realize capital appreciation, but generally would pay
a lower premium than options that are slightly "out-of-the-money." In writing
index options, the Fund will, in effect, sell the potential appreciation in the
value of the applicable index above the exercise price in exchange for the
option premium received. If, at expiration, an index call option sold by the
Fund is exercised, the Fund will pay the purchaser the difference between the
cash value of the applicable index and the exercise price of the option. The
premium, the exercise price and the market value of the applicable index will
determine the gain or loss realized by the Fund as the seller of the index call
option.

    The Fund expects to maintain high turnover in index call options, based on
the Adviser's intent to sell index call options on a portion of its stock
portfolio value and the Fund's initial expectation to roll forward its options
positions approximately every one to three months. For its stock holdings, the
Fund's annual portfolio turnover rate is expected to exceed that of the indices
on which the Fund writes call options due to turnover in connection with the
Fund's active stock selection, tax loss harvesting, dividend


                                       24

<PAGE>

capture and other strategies. On an overall basis, the Fund expects that its
annual turnover rate will exceed 100%. A high turnover rate (100% or more)
necessarily involves greater trading costs to the Fund.

    The Fund's policy that, under normal market conditions, the Fund will invest
at least 80% of its total assets in a combination of (1) dividend-paying common
stocks and (2) common stocks the value of which is subject to covered written
index call options is a non-fundamental policy that may be changed by the Fund's
Board of Trustees (the "Board") without Common Shareholder approval following
the provision of 60 days' prior written notice to Common Shareholders.

    In implementing the Fund's investment strategy, the Adviser and Sub-Adviser
intend to employ a variety of techniques and strategies designed to minimize and
defer the federal income taxes incurred by shareholders in connection with their
investment in the Fund as described below.

    The S&P 500 is an unmanaged index of 500 stocks maintained and published by
Standard & Poor's that is market-capitalization weighted and generally
representative of the performance of larger stocks traded in the United States.

    The Fund is not sponsored, endorsed, sold or promoted by any index sponsor.
No index sponsor has passed on the legality or suitability of, or the accuracy
or adequacy of descriptions and disclosures relating to the Fund. No index
sponsor has made any representation or warranty, express or implied, to the
Common Shareholders of the Fund or any member of the public regarding the
advisability of investing in securities generally or in the Fund particularly,
or the ability of any index to track general stock market performance. The
indices are determined, composed and calculated by the respective index sponsors
without regard to the Fund or its use of the indices for option writing. The
index sponsors have no obligation to take the needs of the Fund or its Common
Shareholders into consideration in determining, composing or calculating the
indices. No index sponsor is responsible for or has participated in the
determination of the timing of, price of, or number of Common Shares of the Fund
to be issued. No index sponsor has any liability in connection with the
management, administration, marketing or trading of the Fund.

    THE INDEX SPONSORS DO NOT GUARANTEE THE ACCURACY AND/OR UNINTERRUPTED
CALCULATION OF THE INDICES OR ANY DATA INCLUDED THEREIN. THE INDEX SPONSORS MAKE
NO WARRANTY, EXPRESS OR IMPLIED, AS TO RESULTS TO BE OBTAINED BY THE FUND, THE
COMMON SHAREHOLDERS OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE INDICES IN
THE FUND'S OPTIONS WRITING PROGRAM. IN PUBLISHING THE INDICES, THE INDEX
SPONSORS MAKE NO EXPRESS OR IMPLIED WARRANTIES, AND EXPRESSLY DISCLAIM ALL
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE WITH
RESPECT TO THE INDICES OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL AN INDEX SPONSOR HAVE ANY LIABILITY FOR ANY LOST
PROFITS OR SPECIAL, INCIDENTAL, PUNITIVE, INDIRECT OR CONSEQUENTIAL DAMAGES,
EVEN IF NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES.

    INVESTMENT STRATEGY.  Eaton Vance will be responsible for the Fund's overall
investment program, structuring and managing the Fund's common stock portfolio,
including dividend capture trading, tax-loss harvesting and other tax-management
techniques, providing consultation to the Sub-Adviser and supervising the
performance of the Sub-Adviser. The Fund's investments will be actively managed,
and securities may be bought or sold on a daily basis. Rampart will be
responsible for providing advice on and execution of the Fund's options
strategy. See "Management of the Fund."

    A team of Eaton Vance investment professionals is responsible for the
overall management of the Fund's investments, including decisions about asset
allocation and securities selection. The portfolio managers utilize information
provided by, and the expertise of, the Adviser's research staff in making
investment decisions. Investment decisions are made primarily on the basis of
fundamental research, which involves consideration of the various company-
specific and general business, economic and market factors that may influence
the future performance of individual companies and equity investments therein.
The Adviser will also consider a variety of other factors in constructing and
maintaining the Fund's stock portfolio, including, but not limited to, stock
dividend yields and payment schedules, overlap between the


                                       25

<PAGE>

Fund's stock holdings and the indices on which it has outstanding options
positions, realization of tax loss harvesting opportunities and other tax
management considerations.

    The Adviser believes that a strategy of owning a portfolio of common stocks
and selling covered call options (a "buy-write strategy") with respect to a
portion thereof can provide current income and gains and attractive risk-
adjusted returns. Compared to selling call options on individual stocks, the
Adviser believes that selling index call options can achieve better tax and
transactional efficiency because listed options on broad-based securities
indices generally qualify as "section 1256 contracts" under the Code, subject to
specialized tax treatment, and because the markets for index options are
generally deeper and more liquid than options on individual stocks. Although the
Fund generally and initially expects to write stock index call options with
respect to only a portion of its common stock portfolio value, the Fund may in
market circumstances deemed appropriate by the Adviser write covered index call
options on up to 100% of the value of its assets.

    Eaton Vance further believes that a strategy of owning a portfolio of common
stocks in conjunction with writing index call options with respect to a portion
thereof should generally provide returns that are superior to owning the same
stocks without an associated call option writing program under three different
stock market scenarios: (1) down-trending equity markets; (2) flat market
conditions; and (3) moderately rising equity markets. In the Adviser's opinion,
only in more strongly rising equity markets would the buy-write strategy
generally be expected to underperform the stock-only portfolio. For these
purposes, the Adviser considers more strongly rising equity market conditions to
exist whenever the current annual rate of return for United States common stocks
(as represented by the S&P 500) exceeds the long-term historical average of
stock market returns. The Adviser considers moderately rising equity market
conditions to exist whenever current annual returns on United States common
stocks are positive, but do not exceed the long-term historical average of stock
market returns.

    To avoid being subject to the "straddle rules" under federal income tax law,
the Fund intends to limit the overlap between its stock holdings (and any subset
thereof) and each index on which it has outstanding options positions to less
than 70% on an ongoing basis. Under the "straddle rules," "offsetting positions
with respect to personal property" generally are considered to be straddles. In
general, investment positions will be offsetting if there is a substantial
diminution in the risk of loss from holding one position by reason of holding
one or more other positions. The Fund expects that the index call options it
writes will not be considered straddles because its stock holdings will be
sufficiently dissimilar from the components of each index on which it has open
call options positions under applicable guidance established by the IRS. Under
certain circumstances, however, the Fund may enter into options transactions or
certain other investments that may constitute positions in a straddle.

    The Fund's index option strategy is designed to produce current cash flow
from option premiums and to moderate the volatility of the Fund's returns. This
index option strategy is of a hedging nature, and is not designed to speculate
on equity market performance. The Adviser believes that the Fund's index option
strategy will moderate the volatility of the Fund's returns because the option
premiums received will help to mitigate the impact of downward price movements
in the stocks held by the Fund, while the Fund's obligations under index calls
written will constrain the Fund's ability to participate in upward price
movements in portfolio stocks. The Adviser initially expects to follow a primary
options strategy of selling index call options with a remaining maturity of
between approximately one and three months and maintaining its short call
options positions until approximately their expiration date, at which time
replacement call option positions with a remaining maturity within this range
are written.

    The Fund expects normally to sell index call options on a portion of its
common stock portfolio value. The Adviser does not intend to sell index call
options representing amounts greater than the value of the Fund's common stock
portfolio (i.e., take a "naked" position). The Adviser generally intends to sell
index call options that are exchange-listed and "European style," meaning that
the options may only be exercised on the expiration date of the option.
Exchange-traded index options are typically settled in cash and provide that the
holder of the option has the right to receive an amount of cash determined by
the excess of the exercise-settlement value of the index over the exercise price
of the option. The exercise-settlement


                                       26

<PAGE>

value is calculated based on opening sales prices of the component index stocks
on the option valuation date, which is the last business day before the
expiration date. Generally, the Adviser intends to sell index call options that
are slightly "out-of-the-money," meaning that option exercise prices generally
will be slightly above the current level of the index at the time the options
are written. The Fund may also sell index options that are more substantially
"out-of-the-money." Such options that are more substantially "out-of-the-money"
provide greater potential for the Fund to realize capital appreciation on its
portfolio stocks but generally would pay a lower premium than options that are
slightly "out-of-the-money." The Adviser expects initially to follow a primary
options strategy of selling index call options with a remaining maturity of
between approximately one and three months and maintaining its short call
options positions until approximately their option valuation date, at which time
replacement call option positions with a remaining maturity within this range
are written.

    The foregoing policies relating to investments in common stocks and options
writing are the Fund's primary investment policies. In addition to its primary
investment policies, the Fund may invest to a limited extent in other types of
securities and engage in certain other investment practices. In addition to
writing index call options, the Fund may write call options on up to 20% of the
value of its total assets on futures contracts based upon broad-based securities
indices. The Fund's use of such options on index futures would be substantially
similar to its use of options directly on indices. The Fund may also invest up
to 20% of its total assets in derivative instruments acquired for hedging, risk
management and investment purposes (to gain exposure to securities, securities
markets, markets indices and/or currencies consistent with its investment
objectives and policies), provided that no more than 10% of the Fund's total
assets may be invested in such derivative instruments acquired for non-hedging
purposes. The loss on derivative instruments (other than purchased options) may
substantially exceed an investment in these instruments. To seek to protect
against price declines in securities holdings with large accumulated gains, the
Fund may use various hedging techniques (such as the purchase and sale of
futures contracts on stocks and stock indices and options thereon, equity swaps,
covered short sales, forward sales of stocks and the purchase and sale of
forward currency exchange contracts and currency futures). By using these
techniques rather than selling appreciated securities, the Fund can, within
certain limitations, reduce its exposure to price declines in the securities
without realizing substantial capital gains under current tax law. Derivative
instruments may also be used by the Fund to enhance returns or as a substitute
for the purchase or sale of securities.

    TAX-MANAGED INVESTING.  Taxes are a major influence on the net after-tax
returns that investors receive on their taxable investments. There are five
potential sources of returns for a Common Shareholder: (1) appreciation or
depreciation in the value of the Common Shares; (2) distributions of qualified
dividend income; (3) distributions of other investment income and net short-term
capital gains; (4) distributions of long-term capital gains (and long-term
capital gains retained by the Fund); and (5) distributions of return of capital.
These different sources of investment returns are subject to widely varying
federal income tax treatment. Distributions of other investment income (i.e.,
non-qualified dividend income) and net realized short-term gains are taxed
currently as ordinary income, at rates as high as 35%. Distributions of
qualified dividend income and net realized long-term gains (whether distributed
or retained by the Fund) are taxed currently at rates up to 15% for individuals
and other noncorporate taxpayers (provided in the case of qualified dividend
income that certain holding period and other requirements are met). Generally,
return from unrealized appreciation and depreciation in the value of Common
Shares and distributions characterized as return of capital are not taxable
until the Common Shareholder sells his or her Common Shares. Upon sale, a
capital gain or loss equal to the difference between the amount realized on the
sale and the Common Shareholder's adjusted tax basis is realized. Capital gain
is considered long-term and is taxed at rates up to 15% for individuals and
other noncorporate taxpayers if the Common Shareholder has held his or her
shares more than one year. Otherwise, capital gain is considered short-term and
is taxed at rates up to 35%. The after-tax returns achieved by a Common
Shareholder will be substantially influenced by the mix of different types of
returns subject to varying federal income tax treatment.

    In implementing the Fund's investment strategy, the Adviser intends to
employ a variety of techniques and strategies designed to minimize and defer the
federal income taxes incurred by Common


                                       27

<PAGE>

Shareholders in connection with their investment in the Fund. These include: (1)
investing in stocks that pay dividends that qualify for federal income taxation
at rates applicable to long-term capital gains and complying with the holding
period and other requirements for favorable tax treatment; (2) selling index
call options that qualify for treatment as "section 1256 contracts" under the
Code, on which capital gains and losses are generally treated as 60% long-term
and 40% short-term, regardless of holding period; (3) limiting the overlap
between the Fund's stock holdings (and any subset thereof) and each index on
which it has outstanding options positions to less than 70% on an ongoing basis
so that the Fund's stock holdings and index call options are not subject to the
"straddle rules;" (4) engaging in a systematic program of tax-loss harvesting in
the Fund's stock portfolio, periodically selling stock positions that have
depreciated in value to realize capital losses that can be used to offset
capital gains realized by the Fund; and (5) managing the sale of appreciated
stock positions so as to minimize the Fund's net realized short-term capital
gains in excess of net realized long-term capital losses. When an appreciated
security is sold, the Fund intends to select for sale the share lots resulting
in the most favorable tax treatment, generally those with holding periods
sufficient to qualify for long-term capital gains treatment that have the
highest cost basis.

    The Fund intends to emphasize investments in stocks that pay dividends that
qualify for federal income taxation at rates applicable to long-term capital
gains. Under federal income tax law enacted in 2003, the qualified dividend
income of individuals and other noncorporate taxpayers is taxed at long-term
capital gain tax rates if certain holding period and other requirements are met.
Qualified dividends are dividends from domestic corporations and dividends from
foreign corporations that meet certain specified criteria. The Fund generally
can pass the tax treatment of qualified dividend income it receives through to
Common Shareholders. For dividends the Fund receives to qualify for tax-
advantaged treatment, the Fund must hold stock paying qualified dividends for
more than 60 days during the 121-day period beginning 60 days before the ex-
dividend date (or more than 90 days during the associated 181-day period, in the
case of certain preferred stocks). In addition, the Fund cannot be obligated to
make related payments (pursuant to a short sale or otherwise) with respect to
positions in any security that is substantially similar or related property with
respect to such stock. Similar provisions apply to each Common Shareholder's
investment in the Fund. In order for qualified dividend income paid by the Fund
to a Common Shareholder to be taxable at long-term capital gains rates, the
Common Shareholder must hold his or her Fund shares for more than 60 days during
the 121-day period surrounding the ex-dividend date. The provisions of the Code
applicable to qualified dividend income are effective through 2010. Thereafter,
qualified dividend income will be subject to tax at ordinary income rates unless
further legislative action is taken. The Fund's investment program and the tax
treatment of Fund distributions may be affected by IRS interpretations of the
Code and future changes in tax laws and regulations, including changes resulting
from the "sunset" provisions described above that would have the effect of
repealing the favorable treatment of qualified dividend income and reimposing
the higher tax rates applicable to ordinary income in 2011 unless further
legislative action is taken.

    The Fund will seek to enhance the level of tax-advantaged dividend income it
receives by engaging in dividend capture trading. In a dividend capture trade,
the Fund sells a stock on or shortly after the stock's ex-dividend date and uses
the sale proceeds to purchase one or more other stocks that are expected to pay
dividends before the next dividend payment on the stock being sold. Through this
practice, the Fund may receive more dividend payments over a given time period
than if it held a single stock. In order for dividends received by the Fund to
qualify for favorable tax treatment, the Fund must comply with the holding
period and other requirements set forth in the preceding paragraph. By complying
with applicable holding period and other requirements while engaging in dividend
capture trading, the Fund may be able to enhance the level of tax-advantaged
dividend income it receives because it will receive more dividend payments
qualifying for favorable treatment during the same time period than if it simply
held its portfolio stocks. The use of dividend capture trading strategies will
expose the Fund to increased trading costs and potentially higher short-term
gain or loss.

    Options on broad-based equity indices that trade on a national securities
exchange registered with the Securities and Exchange Commission (the "SEC") or a
domestic board of trade designated as a contract


                                       28

<PAGE>

market by the Commodity Futures Trading Commission generally will qualify for
treatment as "section 1256 contracts." Options on broad-based equity indices
that trade on other exchanges, boards of trade or markets designated by the
United States Secretary of Treasury also qualify for treatment as "section 1256
contracts." Because only a small number of exchanges, boards and markets outside
the United States have to date received the necessary designation, most foreign-
traded stock index options do not currently qualify for treatment as "section
1256 contracts." To the extent that the Fund writes options on indices based
upon foreign stocks, the Fund generally intends to sell options on broad-based
foreign country and/or regional stock indices that are listed for trading in the
United States or which otherwise qualify as "section 1256 contracts." Options on
foreign indices that are listed for trading in the United States or which
otherwise qualify as "section 1256 contracts" under the Code may trade in
substantially lower volumes and with substantially wider bid-ask spreads than
other options contracts on the same or similar indices that trade on other
markets outside the United States. To implement its options program most
effectively, the Fund may sell index options that do not qualify as "section
1256 contracts." Gain or loss on index options not qualifying as "section 1256
contracts" under the Code would be realized upon disposition, lapse or
settlement of the positions, and would be treated as short-term gain or loss.

    To seek to protect against price declines in securities holdings with large
accumulated gains, the Fund may use various hedging techniques (such as the sale
of futures contracts on stocks and stock indices and options thereon, equity
swaps, covered short sales, and forward sales of stocks). By using these
techniques rather than selling appreciated securities, the Fund can, within
certain limitations, reduce its exposure to price declines in the securities
without currently realizing substantial capital gains under current federal tax
law. Derivative instruments may also be used by the Fund to enhance returns or
as a substitute for the purchase or sale of securities. As a general matter,
dividends received on hedged stock positions are characterized as ordinary
income and are not eligible for favorable tax treatment. Dividends received on
securities with respect to which the Fund is obligated to make related payments
(pursuant to short sales or otherwise) will be treated as fully taxable ordinary
income (i.e., income other than tax-advantaged qualified dividend income). In
addition, use of derivatives may give rise to short-term capital gains and other
income that would not qualify for favorable tax treatment. As indicated above,
in addition to writing index call options, the Fund may invest up to 20% of its
total assets in derivative instruments acquired for hedging, risk management and
investment purposes (to gain exposure to securities, securities markets, markets
indices and/or currencies consistent with its investment objectives and
policies), provided that no more than 10% of the Fund's total assets may be
invested in such derivative instruments acquired for non-hedging purposes. The
loss on derivative instruments (other than purchased options) may substantially
exceed an investment in these instruments.

    COMMON STOCKS.  Under normal market conditions, the Fund's investment
program will consist primarily of owning a diversified portfolio of common
stocks. Common stock represents an equity ownership interest in the issuing
corporation. Holders of common stock generally have voting rights in the issuer
and are entitled to receive common stock dividends when, as and if declared by
the corporation's board of directors. Common stock normally occupies the most
subordinated position in an issuer's capital structure. Returns on common stock
investments consist of any dividends received plus the amount of appreciation or
depreciation in the value of the stock.

    Although common stocks have historically generated higher average returns
than fixed-income securities over the long term and particularly during periods
of high or rising concerns about inflation, common stocks also have experienced
significantly more volatility in returns and may not maintain their real value
during inflationary periods. An adverse event, such as an unfavorable earnings
report, may depress the value of a particular common stock held by the Fund.
Also, the prices of common stocks are sensitive to general movements in the
stock market and a drop in the stock market may depress the price of common
stocks to which the Fund has exposure. Common stock prices fluctuate for many
reasons, including changes in investors' perceptions of the financial condition
of an issuer or the general condition of the relevant stock market, or when
political or economic events affecting the issuer occur. In addition, common
stock prices may be sensitive to rising interest rates as the costs of capital
rise and borrowing costs increase.



                                       29

<PAGE>

    FOREIGN SECURITIES.  The Fund may invest up to 40% of its total assets in
securities of non-United States issuers, including up to 5% of its total assets
in securities of issuers located in emerging markets. The value of foreign
securities is affected by changes in currency rates, foreign tax laws (including
withholding tax), government policies (in this country or abroad), relations
between nations and trading, settlement, custodial and other operational risks.
In addition, the costs of investing abroad are generally higher than in the
United States, and foreign securities markets may be less liquid, more volatile
and less subject to governmental supervision than markets in the United States.
Foreign investments also could be affected by other factors not present in the
United States, including expropriation, armed conflict, confiscatory taxation,
lack of uniform accounting and auditing standards, less publicly available
financial and other information and potential difficulties in enforcing
contractual obligations. As an alternative to holding foreign-traded securities,
the Fund may invest in dollar-denominated securities of foreign companies that
trade on United States exchanges or in the United States over-the-counter market
(including depositary receipts, which evidence ownership in underlying foreign
securities). Dividends received with respect to stock of a foreign corporation
may qualify for the reduced rates of federal income taxation applicable to
qualified dividend income only if such corporation satisfies the requirements to
be a "qualified foreign corporation" as defined in the Code.

    The Fund may invest in ADRs, EDRs and GDRs, which are certificates
evidencing ownership of shares of foreign issuers and are alternatives to
purchasing directly the underlying foreign securities in their national markets
and currencies. However, they continue to be subject to many of the risks
associated with investing directly in foreign securities. These risks include
foreign exchange risk as well as the political and economic risks of the
underlying issuer's country. ADRs, EDRs and GDRs may be sponsored or
unsponsored. Unsponsored receipts are established without the participation of
the issuer. Unsponsored receipts may involve higher expenses, may not pass
through voting or other shareholder rights, and may be less liquid than
sponsored receipts.

    INDEX OPTIONS GENERALLY.  The Fund will pursue its objectives in part by
writing (selling) stock index call options with respect to a portion of its
common stock portfolio value. The Fund generally intends to sell index options
that are exchange-listed and "European style," meaning that the options may be
exercised only on the expiration date of the option. Index options differ from
options on individual securities in that index options (i) typically are settled
in cash rather than by delivery of securities (meaning the exercise of an index
option does not involve the actual purchase or sale of securities) and (ii)
reflect price fluctuations in a group of securities or segments of the
securities market rather than price fluctuations in a single security.

    United States listed options contracts are originated and standardized by
the Options Clearing Corporation (the "OCC"). Currently, United States listed
index options are available on approximately 144 indexes, with new listings
added periodically. In the United States, the Fund generally intends to sell
index call options that are issued, guaranteed and cleared by the OCC. The Fund
may also sell index call options in the United States and outside the United
States that are not issued, guaranteed or cleared by the OCC. The Adviser
believes that there exists sufficient liquidity in the index options markets to
fulfill the Fund's requirements to implement its strategy.

    SELLING INDEX CALL OPTIONS.  The Fund's index option strategy is designed to
produce current cash flow from options premiums and to moderate the volatility
of the Fund's returns. This index option strategy is of a hedging nature, and is
not designed to speculate on equity market performance.

    As the seller of index call options, the Fund will receive cash (the
premium) from the purchasers thereof. The purchaser of an index option has the
right to any appreciation in the value of the applicable index over a fixed
price (the exercise price) as of a specified date in the future (the option
valuation date). Generally, the Fund intends to sell index call options that are
slightly "out-of-the-money" (i.e., the exercise price generally will be slightly
above the current level of the applicable index when the option is sold). The
Fund may also sell index options that are more substantially "out-of-the-money."
Such options that are more substantially "out-of-the-money" provide greater
potential for the Fund to realize capital appreciation on its portfolio stocks
but generally would pay a lower premium than options that are slightly "out-of-
the-money."


                                       30

<PAGE>

When it writes index call options, the Fund will, in effect, sell the potential
appreciation in the value of the applicable index above the exercise price in
exchange for the option premium received. If, at expiration, an index call
option sold by the Fund is exercised, the Fund will pay the purchaser the
difference between the cash value of the applicable index and the exercise price
of the option. The premium, the exercise price and the market value of the
applicable index will determine the gain or loss realized by the Fund as the
seller of the index call option.

    Prior to expiration, the Fund may close an option position by making an
offsetting market purchase of identical option contracts (same type, underlying
index, exercise price and expiration). The cost of closing transactions and
payments in settlement of exercised options will reduce the net option premiums
available for distribution to Common Shareholders by the Fund. The reduction in
net option premiums due to a rise in stock prices should generally be offset, at
least in part, by appreciation in the value of common stocks held and by the
opportunity to realize higher premium income from selling new index options at
higher exercise prices.

    In certain extraordinary market circumstances, to limit the risk of loss on
the Fund's index option strategy, the Fund may enter into "spread" transactions
by purchasing index call options with higher exercise prices than those of index
call options written. The Fund will only engage in such transactions when Eaton
Vance and Rampart believe that certain extraordinary events temporarily have
depressed equity prices and substantial short-term appreciation of such prices
is expected. By engaging in spread transactions in such circumstances the Fund
will reduce the limitation imposed on its ability to participate in such
recovering equity markets that exist if the Fund only writes index call options.
The premiums paid to purchase such call options are expected to be lower than
the premiums earned from the call options written at lower exercise prices.
However, the payment of these premiums will reduce amounts available for
distribution from the Fund's option activity.

    The Fund will sell only "covered" call options. An index call option is
considered covered if the Fund maintains with its custodian assets determined to
be liquid (in accordance with procedures established by the Board) in an amount
at least equal to the contract value of the index. An index call option also is
covered if the Fund holds a call on the same index as the call written where the
exercise price of the call held is (i) equal to or less than the exercise price
of the call written, or (ii) greater than the exercise price of the call
written, provided the difference is maintained by the Fund in segregated assets
determined to be liquid (in accordance with procedures established by the
Board).

    If an option written by the Fund expires unexercised, the Fund realizes on
the expiration date a capital gain equal to the premium received by the Fund at
the time the option was written. If an option written by the Fund is exercised,
the Fund realizes on the expiration date a capital gain if the cash payment made
by the Fund upon exercise is less than the premium received from writing the
option and a capital loss if the cash payment made is more than the premium
received. If a written option is repurchased, the Fund realizes upon the closing
purchase transaction a capital gain if the cost of repurchasing the option is
less than the premium received from writing the option and a capital loss if the
cost of repurchasing the option is more than the premium received.

    For written index options that qualify as "section 1256 contracts," the
Fund's gains and losses thereon generally will be treated as 60% long-term and
40% short-term capital gain or loss, regardless of holding period. In addition,
the Fund generally will be required to "mark to market" (i.e., treat as sold for
fair market value) each outstanding index option position at the close of each
taxable year (and on October 31 of each year for excise tax purposes) and to
adjust the amount of gain or loss subsequently realized to reflect the marking
to market. Gain or loss on index options not qualifying as "section 1256
contracts" under the Code would be realized upon disposition, lapse or exercise
of the positions and would be treated as short-term gain or loss.

    The principal factors affecting the market value of an option contract
include supply and demand in the options market, interest rates, the current
market price of the underlying index in relation to the exercise price of the
option, the actual or perceived volatility associated with the underlying index,
and the time remaining until the expiration date. The premium received for an
option written by the Fund is


                                       31

<PAGE>

recorded as an asset of the Fund and its obligation under the option contract as
an equivalent liability. The Fund then adjusts over time the liability as the
market value of the option changes. The value of each written option will be
marked to market daily and valued at the closing price on the exchange on which
it is traded or, if not traded on an exchange or no closing price is available,
at the mean between the last bid and asked prices or otherwise at fair value as
determined by the Board of the Fund.

    The transaction costs of buying and selling options consist primarily of
commissions (which are imposed in opening, closing and exercise transactions),
but may also include margin and interest costs in particular transactions. The
impact of transaction costs on the profitability of a transaction may often be
greater for options transactions than for transactions in the underlying
securities because these costs are often greater in relation to option premiums
than in relation to the prices of underlying securities. Transaction costs may
be especially significant in option strategies calling for multiple purchases
and sales of options over short periods of time or concurrently. Transaction
costs associated with the Fund's options strategy will vary depending on market
circumstances and other factors.

    There are three items needed to identify a particular index option contract:
(1) the expiration month, (2) the exercise (or strike) price and (3) the type
(i.e., call or put). For example, a January 2005 1200 strike S&P 500 call option
provides the option holder the right to receive $100 multiplied by the positive
difference between the January option exercise-settlement value of the S&P 500
(determine on January 20, 2005 based on opening sales prices of the component
index stocks on that date) and 1200. A call option whose exercise price is above
the current price of the underlying index is called "out-of-the-money" and a
call option whose exercise price is below the current price of the underlying
index is called "in-the-money."

    The following is a conceptual example of the returns that may be achieved
from a buy-write investment strategy that consists of holding a portfolio of
stocks whose performance matches the S&P 500 and selling S&P 500 call options on
the full value of the stock position. This example is not meant to represent the
performance of actual option contracts or the Fund. In particular, it should be
noted that the example is based upon writing call options on a single index
while holding a portfolio of securities precisely matching the index. In
implementing its options strategy, the Fund may write options on a number of
different representative indices, will not hold stocks precisely matching these
indices, and generally intends to write options on only a portion of the value
of its portfolio of common stocks. In addition, the example does not account for
the cost of options transactions, which would lower returns.

    A holder of a portfolio of common stocks writes (sells) January 2005 1200
strike S&P 500 call options on December 17, 2004 when the S&P 500 is at 1198.63.
When written, the options are 1.37 points (0.11%) "out of the money." The
options writer receives $14.41 (1.20%) per option written. Assume that the
portfolio of stocks held by the options writer matches the performance of the
S&P 500 over the period until the January exercise-settlement value of the S&P
500 is determined on January 20, 2005.

    In the example, the return over the period until option expiration earned by
the holder of a portfolio of stocks whose performance matches the S&P 500 and
who writes S&P 500 index call options on the full value of the portfolio
position and maintains the options position until expiration will be as follows:
(1) if the S&P 500 declines 1.20%, the option will expire worthless and the
holder will have a net return of zero (option premium offsets loss in stock
portfolio); (2) if the S&P 500 is flat, the option will again expire worthless
and the holder will have a net return of 1.20% (option premium plus no gain or
loss on portfolio); (3) if the S&P 500 rises 0.11%, the option will again expire
with no value and the holder will have a net return of 1.31% (option premium
plus 0.11% portfolio return); and (4) if the index rises more than 0.11%, the
exercise of the option would limit portfolio gain to 0.11% and total net return
to 1.31%. If the index value at exercise exceeds the exercise price, returns
over the period from the position are capped at 1.31%. On an annualized basis in
this example option premiums increase returns by approximately 12.9% in down,
flat and moderately up markets; annualized returns in this example for the buy-
write strategy, before accounting for the costs of the options transactions, are
capped at approximately 14.1% in a strong up market.

    As demonstrated in the example, writing index call options can lower the
variability of potential return outcomes and can enhance returns in three of
four market performance scenarios (down, flat or


                                       32

<PAGE>

moderately up). Only when the level of the index at option expiration exceeds
the sum of the premium received and the option exercise price would the buy-
write strategy be expected to provide lower returns than the stock portfolio-
only alternative. The amount of downside protection afforded by the buy-write
strategy in declining market scenarios is limited, however, to the amount of
option premium received. If an index declines by an amount greater than the
option premium, a buy-write strategy consisting of owning all of the stocks in
the index and writing index options on the value thereof would generate an
investment loss. The Fund's returns from implementing a buy-write strategy using
index options will also be substantially affected by the performance of the
Fund's stock portfolio versus the indices on which it writes call options and by
the percentage of portfolio value on which options are written. The returns on
the Fund's portfolio are unlikely to be the same as the returns on the indices
on which it writes options.

ADDITIONAL INVESTMENT PRACTICES

    In addition to its primary investment strategies as described above, the
Fund may engage in the following investment practices.

    TEMPORARY INVESTMENTS.  During unusual market circumstances, the Fund may
temporarily invest a substantial portion of its assets in cash or cash
equivalents. Cash equivalents are highly liquid, short-term securities such as
commercial paper, time deposits, certificates of deposit, short-term notes and
short-term United States government obligations. In moving to a substantial
temporary investments position and in transitioning from such a position back
into conformity with the Fund's normal investment policies, the Fund may incur
transaction costs that would not be incurred if the Fund had remained fully
invested in accordance with such normal policies. The transition to and from a
substantial temporary investments position may also result in the Fund having to
sell common stocks and/or close out options positions and then later purchase
common stocks and open new options positions in circumstances that might not
otherwise be optimal. The Fund's investment in such temporary investments under
unusual market circumstances may not be in furtherance of the Fund's investment
objectives.

    WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS.  Securities may be purchased
on a "forward commitment" or "when-issued" basis (meaning securities are
purchased or sold with payment and delivery taking place in the future) in order
to secure what is considered to be an advantageous price and yield at the time
of entering into the transaction. However, the return on a comparable security
when the transaction is consummated may vary from the return on the security at
the time that the forward commitment or when-issued transaction was made. From
the time of entering into the transaction until delivery and payment is made at
a later date, the transacted securities are subject to market fluctuations. In
forward commitment or when-issued transactions, if the seller or buyer, as the
case may be, fails to consummate the transaction, the counterparty may miss the
opportunity of obtaining a price or yield considered to be advantageous. Forward
commitment or when-issued transactions may occur a month or more before delivery
is due. However, no payment or delivery is made until payment is received or
delivery is made from the other party to the transaction. The Fund does not
intend to enter into forward commitment or when-issued transactions for the
purpose of investment leverage.

    ILLIQUID SECURITIES.  The Fund may invest up to 15% of its total assets in
securities for which there is no readily available trading market or that are
otherwise illiquid. Illiquid securities include securities legally restricted as
to resale, such as commercial paper issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended, and securities eligible for resale pursuant
to Rule 144A thereunder. Section 4(2) and Rule 144A securities may, however, be
treated as liquid by the Adviser pursuant to procedures adopted by the Board,
which require consideration of factors such as trading activity, availability of
market quotations and number of dealers willing to purchase the security. If the
Fund invests in Rule 144A securities, the level of portfolio illiquidity may be
increased to the extent that eligible buyers become uninterested in purchasing
such securities.

    It may be difficult to sell illiquid securities at a price representing
their fair value until such time as such securities may be sold publicly. Where
registration is required, a considerable period may elapse between a decision by
the Fund to sell the securities and the time when it would be permitted to sell.



                                       33

<PAGE>

Thus, the Fund may not be able to obtain as favorable a price as that prevailing
at the time of the decision to sell. The Fund may also acquire securities
through private placements under which it may agree to contractual restrictions
on the resale of such securities. Such restrictions might prevent their sale at
a time when such sale would otherwise be desirable.

    OTHER DERIVATIVE INSTRUMENTS.  In addition to the intended strategy of
selling index call options, the Fund may invest up to 20% of its total assets in
other derivative instruments (which are instruments that derive their value from
another instrument, security or index) acquired for hedging, risk management and
investment purposes (to gain exposure to securities, securities markets, markets
indices and/or currencies consistent with its investment objectives and
policies), provided that no more than 10% of the Fund's total assets may be
invested in such derivative instruments for non-hedging purposes. These
strategies may be executed through the use of derivative contracts in the United
States or abroad. In the course of pursuing these investment strategies, the
Fund may purchase and sell derivative contracts based on equity and fixed-income
indices and other instruments, purchase and sell futures contracts and options
thereon, and enter into various transactions such as swaps, caps, floors or
collars. In addition, derivatives may also include new techniques, instruments
or strategies that are not currently available. Derivative instruments may be
used by the Fund to enhance returns or as a substitute for the purchase or sale
of securities. The loss on derivative instruments (other than purchased options)
may substantially exceed an investment in these instruments.

    SWAPS.  Swap contracts may be purchased or sold to hedge against
fluctuations in securities prices, interest rates or market conditions, to
mitigate non-payment or default risk or to gain exposure to particular
securities, baskets of securities, indices or currencies. In a standard "swap"
transaction, two parties agree to exchange the returns (or differentials in
rates of return) on different currencies, securities, baskets of currencies or
securities, indices or other instruments, which returns are calculated with
respect to a "notional amount," i.e., the designated referenced amount of
exposure to the underlying instruments. The Fund will enter into swaps only on a
net basis, i.e., the two payment streams are netted out, with the Fund receiving
or paying, as the case may be, only the net amount of the two payments. If the
other party to a swap defaults, the Fund's risk of loss consists of the net
amount of payments that the Fund is contractually entitled to receive. The net
amount of the excess, if any, of the Fund's obligations over its entitlements
will be maintained in a segregated account by the Fund's custodian. The Fund
will not enter into any swap unless the claims-paying ability of the other party
thereto is considered to be investment grade by the Adviser. If there is a
default by the other party to such a transaction, the Fund will have contractual
remedies pursuant to the agreements related to the transaction. Swaps are traded
in the over-the-counter market. The use of swaps is a highly specialized
activity, which involves investment techniques and risks different from those
associated with ordinary portfolio securities transactions. If the Adviser is
incorrect in its forecasts of market values, interest rates and other applicable
factors, the total return performance of the Fund would be unfavorably affected.

    TOTAL RETURN SWAPS.  Total return swaps are contracts in which one party
agrees to make payments of the total return from the designated underlying
asset(s), which may include securities, baskets of securities, or securities
indices during the specified period, in return for payments equal to a fixed or
floating rate of interest or the total return from other designated underlying
asset(s).

    INTEREST RATE SWAPS.  Interest rate swaps involve the exchange by the Fund
with another party of their respective commitments to pay or receive interest
(e.g., an exchange of fixed rate payments for floating rate payments).

    FUTURES AND OPTIONS ON FUTURES.  The Fund may purchase and sell various
kinds of financial futures contracts and options thereon to seek to hedge
against changes in stock prices or interest rates, for other risk management
purposes or to gain exposure to certain securities, indices and currencies.
Futures contracts may be based on various securities indices and securities.
Such transactions involve a risk of loss or depreciation due to adverse changes
in securities prices, which may exceed the Fund's initial investment in these
contracts. The Fund will only purchase or sell futures contracts or related
options in compliance with the rules of the Commodity Futures Trading
Commission. These transactions involve transaction costs.


                                       34

<PAGE>

Sales of futures contracts and related options generally result in realization
of short-term or long-term capital gain depending on the period for which the
investment is held. To the extent that any futures contract or options on
futures contract held by the Fund is a "section 1256 contract" under the Code,
the contract will be marked-to-market annually and any gain or loss will be
treated as 60% long-term and 40% short-term, regardless of the holding period
for such contract.

    SHORT SALES.  The Fund may sell a security short if it owns at least an
equal amount of the security sold short or another security convertible or
exchangeable for an equal amount of the security sold short without payment of
further compensation (a short sale against-the-box). In a short sale against-
the-box, the short seller is exposed to the risk of being forced to deliver
stock that it holds to close the position if the borrowed stock is called in by
the lender, which would cause gain or loss to be recognized on the delivered
stock. The Fund expects normally to close its short sales against-the-box by
delivering newly acquired stock.

    Short sales against-the-box can be a tax-efficient alternative to the sale
of an appreciated securities position. The ability to use short sales against-
the-box as a tax-efficient management technique with respect to holdings of
appreciated securities is limited to circumstances in which the hedging
transaction is closed out not later than thirty days after the end of the Fund's
taxable year in which the transaction was initiated, and the underlying
appreciated securities position is held unhedged for at least the next sixty
days after the hedging transaction is closed. Not meeting these requirements
would trigger the recognition of gain on the underlying appreciated securities
position under the federal tax laws applicable to constructive sales.

    SECURITIES LENDING.  The Fund may seek to earn income by lending portfolio
securities to broker-dealers or other institutional borrowers. As with other
extensions of credit, there are risks of delay in recovery or even loss of
rights in the securities loaned if the borrower of the securities fails
financially. Loans will be made only to organizations whose credit quality or
claims paying ability is considered by the Adviser to be at least investment
grade and when the expected return, net of administrative expenses and any
finders' fees, justifies the attendant risk. Securities loans currently are
required to be secured continuously by collateral in cash, cash equivalents
(such as money market instruments) or other liquid securities held by the
custodian and maintained in an amount at least equal to the market value of the
securities loaned. The financial condition of the borrower will be monitored by
the Adviser on an ongoing basis.

    BORROWINGS.  The Fund may borrow money to the extent permitted under the
1940 Act as interpreted, modified or otherwise permitted by the regulatory
authority having jurisdiction. Although it does not currently intend to do so,
the Fund may in the future from time to time borrow money to add leverage to the
portfolio. The Fund may also borrow money for temporary administrative purposes
or to meet temporary cash needs.

    REVERSE REPURCHASE AGREEMENTS.  The Fund may enter into reverse repurchase
agreements. Under a reverse repurchase agreement, the Fund temporarily transfers
possession of a portfolio instrument to another party, such as a bank or broker-
dealer, in return for cash. At the same time, the Fund agrees to repurchase the
instrument at an agreed upon time (normally within seven days) and price, which
reflects an interest payment. The Fund may enter into such agreements when it is
able to invest the cash acquired at a rate higher than the cost of the
agreement, which would increase earned income. Income realized on reverse
repurchase agreements is taxable as ordinary income.

    When the Fund enters into a reverse repurchase agreement, any fluctuations
in the market value of either the securities transferred to another party or the
securities in which the proceeds may be invested would affect the market value
of the Fund's assets. As a result, such transactions may increase fluctuations
in the market value of the Fund's assets. There is a risk that large
fluctuations in the market value of the Fund's assets could affect net asset
value and the market price of Common Shares. Because reverse repurchase
agreements may be considered to be the practical equivalent of borrowing funds,
they constitute a form of leverage and may be subject to leverage risks. Such
agreements will be treated as subject to investment restrictions as mentioned
above under "Borrowings." If the Fund reinvests the proceeds of a


                                       35

<PAGE>

reverse repurchase agreement at a rate lower than the cost of the agreement,
entering into the agreement will lower the Fund's cash available for
distribution.

    PORTFOLIO TURNOVER.  The Fund will buy and sell securities to seek to
accomplish its investment objectives. Portfolio turnover generally involves
expense to the Fund, including brokerage commissions and other transaction costs
on the sale of securities and reinvestment in other securities. The Fund expects
to maintain high turnover in index call options, based on the Adviser's intent
to sell index call options on a portion of its stock portfolio value and the
Fund's initial expectation to roll forward its options positions approximately
every one to three months. For its stock holdings, the Fund's annual portfolio
turnover rate is expected to exceed that of the indices on which the Fund writes
call options due to turnover in connection with the Fund's active stock
selection, tax loss harvesting, dividend capture and other strategies. On an
overall basis, the Fund expects that its annual turnover rate will exceed 100%.
A high turnover rate (100% or more) necessarily involves greater trading costs
to the Fund.

RISK CONSIDERATIONS

    NO OPERATING HISTORY.  The Fund is a newly organized, diversified closed-end
investment company with no history of operations and is designed for long-term
investors and not as a trading vehicle.

    INVESTMENT AND MARKET RISK.  An investment in Common Shares is subject to
investment risk, including the possible loss of the entire principal amount
invested. An investment in Common Shares represents an indirect investment in
the securities owned by the Fund, which are generally traded on a securities
exchange or in the over-the-counter markets. The value of these securities, like
other market investments, may move up or down, sometimes rapidly and
unpredictably. Because the Fund normally intends to sell stock index call
options on a portion of its common stock portfolio value, the Fund's
appreciation potential from equity market performance will be more limited than
if the Fund did not engage in selling stock index call options. The Common
Shares at any point in time may be worth less than the original investment, even
after taking into account any reinvestment of distributions.

    ISSUER RISK.  The value of securities held by the Fund may decline for a
number of reasons that directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the issuer's goods and
services.

    EQUITY RISK.  Under normal market conditions, the Fund's investment program
will consist primarily of owning a diversified portfolio of common stocks.
Therefore, a principal risk of investing in the Fund is equity risk. Equity risk
is the risk that the value of securities held by the Fund will fall due to
general market or economic conditions, perceptions regarding the industries in
which the issuers of securities held by the Fund participate, and the particular
circumstances and performance of companies whose securities the Fund holds.
Although common stocks have historically generated higher average returns than
fixed-income securities over the long term, common stocks also have experienced
significantly more volatility in returns. An adverse event, such as an
unfavorable earnings report, may depress the value of equity securities of an
issuer held by the Fund; the price of common stock of an issuer may be
particularly sensitive to general movements in the stock market; or a drop in
the stock market may depress the price of most or all of the common stocks held
by the Fund. In addition, common stock of an issuer in the Fund's portfolio may
decline in price if the issuer fails to make anticipated dividend payments
because, among other possible reasons, the issuer of the security experiences a
decline in its financial condition. Common stocks in which the Fund will invest
are structurally subordinated to preferred stocks, bonds and other debt
instruments in a company's capital structure, in terms of priority to corporate
income, and therefore will be subject to greater dividend risk than preferred
stocks or debt instruments of such issuers. Finally, common stock prices may be
sensitive to rising interest rates, as the costs of capital rise and borrowing
costs increase.

    RISKS OF INVESTING IN MID-CAP COMPANIES.  The Fund may make investments in
stocks of companies whose market capitalization is considered middle sized or
"mid-cap." Mid-cap companies often are newer or less established companies than
larger companies. Investments in mid-cap companies carry additional risks
because earnings of these companies tend to be less predictable; they often have
limited product lines,


                                       36

<PAGE>

markets, distribution channels or financial resources; and the management of
such companies may be dependent upon one or a few key people. The market
movements of equity securities of mid-cap companies may be more abrupt or
erratic than the market movements of equity securities of larger, more
established companies or the stock market in general. Historically, mid-cap
companies have sometimes gone through extended periods when they did not perform
as well as larger companies. In addition, equity securities of mid-cap companies
generally are less liquid than those of larger companies. This means that the
Fund could have greater difficulty selling such securities at the time and price
that the Fund would like.

    RISKS OF SELLING INDEX CALL OPTIONS.  Under normal market conditions, a
portion of the Fund's common stock portfolio value will be subject to written
index call options. The purchaser of an index call option has the right to any
appreciation in the value of the index over the exercise price of the call
option as of the valuation date of the option. Because their exercise is settled
in cash, sellers of index call options such as the Fund cannot provide in
advance for their potential settlement obligations by acquiring and holding the
underlying securities. The Fund intends to mitigate the risks of its written
index call positions by writing options on one or more broad-based stock indices
that the Adviser believes collectively approximate the characteristics of its
common stock portfolio (or that portion of its portfolio against which options
are written). However, the Fund does not intend to acquire and hold a portfolio
of exactly the same stocks as the indices on which it writes call options. Due
to tax considerations, the Fund intends to limit the overlap between its stock
holdings (and any subset thereof) and each index on which it has outstanding
options positions to less than 70% on an ongoing basis. The Fund's stock
holdings will normally include stocks not included in the indices on which it
writes call options. Consequently, the Fund bears the risk that the performance
of the Fund's stock portfolio will vary from the performance of the indices on
which it writes call options. For example, the Fund will suffer a loss if the
S&P 500 appreciates substantially above the exercise price of S&P 500 call
options written by the Fund while the securities held by the Fund in the
aggregate fail to appreciate as much or decline in value over the life of the
written option. Index options written by the Fund will be priced on a daily
basis. Their value will be affected primarily by changes in the price and
dividend rates of the underlying common stocks in such index, changes in actual
or perceived volatility of such index and the remaining time to the options'
expiration. The trading price of index call options will also be affected by
liquidity considerations and the balance of purchase and sale orders.

    A decision as to whether, when and how to use options involves the exercise
of skill and judgment, and even a well-conceived and well-executed options
program may be adversely affected by market behavior or unexpected events. As
the writer of index call options, the Fund will forgo, during the option's life,
the opportunity to profit from increases in the value of the applicable index
above the sum of the option premium received and the exercise price of the call
option, but retains the risk of loss, minus the option premium received, should
the value of the applicable index decline. When a call option is exercised, the
Fund will be required to deliver an amount of cash determined by the excess of
the value of the applicable index at contract termination over the exercise
price of the option. Thus, the exercise of index call options sold by the Fund
may require the Fund to sell portfolio securities to generate cash at
inopportune times or for unattractive prices.

    To the extent that the Fund writes options on indices based upon foreign
stocks, the Fund generally intends to sell options on broad-based foreign
country and/or regional stock indices that are listed for trading in the United
States or which otherwise qualify as "section 1256 contracts." Options on
foreign indices that are listed for trading in the United States or which
otherwise qualify as "section 1256 contracts" under the Code may trade in
substantially lower volumes and with substantially wider bid-ask spreads than
other options contracts on the same or similar indices that trade on other
markets outside the United States. To implement its options program most
effectively, the Fund may sell index options that do not qualify as "section
1256 contracts." Gain or loss on index options not qualifying as "section 1256
contracts" under the Code would be realized upon disposition, lapse or
settlement of the positions and would be treated as short-term gain or loss.

    The trading price of options may be adversely affected if the market for
such options becomes less liquid or smaller. The Fund may close out a call
option by buying the option instead of letting it expire or


                                       37

<PAGE>

be exercised. There can be no assurance that a liquid market will exist when the
Fund seeks to close out a call option position by buying the option. Reasons for
the absence of a liquid secondary market on an exchange include the following:
(i) there may be insufficient trading interest in certain options; (ii)
restrictions may be imposed by an exchange on opening transactions or closing
transactions or both; (iii) trading halts, suspensions or other restrictions may
be imposed with respect to particular classes or series of options; (iv) unusual
or unforeseen circumstances may interrupt normal operations on an exchange; (v)
the facilities of an exchange or the Options Clearing Corporation (the "OCC")
may not at all times be adequate to handle current trading volume; or (vi) one
or more exchanges could, for economic or other reasons, decide or be compelled
to discontinue the trading of options (or a particular class or series of
options) at some future date. If trading were discontinued, the secondary market
on that exchange (or in that class or series of options) would cease to exist.
However, outstanding options on that exchange that had been issued by the OCC as
a result of trades on that exchange would continue to be exercisable in
accordance with their terms.

    The hours of trading for options may not conform to the hours during which
common stocks held by the Fund are traded. To the extent that the options
markets close before the markets for securities, significant price and rate
movements can take place in the securities markets that would not be reflected
concurrently in the options markets. Index call options are marked to market
daily and their value is affected by changes in the value and dividend rates of
the securities represented in the underlying index, changes in interest rates,
changes in the actual or perceived volatility of the associated index and the
remaining time to the options' expiration, as well as trading conditions in the
options market.

    TAX RISK.  Reference is made to "Federal Income Tax Matters" for an
explanation of the federal income tax consequences and attendant risks of
investing in the Fund. Although the Fund seeks to minimize and defer the federal
income taxes incurred by Common Shareholders in connection with their investment
in the Fund, there can be no assurance that it will be successful in this
regard. The tax treatment and characterization of the Fund's distributions may
change over time due to changes in the Fund's mix of investment returns and
changes in the federal tax laws, regulations and administrative and judicial
interpretations. The provisions of the Code applicable to qualified dividend
income are set to expire at the close of 2010. Thereafter, the Fund's
distributions to Common Shareholders of qualified dividend income will be
subject to tax at the higher rates that apply to ordinary income unless further
legislative action is taken. There can be no assurances that after 2010 such
qualified dividends will be available to the Fund and its Common Shareholders.
The Fund's investment program and the tax treatment of Fund distributions may be
affected by IRS interpretations of the Code and future changes in tax laws and
regulations, including changes resulting from the "sunset" provisions described
above that would have the effect of repealing the favorable treatment of
qualified dividend income and reimposing the higher tax rates applicable to
ordinary income beginning in 2011 unless further legislative action is taken.
Distributions paid on the Common Shares may be characterized variously as non-
qualified dividends (taxable at ordinary income rates), qualified dividends
(generally taxable at long-term capital gains rates), capital gains dividends
(taxable at long-term capital gains rates) or return of capital (generally not
currently taxable). The ultimate tax characterization of the Fund's
distributions made in a calendar year may not finally be determined until after
the end of that calendar year. Distributions to a Common Shareholder that are
return of capital will be tax free to the amount of the Common Shareholder's
current tax basis in his or her Common Shares, with any distribution amounts
exceeding such basis treated as capital gain on a deemed sale of Common Shares.
Common Shareholders are required to reduce their tax basis in Common Shares by
the amount of tax-free return of capital distributions received, thereby
increasing the amount of capital gain (or decreasing the amount of capital loss)
to be recognized upon a later disposition of the Common Shares. In order for
Fund distributions of qualified dividend income to be taxable at favorable long-
term capital gains rates, a Common Shareholder must meet certain prescribed
holding period and other requirements with respect to his or her Common Shares.
If positions held by the Fund were treated as "straddles" for federal income tax
purposes, dividends on such positions would not constitute qualified dividend
income subject to favorable income tax treatment. Gain or loss on positions in a
straddle are subject to special (and generally disadvantageous) rules as
described under "Federal Income Tax Matters."



                                       38

<PAGE>

    DISTRIBUTION RISK.  The quarterly distributions Common Shareholders will
receive from the Fund will be sourced from the Fund's dividends and interest
income after payment of Fund expenses, net option premiums, and net realized and
unrealized gains on stock investments. The Fund's cash available for
distribution may vary widely over the short- and long-term. Dividends on common
stocks are not fixed but are declared at the discretion of the issuer's board of
directors. The Fund's dividend income will be substantially influenced by the
activity level and success of its dividend capture trading program. If stock
market volatility and/or stock prices decline, the level of premiums from
writing index call options and the amounts available for distribution from the
Fund's options activity will likely decrease as well. Payments to close written
call options will reduce amounts available for distribution from call option
premiums received. Net realized and unrealized gains on the Fund's stock
investments will be determined primarily by the direction and movement of the
United States stock market and the particular stocks held. There can be no
assurance that quarterly distributions paid by the Fund to the Common
Shareholders will be maintained at initial levels or increase over time.

    FOREIGN SECURITY RISK.  The value of foreign securities is affected by
changes in currency rates, foreign tax laws (including withholding tax),
government policies (in this country or abroad), relations between nations and
trading, settlement, custodial and other operational risks. In addition, the
costs of investing abroad (such as foreign brokerage costs, custodial expenses
and other fees) are generally higher than in the United States, and foreign
securities markets may be less liquid, more volatile and less subject to
governmental supervision than markets in the United States. Foreign investments
also could be affected by other factors not present in the United States,
including expropriation of assets, armed conflict, confiscatory taxation, lack
of uniform accounting and auditing standards, less publicly available financial
and other information and potential difficulties in enforcing contractual
obligations or repatriating capital invested in foreign countries. As an
alternative to holding foreign-traded securities, the Fund may invest in dollar-
denominated securities of foreign companies that trade on United States
exchanges or in the United States over-the-counter market (including depositary
receipts, which evidence ownership in underlying foreign securities). Since the
Fund may invest in securities denominated or quoted in currencies other than the
United States dollar, the Fund will be affected by changes in foreign currency
exchange rates (and exchange control regulations) which affect the value of
investments held by the Fund and the accrued income and appreciation or
depreciation of the investments in United States dollars. Changes in foreign
currency exchange rates relative to the United States dollar will affect the
United States dollar value of the Fund's assets denominated in that currency and
the Fund's return on such assets as well as any temporary uninvested reserves in
bank deposits in foreign currencies. In addition, the Fund will incur costs in
connection with conversions between various currencies. Foreign securities may
not be eligible for the reduced rate of taxation applicable to qualified
dividend income.

    Because foreign companies may not be subject to accounting, auditing and
financial reporting standards, practices and requirements comparable to those
applicable to United States companies, there may be less publicly available
information about a foreign company than about a domestic company. There is
generally less government supervision and regulation of securities exchanges,
broker-dealers and listed companies than in the United States. Mail service
between the United States and foreign countries may be slower or less reliable
than within the United States, thus increasing the risk of delayed settlements
of portfolio transactions for, or loss of certificates of, portfolio securities.
Payment for securities before delivery may be required. In addition, with
respect to certain foreign countries, there is the possibility of expropriation
or confiscatory taxation, political or social instability, or diplomatic
developments that could adversely affect investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the United States economy in such respects as growth of gross national product,
rate of inflation, capital reinvestment, resource self-sufficiency and balance
of payments position. Foreign securities markets, while growing in volume and
sophistication, are generally not as developed as those in the United States,
and securities of some foreign issuers (particularly those located in developing
countries) may be less liquid and more volatile than securities of comparable
United States companies.

    EMERGING MARKET SECURITY RISK.  The Fund may invest up to 5% of its total
assets in securities of issuers located in emerging markets. The risks of
foreign investments described above apply to an even


                                       39

<PAGE>

greater extent to investments in emerging markets. The securities markets of
emerging countries are generally smaller, less developed, less liquid, and more
volatile than the securities markets of the United States and developed foreign
markets. Disclosure and regulatory standards in many respects are less stringent
than in the United States and developed foreign markets. There also may be a
lower level of monitoring and regulation of securities markets in emerging
market countries and the activities of investors in such markets and enforcement
of existing regulations may be limited. Many emerging countries have experienced
substantial, and in some periods extremely high, rates of inflation for many
years. Inflation and rapid fluctuations in inflation rates have had and may
continue to have very negative effects on the economies and securities markets
of certain emerging countries. Economies in emerging markets generally are
heavily dependent upon international trade and, accordingly, have been and may
continue to be affected adversely by trade barriers, exchange controls, managed
adjustments in relative currency values, and other protectionist measures
imposed or negotiated by the countries with which they trade. The economies of
these countries also have been and may continue to be adversely affected by
economic conditions in the countries in which they trade. The economies of
countries with emerging markets may also be predominantly based on only a few
industries or dependent on revenues from particular commodities. In addition,
custodial services and other costs relating to investment in foreign markets may
be more expensive in emerging markets than in many developed foreign markets,
which could reduce the Fund's income from such securities.

    In many cases, governments of emerging countries continue to exercise
significant control over their economies, and government actions relative to the
economy, as well as economic developments generally, may affect the Fund's
investments in those countries. In addition, there is a heightened possibility
of expropriation or confiscatory taxation, imposition of withholding taxes on
dividend and interest payments, or other similar developments that could affect
investments in those countries. There can be no assurance that adverse political
changes will not cause the Fund to suffer a loss of any or all of its
investments.

    INTEREST RATE RISK.  The premiums from writing index call options and
amounts available for distribution from the Fund's options activity may decrease
in declining interest rate environments. The value of the Fund's common stock
investments may also be influenced by changes in interest rates. Higher yielding
stocks and stocks of issuers whose businesses are substantially affected by
changes in interest rates may be particularly sensitive to interest rate risk.

    DERIVATIVES RISK.  In addition to writing index call options, the risks of
which are described above, the Fund may invest up to 20% of its total assets in
other derivative investments acquired for hedging, risk management and
investment purposes, provided that no more than 10% of the Fund's total assets
may be invested in such derivative instruments acquired for non-hedging
purposes. The loss on derivative instruments (other than purchased options) may
substantially exceed an investment in these instruments. Derivative transactions
including options on securities and securities indices and other transactions in
which the Fund may engage (such as futures contracts and options thereon, swaps
and short sales) may subject the Fund to increased risk of principal loss due to
unexpected movements in stock prices, changes in stock volatility levels and
interest rates, and imperfect correlations between the Fund's securities
holdings and indices upon which derivative transactions are based. Derivatives
can be illiquid, may disproportionately increase losses, and may have a
potentially large impact on the Fund's performance. The Fund also will be
subject to credit risk with respect to the counterparties to any over-the-
counter derivatives contracts entered into by the Fund. If a counterparty
becomes bankrupt or otherwise fails to perform its obligations under a
derivative contract due to financial difficulties, the Fund may experience
significant delays in obtaining any recovery under the derivative contract in a
bankruptcy or other reorganization proceeding. The Fund may obtain only a
limited recovery or no recovery in such circumstances. Derivatives may
disproportionately increase losses and have a potentially large negative impact
on the Funds' performance.

    LIQUIDITY RISK.  The Fund may invest up to 15% of its total assets in
securities for which there is no readily available trading market or which are
otherwise illiquid. The Fund may not be able readily to dispose of such
securities at prices that approximate those at which the Fund could sell such
securities if they were more widely traded and, as a result of such illiquidity,
the Fund may have to sell other


                                       40

<PAGE>

investments or engage in borrowing transactions if necessary to raise cash to
meet its obligations. In addition, the limited liquidity could affect the market
price of the securities, thereby adversely affecting the Fund's net asset value,
and at times may make the disposition of securities infeasible.

    INFLATION RISK.  Inflation risk is the risk that the purchasing power of
assets or income from investment will be worth less in the future as inflation
decreases the value of money. As inflation increases, the real value of the
Common Shares and distributions thereon can decline.

    MARKET PRICE OF COMMON SHARES.  The Fund's share price will fluctuate and,
at the time of sale, shares may be worth more or less than the original
investment or the Fund's then current net asset value. The Fund cannot predict
whether its shares will trade at a price at, above or below its net asset value.
Shares of closed-end funds frequently trade at a discount to net asset value.

    FINANCIAL LEVERAGE RISK.  Although the Fund has no current intention to do
so, the Fund is authorized and reserves the flexibility to utilize leverage
through the issuance of preferred shares and/or borrowings, including the
issuance of debt securities. In the event that the Fund determines in the future
to utilize investment leverage, there can be no assurance that such a leveraging
strategy will be successful during any period in which it is employed. Leverage
creates risks for Common Shareholders, including the likelihood of greater
volatility of net asset value and market price of the Common Shares and the risk
that fluctuations in distribution rates on any preferred shares or fluctuations
in borrowing costs may affect the return to Common Shareholders. To the extent
the returns derived from securities purchased with proceeds received from
leverage exceeds the cost of leverage, the Fund's distributions may be greater
than if leverage had not been used. Conversely, if the returns from the
securities purchased with such proceeds are not sufficient to cover the cost of
leverage, the amount available for distribution to Common Shareholders will be
less than if leverage had not been used. In the latter case, Eaton Vance, in its
best judgment, may nevertheless determine to maintain the Fund's leveraged
position if it deems such action to be appropriate. The costs of an offering of
preferred shares and/or a borrowing program would be borne by Common
Shareholders and consequently would result in a reduction of the net asset value
of Common Shares. In addition, the fee paid to Eaton Vance will be calculated on
the basis of the Fund's average daily gross assets, including proceeds from the
issuance of preferred shares and/or borrowings, so the fee will be higher when
leverage is utilized. In this regard, holders of preferred shares do not bear
the investment advisory fee. Rather, Common Shareholders bear the portion of the
investment advisory fee attributable to the assets purchased with the proceeds
of the preferred shares offering.

    MANAGEMENT RISK.  The Fund is subject to management risk because it is an
actively managed portfolio. Eaton Vance, Rampart and the individual portfolio
managers invest the assets of the Fund as they deem appropriate in implementing
the Fund's investment strategy. Accordingly, the success of the Fund depends
upon the investment skills and analytical abilities of Eaton Vance, Rampart and
the individual portfolio managers to develop and actively implement investment
strategies that achieve the Fund's investment objectives. There is no assurance
that Eaton Vance, Rampart and the individual portfolio managers will be
successful in developing and implementing the Fund's investment strategy.
Subjective decisions made by Eaton Vance, Rampart and the individual portfolio
managers may cause the Fund to incur losses or to miss profit opportunities on
which it could otherwise have capitalized.

    MARKET DISRUPTION.  The aftermath of the war in Iraq and the continuing
occupation of Iraq, instability in the Middle East and terrorist attacks in the
U.S. and around the world have resulted in market volatility and may have long-
term effects on the U.S. and worldwide financial markets and may cause further
economic uncertainties in the U.S. and worldwide. The Fund does not know how
long the securities markets will continue to be affected by these events and
cannot predict the effects of the occupation or similar events in the future on
the U.S. economy and securities markets. Given the risks described above, an
investment in the Common Shares may not be appropriate for all investors. You
should carefully consider your ability to assume these risks before making an
investment in the Fund.

    ANTI-TAKEOVER PROVISIONS.  The Fund's Agreement and Declaration of Trust
includes provisions that could limit the ability of other persons or entities to
acquire control of the Fund or to change the composition of its Board. These
provisions may deprive Common Shareholders of opportunities to sell their Common
Shares at a premium over the then current market price of the Common Shares. See
"Description of Capital Structure -- Anti-Takeover Provisions in the Agreement
and Declaration of Trust."



                                       41

<PAGE>

                             MANAGEMENT OF THE FUND

BOARD OF TRUSTEES

    The management of the Fund, including general supervision of the duties
performed by the Adviser under the Advisory Agreement (as defined below) and the
Sub-Adviser under the Sub-Advisory Agreement (as defined below), is the
responsibility of the Fund's Board under the laws of The Commonwealth of
Massachusetts and the 1940 Act.

THE ADVISER

    Eaton Vance acts as the Fund's investment adviser under an Investment
Advisory Agreement (the "Advisory Agreement"). The Adviser's principal office is
located at The Eaton Vance Building, 255 State Street, Boston, Massachusetts
02109. Eaton Vance, its affiliates and predecessor companies have been managing
assets of individuals and institutions since 1924 and of investment funds since
1931. Eaton Vance (or its affiliates) currently serves as the investment adviser
to investment funds and various individual and institutional clients with
combined assets under management of approximately $124.1 billion as of September
30, 2006, including approximately $74.9 billion in equity assets. Eaton Vance is
a direct, wholly-owned subsidiary of Eaton Vance Corp., a publicly-held holding
company, which through its subsidiaries and affiliates engages primarily in
investment management, administration and marketing activities.

    Under the general supervision of the Fund's Board, Eaton Vance will be
responsible for the Fund's overall investment program, structuring and managing
the Fund's common stock portfolio, including dividend capture trading, tax-loss
harvesting and other tax-management techniques, providing consultation to the
Sub-Adviser and supervising the performance of the Sub-Adviser. As described
below under the caption "The Sub-Adviser," Rampart will be responsible for
providing advice on and execution of the Fund's options strategy. The Adviser
will furnish to the Fund investment advice and office facilities, equipment and
personnel for servicing the investments of the Fund. The Adviser will compensate
all Trustees and officers of the Fund who are members of the Adviser's
organization and who render investment services to the Fund, and will also
compensate all other Adviser personnel who provide research and investment
services to the Fund. In return for these services, facilities and payments, the
Fund has agreed to pay the Adviser as compensation under the Advisory Agreement
an annual fee in the amount of 1.00% of the average daily gross assets of the
Fund. For purposes of the Advisory Agreement and the Sub-Advisory Agreement,
gross assets of the Fund means total assets of the Fund, including any form of
investment leverage that the Fund may in the future determine to utilize, minus
all accrued expenses incurred in the normal course of operations, but not
excluding any liabilities or obligations attributable to any future investment
leverage obtained through (i) indebtedness of any type (including, without
limitation, borrowing through a credit facility/commercial paper program or the
issuance debt securities), (ii) the issuance of preferred shares or other
similar preference securities, (iii) the reinvestment of collateral received for
securities loaned in accordance with the Fund's investment objectives and
policies and/or (iv) any other means. During any future periods in which the
Fund is using leverage, the fees paid to Eaton Vance for investment advisory
services will be higher than if the Fund did not use leverage because the fees
paid will be calculated on the basis of the Fund's gross assets, including
proceeds from any borrowings and from the issuance of preferred shares.

    Walter A. Row and Michael A. Allison are the Fund's portfolio managers and
together are responsible for managing the Fund's overall investment program,
structuring and managing the Fund's common stock portfolio, providing
consultation to the Sub-Adviser and supervising the performance of the Sub-
Adviser. Mr. Row and Mr. Allison are the portfolio managers responsible for the
day-to-day management of Eaton Vance's responsibilities with respect to the
Fund's investment portfolio.

    Mr. Row is Vice President and Director of Equity Research at Eaton Vance. He
is a member of Eaton Vance's Equity Strategy Committee and manages five other
Eaton Vance registered closed-end investment


                                       42

<PAGE>

companies. He has been a member of Eaton's Vance's equity investment team since
1996, and has over 25 years of professional experience.

    Mr. Allison is a Vice President of Eaton Vance and co-portfolio manager of a
privately offered equity fund sponsored by Eaton Vance. He has been a member of
Eaton Vance's equity investment team since 2000, and has over 17 years of
professional experience.

THE SUB-ADVISER

    Eaton Vance has engaged Rampart to serve as a sub-adviser to the Fund to
provide advice on and execution of the Fund's options strategy. Rampart's
principal office is located at One International Place, Boston, Massachusetts
02110. Founded in 1983, Rampart provides customized options program management
utilizing listed equity and index options to a spectrum of institutional, high
net worth and investment company clients. Rampart managed approximately $6.6
billion in assets as of September 30, 2006.

    Ronald M. Egalka is the portfolio manager at Rampart responsible for the
development and implementation of the options strategy utilized in managing the
Fund.

    Mr. Egalka is President and CEO of Rampart. He is also President of Rampart
Securities, Inc., an affiliate of Rampart and a NASD member broker/dealer. Mr.
Egalka oversees the development and implementation of options investment
strategies employed by Rampart clients, including five other Eaton Vance
registered closed-end investment companies.

    Under the terms of the Sub-Advisory Agreement (the "Sub-Advisory Agreement")
between Eaton Vance and Rampart, Eaton Vance (and not the Fund) will pay Rampart
a fee at an annual rate equal to 0.05% of the value of the Fund's average daily
gross assets that is subject to written call options. Pursuant to the terms of
the Advisory Agreement, Eaton Vance, upon approval by the Board, may terminate
the Sub-Advisory Agreement and Eaton Vance may assume full responsibility for
the services provided by Rampart without the need for approval by shareholders
of the Fund.

    The Fund, the Adviser and the Sub-Adviser have adopted codes of ethics
relating to personal securities transactions (the "Codes of Ethics"). The Codes
of Ethics permit Adviser and Sub-Adviser personnel to invest in securities
(including securities that may be purchased or held by the Fund) for their own
accounts, subject to certain pre-clearance, reporting and other restrictions and
procedures contained in such Codes of Ethics.

ADDITIONAL INFORMATION REGARDING PORTFOLIO MANAGERS

    The Statement of Additional Information provides additional information
about the portfolio managers' compensation, other accounts managed by the
portfolio managers, and the portfolio managers' ownership of securities in the
Fund.

THE ADMINISTRATOR

    Eaton Vance serves as administrator of the Fund. Under an Administration
Agreement with the Fund (the "Administration Agreement"), Eaton Vance is
responsible for managing the business affairs of the Fund, subject to the
supervision of the Fund's Board. Eaton Vance will furnish to the Fund all office
facilities, equipment and personnel for administering the affairs of the Fund.
Eaton Vance's administrative services include recordkeeping, preparation and
filing of documents required to comply with federal and state securities laws,
supervising the activities of the Fund's custodian and transfer agent, providing
assistance in connection with the Board and shareholders' meetings, providing
service in connection with any repurchase offers and other administrative
services necessary to conduct the Fund's business. Eaton Vance currently
receives no compensation for providing administrative services to the Fund. In
addition to the management fee, the Fund pays all costs and expenses of its
operation, including compensation of its Trustees (other than those affiliated
with the Adviser), custodial expenses, dividend disbursing expenses, legal fees,
expenses of independent auditors, expenses of preparing Fund documents and
reports to governmental agencies, and taxes and filing or other fees, if any.



                                       43

<PAGE>

                                  DISTRIBUTIONS

    Commencing with the Fund's first distribution, the Fund intends to make
regular quarterly distributions to Common Shareholders sourced from the Fund's
cash available for distribution. "Cash available for distribution" will consist
of the Fund's dividends and interest income after payment of Fund expenses, net
option premiums and net realized and unrealized gains on stock investments. The
Fund's distribution rate may be adjusted from time to time. The Board may modify
this distribution policy at any time without obtaining the approval of Common
Shareholders. The initial distribution is expected to be declared approximately
75 days and paid approximately 90 to 120 days after the completion of this
offering, depending on market conditions.

    The Fund's annual distributions will likely differ from annual net
investment income. The investment income of the Fund will consist of all
dividend and interest income accrued on portfolio investments, short-term
capital gain (including short-term gains on option positions and gains on the
sale of portfolio investments held for one year or less) in excess of long-term
capital loss and income from certain hedging transactions, less all expenses of
the Fund. Expenses of the Fund will be accrued each day. To the extent that that
Fund's net investment income for any year exceeds the total quarterly
distributions paid during the year, the Fund will make a special distribution at
or near year-end of such excess amount as may be required. Over time, all of the
Fund's investment company taxable income will be distributed.

    At least annually, the Fund intends to distribute any net capital gain
(which is the excess of net long-term capital gain over net short-term capital
loss) or, alternatively, to retain all or a portion of the year's net capital
gain and pay federal income tax on the retained gain. As provided under federal
tax law, Common Shareholders of record as of the end of the Fund's taxable year
will include their attributable share of the retained gain in their income for
the year as a long-term capital gain, and will be entitled to a tax credit or
refund for the tax paid on their behalf by the Fund. The Fund may treat the cash
value of tax credit and refund amounts in connection with retained capital gains
as a substitute for equivalent cash distributions.

    If, for any calendar year, as discussed above, the total distributions made
exceed the Fund's net investment taxable income and net capital gains, the
excess generally will be treated as a tax-free return of capital to each Common
Shareholder (up to the amount of the Common Shareholder's basis in his or her
Common Shares) and thereafter as gain from the sale of Common Shares. The amount
treated as a tax-free return of capital will reduce the Common Shareholder's
adjusted basis in his or her Common Shares, thereby increasing his or her
potential gain or reducing his or her potential loss on the subsequent sale of
his or her Common Shares. Distributions in any year may include a substantial
return of capital component. Under the 1940 Act, for any distribution that
includes amounts from sources other than net income, the Fund is required to
provide Common Shareholders a written statement regarding the components of such
distribution. Such a statement will be provided at the time of any distribution
believed to include any such amounts.

    To permit the Fund to maintain more stable distributions, distribution rates
will be based on projected annual cash available for distribution. As a result,
the distributions paid by the Fund for any particular quarter may be more or
less than the amount of cash available for distribution for that quarterly
period. In certain circumstances, the Fund may be required to sell a portion of
its investment portfolio to fund distributions. Distributions will reduce the
Common Shares' net asset value.

    Common Shareholders may automatically reinvest some or all of their
distributions in additional Common Shares under the Fund's dividend reinvestment
plan. See "Dividend Reinvestment Plan."

    The Fund has applied for an order from the Securities and Exchange
Commission granting it an exemption from Section 19(b) of the 1940 Act and Rule
19b-1 thereunder to permit the Fund to include realized long-term capital gains
as a part of its regular distributions to Common Shareholders more frequently
than would otherwise be permitted by the 1940 Act (generally once per taxable
year). In the event that such an exemptive order is obtained, the Fund will
consider increasing the frequency of its regular distributions to Common
Shareholders from quarterly to monthly. The Fund does not intend to designate
more than the permitted number of capital gain distributions until it receives
such an exemptive


                                       44

<PAGE>

order. However, if the Fund fails to receive the requested relief and the Fund
is unable to include realized capital gains in regular distributions more
frequently than would otherwise be permitted by the 1940 Act, the Adviser does
not believe that the distribution policy, as set forth above, will otherwise be
adversely affected. The Adviser does not believe that retaining capital gains
and paying tax thereon would have a material adverse affect on the Fund or the
Common Shareholders.

                           FEDERAL INCOME TAX MATTERS

    The following discussion of federal income tax matters is based on the
advice of Kirkpatrick & Lockhart Nicholson Graham LLP, counsel to the Fund. The
Fund intends to elect to be treated and to qualify each year as a regulated
investment company (a "RIC") under the Code. Accordingly, the Fund intends to
satisfy certain requirements relating to sources of its income and
diversification of its assets and to distribute substantially all of its net
income and net short-term capital gains (after reduction by net long term
capital losses and any available capital loss carryforwards) in accordance with
the timing requirements imposed by the Code, so as to maintain its regulated
investment company status and to avoid paying federal income or excise tax
thereon. To the extent it qualifies for treatment as a regulated investment
company and satisfies the above-mentioned distribution requirements, the Fund
will not be subject to federal income tax on income paid to its shareholders in
the form of dividends or capital gains distributions.

    At least annually, the Fund intends to distribute any net capital gain
(which is the excess of net long-term capital gain over net short-term capital
loss) or, alternatively, to retain all or a portion of the year's net capital
gain and pay federal income tax on the retained gain. As provided under federal
tax law, Common Shareholders of record as of the end of the Fund's taxable year
will include their attributable share of the retained gain in their income for
the year as long-term capital gain (regardless of holding period in the Common
Shares), and will be entitled to a tax credit or refund for the tax paid on
their behalf by the Fund. Common Shareholders of record for the retained capital
gain will also be entitled to increase their tax basis in their Common Shares by
65 percent of the allocated gain. Distributions of the Fund's net capital gain
("capital gain distributions"), if any, are taxable to Common Shareholders as
long-term capital gain, regardless of their holding period in the Common Shares.
Distributions of the Fund's net realized short-term gains will be taxable as
ordinary income.

    If, for any calendar year, the Fund's total distributions exceed the Fund's
current and accumulated earnings and profits, the excess will be treated as a
tax-free return of capital to each Common Shareholder (up to the amount of the
Common Shareholder's basis in his or her Common Shares) and thereafter as gain
from the sale of Common Shares (assuming the Common Shares are held as a capital
asset). The amount treated as a tax-free return of capital will reduce the
Common Shareholder's adjusted basis in his or her Common Shares, thereby
increasing his or her potential gain or reducing his or her potential loss on
the subsequent sale or other disposition of his or her Common Shares. See below
for a summary of the maximum tax rates applicable to long-term capital gain
(including capital gain distributions). A corporation that owns Fund shares
generally will not be entitled to the dividends received deduction ("DRD") with
respect to all (or any prescribed percentage) of the distributions it receives
from the Fund. Fund distributions that are attributable to qualified dividend
income received by the Fund from certain domestic corporations may be designated
by the Fund as being eligible for the DRD.

    If the Fund does not qualify as a RIC for any taxable year, the Fund's
taxable income will be subject to corporate income taxes, and all distributions
from earnings and profits, including distributions of net capital gain (if any),
will be taxable to the shareholder as ordinary income. Such distributions
generally would be eligible (i) to be treated as qualified dividend income in
the case of individual and other noncorporate shareholders and (ii) for the DRD
in the case of corporate shareholders. In addition, in order to requalify for
taxation as a RIC, the Fund may be required to recognize unrealized gains, pay
substantial taxes and interest, and make certain distributions.

    Certain of the Fund's investment practices are subject to special and
complex federal income tax provisions that may, among other things, (i) convert
dividends that would otherwise constitute qualified


                                       45

<PAGE>

dividend income into ordinary income, (ii) treat dividends that would otherwise
be eligible for the corporate DRD as ineligible for such treatment, (iii)
disallow, suspend or otherwise limit the allowance of certain losses or
deductions, (iv) convert long-term capital gain into short-term capital gain or
ordinary income, (v) convert an ordinary loss or deduction into a capital loss
(the deductibility of which is more limited), (vi) cause the Fund to recognize
income or gain without a corresponding receipt of cash, (vii) adversely affect
the time as to when a purchase or sale of stock or securities is deemed to
occur, (viii) adversely alter the characterization of certain complex financial
transactions, and (ix) produce income that will not qualify as good income for
purposes of the income requirement that applies to RICs. While it may not always
be successful in doing so, the Fund will seek to avoid or minimize the adverse
tax consequences of its investment practices.

    For the Fund's index call options that qualify as "section 1256 contracts,"
Code Section 1256 generally will require any gain or loss arising from the
lapse, closing out or exercise of such positions to be treated as 60% long-term
and 40% short-term capital gain or loss. In addition, the Fund generally will be
required to "mark to market" (i.e., treat as sold for fair market value) each
outstanding index option position at the close of each taxable year (and on
October 31 of each year for excise tax purposes). If a "section 1256 contract"
held by the Fund at the end of a taxable year is sold in the following year, the
amount of any gain or loss realized on such sale will be adjusted to reflect the
gain or loss previously taken into account under the "mark to market" rules. In
addition to most index call options, "section 1256 contracts" under the Code
include certain other options contracts, certain regulated futures contracts,
and certain other financial contracts.

    The Fund's index call options that do not qualify as "section 1256
contracts" under the Code generally will be treated as equity options governed
by Code Section 1234. Pursuant to Code Section 1234, if a written option expires
unexercised, the premium received is short-term capital gain to the Fund. If the
Fund enters into a closing transaction, the difference between the premium
received for writing the option, and the amount paid to close out its position
is short-term capital gain or loss. If a call option written by the Fund that is
not a "section 1256 contract" is cash settled, any resulting gain or loss will
be short-term.

    The Code contains special rules that apply to "straddles," defined generally
as the holding of "offsetting positions with respect to personal property." For
example, the straddle rules normally apply when a taxpayer holds stock and an
offsetting option with respect to such stock or substantially identical stock or
securities. In general, investment positions will be offsetting if there is a
substantial diminution in the risk of loss from holding one position by reason
of holding one or more other positions. The Fund expects that the index call
options it writes will not be considered straddles for this purpose because the
Fund's portfolio of common stocks will be sufficiently dissimilar from the
components of each index on which it has outstanding options positions under
applicable guidance established by the IRS. Under certain circumstances,
however, the Fund may enter into options transactions or certain other
investments that may constitute positions in a straddle. If two or more
positions constitute a straddle, recognition of a realized loss from one
position must generally be deferred to the extent of unrecognized gain in an
offsetting position. In addition, long-term capital gain may be recharacterized
as short-term capital gain, or short-term capital loss as long-term capital
loss. Interest and other carrying charges allocable to personal property that is
part of a straddle are not currently deductible but must instead be capitalized.
Similarly, "wash sale" rules apply to prevent the recognition of loss by the
Fund from the disposition of stock or securities at a loss in a case in which
identical or substantially identical stock or securities (or an option to
acquire such property) is or has been acquired within a prescribed period.

    The Code allows a taxpayer to elect to offset gains and losses from
positions that are part of a "mixed straddle." A "mixed straddle" is any
straddle in which one or more but not all positions are "section 1256
contracts." The Fund may be eligible to elect to establish one or more mixed
straddle accounts for certain of its mixed straddle trading positions. The mixed
straddle account rules require a daily "marking to market" of all open positions
in the account and a daily netting of gains and losses from all positions in the
account. At the end of a taxable year, the annual net gains or losses from the
mixed straddle account are recognized for tax purposes. The net capital gain or
loss is treated as 60% long-term and 40% short-


                                       46

<PAGE>

term capital gain or loss if attributable to the "section 1256 contract"
positions, or all short-term capital gain or loss if attributable to the non-
section 1256 contract positions.

    The Fund may recognize gain (but not loss) from a constructive sale of
certain "appreciated financial positions" if the Fund enters into a short sale,
offsetting notional principal contract, or forward contract transaction with
respect to the appreciated position or substantially identical property.
Appreciated financial positions subject to this constructive sale treatment
include interests (including options and forward contracts and short sales) in
stock and certain other instruments. Constructive sale treatment does not apply
if the transaction is closed out not later than thirty days after the end of the
taxable year in which the transaction was initiated, and the underlying
appreciated securities position is held unhedged for at least the next sixty
days after the hedging transaction is closed.

    Gain or loss from a short sale of property is generally considered as
capital gain or loss to the extent the property used to close the short sale
constitutes a capital asset in the Fund's hands. Except with respect to certain
situations where the property used to close a short sale has a long-term holding
period on the date the short sale is entered into, gains on short sales
generally are short-term capital gains. A loss on a short sale will be treated
as a long-term capital loss if, on the date of the short sale, "substantially
identical property" has been held by the Fund for more than one year. In
addition, entering into a short sale may result in suspension of the holding
period of "substantially identical property" held by the Fund.

    Gain or loss on a short sale will generally not be realized until such time
as the short sale is closed. However, as described above in the discussion of
constructive sales, if the Fund holds a short sale position with respect to
securities that has appreciated in value, and it then acquires property that is
the same as or substantially identical to the property sold short, the Fund
generally will recognize gain on the date it acquires such property as if the
short sale were closed on such date with such property. Similarly, if the Fund
holds an appreciated financial position with respect to securities and then
enters into a short sale with respect to the same or substantially identical
property, the Fund generally will recognize gain as if the appreciated financial
position were sold at its fair market value on the date it enters into the short
sale. The subsequent holding period for any appreciated financial position that
is subject to these constructive sale rules will be determined as if such
position were acquired on the date of the constructive sale.

    Under the "Jobs and Growth Tax Relief Reconciliation Act of 2003" (the "2003
Tax Act"), certain dividend distributions paid by the Fund (whether paid in cash
or reinvested in additional Common Shares) to individual taxpayers are taxed at
rates applicable to net long-term capital gains (15%, or 5% for individuals in
the 10% or 15% tax brackets). This tax treatment applies only if certain holding
period and other requirements are satisfied by the Common Shareholder, as
discussed below, and the dividends are attributable to qualified dividend income
received by the Fund itself. For this purpose, "qualified dividend income" means
dividends received by the Fund from United States corporations and "qualified
foreign corporations," provided that the Fund satisfies certain holding period
and other requirements in respect of the stock of such corporations.

    Subject to certain exceptions, a "qualified foreign corporation" is any
foreign corporation that is either (i) incorporated in a possession of the
United States (the "possessions test"), or (ii) eligible for benefits of a
comprehensive income tax treaty with the United States that the Secretary of the
Treasury determines is satisfactory for these purposes and which includes an
exchange of information program (the "treaty test"). The Secretary of the
Treasury has currently identified tax treaties between the United States and 52
other countries that satisfy the treaty test. Subject to the same exceptions, a
foreign corporation that does not satisfy either the possessions test or the
treaty test will still be considered a "qualified foreign corporation" with
respect to any dividend paid by such corporation if the stock with respect to
which such dividend is paid is readily tradable on an established securities
market in the United States. The Treasury Department has issued a notice stating
that common or ordinary stock, or an ADR in respect of such stock, is considered
"readily tradable" if it is listed on a national securities exchange that is
registered under section 6 of the Securities Exchange Act of 1934, as amended,
or on the National Association of Securities Dealers


                                       47

<PAGE>

Automated Quotations system. Foreign corporations that are passive foreign
investment companies will not be "qualified foreign corporations."

    In order for qualified dividends paid by the Fund to a Common Shareholder to
be taxable at long-term capital gains rates, the Common Shareholder must hold
his or her Common Shares for more than 60 days during the 121-day period
surrounding the ex-dividend date. For dividends the Fund receives to qualify for
tax-advantaged treatment, the Fund must hold stock paying qualified dividend
income for more than 60 days during the 121-day period beginning 60 days before
the ex-dividend date (or more than 90 days during the associated 181-day period,
in the case of certain preferred stocks). In addition, neither a Common
Shareholder nor the Fund can be obligated to make related payments (pursuant to
a short sale or otherwise) with respect to positions in any security that is
substantially similar or related property with respect to his or her Common
Shares or such stock, respectively. Gains on option positions treated as short-
term and other short-term gains, interest income and non-qualified dividends are
not eligible for the lower tax rate. The special rules relating to the taxation
of ordinary income dividends paid by the Fund that are attributable to the
Fund's qualified income only apply to taxable years beginning before January 1,
2011. Thereafter, all of the Fund's distributions that are characterized as
dividends, other than capital gain distributions, will be fully taxable at
ordinary income tax rates unless further Congressional action is taken. There
can be no assurance as to what portion of the Fund's dividend distributions will
qualify for favorable treatment under the 2003 Tax Act. The Fund's investment
program and the tax treatment of Fund distributions may be affected by IRS
interpretations of the Code and future changes in tax laws and regulations,
including changes resulting from the "sunset" provisions described above that
would have the effect of repealing the favorable treatment of qualified dividend
income and reimposing the higher tax rates applicable to ordinary income in 2011
unless further legislative action is taken.

    The Fund will inform Common Shareholders of the source and tax status of all
distributions promptly after the close of each calendar year.

    Selling Common Shareholders will generally recognize gain or loss in an
amount equal to the difference between the amount realized on the sale and the
Common Shareholder's adjusted tax basis in the Common Shares sold. If the Common
Shares are held as a capital asset, the gain or loss will be a capital gain or
loss. The maximum tax rate applicable to net capital gains recognized by
individuals and other non-corporate taxpayers is (i) the same as the maximum
ordinary income tax rate for gains recognized on the sale of capital assets held
for one year or less (in 2006, 35%), or (ii) 15% for gains recognized on the
sale of capital assets held for more than one year (as well as any capital gain
distributions) (5% for individuals in the 10% or 15% tax brackets). Any loss on
a disposition of Common Shares held for six months or less will be treated as a
long-term capital loss to the extent of any capital gain distributions received
with respect to those Common Shares. For purposes of determining whether Common
Shares have been held for six months or less, the holding period is suspended
for any periods during which the Common Shareholder's risk of loss is diminished
as a result of holding one or more other positions in substantially similar or
related property, or through certain options or short sales. Any loss realized
on a sale or exchange of Common Shares will be disallowed to the extent those
Common Shares are replaced by other Common Shares within a period of 61 days
beginning 30 days before and ending 30 days after the date of disposition of the
Common Shares (whether through the reinvestment of distributions or otherwise).
In that event, the basis of the replacement Common Shares will be adjusted to
reflect the disallowed loss.

    An investor should be aware that, if Common Shares are purchased shortly
before the record date for any taxable distribution (including a capital gain
distribution), the purchase price likely will reflect the value of the
distribution and the investor then would receive a taxable distribution that is
likely to reduce the trading value of such Common Shares, in effect resulting in
a taxable return of some of the purchase price. Taxable distributions to certain
individuals and certain other non-corporate Common Shareholders, including those
who have not provided their correct taxpayer identification number and other
required certifications, may be subject to "backup" federal income tax
withholding at the fourth lowest rate of tax applicable to a single individual
(in 2006, 28%).



                                       48

<PAGE>

    An investor should also be aware that the benefits of the reduced tax rate
applicable to long-term capital gains and qualified dividend income may be
impacted by the application of the alternative minimum tax to individual
shareholders.

    The foregoing briefly summarizes some of the important federal income tax
consequences to Common Shareholders of investing in Common Shares, reflects the
federal tax law as of the date of this Prospectus, and does not address special
tax rules applicable to certain types of investors, such as corporate and
foreign investors. A more complete discussion of the tax rules applicable to the
Fund and the Common Shareholders can be found in the Statement of Additional
Information that is incorporated by reference into this Prospectus. Unless
otherwise noted, this discussion assumes that an investor is a United States
person and holds Common Shares as a capital asset. This discussion is based upon
current provisions of the Code, the regulations promulgated thereunder, and
judicial and administrative ruling authorities, all of which are subject to
change or differing interpretations by the courts or the IRS retroactively or
prospectively. Investors should consult their tax advisors regarding other
federal, state or local tax considerations that may be applicable in their
particular circumstances, as well as any proposed tax law changes.

                           DIVIDEND REINVESTMENT PLAN

    Pursuant to the Fund's dividend reinvestment plan (the "Plan"), unless a
Common Shareholder elects to receive distributions in cash, all distributions
(including capital gain dividends) will be automatically reinvested in Common
Shares.

    PFPC Inc. (the "Plan Agent") serves as agent for the Common Shareholders in
administering the Plan. Common Shareholders who elect not to participate in the
Plan will receive all Fund distributions in cash paid by check mailed directly
to the Common Shareholder of record (or, if the Common Shares are held in street
or other nominee name, then to the nominee) by PFPC Inc., as disbursing agent.
Participation in the Plan is completely voluntary and may be terminated or
resumed at any time without penalty by written notice if received by the Plan
Agent prior to any distribution record date.

    Common Shares will be acquired by the Plan Agent or an independent broker-
dealer for the participants' accounts, depending upon the circumstances
described below, either (i) through receipt of additional previously authorized
but unissued Common Shares from the Fund ("newly issued Common Shares") or (ii)
by purchase of outstanding Common Shares on the open market ("open-market
purchases") on the New York Stock Exchange or elsewhere. If, on the payment date
for the distribution, the net asset value per Common Share is equal to or less
than the market price per Common Share plus estimated brokerage commissions
(such condition being referred to herein as "market premium"), the Plan Agent
will invest the distribution amount in newly issued Common Shares on behalf of
the participants. The number of newly issued Common Shares to be credited to
each participant's account will be determined by dividing the dollar amount of
the distribution by the net asset value per Common Share on the date the Common
Shares are issued, provided that the maximum discount from the then current
market price per Common Share on the date of issuance may not exceed 5%. If on
the distribution payment date the net asset value per Common Share is greater
than the market value plus estimated brokerage commissions (such condition being
referred to herein as "market discount"), the Plan Agent will invest the
distribution amount in Common Shares acquired on behalf of the participants in
open-market purchases.

    In the event of a market discount on the distribution payment date, the Plan
Agent will have up to 30 days after the distribution payment date to invest the
distribution amount in Common Shares acquired in open-market purchases. If,
before the Plan Agent has completed its open-market purchases, the market price
of a Common Share exceeds the net asset value per Common Share, the average per
Common Share purchase price paid by the Plan Agent could exceed the net asset
value of the Fund's Common Shares, resulting in the acquisition of fewer Common
Shares than if the distribution had been paid in newly issued Common Shares on
the distribution payment date. Therefore, the Plan provides that if the Plan
Agent is unable to invest the full distribution amount in open-market purchases
during the purchase period or if the market discount shifts to a market premium
during the purchase period, the Plan Agent will cease making


                                       49

<PAGE>

open-market purchases and will invest the uninvested portion of the distribution
amount in newly issued Common Shares.

    The Plan Agent maintains all Common Shareholders' accounts in the Plan and
furnishes written confirmation of all transactions in the accounts, including
information needed by Common Shareholders for tax records. Common Shares in the
account of each Plan participant will be held by the Plan Agent on behalf of the
Plan participant, and each Common Shareholder's proxy will include those Common
Shares purchased or received pursuant to the Plan. The Plan Agent will forward
all proxy solicitation materials to participants and vote proxies for Common
Shares held pursuant to the Plan in accordance with the instructions of the
participants. In the case of Common Shareholders such as banks, brokers or
nominees that hold Common Shares for others who are the beneficial owners, the
Plan Agent will administer the Plan on the basis of the number of Common Shares
certified from time to time by the record Common Shareholder's name and held for
the account of beneficial owners who participate in the Plan.

    There will be no brokerage charges with respect to Common Shares issued
directly by the Fund as a result of distributions payable either in Common
Shares or in cash. However, each Plan participant will pay a pro rata share of
brokerage commissions incurred with respect to the Plan Agent's open-market
purchases in connection with the reinvestment of distributions.

    Common Shareholders participating in the Plan may receive benefits not
available to Common Shareholders not participating in the Plan. If the market
price (plus commissions) of the Fund's Common Shares is above their net asset
value, participants in the Plan will receive Common Shares of the Fund purchased
at a discount to market price and having a current value that exceeds the cash
distributions they would have otherwise received on their Common Shares. If the
market price (plus commissions) of the Fund's Common Shares is below their net
asset value, Plan participants will receive Common Shares with a net asset value
that exceeds the cash distributions they would have otherwise received on their
Common Shares. There may, however, be insufficient Common Shares available in
the market at prices below net asset value to satisfy the Plan's requirements,
in which case the Plan Agent will acquire newly issued Common Shares. Also,
since the Fund does not redeem its Common Shares, the price on resale of Common
Shares may be more or less than their net asset value.

    Experience under the Plan may indicate that changes are desirable.
Accordingly, upon 30 days' notice to Plan participants, the Fund reserves the
right to amend or terminate the Plan. A Plan participant will be charged a $5.00
service charge and pay brokerage charges whenever he or she directs the Plan
Agent to sell Common Shares held in a distribution reinvestment account.

    All correspondence concerning the Plan should be directed to the Plan Agent
at PFPC Inc., P.O. Box 43027, Providence, Rhode Island 02940-3027. Please call
1-800-331-1710 between the hours of 9:00 a.m. and 5:00 p.m. Eastern Time if you
have questions regarding the Plan.

                        DESCRIPTION OF CAPITAL STRUCTURE

    The Fund is an unincorporated business trust established under the laws of
The Commonwealth of Massachusetts by an Agreement and Declaration of Trust dated
and filed with the Secretary of The Commonwealth on October 5, 2005 (the
"Declaration of Trust"). The Declaration of Trust provides that the Board may
authorize separate classes of shares of beneficial interest. The Board has
authorized an unlimited number of Common Shares. The Fund intends to hold annual
meetings of Common Shareholders in compliance with the requirements of the New
York Stock Exchange.

COMMON SHARES

    The Declaration of Trust permits the Fund to issue an unlimited number of
full and fractional common shares of beneficial interest, $.01 par value per
share. Each Common Share represents an equal proportionate interest in the
assets of the Fund with each other Common Share in the Fund. Holders of Common
Shares will be entitled to the payment of distributions when, as and if declared
by the Board. The 1940 Act or the terms of any future borrowings or issuance of
preferred shares may limit the payment of


                                       50

<PAGE>

distributions to the holders of Common Shares. Each whole Common Share shall be
entitled to one vote as to matters on which it is entitled to vote pursuant to
the terms of the Declaration of Trust on file with the Securities and Exchange
Commission. Upon liquidation of the Fund, after paying or adequately providing
for the payment of all liabilities of the Fund and the liquidation preference
with respect to any outstanding preferred shares, and upon receipt of such
releases, indemnities and refunding agreements as they deem necessary for their
protection, the Board may distribute the remaining assets of the Fund among the
holders of the Common Shares. The Declaration of Trust provides that Common
Shareholders are not liable for any liabilities of the Fund, and requires
inclusion of a clause to that effect in agreements entered into by the Fund and,
in coordination with the Fund's By-laws, indemnifies shareholders against any
such liability. Although shareholders of an unincorporated business trust
established under Massachusetts law may, in certain limited circumstances, be
held personally liable for the obligations of the business trust as though they
were general partners, the provisions of the Fund's Declaration of Trust and By-
laws described in the foregoing sentence make the likelihood of such personal
liability remote.

    The Fund has no current intention to issue preferred shares or to borrow
money. However, if at some future time there are any borrowings or preferred
shares outstanding, the Fund may not be permitted to declare any cash
distribution on its Common Shares, unless at the time of such declaration, (i)
all accrued distributions on preferred shares or accrued interest on borrowings
have been paid and (ii) the value of the Fund's total assets (determined after
deducting the amount of such distribution), less all liabilities and
indebtedness of the Fund not represented by senior securities, is at least 300%
of the aggregate amount of such securities representing indebtedness and at
least 200% of the aggregate amount of securities representing indebtedness plus
the aggregate liquidation value of the outstanding preferred shares. In addition
to the requirements of the 1940 Act, the Fund may be required to comply with
other asset coverage requirements as a condition of the Fund obtaining a rating
of preferred shares from a nationally recognized statistical rating agency (a
"Rating Agency"). These requirements may include an asset coverage test more
stringent than under the 1940 Act. This limitation on the Fund's ability to make
distributions on its Common Shares could in certain circumstances impair the
ability of the Fund to maintain its qualification for taxation as a regulated
investment company for federal income tax purposes. If the Fund were in the
future to issue preferred shares or borrow money, it would intend, however, to
the extent possible to purchase or redeem preferred shares or reduce borrowings
from time to time to maintain compliance with such asset coverage requirements
and may pay special distributions to the holders of the preferred shares in
certain circumstances in connection with any potential impairment of the Fund's
status as a regulated investment company. Depending on the timing of any such
redemption or repayment, the Fund may be required to pay a premium in addition
to the liquidation preference of the preferred shares to the holders thereof.

    The Fund has no present intention of offering additional Common Shares,
except as described herein. Other offerings of its Common Shares, if made, will
require approval of the Board. Any additional offering will not be sold at a
price per Common Share below the then current net asset value (exclusive of
underwriting discounts and commissions) except in connection with an offering to
existing Common Shareholders or with the consent of a majority of the Fund's
outstanding Common Shares. The Common Shares have no preemptive rights.

    The Fund generally will not issue Common Share certificates. However, upon
written request to the Fund's transfer agent, a share certificate will be issued
for any or all of the full Common Shares credited to an investor's account.
Common Share certificates that have been issued to an investor may be returned
at any time.

REPURCHASE OF COMMON SHARES AND OTHER METHODS TO ADDRESS POTENTIAL DISCOUNT

    Because shares of closed-end management investment companies frequently
trade at a discount to their net asset values, the Board has determined that
from time to time it may be in the interest of Common Shareholders for the Fund
to take corrective actions to reduce trading discounts in the Common Shares. The
Board, in consultation with Eaton Vance, will review at least annually the
possibility of open market repurchases and/or tender offers for the Common
Shares and will consider such factors as the


                                       51

<PAGE>

market price of the Common Shares, the net asset value of the Common Shares, the
liquidity of the assets of the Fund, the effect on the Fund's expenses, whether
such transactions would impair the Fund's status as a regulated investment
company or result in a failure to comply with applicable asset coverage
requirements, general economic conditions and such other events or conditions
that may have a material effect on the Fund's ability to consummate such
transactions. There are no assurances that the Board will, in fact, decide to
undertake either of these actions or, if undertaken, that such actions will
result in the Common Shares trading at a price equal to or approximating their
net asset value. The Board, in consultation with Eaton Vance, may from time to
time review other possible actions to reduce trading discounts in the Common
Shares.

PREFERRED SHARES

    The Fund has no current intention of issuing any shares other than the
Common Shares. However, the Declaration of Trust authorizes the issuance of an
unlimited number of shares of beneficial interest with preference rights (the
"preferred shares") in one or more series, with rights as determined by the
Board, by action of the Board without the approval of the Common Shareholders.

    Under the requirements of the 1940 Act, the Fund must, immediately after the
issuance of any preferred shares, have an "asset coverage" of at least 200%.
Asset coverage means the ratio which the value of the total assets of the Fund,
less all liabilities and indebtedness not represented by senior securities (as
defined in the 1940 Act), bears to the aggregate amount of senior securities
representing indebtedness of the Fund, if any, plus the aggregate liquidation
preference of the preferred shares. If the Fund seeks a rating for preferred
shares, asset coverage requirements in addition to those set forth in the 1940
Act may be imposed. The liquidation value of any preferred shares would be
expected to equal their aggregate original purchase price plus redemption
premium, if any, together with any accrued and unpaid distributions thereon (on
a cumulative basis), whether or not earned or declared. The terms of any
preferred shares, including their distribution rate, voting rights, liquidation
preference and redemption provisions, will be determined by the Board (subject
to applicable law and the Fund's Declaration of Trust) if and when it authorizes
preferred shares. The Fund may issue preferred shares that provide for the
periodic redetermination of the distribution rate at relatively short intervals
through an auction or remarketing procedure, although the terms of such
preferred shares may also enable the Fund to lengthen such intervals. At times,
the distribution rate as redetermined on any preferred shares could exceed the
Fund's return after expenses on the investment of proceeds from the preferred
shares and the Fund's leveraged capital structure would result in a lower rate
of return to Common Shareholders than if the Fund were not so structured.

    In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Fund, the terms of any preferred shares may entitle the
holders of preferred shares to receive a preferential liquidating distribution
(expected to equal the original purchase price per share plus redemption
premium, if any, together with accrued and unpaid dividends, whether or not
earned or declared and on a cumulative basis) before any distribution of assets
is made to Common Shareholders. After payment of the full amount of the
liquidating distribution to which they are entitled, the preferred shareholders
would not be entitled to any further participation in any distribution of assets
by the Fund. Holders of preferred shares, voting as a class, would be entitled
to elect two of the Fund's Trustees, if any preferred shares are issued. Under
the 1940 Act, if at any time dividends on the preferred shares are unpaid in an
amount equal to two full years' dividends thereon, the holders of all
outstanding preferred shares, voting as a class, will be entitled to elect a
majority of the Board until all dividends in default have been paid or declared
and set apart for payment. In addition, if required by a Rating Agency rating
the preferred shares or if the Board determines it to be in the best interests
of the Common Shareholders, issuance of the preferred shares may result in more
restrictive provisions than required under the 1940 Act. In this regard, holders
of preferred shares may, for example, be entitled to elect a majority of the
Fund's Board if only one dividend on the preferred shares is in arrears.

    In the event of any future issuance of preferred shares, the Fund likely
would seek a credit rating for such preferred shares from a Rating Agency. In
such event, as long as preferred shares are outstanding, the


                                       52

<PAGE>

composition of its portfolio will reflect guidelines established by such Rating
Agency. Based on previous guidelines established by Rating Agencies for the
securities of other issuers, the Fund anticipates that the guidelines with
respect to any preferred shares would establish a set of tests for portfolio
composition and asset coverage that supplement (and in some cases are more
restrictive than) the applicable requirements under the 1940 Act. Although no
assurance can be given as to the nature or extent of the guidelines that may be
imposed in connection with obtaining a rating of any preferred shares, the Fund
anticipates that such guidelines would include asset coverage requirements that
are more restrictive than those under the 1940 Act, restrictions on certain
portfolio investments and investment practices and certain mandatory redemption
requirements relating to any preferred shares. No assurance can be given that
the guidelines actually imposed with respect to any preferred shares by a Rating
Agency would be more or less restrictive than those described in this
Prospectus.

CREDIT FACILITY/COMMERCIAL PAPER PROGRAM

    The Fund has no current intention to borrow money for the purpose of
obtaining investment leverage. If, in the future, the Fund determines to engage
in investment leverage using borrowings, the Fund may enter into definitive
agreements with respect to a credit facility/commercial paper program or other
borrowing program, pursuant to which the Fund would expect to be entitled to
borrow up to a specified amount. Any such borrowings would constitute financial
leverage. Borrowings under such a facility/commercial paper program would not be
expected to be convertible into any other securities of the Fund. Outstanding
amounts would be expected to be prepayable by the Fund prior to final maturity
without significant penalty, and no sinking fund or mandatory retirement
provisions would be expected to apply. Outstanding amounts would be payable at
maturity or such earlier times as required by the agreement. The Fund may be
required to prepay outstanding amounts under the facility/program or incur a
penalty rate of interest in the event of the occurrence of certain events of
default. The Fund would be expected to indemnify the lenders under the
facility/program against liabilities they may incur in connection with the
facility/program.

    In addition, the Fund expects that any such credit facility/program would
contain covenants that, among other things, likely would limit the Fund's
ability to pay distributions in certain circumstances, incur additional debt,
change its fundamental investment policies and engage in certain transactions,
including mergers and consolidations, and may require asset coverage ratios in
addition to those required by the 1940 Act. The Fund may be required to pledge
its assets and to maintain a portion of its assets in cash or high-grade
securities as a reserve against interest or principal payments and expenses. The
Fund expects that any credit facility/program would have customary covenant,
negative covenant and default provisions. There can be no assurance that the
Fund will enter into an agreement for a credit facility/program on terms and
conditions representative of the foregoing, or that additional material terms
will not apply. In addition, if entered into, any such credit facility/program
may in the future be replaced or refinanced by one or more credit facilities
having substantially different terms or by the issuance of preferred shares or
debt securities.

EFFECTS OF POSSIBLE FUTURE LEVERAGE

    As discussed above, the Fund has no current intention to issue preferred
shares or to borrow money for the purpose of obtaining investment leverage. In
the event that the Fund determines in the future to utilize investment leverage,
there can be no assurance that such a leveraging strategy would be successful
during any period in which it is employed. Leverage creates risks for Common
Shareholders, including the likelihood of greater volatility of net asset value
and market price of the Common Shares and the risk that fluctuations in
distribution rates on any preferred shares or fluctuations in borrowing costs
may affect the return to Common Shareholders. To the extent that amounts
available for distribution derived from securities purchased with the proceeds
of leverage exceed the cost of such leverage, the Fund's distributions would be
greater than if leverage had not been used. Conversely, if the amounts available
for distribution derived from securities purchased with leverage proceeds are
not sufficient to cover the cost of leverage, distributions to Common
Shareholders would be less than if leverage had not been used. In the latter
case,


                                       53

<PAGE>

Eaton Vance, in its best judgment, may nevertheless determine to maintain the
Fund's leveraged position if it deems such action to be appropriate. The costs
of an offering of preferred shares and/or a borrowing program would be borne by
Common Shareholders and consequently would result in a reduction of the net
asset value of Common Shares. See "Risk Factors -- Financial Leverage Risk."

    In addition, the fee paid to Eaton Vance will be calculated on the basis of
the Fund's average daily gross assets, including proceeds from the issuance of
preferred shares and/or borrowings, so the fees would be higher if leverage is
utilized. In this regard, holders of preferred shares would not bear the
investment advisory fee. Rather, Common Shareholders would bear the portion of
the investment advisory fee attributable to the assets purchased with the
proceeds of the preferred shares offering. See "Risk Factors -- Financial
Leverage Risk."

ANTI-TAKEOVER PROVISIONS IN THE AGREEMENT AND DECLARATION OF TRUST

    The Declaration of Trust includes provisions that could have the effect of
limiting the ability of other entities or persons to acquire control of the Fund
or to change the composition of its Board and could have the effect of depriving
Common Shareholders of an opportunity to sell their Common Shares at a premium
over prevailing market prices by discouraging a third party from seeking to
obtain control of the Fund. These provisions may have the effect of discouraging
attempts to acquire control of the Fund, which attempts could have the effect of
increasing the expenses of the Fund and interfering with the normal operation of
the Fund. The Board is divided into three classes, with the term of one class
expiring at each annual meeting of shareholders. At each annual meeting, one
class of Trustees is elected to a three-year term. This provision could delay
for up to two years the replacement of a majority of the Board. A Trustee may be
removed from office only for cause by a written instrument signed by the
remaining Trustees or by a vote of the holders of at least two-thirds of the
class of shares of the Fund that elected such Trustee and are entitled to vote
on the matter.

    In addition, the Declaration of Trust requires the favorable vote of the
holders of at least 75% of the outstanding shares of each class of the Fund,
voting as a class, then entitled to vote to approve, adopt or authorize certain
transactions with 5%-or-greater holders of a class of shares and their
associates, unless the Board shall by resolution have approved a memorandum of
understanding with such holders, in which case normal voting requirements would
be in effect. For purposes of these provisions, a 5%-or-greater holder of a
class of shares (a "Principal Shareholder") refers to any person who, whether
directly or indirectly and whether alone or together with its affiliates and
associates, beneficially owns 5% or more of the outstanding shares of any class
of beneficial interest of the Fund. The transactions subject to these special
approval requirements are: (i) the merger or consolidation of the Fund or any
subsidiary of the Fund with or into any Principal Shareholder; (ii) the issuance
of any securities of the Fund to any Principal Shareholder for cash; (iii) the
sale, lease or exchange of all or any substantial part of the assets of the Fund
to any Principal Shareholder (except assets having an aggregate fair market
value of less than $1,000,000, aggregating for the purpose of such computation
all assets sold, leased or exchanged in any series of similar transactions
within a twelve-month period); or (iv) the sale, lease or exchange to the Fund
or any subsidiary thereof, in exchange for securities of the Fund, of any assets
of any Principal Shareholder (except assets having an aggregate fair market
value of less than $1,000,000, aggregating for the purposes of such computation
all assets sold, leased or exchanged in any series of similar transactions
within a twelve-month period).

    The Board has determined that provisions with respect to the Board and the
75% voting requirements described above, which voting requirements are greater
than the minimum requirements under Massachusetts law or the 1940 Act, are in
the best interest of Common Shareholders generally. Reference should be made to
the Declaration of Trust on file with the Securities and Exchange Commission for
the full text of these provisions.



                                       54

<PAGE>

CONVERSION TO OPEN-END FUND

    The Fund may be converted to an open-end management investment company at
any time if approved by the lesser of (i) two-thirds or more of the Fund's then
outstanding Common Shares and preferred shares (if any), each voting separately
as a class, or (ii) more than 50% of the then outstanding Common Shares and
preferred shares (if any), voting separately as a class if such conversion is
recommended by at least 75% of the Trustees then in office. If approved in the
foregoing manner, conversion of the Fund could not occur until 90 days after the
shareholders' meeting at which such conversion was approved and would also
require at least 30 days' prior notice to all shareholders. Conversion of the
Fund to an open-end management investment company also would require the
redemption of any outstanding preferred shares and could require the repayment
of borrowings, which would eliminate any future leveraged capital structure of
the Fund with respect to the Common Shares. In the event of conversion, the
Common Shares would cease to be listed on the New York Stock Exchange or other
national securities exchange or market system. The Board believes that the
closed-end structure is desirable, given the Fund's investment objectives and
policies. Investors should assume, therefore, that it is unlikely that the Board
would vote to convert the Fund to an open-end management investment company.
Shareholders of an open-end management investment company may require the
company to redeem their shares at any time (except in certain circumstances as
authorized by or under the 1940 Act) at their net asset value, less such
redemption charge, if any, as might be in effect at the time of a redemption. If
the Fund were to convert to an open-end investment company, the Fund expects it
would pay all such redemption requests in cash, but would likely reserve the
right to pay redemption requests in a combination of cash or securities. If such
partial payment in securities were made, investors may incur brokerage costs in
converting such securities to cash. If the Fund were converted to an open-end
fund, it is likely that new Common Shares would be sold at net asset value plus
a sales load.



                                       55

<PAGE>

                                  UNDERWRITING

    Wachovia Capital Markets, LLC, Citigroup Global Markets Inc., UBS Securities
LLC, and A.G. Edwards & Sons, Inc. are acting as the representatives of the
underwriters ("Underwriter") named below. Subject to the terms and conditions
stated in the underwriting agreement, dated the date of this prospectus, each
Underwriter named below has agreed to purchase, and the Fund has agreed to sell
to that Underwriter, the number of Common Shares set forth opposite the
Underwriter's name.


<Table>
<Caption>
                                                             NUMBER OF
UNDERWRITERS                                               COMMON SHARES
------------                                               -------------

<S>                                                        <C>

Wachovia Capital Markets, LLC............................
Citigroup Global Markets Inc. ...........................
UBS Securities LLC.......................................
A.G. Edwards & Sons, Inc. ...............................
Robert W. Baird & Co. Incorporated.......................
Banc of America Securities LLC...........................
BB&T Capital Markets, a division of Scott & Stringfellow,
  Inc. ..................................................
Ferris, Baker Watts, Incorporated........................
H&R Block Financial Advisors, Inc. ......................
J.J.B. Hilliard, W.L. Lyons, Inc. .......................
Janney Montgomery Scott LLC..............................
KeyBanc Capital Markets, a division of McDonald
  Investments Inc. ......................................
Morgan Keegan & Company, Inc. ...........................
Oppenheimer & Co. Inc. ..................................
Raymond James & Associates, Inc. ........................
RBC Capital Markets Corporation..........................
Ryan Beck & Co., Inc. ...................................
Stephens Inc. ...........................................
Stifel, Nicolaus & Company, Incorporated.................
SunTrust Capital Markets, Inc. ..........................
Wedbush Morgan Securities Inc. ..........................
Wells Fargo Securities, LLC..............................

  Total..................................................


</Table>


    The underwriting agreement provides that the obligations of the Underwriters
to purchase the Common Shares included in this offering are subject to approval
of legal matters by counsel and to other conditions. The Underwriters are
obligated to purchase all the Common Shares (other than those covered by the
over-allotment option described below) shown in the table above if any of the
Common Shares are purchased.

    The Underwriters propose to offer some of the Common Shares directly to the
public at the public offering price set forth on the cover page of this
prospectus and some of the Common Shares to dealers at the public offering price
less a concession not to exceed $      per share. The sales load the Fund will
pay of $0.90 per share is equal to 4.5% of the initial public offering price.
The Underwriters may allow, and dealers may reallow, a concession not to exceed
$      per share on sales to other dealers. If all of the Common Shares are not
sold at the initial public offering price, the representatives may change the
public offering price and other selling terms. Investors must pay for any Common
Shares purchased on or before            , 2006. The representatives have
advised the Fund that the Underwriters do not intend to confirm any sales to any
accounts over which they exercise discretionary authority.

    The Adviser (and not the Fund) has agreed to pay to Wachovia Capital
Markets, LLC, from its own assets, a structuring fee for advice relating to the
structure, design and organization of the Fund as well as services related to
the sale and distribution of the Fund's Common Shares in the amount of $     .
The structuring fee paid to Wachovia Capital Markets, LLC will not exceed
0.     % of the total public offering price of the Common Shares sold in this
offering.



                                       56

<PAGE>

    The Adviser (and not the Fund) has agreed to pay to Citigroup Global Markets
Inc., from its own assets, a structuring fee for advice relating to the
structure, design and organization of the Fund as well as services related to
the sale and distribution of the Fund's Common Shares in the amount of
$          . The structuring fee paid to Citigroup Global Markets Inc. will not
exceed 0.  % of the total public offering price of the Common Shares sold in
this offering.

    The Adviser (and not the Fund) has agreed to pay to UBS Securities LLC, from
its own assets, a structuring fee for certain financial advisory services in
assisting the Adviser in structuring and organizing the Fund in the amount of
$          . The structuring fee paid to UBS Securities LLC will not exceed
0.  % of the total public offering price of the Common Shares sold in this
offering.

    The Adviser (and not the Fund) may also pay certain qualifying Underwriters
a marketing and structuring fee, a sales incentive fee, or additional
compensation in connection with the offering.

    The total amount of the underwriter compensation payments described above
will not exceed 4.5% of the total public offering price of the shares offered
hereby. The sum total of all compensation to the Underwriters in connection with
this public offering of Common Shares, including sales load and all forms of
additional compensation or structuring or sales incentive fee payments to the
Underwriters and other expenses, will be limited to not more than 9.0% of the
total public offering price of the Common Shares sold in this offering.

    The Fund has granted to the Underwriters an option, exercisable for 45 days
from the date of this prospectus, to purchase up to            additional Common
Shares at the public offering price less the sales load. The Underwriters may
exercise the option solely for the purpose of covering over-allotments, if any,
in connection with this offering. To the extent such option is exercised, each
Underwriter must purchase a number of additional Common Shares approximately
proportionate to that Underwriter's initial purchase commitment.

    The Fund has agreed that, for a period of 180 days from the date of this
Prospectus, it will not, without the prior written consent of Wachovia Capital
Markets, LLC, on behalf of the Underwriters, dispose of or hedge any Common
Shares or any securities convertible into or exchangeable for Common Shares.
Wachovia Capital Markets, LLC, in its sole discretion, may release any of the
securities subject to these agreements at any time without notice.

    The Underwriters have undertaken to sell Common Shares to a minimum of 2,000
beneficial owners in lots of 100 or more shares to meet the New York Stock
Exchange distribution requirements for trading.

    The Fund's Common Shares have been approved for listing on the New York
Stock Exchange under the symbol "ETY," subject to notice of issuance.

    The following table shows the sales load that the Fund will pay to the
Underwriters in connection with this offering. These amounts are shown assuming
both no exercise and full exercise of the Underwriters' option to purchase
additional Common Shares.


<Table>
<Caption>
                                                           PAID BY FUND
                                                   ---------------------------
                                                   NO EXERCISE   FULL EXERCISE
                                                   -----------   -------------

<S>                                                <C>           <C>

Per Share........................................     $              $
Total............................................          $              $
</Table>


    The Fund, the Adviser and the Subadviser have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, or to contribute to payments the Underwriters may be
required to make because of any of those liabilities. Certain Underwriters may
make a market in the Common Shares after trading in the Common Shares has
commenced on the NYSE. No Underwriter, however, is obligated to conduct market-
making activities and any such activities may be discontinued at any time
without notice, at the sole discretion of the Underwriter. No assurance can be
given as to the liquidity of, or the trading market for, the Common Shares as a
result of any market-making activities undertaken by any Underwriter. This
prospectus is to be used by any Underwriter in connection


                                       57

<PAGE>

with the offering and, during the period in which a prospectus must be
delivered, with offers and sales of the Common Shares in market-making
transactions in the over-the-counter market at negotiated prices related to
prevailing market prices at the time of the sale.

    In connection with the offering, Wachovia Capital Markets, LLC, on behalf of
itself and the other Underwriters, may purchase and sell Common Shares in the
open market. These transactions may include short sales, syndicate covering
transactions and stabilizing transactions. Short sales involve syndicate sales
of Common Shares in excess of the number of Common Shares to be purchased by the
Underwriters in the offering, which creates a syndicate short position.
"Covered" short sales are sales of Common Shares made in an amount up to the
number of Common Shares represented by the Underwriters' over-allotment option.
In determining the source of Common Shares to close out the covered syndicate
short position, the Underwriters will consider, among other things, the price of
Common Shares available for purchase in the open market as compared to the price
at which they may purchase Common Shares through the over-allotment option.

    Transactions to close out the covered syndicate short position involve
either purchases of Common Shares in the open market after the distribution has
been completed or the exercise of the over-allotment option. The Underwriters
may also make "naked" short sales of Common Shares in excess of the over-
allotment option. The Underwriters must close out any naked short position by
purchasing Common Shares in the open market. A naked short position is more
likely to be created if the Underwriters are concerned that there may be
downward pressure on the price of Common Shares in the open market after pricing
that could adversely affect investors who purchase in the offering. Stabilizing
transactions consist of bids for or purchases of Common Shares in the open
market while the offering is in progress.

    The Underwriters may impose a penalty bid. Penalty bids allow the
underwriting syndicate to reclaim selling concessions allowed to an underwriter
or a dealer for distributing Common Shares in this offering if the syndicate
repurchases Common Shares to cover syndicate short positions or to stabilize the
purchase price of the Common Shares.

    Any of these activities may have the effect of preventing or retarding a
decline in the market price of Common Shares. They may also cause the price of
Common Shares to be higher than the price that would otherwise exist in the open
market in the absence of these transactions.

    The Underwriters may conduct these transactions on the New York Stock
Exchange or in the over-the-counter market, or otherwise. If the Underwriters
commence any of these transactions, they may discontinue them at any time.

    A prospectus in electronic format may be made available on the websites
maintained by one or more of the Underwriters. Other than the prospectus in
electronic format, the information on any such Underwriter's website is not part
of this prospectus. The representatives may agree to allocate a number of Common
Shares to Underwriters for sale to their online brokerage account holders. The
representatives will allocate Common Shares to Underwriters that may make
Internet distributions on the same basis as other allocations. In addition,
Common Shares may be sold by the Underwriters to securities dealers who resell
Common Shares to online brokerage account holders.

    The Fund anticipates that, from time to time, certain Underwriters may act
as brokers or dealers in connection with the execution of the Fund's portfolio
transactions after they have ceased to be Underwriters and, subject to certain
restrictions, may act as brokers while they are Underwriters.

    Certain Underwriters may, from time to time, engage in transactions with or
perform services for the Adviser, the Subadviser and their affiliates in the
ordinary course of business.

    Prior to the initial public offering of Common Shares, the Adviser purchased
Common Shares from the Fund in an amount satisfying the net worth requirements
of Section 14(a) of the 1940 Act.

    The principal business address of Wachovia Capital Markets, LLC is 375 Park
Avenue, New York, New York 10152. The principal business address of Citigroup
Global Markets Inc. is 388 Greenwich Street, New York, New York 10013. The
principal business address of UBS Securities LLC is 299 Park Avenue,


                                       58

<PAGE>

New York, New York 10171. The principal business address of A.G. Edwards & Sons,
Inc. is One North Jefferson Avenue, St. Louis, Missouri 63103.

                          CUSTODIAN AND TRANSFER AGENT

    Investors Bank & Trust Company ("IBT"), 200 Clarendon Street, Boston,
Massachusetts 02116 is the custodian of the Fund and will maintain custody of
the securities and cash of the Fund. IBT maintains the Fund's general ledger and
computes net asset value per share daily. IBT also attends to details in
connection with the sale, exchange, substitution, transfer and other dealings
with the Fund's investments and receives and disburses all funds. IBT also
assists in preparation of shareholder reports and the electronic filing of such
reports with the SEC.

    PFPC Inc., P.O. Box 43027, Providence, Rhode Island 02940-3027 is the
transfer agent and dividend disbursing agent of the Fund.

                                 LEGAL OPINIONS

    Certain legal matters in connection with the Common Shares will be passed
upon for the Fund by Kirkpatrick & Lockhart Nicholson Graham LLP, Boston,
Massachusetts, and for the Underwriters by Simpson Thacher & Bartlett LLP, New
York, New York. Simpson Thacher & Bartlett LLP may rely as to certain matters of
Massachusetts law on the opinion of Kirkpatrick & Lockhart Nicholson Graham LLP,
Boston, Massachusetts.

                             REPORTS TO SHAREHOLDERS

    The Fund will send to Common Shareholders unaudited semi-annual and audited
annual reports, including a list of investments held.

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    Deloitte & Touche LLP, Boston, Massachusetts, is the independent registered
public accounting firm for the Fund and will audit the Fund's financial
statements.

                             ADDITIONAL INFORMATION

    The Prospectus and the Statement of Additional Information do not contain
all of the information set forth in the Registration Statement that the Fund has
filed with the SEC. The complete Registration Statement may be obtained from the
SEC upon payment of the fee prescribed by its rules and regulations. The
Statement of Additional Information can be obtained without charge by calling 1-
800- 225-6265.

    Statements contained in this Prospectus as to the contents of any contract
or other documents referred to are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or other document filed
as an exhibit to the Registration Statement of which this Prospectus forms a
part, each such statement being qualified in all respects by such reference.



                                       59

<PAGE>

          TABLE OF CONTENTS FOR THE STATEMENT OF ADDITIONAL INFORMATION



<Table>
<Caption>
                                                                          PAGE
                                                                          ----

<S>                                                                       <C>


Additional investment information and restrictions.....................      2
Trustees and officers..................................................      5
Investment advisory and other services.................................     12
Determination of net asset value.......................................     17
Portfolio trading......................................................     18
Taxes..................................................................     20
Other information......................................................     26
Independent registered public accounting firm..........................     26
Financial statements...................................................     28
Notes to financial statements..........................................     29
Appendix A: Proxy voting policies and procedures.......................    A-1
</Table>





                                       60

<PAGE>

                            THE FUND'S PRIVACY POLICY

    The Eaton Vance organization is committed to ensuring your financial
privacy. Each of the financial institutions identified below has in effect the
following policy ("Privacy Policy") with respect to nonpublic personal
information about its customers:

    - Only such information received from you, through application forms or
      otherwise, and information about your Eaton Vance fund transactions will
      be collected. This may include information such as name, address, social
      security number, tax status, account balances and transactions.

    - None of such information about you (or former customers) will be disclosed
      to anyone, except as permitted by law (which includes disclosure to
      employees necessary to service your account). In the normal course of
      servicing a customer's account, Eaton Vance may share information with
      unaffiliated third parties that perform various required services such as
      transfer agents, custodians and broker/dealers.

    - Policies and procedures (including physical, electronic and procedural
      safeguards) are in place that are designed to protect the confidentiality
      of such information.

    - We reserve the right to change our Privacy Policy at any time upon proper
      notification to you. Customers may want to review our Privacy Policy
      periodically for changes by accessing the link on our homepage:
      www.eatonvance.com.

    Our pledge of privacy applies to the following entities within the Eaton
Vance organization: the Eaton Vance Family of Funds, Eaton Vance Management,
Eaton Vance Investment Counsel, Boston Management and Research, and Eaton Vance
Distributors, Inc.

    In addition, our Privacy Policy only applies to those Eaton Vance customers
who are individuals and who have a direct relationship with us. If a customer's
account (i.e., fund shares) is held in the name of a third-party financial
adviser/broker-dealer, it is likely that only such adviser's privacy policies
apply to the customer. This notice supersedes all previously issued privacy
disclosures.

    For more information about Eaton Vance's Privacy Policy, please call 1-800-
262-1122.



                                       61

<PAGE>

                               (EATON VANCE LOGO)

                             EATON VANCE TAX-MANAGED
                         DIVERSIFIED EQUITY INCOME FUND


                                  -------------

                             PRELIMINARY PROSPECTUS
                                NOVEMBER   , 2006

                                  -------------

                               WACHOVIA SECURITIES
                                    CITIGROUP
                               UBS INVESTMENT BANK
                                  A.G. EDWARDS

                              ROBERT W. BAIRD & CO.
                         BANC OF AMERICA SECURITIES LLC
                              BB&T CAPITAL MARKETS
                               FERRIS, BAKER WATTS
                                  INCORPORATED
                       H&R BLOCK FINANCIAL ADVISORS, INC.
                        J.J.B. HILLIARD, W.L. LYONS, INC.
                           JANNEY MONTGOMERY SCOTT LLC
                             KEYBANC CAPITAL MARKETS
                          MORGAN KEEGAN & COMPANY, INC.
                                OPPENHEIMER & CO.
                                  RAYMOND JAMES
                               RBC CAPITAL MARKETS
                                 RYAN BECK & CO.
                                  STEPHENS INC.
                                 STIFEL NICOLAUS
                           SUNTRUST ROBINSON HUMPHREY
                         WEDBUSH MORGAN SECURITIES INC.
                             WELLS FARGO SECURITIES

                                                                     CE-TMDEIFRH

<PAGE>

THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS NOT COMPLETE AND
MAY BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION
STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS
STATEMENT OF ADDITIONAL INFORMATION, WHICH IS NOT A PROSPECTUS, IS NOT AN OFFER
TO SELL THESE SECURITIES AND IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.

                                          SUBJECT TO COMPLETION OCTOBER 24, 2006

                       STATEMENT OF ADDITIONAL INFORMATION
                                NOVEMBER   , 2006

             EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND

THE EATON VANCE BUILDING
255 STATE STREET
BOSTON, MASSACHUSETTS 02109
(800) 225-6265

                                TABLE OF CONTENTS



<Table>
<Caption>
                                                                          PAGE
                                                                          ----

<S>                                                                       <C>

Additional investment information and restrictions.....................      2
Trustees and officers..................................................      5
Investment advisory and other services.................................     12
Determination of net asset value.......................................     17
Portfolio trading......................................................     18
Taxes..................................................................     20
Other information......................................................     26
Independent registered public accounting firm..........................     26
Financial statements...................................................     28
Notes to financial statements..........................................     29
Appendix A: Proxy voting policies and procedures.......................    A-1
</Table>


    THIS STATEMENT OF ADDITIONAL INFORMATION ("SAI") IS NOT A PROSPECTUS AND IS
AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS ONLY IF PRECEDED OR
ACCOMPANIED BY THE PROSPECTUS OF EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY
INCOME FUND (THE "FUND") DATED NOVEMBER   , 2006 (THE "PROSPECTUS"), AS
SUPPLEMENTED FROM TIME TO TIME, WHICH IS INCORPORATED HEREIN BY REFERENCE. THIS
SAI SHOULD BE READ IN CONJUNCTION WITH SUCH PROSPECTUS, A COPY OF WHICH MAY BE
OBTAINED WITHOUT CHARGE BY CONTACTING YOUR FINANCIAL INTERMEDIARY OR CALLING THE
FUND AT 1-800-225-6265.

<PAGE>

    Capitalized terms used in this SAI and not otherwise defined have the
meanings given them in the Fund's Prospectus.

               ADDITIONAL INVESTMENT INFORMATION AND RESTRICTIONS

    Primary investment strategies are described in the Prospectus. The following
is a description of the various investment policies that may be engaged in,
whether as a primary or secondary strategy, and a summary of certain attendant
risks. Eaton Vance and the Sub-Adviser may not buy any of the following
instruments or use any of the following techniques unless they believe that
doing so will help to achieve the Fund's investment objectives.

    EQUITY INVESTMENTS.  As described in the Prospectus, the Fund invests
primarily in common stocks.

    PREFERRED STOCKS.  The Fund may invest in preferred stocks of both domestic
and foreign issuers. Under normal market conditions, the Fund expects, with
respect to that portion of its total assets invested in preferred stocks, to
invest only in preferred stocks of investment grade quality as determined by
S&P, Fitch or Moody's or, if unrated, determined to be of comparable quality by
Eaton Vance. The foregoing credit quality policies apply only at the time a
security is purchased, and the Fund is not required to dispose of a security in
the event of a downgrade of an assessment of credit quality or the withdrawal of
a rating. Preferred stocks involve credit risk, which is the risk that a
preferred stock will decline in price, or fail to pay dividends when expected,
because the issuer experiences a decline in its financial status. In addition to
credit risk, investment in preferred stocks involves certain other risks as more
fully described in the Prospectus.

    DERIVATIVE INSTRUMENTS.  In addition to the intended strategy of selling
index call options, the Fund may invest up to 20% of its total assets in other
derivative instruments (which are instruments that derive their value from
another instrument, security or index) acquired for hedging, risk management and
investment purposes (to gain exposure to securities, securities markets, markets
indices and/or currencies consistent with the Fund's investment objectives and
policies), provided that no more than 10% of the Fund's total assets (other than
writing call options on futures contracts on securities indices as described in
the prospectus) may be invested in such derivative instruments acquired for non-
hedging purposes. These strategies may be executed through the use of derivative
contracts in the United States or abroad. In the course of pursuing these
investment strategies, the Fund may purchase and sell derivative contracts based
on exchange-listed and equity and fixed-income indices and other instruments;
purchase and sell futures contracts and options thereon; and enter into various
transactions such as swaps, caps, floors or collars. In addition, derivatives
may include new techniques, instruments or strategies that are permitted as
regulatory changes occur. Derivative instruments may be used by the Fund to
enhance returns or as a substitute for the purchase or sale of securities.
Transactions in derivative instruments involve a risk of loss or depreciation
due to unanticipated adverse changes in securities prices, interest rates,
indices or the other financial instruments' prices; the inability to close out a
position; default by the counterparty; imperfect correlation between a position
and the desired hedge; tax constraints on closing out positions; and portfolio
management constraints on securities subject to such transactions. The loss on
derivative instruments (other than purchased options) may substantially exceed
an investment in these instruments. In addition, the entire premium paid for
purchased options may be lost before they can be profitably exercised.
Transaction costs are incurred in opening and closing positions. Derivative
instruments may sometimes increase or leverage exposure to a particular market
risk, thereby increasing price volatility. Over-the-counter ("OTC") derivative
instruments, equity swaps and forward sales of stocks involve an enhanced risk
that the issuer or counterparty will fail to perform its contractual
obligations. Some derivative instruments are not readily marketable or may
become illiquid under adverse market conditions. In addition, during periods of
market volatility, a commodity exchange may suspend or limit trading in an
exchange-traded derivative instrument, which may make the contract temporarily
illiquid and difficult to price. Commodity exchanges may also establish daily
limits on the amount that the price of a futures contract or futures option can
vary from the previous day's settlement price. Once the daily limit is reached,
no trades may be made that day at a price beyond the limit. This may prevent the
closing out of


                                        2

<PAGE>

positions to limit losses. The staff of the SEC takes the position that certain
purchased OTC options, and assets used as cover for certain written OTC options,
are illiquid. The ability to terminate OTC derivative instruments may depend on
the cooperation of the counterparties to such contracts. For thinly traded
derivative instruments, the only source of price quotations may be the selling
dealer or counterparty. In addition, certain provisions of the Internal Revenue
Code of 1986, as amended (the "Code") limit the use of derivative instruments.
The Fund has claimed an exclusion from the definition of a Commodity Pool
Operator ("CPO") under the Commodity Exchange Act and therefore is not subject
to registration or regulation as a CPO. There can be no assurance that the use
of derivative instruments will be advantageous.

    Foreign exchange traded futures contracts and options thereon may be used
only if the Adviser determines that trading on such foreign exchange does not
entail risks, including credit and liquidity risks, that are materially greater
than the risks associated with trading on CFTC-regulated exchanges.

                                   SHORT SALES

    The Fund may sell a security short if it owns at least an equal amount of
the security sold short or another security convertible or exchangeable for an
equal amount of the security sold short without payment of further compensation
(a short sale against-the-box).

    Purchasing securities to close out the short position can itself cause the
price of the securities to rise further, thereby exacerbating the loss. Short-
selling exposes the Fund to unlimited risk with respect to that security due to
the lack of an upper limit on the price to which an instrument can rise.
Although the Fund reserves the right to utilize short sales, the Adviser is
under no obligation to utilize short sales at all.

                               SECURITIES LENDING

    As described in the Prospectus, the Fund may lend a portion of its portfolio
securities to broker-dealers or other institutional borrowers. Loans will be
made only to organizations whose credit quality or claims paying ability is
considered by the Adviser to be at least investment grade. All securities loans
will be collateralized on a continuous basis by cash, cash equivalents (such as
money market instruments) or other liquid securities held by the custodian and
maintained in an amount at least equal to the market value of the securities
loaned. The Fund may receive loan fees in connection with loans that are
collateralized by securities or on loans of securities for which there is
special demand. The Fund may also seek to earn income on securities loans by
reinvesting cash collateral in securities consistent with its investment
objectives and policies, seeking to invest at rates that are higher than the
"rebate" rate that it normally will pay to the borrower with respect to such
cash collateral. Any such reinvestment will be subject to the investment
policies, restrictions and risk considerations described in the Prospectus and
in this SAI.

    Securities loans may result in delays in recovering, or a failure of the
borrower to return, the loaned securities. The defaulting borrower ordinarily
would be liable to the Fund for any losses resulting from such delays or
failures, and the collateral provided in connection with the loan normally would
also be available for that purpose. Securities loans normally may be terminated
by either the Fund or the borrower at any time. Upon termination and the return
of the loaned securities, the Fund would be required to return the related cash
or securities collateral to the borrower and it may be required to liquidate
longer term portfolio securities in order to do so. To the extent that such
securities have decreased in value, this may result in the Fund realizing a loss
at a time when it would not otherwise do so. The Fund also may incur losses if
it is unable to reinvest cash collateral at rates higher than applicable rebate
rates paid to borrowers and related administrative costs. These risks are
substantially the same as those incurred through investment leverage and will be
subject to the investment policies, restrictions and risk considerations
described in the Prospectus and in this SAI.

    The Fund will receive amounts equivalent to any interest or other
distributions paid on securities while they are on loan, and the Fund will not
be entitled to exercise voting or other beneficial rights on


                                        3

<PAGE>

loaned securities. The Fund will exercise its right to terminate loans and
thereby regain these rights whenever the Adviser considers it to be in the
Fund's interest to do so, taking into account the related loss of reinvestment
income and other factors.

                              TEMPORARY INVESTMENTS

    The Fund may invest temporarily in cash or cash equivalents. Cash
equivalents are highly liquid, short-term securities such as commercial paper,
time deposits, certificates of deposit, short-term notes and short-term United
States government obligations.

                             INVESTMENT RESTRICTIONS

    The following investment restrictions of the Fund are designated as
fundamental policies and as such cannot be changed without the approval of the
holders of a majority of the Fund's outstanding voting securities, which as used
in this SAI means the lesser of (a) 67% of the shares of the Fund present or
represented by proxy at a meeting if the holders of more than 50% of the
outstanding shares are present or represented at the meeting or (b) more than
50% of outstanding shares of the Fund. As a matter of fundamental policy, the
Fund may not:

       (1) Borrow money, except as permitted by the Investment Company Act of
    1940, as amended (the "1940 Act"). The 1940 Act currently requires that any
    indebtedness incurred by a closed-end investment company have an asset
    coverage of at least 300%;

       (2) Issue senior securities, as defined in the 1940 Act, other than (i)
    preferred shares which immediately after issuance will have asset coverage
    of at least 200%, (ii) indebtedness which immediately after issuance will
    have asset coverage of at least 300%, or (iii) the borrowings permitted by
    investment restriction (1) above. The 1940 Act currently defines "senior
    security" as any bond, debenture, note or similar obligation or instrument
    constituting a security and evidencing indebtedness and any stock of a class
    having priority over any other class as to distribution of assets or payment
    of dividends. Debt and equity securities issued by a closed-end investment
    company meeting the foregoing asset coverage provisions are excluded from
    the general 1940 Act prohibition on the issuance of senior securities;

       (3) Purchase securities on margin (but the Fund may obtain such short-
    term credits as may be necessary for the clearance of purchases and sales of
    securities). The purchase of investment assets with the proceeds of a
    permitted borrowing or securities offering will not be deemed to be the
    purchase of securities on margin;

       (4) Underwrite securities issued by other persons, except insofar as it
    may technically be deemed to be an underwriter under the Securities Act of
    1933, as amended, in selling or disposing of a portfolio investment;

       (5) Make loans to other persons, except by (a) the acquisition of loans,
    loan interests, debt securities and other obligations in which the Fund is
    authorized to invest in accordance with its investment objectives and
    policies, (b) entering into repurchase agreements and (c) lending its
    portfolio securities;

       (6) Purchase or sell real estate, although it may purchase and sell
    securities which are secured by interests in real estate and securities of
    issuers which invest or deal in real estate. The Fund reserves the freedom
    of action to hold and to sell real estate acquired as a result of the
    ownership of securities;

       (7) Purchase or sell physical commodities or contracts for the purchase
    or sale of physical commodities. Physical commodities do not include futures
    contracts with respect to securities, securities indices, currency or other
    financial instruments;



                                        4

<PAGE>

       (8) With respect to 75% of its total assets, invest more than 5% of its
    total assets in the securities of a single issuer or purchase more than 10%
    of the outstanding voting securities of a single issuer, except obligations
    issued or guaranteed by the U.S. government, its agencies or
    instrumentalities and except securities of other investment companies; and

       (9) Invest 25% or more of its total assets in any single industry (other
    than securities issued or guaranteed by the U.S. government or its agencies
    or instrumentalities).

    In regard to 5(c), the value of the securities loaned by the Fund may not
exceed 33 1/3% of its total assets.

    The Fund may borrow money as a temporary measure for extraordinary or
emergency purposes, including the payment of dividends and the settlement of
securities transactions which otherwise might require untimely dispositions of
Fund securities. The 1940 Act currently requires that the Fund have 300% asset
coverage with respect to all borrowings other than temporary borrowings.

    For purposes of construing restriction (9), securities of the U.S.
Government, its agencies, or instrumentalities are not considered to represent
industries. Municipal obligations backed by the credit of a governmental entity
are also not considered to represent industries.

    The Fund has adopted the following nonfundamental investment policy which
may be changed by the Board without approval of the Fund's shareholders. As a
matter of nonfundamental policy, the Fund may not make short sales of securities
or maintain a short position, unless at all times when a short position is open
the Fund either owns an equal amount of such securities or owns securities
convertible into or exchangeable, without payment of any further consideration,
for securities of the same issue as, and equal in amount to, the securities sold
short.

    Upon the Board's approval, the Fund may invest more than 10% of its total
assets in one or more other management investment companies (or may invest in
affiliated investment companies) to the extent permitted by the 1940 Act and
rules thereunder.

    Whenever an investment policy or investment restriction set forth in the
Prospectus or this SAI states a maximum percentage of assets that may be
invested in any security or other asset or describes a policy regarding quality
standards, such percentage limitation or standard shall be determined
immediately after and as a result of the Fund's acquisition of such security or
asset. Accordingly, any later increase or decrease resulting from a change in
values, assets or other circumstances or any subsequent rating change made by a
rating service (or as determined by the Adviser if the security is not rated by
a rating agency) will not compel the Fund to dispose of such security or other
asset. Notwithstanding the foregoing, the Fund must always be in compliance with
the borrowing policies set forth above.

                              TRUSTEES AND OFFICERS

    The Trustees of the Fund are responsible for the overall management and
supervision of the affairs of the Fund. The Trustees and officers of the Fund
are listed below. Except as indicated, each individual has held the office shown
or other offices in the same company for the last five years. The "noninterested
Trustees" consist of those Trustees who are not "interested persons" of the
Fund, as that term is defined under the 1940 Act. The business address of each
Trustee and officer is The Eaton Vance Building, 255 State Street, Boston,
Massachusetts 02109. As used in this SAI, "EVC" refers to Eaton Vance Corp.,
"EV" refers to Eaton Vance, Inc., "BMR" refers to Boston Management and
Research, and "EVD" refers to Eaton Vance Distributors Inc. EVC and EV are the
corporate parent and trustee, respectively, of Eaton Vance and BMR. Eaton Vance
has engaged Rampart Investment Management Company, Inc. ("Rampart" or the "Sub-
Adviser") to serve as sub-adviser to the Fund to provide advice on and execution
of the construction of the Fund's equity portfolio and options strategy,
pursuant to an investment sub-advisory agreement (the "Sub-Advisory


                                        5

<PAGE>

Agreement") between the Adviser and Rampart. Each officer of Eaton Vance may
hold a position with other Eaton Vance affiliates that is comparable to his or
her position with Eaton Vance listed below.


<Table>
<Caption>
                                                                                              NUMBER OF
                                                                           PRINCIPAL        PORTFOLIOS IN
                                                 TERM OF OFFICE          OCCUPATION(S)       FUND COMPLEX           OTHER
NAME AND                    POSITION(S)            AND LENGTH          DURING PAST FIVE      OVERSEEN BY        DIRECTORSHIPS
DATE OF BIRTH              WITH THE FUND           OF SERVICE                YEARS            TRUSTEE(1)            HELD
-------------          --------------------   --------------------   --------------------   -------------   --------------------

<S>                    <C>                    <C>                    <C>                    <C>             <C>

INTERESTED TRUSTEE
James B. Hawkes        Trustee and Vice       Since 10/5/05          Chairman, and Chief         166        Director of EVC
11/9/41                President              Three Years            Executive Officer of
                                                                     BMR, Eaton Vance,
                                                                     EVC and EV; Director
                                                                     of EV; Vice
                                                                     President and
                                                                     Director of EVD.
                                                                     Trustee and/or
                                                                     officer of 166
                                                                     registered
                                                                     investment companies
                                                                     in the Eaton Vance
                                                                     Fund Complex. Mr.
                                                                     Hawkes is an
                                                                     interested person
                                                                     because of his
                                                                     positions with BMR,
                                                                     Eaton Vance, EVC and
                                                                     EV, which are
                                                                     affiliates of the
                                                                     Fund.
NONINTERESTED
  TRUSTEES
Benjamin C. Esty       Trustee(2)             Since 10/5/05          Roy and Elizabeth           166        None
1/2/63                                        Three Years            Simmons Professor of
                                                                     Business
                                                                     Administration,
                                                                     Harvard University
                                                                     Graduate School of
                                                                     Business
                                                                     Administration
                                                                     (since 2003).
                                                                     Formerly Associate
                                                                     Professor, Harvard
                                                                     University Graduate
                                                                     School of Business
                                                                     Administration
                                                                     (2000-2003)
Samuel L. Hayes, III   Chairman of the        Since 10/5/05          Jacob H. Schiff             166        Director of Tiffany
2/23/35                Board and Trustee(2)   Three Years            Professor of                           & Co. (specialty
                                                                     Investment Banking                     retailer)
                                                                     Emeritus, Harvard
                                                                     University Graduate
                                                                     School of Business
                                                                     Administration.
                                                                     Director of Yakima
                                                                     Products, Inc.
                                                                     (manufacturer of
                                                                     automotive
                                                                     accessories) (since
                                                                     2001) and Director
                                                                     of Telect, Inc.
                                                                     (telecommunication
                                                                     services company).
</Table>


                                        6

<PAGE>

<Table>
<Caption>
                                                                                              NUMBER OF
                                                                           PRINCIPAL        PORTFOLIOS IN
                                                 TERM OF OFFICE          OCCUPATION(S)       FUND COMPLEX           OTHER
NAME AND                    POSITION(S)            AND LENGTH          DURING PAST FIVE      OVERSEEN BY        DIRECTORSHIPS
DATE OF BIRTH              WITH THE FUND           OF SERVICE                YEARS            TRUSTEE(1)            HELD
-------------          --------------------   --------------------   --------------------   -------------   --------------------

<S>                    <C>                    <C>                    <C>                    <C>             <C>
William H. Park        Trustee(3)             Since 10/5/05          Vice Chairman,              166        None
9/19/47                                       Three Years            Commercial
                                                                     Industrial Finance
                                                                     Corp. (specialty
                                                                     finance company)
                                                                     (since 2005).
                                                                     Formerly, President
                                                                     and Chief Executive
                                                                     Officer, Prizm
                                                                     Capital Management,
                                                                     LLC (investment
                                                                     management firm)
                                                                     (2002-2005).
                                                                     Formerly, Executive
                                                                     Vice President and
                                                                     Chief Financial
                                                                     Officer, United
                                                                     Asset Management
                                                                     Corporation (a
                                                                     holding company
                                                                     owning institutional
                                                                     investment
                                                                     management firms
                                                                     (1982-2001).
Ronald A. Pearlman     Trustee(3)             Since 10/5/05          Professor of Law,           166        None
7/10/40                                       Three Years            Georgetown
                                                                     University Law
                                                                     Center.
Norton A. Reamer       Trustee(4)             Since 10/5/05          President, Chief            166        None
9/21/35                                       Three Years            Executive Officer
                                                                     and a Director of
                                                                     Asset Management
                                                                     Finance Corp. (a
                                                                     specialty finance
                                                                     company serving the
                                                                     investment
                                                                     management industry)
                                                                     (since October
                                                                     2003). President,
                                                                     Unicorn Corporation
                                                                     (an investment and
                                                                     financial services
                                                                     company) (since
                                                                     September 2000).
                                                                     Formerly, Chairman
                                                                     and Chief Operating
                                                                     Officer, Hellman,
                                                                     Jordan Management
                                                                     Co., Inc. (an
                                                                     investment
                                                                     management company)
                                                                     (2000-2003).
                                                                     Formerly, Advisory
                                                                     Director of
                                                                     Berkshire Capital
                                                                     Corporation
                                                                     (investment banking
                                                                     firm) (2002-2003).
Lynn A. Stout          Trustee(4)             Since 10/5/05          Professor of Law,           166        None
9/14/57                                       Three Years            University of
                                                                     California at Los
                                                                     Angeles School of
                                                                     Law.
Ralph F. Verni         Trustee(4)             Since 10/5/05          Consultant and              166        None
1/26/43                                       Three Years            private investor.
</Table>


--------

(1) Includes both master and feeder funds in master-feeder structure.

(2) Class I Trustees whose term expires in [2006].

(3) Class II Trustees whose term expires in [2007].

(4) Class III Trustees whose term expires in [2008].



                                        7

<PAGE>

                     PRINCIPAL OFFICERS WHO ARE NOT TRUSTEES


<Table>
<Caption>
                                                                TERM OF OFFICE
                                     POSITION(S)                  AND LENGTH             PRINCIPAL OCCUPATIONS
NAME AND DATE OF BIRTH              WITH THE FUND                 OF SERVICE            DURING PAST FIVE YEARS
----------------------  -------------------------------------   --------------   ------------------------------------

<S>                     <C>                                     <C>              <C>

Duncan W. Richardson    President and Chief Executive Officer   Since 10/5/05    Executive Vice President and Chief
10/26/57                                                                         Equity Investment Officer of EVC,
                                                                                 Eaton Vance and BMR. Officer of 54
                                                                                 registered investment companies
                                                                                 managed by Eaton Vance or BMR.
Thomas E. Faust Jr.     Vice President                          Since 10/5/05    President of Eaton Vance, BMR, EVC
5/31/58                                                                          and EV, and Director of EVC; Chief
                                                                                 Investment Officer of Eaton Vance,
                                                                                 BMR and EVC. Officer of 68
                                                                                 registered investment companies and
                                                                                 5 private investment companies
                                                                                 managed by Eaton Vance or BMR.
Walter A. Row, III      Vice President                          Since 10/05/05   Director of Equity Research and a
7/20/57                                                                          Vice President of Eaton Vance and
                                                                                 BMR. Officer of 31 registered
                                                                                 investment companies managed by
                                                                                 Eaton Vance or BMR.
Judith A. Saryan        Vice President                          Since 10/5/05    Vice President of Eaton Vance and
8/21/54                                                                          BMR. Officer of 35 registered
                                                                                 investment companies managed by
                                                                                 Eaton Vance or BMR.
Barbara E. Campbell     Treasurer and Principal Financial and   Since 10/5/05    Vice President of BMR and Eaton
6/19/57                 Accounting Officer                                       Vance. Officer of 166 registered
                                                                                 investment companies managed by
                                                                                 Eaton Vance or BMR.
Paul M. O'Neil          Chief Compliance Officer                Since 10/5/05    Vice President of Eaton Vance and
7/11/53                                                                          BMR. Officer of 166 registered
                                                                                 investment companies managed by
                                                                                 Eaton Vance or BMR.
Alan R. Dynner          Secretary                               Since 10/5/05    Vice President, Secretary and Chief
11/9/41                                                                          Legal Counsel of BMR, Eaton Vance,
                                                                                 EVD EV and EVC. Officer of 166
                                                                                 registered investment companies
                                                                                 managed by Eaton Vance or BMR.
</Table>


    The Board of Trustees of the Fund has several standing Committees, including
the Governance Committee, the Audit Committee, and the Special Committee. Each
such Committee is comprised of only noninterested Trustees.

    Messrs. Esty, Hayes, Park, Pearlman, Reamer, Verni and Ms. Stout are members
of the Governance Committee of the Board of Trustees of the Fund. currently
serves as chairperson of the Governance Committee. The purpose of the Governance
Committee is to consider, evaluate and make recommendations to the Board of
Trustees with respect to the structure, membership and operation of the Board of
Trustees and the Committees thereof, including the nomination and selection of
noninterested Trustees and a Chairperson of the Board of Trustees and
compensation of such persons.

    The Governance Committee will, when a vacancy exists or is anticipated,
consider any nominee for noninterested Trustee recommended by a shareholder if
such recommendation is submitted in writing to the Governance Committee,
contains sufficient background information concerning the candidate including
evidence the candidate is willing to serve as a noninterested Trustee if
selected for the position and is received in a sufficiently timely manner.

    Messrs. Reamer (Chair), Hayes, Park, Verni and Ms. Stout are members of the
Audit Committee of the Board of Trustees of the Fund. The Board of Trustees has
designated Messrs. Hayes, Park and Reamer, each a noninterested Trustee, as
audit committee financial experts. The Audit Committee's purposes are to (i)
oversee the Fund's accounting and financial reporting processes, its internal
control over financial reporting, and, as appropriate, the internal control over
financial reporting of certain service providers; (ii) oversee or, as
appropriate, assist Board oversight of the quality and integrity of the Fund's
financial statements and the independent audit thereof; (iii) oversee, or, as
appropriate, assist Board oversight of, the Fund's compliance with legal and
regulatory requirements that relate to the Fund's accounting and financial
reporting, internal control over financial reporting and independent audits;
(iv) approve prior to appointment the engagement and, when appropriate,
replacement of the independent registered public accounting firm, and, if
applicable, nominate the independent registered public accounting firm to be
proposed for shareholder ratification in any proxy statement of the Fund; (v)
evaluate the qualifications, independence and performance of the independent
registered public accounting firm and the audit partner in charge of leading the
audit; and (vi) prepare, as necessary, audit committee reports consistent with
the requirements of Rule 306 of Regulation S-K for inclusion in the proxy
statement of the Fund.



                                        8

<PAGE>

    Messrs. Hayes (Chair), Esty, Park, Pearlman and Reamer are currently members
of the Special Committee of the Board of Trustees of the Fund. The purposes of
the Special Committee are to consider, evaluate and make recommendations to the
Board of Trustees concerning the following matters: (i) contractual arrangements
with each service provider to the Fund, including advisory, sub-advisory,
transfer agency, custodial and fund accounting, distribution services and
administrative services; (ii) any and all other matters in which any of the Fund
service providers (including Eaton Vance or any affiliated entity thereof) has
an actual or potential conflict of interest with the interests of the Fund, or
investors therein; and (iii) any other matter appropriate for review by the non-
interested Trustees, unless the matter is within the responsibilities of the
Audit Committee or the Governance Committee of the Fund.

    As of the date of this SAI, the Governance Committee has met           , the
Audit Committee has met            and the Special Committee has met           .

    When considering approval of the Advisory Agreement between the Fund and the
Adviser, and the Sub-Advisory Agreement between the Adviser and Rampart, the
Special Committee considered, among other things, the following:

    - A report comparing the fees and expenses of the Fund and certain
      profitability analyses prepared by Eaton Vance and Rampart;

    - Information on the relevant peer group(s) of funds;

    - The economic outlook and the general investment outlook in the relevant
      investment markets;

    - Eaton Vance's and Rampart's results and financial condition and the
      overall organization of the Adviser and the Sub-Adviser;

    - Arrangements regarding the distribution of Fund shares;

    - The procedures used to determine the fair value of the Fund's assets;

    - The allocation of brokerage and the benefits received by the Adviser and
      the Sub-Adviser as the result of brokerage allocation, including
      allocations to soft dollar brokerage and allocations to firms that sell
      Eaton Vance fund shares;

    - Eaton Vance's management of the relationship with the custodian,
      subcustodians and fund accountants;

    - The resources devoted to Eaton Vance's compliance efforts undertaken on
      behalf of the funds it manages and the record of compliance with the
      investment policies and restrictions and with policies on personal
      securities transactions;

    - Rampart's compliance efforts with respect to the accounts it manages;

    - The quality, nature, cost and character of the administrative and other
      non-investment management services provided by Eaton Vance and its
      affiliates and by Rampart;

    - The terms of the Advisory Agreement and the Sub-Advisory Agreement, and
      the reasonableness and appropriateness of the particular fee paid by the
      Fund for the services described therein;

    - Operating expenses (including transfer agency expenses) to be paid to
      third parties; and

    - Information to be provided to investors, including the Fund's
      shareholders.

    In evaluating the Advisory Agreement between the Fund and Eaton Vance, the
Sub-Advisory Agreement between the Adviser and Rampart, the Special Committee
reviewed material furnished by Eaton Vance and Rampart at the initial Board
meeting held on [November 14], 2005, including the above referenced
considerations and information relating to the education, experience and number
of investment professionals and other personnel who would provide services under
the Advisory Agreement and under the Sub-Advisory Agreement. The Special
Committee also took into account the time and attention to be devoted by senior
management to the Fund and the other funds in the complex. The Special Committee



                                        9

<PAGE>

evaluated the level of skill required to manage the Fund and concluded that the
human resources available at Eaton Vance were appropriate to fulfill effectively
the duties of the Adviser on behalf of the Fund. The Special Committee also
considered the business reputation of the Adviser, its financial resources and
professional liability insurance coverage and concluded that Eaton Vance would
be able to meet any reasonably foreseeable obligations under the Advisory
Agreement. The Special Committee also considered the business reputation of
Rampart, Rampart's respective investment strategies and its past experience in
implementing these strategies.

    The Special Committee received information concerning the investment
philosophy and investment process to be applied by Eaton Vance and Rampart in
managing the Fund. In this regard, the Special Committee considered Eaton
Vance's in-house research capabilities as well as other resources available to
Eaton Vance personnel, including research services that may be available to
Eaton Vance as a result of securities transactions effected for the Fund and
other investment advisory clients. The Special Committee concluded that Eaton
Vance's and Rampart's investment process, research capabilities and philosophy
were well suited to the Fund, given the Fund's investment objective and
policies.

    In addition to the factors mentioned above, the Special Committee also
reviewed the level of the Adviser's profits in respect of the management of the
Eaton Vance funds, including the Fund. The Special Committee considered the
other profits realized by Eaton Vance and its affiliates in connection with the
operation of the Fund. The Special Committee also considered profit margins of
Eaton Vance in comparison with available industry data. In addition, the Special
Committee considered the fiduciary duty assumed by the Adviser in connection
with the service rendered to the Fund and the business reputation of the
Adviser, its financial resources and its professional liability insurance
coverage. In evaluating the fees to be paid to Rampart, the Special Committee
considered and discussed fees paid to other investment sub-advisers in similar
circumstances, as well as fees charged by Rampart to its other clients.

    The Special Committee did not consider any single factor as controlling in
determining whether or not to approve the Advisory Agreement and the Sub-
Advisory Agreement. Nor are the items described herein all encompassing of the
matters considered by the Special Committee. In assessing the information
provided by Eaton Vance, Rampart and their affiliates, the Special Committee
also took into consideration the benefits to shareholders of investing in a fund
that is part of a large family of funds which provides a large variety of
shareholder services.

    Based on its consideration of all factors that it deemed material and
assisted by the advice of its independent counsel, the Special Committee
concluded that the approval of the Advisory Agreement and the Sub-Advisory
Agreement, including the fee structure (described herein) is in the interests of
shareholders. The Special Committee also considered that the Adviser would enter
into a Shareholder Servicing Agreement with           , whereby the Adviser (and
not the Fund) would pay            to provide upon request certain market data
and reports to support shareholder services pursuant to the agreement.

                                 SHARE OWNERSHIP

    The following table shows the dollar range of equity securities beneficially
owned by each Trustee in the Fund and all Eaton Vance Funds overseen by the
Trustee as of December 31, 2005. None of the Trustees own shares of the Fund
since the Fund has not commenced operations.


<Table>
<Caption>
                                                            AGGREGATE DOLLAR RANGE OF EQUITY
                                        DOLLAR RANGE OF    SECURITIES OWNED IN ALL REGISTERED
                                       EQUITY SECURITIES    FUNDS OVERSEEN BY TRUSTEE IN THE
NAME OF TRUSTEE                        OWNED IN THE FUND        EATON VANCE FUND COMPLEX
---------------                        -----------------   ----------------------------------

<S>                                    <C>                 <C>

INTERESTED TRUSTEE...................
NON-INTERESTED TRUSTEES..............
</Table>


--------



                                       10

<PAGE>

    As of December 31, 2005, no non-interested Trustee or any of their immediate
family members owned beneficially or of record any class of securities of EVC,
EVD, Rampart or any person controlling, controlled by or under common control
with EVC, EVD or Rampart.

    During the calendar years ended December 31, 2004 and December 31, 2005, no
non-interested Trustee (or their immediate family members) had:

       1. Any direct or indirect interest in Eaton Vance, EVC, EVD, Rampart or
    any person controlling, controlled by or under common control with EVC, EVD
    or Rampart;

       2. Any direct or indirect material interest in any transaction or series
    of similar transactions with (i) the Fund; (ii) another fund managed by EVC
    or Rampart, distributed by EVD or a person controlling, controlled by or
    under common control with EVC, EVD or Rampart; (iii) EVC, EVD or Rampart;
    (iv) a person controlling, controlled by or under common control with EVC,
    EVD or Rampart; or (v) an officer of any of the above; or

       3. Any direct or indirect relationship with (i) the Fund; (ii) another
    fund managed by EVC or Rampart, distributed by EVD or a person controlling,
    controlled by or under common control with EVC, EVD or Rampart; (iii) EVC,
    EVD or Rampart; (iv) a person controlling, controlled by or under common
    control with EVC, EVD or Rampart; or (v) an officer of any of the above.

    During the calendar years ended December 31, 2004 and December 31, 2005 no
officer of EVC, EVD, Rampart or any person controlling, controlled by or under
common control with EVC, EVD or Rampart served on the Board of Directors of a
company where a noninterested Trustee of the Fund or any of their immediate
family members served as an officer.

    Trustees of the Fund who are not affiliated with the Adviser may elect to
defer receipt of all or a percentage of their annual fees in accordance with the
terms of a Trustees Deferred Compensation Plan (the "Trustees' Plan"). Under the
Trustees' Plan, an eligible Trustee may elect to have his deferred fees invested
by the Fund in the shares of one or more funds in the Eaton Vance Family of
Funds, and the amount paid to the Trustees under the Trustees' Plan will be
determined based upon the performance of such investments. Deferral of Trustees'
fees in accordance with the Trustees' Plan will have a negligible effect on the
Fund's assets, liabilities, and net income per share, and will not obligate the
Fund to retain the services of any Trustee or obligate the Fund to pay any
particular level of compensation to the Trustee. The Fund does not have a
retirement plan for its Trustees.

    The fees and expenses of the Trustees of the Fund are paid by the Fund. (A
Trustee of the Fund who is a member of the Eaton Vance organization receives no
compensation from the Fund.) For the Fund's fiscal year ending December 31,
2005, it is anticipated that the Trustees of the Fund will earn the following
compensation in their capacities as Trustees. For the year ended December 31,
2005, the Trustees earned the compensation set forth below in their capacities
as Trustees from the funds in the Eaton Vance Fund Complex(1).


<Table>
<Caption>
SOURCE OF COMPENSATION
----------------------

<S>                                                                          <C>

Fund*...................................................................
Fund Complex**..........................................................
</Table>


--------

 *  Estimated

**             and            were elected on            , 2005 and they did not
    receive fees for the period.

    (1) As of November   , 2006, the Eaton Vance fund complex consisted of
registered investment companies or series thereof.

    (2) Includes $      of deferred compensation.

    (3) Includes $      of deferred compensation.



                                       11

<PAGE>

    PROXY VOTING POLICY.  The Fund is subject to the Eaton Vance Funds Proxy
Voting Policy and Procedures, pursuant to which the Trustees have delegated
proxy voting responsibility to the Adviser and adopted the Adviser's proxy
voting policies and procedures (the "Policies") which are attached as Appendix A
to this SAI. The Trustees will review the Fund's proxy voting records from time
to time and will annually consider approving the Policies for the upcoming year.
In the event that a conflict of interest arises between the Fund's shareholders
and the Adviser or any of its affiliates or any affiliate of the Fund, the
Adviser will generally refrain from voting the proxies related to the companies
giving rise to such conflict until it consults with the Board of the Fund,
except as contemplated under the Fund Policy. The Board's Special Committee will
instruct the Adviser on the appropriate course of action. The Fund's and the
Adviser's Proxy Voting Policies and Procedures are attached as Appendix A to
this SAI.

    Information on how the Fund voted proxies relating to portfolio securities
during the 12 month period ended June 30, 2005 will be available (1) without
charge, upon request, by calling 1-800-262-1122, and (2) on the Securities and
Exchange Commission's website at http://www.sec.gov.

                     INVESTMENT ADVISORY AND OTHER SERVICES

    THE INVESTMENT ADVISER.  Eaton Vance, its affiliates and its predecessor
companies have been managing assets of individuals and institutions since 1924
and of investment companies since 1931. They maintain a large staff of
experienced fixed-income, senior loan and equity investment professionals to
service the needs of their clients. The fixed-income group focuses on all kinds
of taxable investment-grade and high-yield securities, tax-exempt investment-
grade and high-yield securities, and U.S. Government securities. The senior loan
group focuses on senior floating rate loans, unsecured loans and other floating
rate debt securities such as notes, bonds and asset backed securities. The
equity group covers stocks ranging from blue chip to emerging growth companies.
Eaton Vance and its affiliates act as adviser to a family of mutual funds, and
individual and various institutional accounts, including corporations,
hospitals, retirement plans, universities, foundations and trusts.

    The Fund will be responsible for all of its costs and expenses not expressly
stated to be payable by Eaton Vance under the Advisory Agreement or
Administration Agreement. Such costs and expenses to be borne by the Fund
include, without limitation: custody and transfer agency fees and expenses,
including those incurred for determining net asset value and keeping accounting
books and records; expenses of pricing and valuation services; the cost of share
certificates; membership dues in investment company organizations; expenses of
acquiring, holding and disposing of securities and other investments; fees and
expenses of registering under the securities laws; stock exchange listing fees
and governmental fees; rating agency fees and preferred share remarketing
expenses; expenses of reports to shareholders, proxy statements and other
expenses of shareholders' meetings; insurance premiums; printing and mailing
expenses; interest, taxes and corporate fees; legal and accounting expenses;
compensation and expenses of Trustees not affiliated with Eaton Vance; expenses
of conducting repurchase offers for the purpose of repurchasing Fund shares; and
investment advisory and administration fees. The Fund will also bear expenses
incurred in connection with any litigation in which the Fund is a party and any
legal obligation to indemnify its officers and Trustees with respect thereto, to
the extent not covered by insurance.

    The Advisory Agreement with the Adviser continues in effect for an initial
period of two years until           , 200 , and from year to year thereafter so
long as such continuance is approved at least annually (i) by the vote of a
majority of the noninterested Trustees of the Fund or of the Adviser, such vote
being cast in person at a meeting specifically called for the purpose of voting
on such approval and (ii) by the Board of Trustees of the Fund or by vote of a
majority of the outstanding shares of the Fund. The Fund's Administration
Agreement continues in effect from year to year so long as such continuance is
approved at least annually by the vote of a majority of the Fund's Trustees.
Each agreement may be terminated at any time without penalty on sixty (60) days'
written notice by the Trustees of the Fund or Eaton Vance, as applicable, or by
vote of the majority of the outstanding shares of the Fund. Each agreement will
terminate automatically in the event of its assignment. Each agreement provides
that, in the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of its obligations or duties to the Fund under


                                       12

<PAGE>

such agreements on the part of Eaton Vance, Eaton Vance shall not be liable to
the Fund for any loss incurred, to the extent not covered by insurance.

    The Advisory Agreement provides that Eaton Vance may engage one or more
investment sub-advisers to assist with some or all aspects of the management of
the Fund's investments subject to such approvals as are required under the 1940
Act. Pursuant to these provisions, Eaton Vance has engaged Rampart, as a sub-
adviser to provide assistance with the development, implementation and execution
of the Fund's options strategy. The Advisory Agreement provides that Eaton Vance
may terminate any sub-advisory agreement entered into and directly assume any
functions performed by the sub-adviser, upon approval of the Board of Trustees,
without the need for approval of the shareholders of the Fund.

    Pursuant to an investment advisory agreement between the Adviser and the
Fund, the Fund has agreed to pay an investment advisory fee, payable on a
monthly basis, at an annual rate of 1.00% of the average daily gross mean total
assets of the Fund, including any form of investment leverage that the Fund may
in the future determine to utilize, minus all expenses incurred in the normal
course of operations, but not excluding any liabilities or obligations
attributable to any future investment leverage obtained through (i) indebtedness
of any type (including without limitation, borrowing through a credit
facility/commercial paper program or the issuance of debt securities), (ii) the
issuance of preferred shares or other similar preference securities, (iii) the
reinvestment of collateral received for securities loaned in accordance with the
Fund's investment objectives and policies and/or (iv) any other means.

    Eaton Vance is a business trust organized under Massachusetts law. EV serves
as trustee of Eaton Vance. Eaton Vance and EV are wholly-owned subsidiaries of
EVC, a Maryland corporation and publicly-held holding company. EVC through its
subsidiaries and affiliates engages primarily in investment management,
administration and marketing activities. The Directors of EVC are James B.
Hawkes, Thomas E. Faust Jr., Ann E. Berman, John G.L. Cabot, Leo I. Higdon, Jr.,
Vincent M. O'Reilly, Dorothy E. Puhy and Winthrop H. Smith, Jr. All shares of
the outstanding Voting Common Stock of EVC are deposited in a Voting Trust, the
Voting Trustees of which are Messrs. Hawkes, Faust, Jeffrey P. Beale, Cynthia J.
Clemson, Alan R. Dynner, Michael R. Mach, Robert B. Macintosh, Thomas M.
Metzold, Scott H. Page, Duncan W. Richardson, G. West Saltonstall, Judith A.
Saryan, William M. Steul, Payson F. Swaffield, Michael W. Weilheimer, and
Wharton P. Whitaker (all of whom are officers of Eaton Vance). The Voting
Trustees have unrestricted voting rights for the election of Directors of EVC.
All of the outstanding voting trust receipts issued under said Voting Trust are
owned by certain of the officers of BMR and Eaton Vance who are also officers,
or officers and Directors of EVC and EV. As indicated under "Management and
Organization," all of the officers of the Fund (as well as Mr. Hawkes who is
also a Trustee) hold positions in the Eaton Vance organization.

    EVC and its affiliates and their officers and employees from time to time
have transactions with various banks, including the custodian of the Fund, IBT.
It is Eaton Vance's opinion that the terms and conditions of such transactions
were not and will not be influenced by existing or potential custodial or other
relationships between the Fund and such banks.

    THE SUB-ADVISER.  Rampart acts as the Fund's investment sub-adviser and
provides advice and assistance in pursuing the Fund's options strategy pursuant
to a sub-advisory agreement between the Adviser and Rampart (the "Sub-Advisory
Agreement"). Rampart, a Massachusetts corporation, was founded in 1983 by its
current owners Ronald M. Egalka and David R. Fraley. The Sub-Adviser provides
customized investment management services within a core competency in options to
a spectrum of institutional clients. Since its inception, the Sub-Adviser has
continuously expanded its computer modeling and analytical capabilities and
created tools to capitalize on opportunities in the capital markets. Rampart's
principal office is located at One International Place, Boston, MA 02110. As of
September 30, 2006 Rampart had approximately $6.6 billion of assets under
management.

    Under the terms of its Sub-Advisory Agreement, Rampart provides advice and
assistance with the development, implementation and execution of the Fund's
options strategy, all subject to the supervision and direction of the Fund's
Board of Trustees and the Adviser. For services rendered by Rampart under the


                                       13

<PAGE>

Sub-Advisory Agreement, Eaton Vance pays Rampart a fee, payable monthly, in an
annual amount equal to 0.05% of the value of the Fund's average daily gross
assets that is subject to written call options.

    The Sub-Advisory Agreement with Rampart continues until           , 200
and from year to year thereafter if approved annually (i) by the Fund's Board of
Trustees or by the holders of a majority of its outstanding voting securities
and (ii) by a majority of the Trustees who are not "interested persons" (as
defined in the 1940 Act) of any party to the Sub-Advisory Agreement, by vote
cast in person at a meeting called for the purpose of voting on such approval.
The Sub-Advisory Agreement terminates automatically on its assignment and may be
terminated without penalty on 60 days written notice at the option of either the
Adviser, by the Fund's Board of Trustees or by a vote of a majority (as defined
in the 1940 Act) of the Fund's outstanding shares or by Rampart upon 3 months
notice. As discussed above, Eaton Vance may terminate the Sub-Advisory Agreement
with Rampart and directly assume responsibility for the services provided by
Rampart upon approval by the Board of Trustees without the need for approval of
the shareholders of the Fund.

    The Sub-Advisory Agreement with Rampart provides that in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard for its
obligations and duties thereunder, Rampart is not liable for any error or
judgment or mistake of law or for any loss suffered by the Fund.

    PORTFOLIO MANAGERS.  The portfolio managers of the Fund are Walter A. Row
and Michael A Allison of Eaton Vance and Ronald M. Egalka of Rampart. Each
portfolio manager manages other investment companies and/or investment accounts
in addition to the Fund. The following tables show, as of           , 2006, the
number of accounts each portfolio manager managed in each of the listed
categories and the total assets in the accounts managed within each category.
The table also shows the number of accounts with respect to which the advisory
fee is based on the performance of the account, if any, and the total assets in
those accounts.


<Table>
<Caption>
                                                            NUMBER OF    TOTAL ASSETS
                                                             ACCOUNTS     OF ACCOUNTS
                                  NUMBER                     PAYING A      PAYING A
                                    OF      TOTAL ASSETS   PERFORMANCE    PERFORMANCE
                                 ACCOUNTS   OF ACCOUNTS*       FEE            FEE
                                 --------   ------------   -----------   ------------

<S>                              <C>        <C>            <C>           <C>

WALTER A. ROW, III
Registered Investment
  Companies**..................               $                            $
Other Pooled Investment
  Vehicles.....................                      $                            $
Other Accounts.................                      $                            $
MICHAEL A. ALLISON
Registered Investment
  Companies**
Other Pooled Investment
  Vehicles
Other Accounts.................
RONALD M. EGALKA
Registered Investment
  Companies**..................                      $                            $
Other Pooled Investment
  Vehicles.....................                      $                            $
Other Accounts.................                      $                            $
</Table>


--------

 *  In millions of dollars.

**  For registered investment companies, assets represent net assets of all
    open-end investment companies and gross assets of all closed-end investment
    companies.

    None of the portfolio managers beneficially owned shares of the Fund as of
the date of this SAI.



                                       14

<PAGE>

    It is possible that conflicts of interest may arise in connection with the
portfolio managers' management of the Fund's investments on the one hand and the
investments of other accounts for which the Fund manager is responsible for on
the other. For example, a portfolio manager may have conflicts of interest in
allocating management time, resources and investment opportunities among the
Fund and other accounts he advises. In addition due to differences in the
investment strategies or restrictions between the Fund and the other accounts, a
portfolio manager may take action with respect to another account that differs
from the action taken with respect to the Fund. In some cases, another account
managed by a portfolio manager may compensate the investment adviser based on
the performance of the securities held by that account. The existence of such a
performance based fee may create additional conflicts of interest for the
portfolio manager in the allocation of management time, resources and investment
opportunities. Whenever conflicts of interest arise, the portfolio manager will
endeavor to exercise his discretion in a manner that he believes is equitable to
all interested persons.

    EATON VANCE'S COMPENSATION STRUCTURE AND METHOD TO DETERMINE
COMPENSATION.  Compensation of the Adviser's portfolio managers and other
investment professionals has three primary components: (1) a base salary, (2) an
annual cash bonus, and (3) annual stock-based compensation consisting of options
to purchase shares of EVC's nonvoting common stock and/or restricted shares of
EVC's nonvoting common stock. The Adviser's investment professionals also
receive certain retirement, insurance and other benefits that are broadly
available to all the Adviser's employees. Compensation of the Adviser's
investment professionals is reviewed primarily on an annual basis. Cash bonuses,
stock-based compensation awards, and adjustments in base salary are typically
paid or put into effect at or shortly after the October 31st fiscal year-end of
EVC.

    The Adviser compensates its portfolio managers based primarily on the scale
and complexity of their portfolio responsibilities and the total return
performance of managed funds and accounts versus appropriate peer groups or
benchmarks. Performance is normally based on periods ending on the September
30th preceding fiscal year-end. Fund performance is evaluated primarily versus
peer groups of funds as determined by Lipper Inc. and/or Morningstar, Inc. In
evaluating the performance of a fund and its manager, emphasis is normally
placed on three-year performance, with consideration of performance over longer
and shorter periods. For funds that are tax-managed or otherwise have an
objective of after-tax returns, performance is measured net of taxes. For other
funds, performance is evaluated on a pre-tax basis. In addition to rankings
within peer groups of funds on the basis of absolute performance, consideration
may also be given to risk-adjusted performance. For funds with an investment
objective other than total return (such as current income), consideration will
also be given to the fund's success in achieving its objective. For managers
responsible for multiple funds and accounts, investment performance is evaluated
on an aggregate basis, based on averages or weighted averages among managed
funds and accounts. Funds and accounts that have performance-based advisory fees
are not accorded disproportionate weightings in measuring aggregate portfolio
manager performance.

    The compensation of portfolio managers with other job responsibilities (such
as heading an investment group or providing analytical support to other
portfolios) will include consideration of the scope of such responsibilities and
the managers' performance in meeting them.

    The Adviser seeks to compensate portfolio managers commensurate with their
responsibilities and performance, and competitive with other firms within the
investment management industry. The Adviser participates in investment-industry
compensation surveys and utilizes survey data as a factor in determining salary,
bonus and stock-based compensation levels for portfolio managers and other
investment professionals. Salaries, bonuses and stock-based compensation are
also influenced by the operating performance of the Adviser and its parent
company. The overall annual cash bonus pool is based on a substantially fixed
percentage of pre-bonus operating income. While the salaries of the Adviser's
portfolio managers are comparatively fixed, cash bonuses and stock-based
compensation may fluctuate significantly from year to year, based on changes in
manager performance and other factors as described herein. For a high performing
portfolio manager, cash bonuses and stock-based compensation may represent a
substantial portion of total compensation.



                                       15

<PAGE>

    RAMPART'S COMPENSATION STRUCTURE AND METHOD TO DETERMINE COMPENSATION.  The
identified Rampart portfolio manager is a founding shareholder. The compensation
of the identified portfolio manager has two primary components: (1) a base
salary, and (2) an annual cash bonus. There are also certain retirement,
insurance and other benefits that are broadly available to all Rampart
employees. Compensation of Rampart investment professionals is reviewed
primarily on an annual basis. Cash bonuses and adjustments in base salary are
typically paid or put into effect at or shortly after the June 30 fiscal year-
end of Rampart.

    METHOD TO DETERMINE COMPENSATION.  Rampart compensates its founding
shareholders/identified portfolio managers based primarily on the scale and
complexity of their responsibilities. The performance of portfolio managers is
evaluated primarily based on success in achieving portfolio objectives for
managed funds and accounts. Rampart seeks to compensate all portfolio managers
commensurate with their responsibilities and performance, and competitive with
other firms within the investment management industry. This is reflected in the
founding shareholders/identified portfolio managers' salaries.

    Salaries and profit participations are also influenced by the operating
performance of Rampart. While the salaries of Rampart's founding
shareholders/identified portfolio managers are comparatively fixed, profit
participations may fluctuate substantially from year to year, based on changes
in financial performance.

                                 CODES OF ETHICS

    The Adviser, Rampart and the Fund have adopted Codes of Ethics governing
personal securities transactions. Under the Codes of Ethics, Eaton Vance and
Rampart employees may purchase and sell securities (including securities held or
eligible for purchase by the Fund) subject to certain pre-clearance and
reporting requirements and other procedures.

    The Codes of Ethics can be reviewed and copied at the Securities and
Exchange Commission's public reference room in Washington, DC (call 1-202-942-
8090 for information on the operation of the public reference room); on the
EDGAR Database on the SEC's Internet site (http://www.sec.gov); or, upon payment
of copying fees, by writing, to the SEC's public reference section, Washington,
DC 20549-0102, or by electronic mail at publicinfo@sec.gov.

                          INVESTMENT ADVISORY SERVICES

    Under the general supervision of the Fund's Board of Trustees, Eaton Vance
will carry out the investment and reinvestment of the assets of the Fund, will
furnish continuously an investment program with respect to the Fund, will
determine which securities should be purchased, sold or exchanged, and will
implement such determinations and will supervise the overall activities of the
Sub-Adviser. Eaton Vance will furnish to the Fund investment advice and provide
related office facilities and personnel for servicing the investments of the
Fund. Eaton Vance will compensate all Trustees and officers of the Fund who are
members of the Eaton Vance organization and who render investment services to
the Fund, and will also compensate all other Eaton Vance personnel who provide
research and investment services to the Fund.

                             ADMINISTRATIVE SERVICES

    Under the Administration Agreement, Eaton Vance is responsible for managing
the business affairs of the Fund, subject to the supervision of the Fund's Board
of Trustees. Eaton Vance will furnish to the Fund all office facilities,
equipment and personnel for administering the affairs of the Fund. Eaton Vance
will compensate all Trustees and officers of the Fund who are members of the
Eaton Vance organization and who render executive and administrative services to
the Fund, and will also compensate all other Eaton Vance personnel who perform
management and administrative services for the Fund. Eaton Vance's
administrative services include recordkeeping, preparation and filing of
documents required to comply with federal and state securities laws, supervising
the activities of the Fund's custodian and transfer agent,


                                       16

<PAGE>

providing assistance in connection with the Trustees' and shareholders'
meetings, providing services in connection with repurchase offers, if any, and
other administrative services necessary to conduct the Fund's business.

                        DETERMINATION OF NET ASSET VALUE

    The net asset value per share of the Fund is determined no less frequently
than daily, on each day that the New York Stock Exchange (the "Exchange") is
open for trading, as of the close of regular trading on the Exchange (normally
4:00 p.m. New York time). The Fund's net asset value per share is determined by
IBT, in the manner authorized by the Trustees of the Fund. Net asset value is
computed by dividing the value of the Fund's total assets, less its liabilities,
by the number of shares outstanding.

    The Trustees of the Fund have established the following procedures for fair
valuation of the Fund's assets under normal market conditions. Marketable
securities listed on foreign or United States securities exchanges generally are
valued at closing sale prices or, if there were no sales, at the mean between
the closing bid and asked prices therefor on the exchange where such securities
are principally traded (unless an active over-the-counter market in an exchange
listed security better reflects current market value). Marketable securities
listed in the NASDAQ National Market System are valued at the NASDAQ official
closing price. Unlisted or listed securities for which closing sale prices are
not available are valued at the mean between the latest bid and asked prices. An
exchange-traded option is valued on the valuation day as the "Primary Market"
quote reported by the Option Pricing Authority ("OPRA"). OPRA gathers options
quotations from the six major United States Options exchanges and reports the
last sale price from any exchange on which the option is listed. If no such
sales are reported, such portion will be valued at the mean of the closing bid
and asked prices on the valuation day on the exchange on which the options are
primarily traded. When the Fund writes a call option it records the premium as
an asset and equivalent liability and thereafter adjusts the liability to the
market value of the option determined in accordance with the preceding sentence.

    The Adviser and the valuation committee may implement new pricing
methodologies or expand mark-to-market valuation of debt securities whose market
prices are not readily available in the future, which may result in a change in
the Fund's net asset value per share. The Fund's net asset value per share will
also be affected by fair value pricing decisions and by changes in the market
for such debt securities. In determining the fair value of a debt security, the
Adviser will consider relevant factors, data, and information, including: (i)
the characteristics of and fundamental analytical data relating to the debt
security, including the cost, size, current interest rate, period until next
interest rate reset, maturity and base lending rate of the debt security, the
terms and conditions of the debt security and any related agreements, and the
position of the debt security in the borrower's debt structure; (ii) the nature,
adequacy and value of the collateral, including the Fund's rights, remedies and
interests with respect to the collateral; (iii) the creditworthiness of the
borrower, based on an evaluation of its financial condition, financial
statements and information about the borrower's business, cash flows, capital
structure and future prospects; (iv) information relating to the market for the
debt security, including price quotations for and trading in the debt security
and interests in similar debt securities and the market environment and investor
attitudes towards the debt security and interests in similar debt securities;
(v) the experience, reputation, stability and financial condition of the agent
and any intermediate participants in the debt security; and (vi) general
economic and market conditions affecting the fair value of the debt security.
The fair value of each debt security is reviewed and approved by the Adviser's
valuation committee and the Fund's Trustees.

    Debt securities for which the over-the-counter market is the primary market
are normally valued on the basis of prices furnished by one or more pricing
services at the mean between the latest available bid and asked prices. OTC
options are valued at prices obtained from a broker (typically the counterparty
to the options) on the valuation day. Financial futures contracts listed on
commodity exchanges and exchange-traded options are valued at closing settlement
prices. Short-term obligations having remaining maturities of less than 60 days
are valued at amortized cost, which approximates value, unless the Trustees
determine


                                       17

<PAGE>

that under particular circumstances such method does not result in fair value.
As authorized by the Trustees, debt securities (other than short-term
obligations) may be valued on the basis of valuations furnished by a pricing
service which determines valuations based upon market transactions for normal,
institutional-size trading units of such securities. Securities for which there
is no such quotation or valuation and all other assets are valued at fair value
as determined in good faith by or at the direction of the Fund's Trustees
considering relevant factors, data and information, including the market value
of freely tradable securities of the same class in the principal market on which
such securities are normally traded.

    All other securities are valued at fair value as determined in good faith by
or at the direction of the Trustees.

    The daily valuation of foreign equity securities held by the Fund generally
is determined as of the close of trading on the principal exchange on which such
securities trade. Events occurring after the close of trading on foreign
exchanges may result in adjustments to the valuation of foreign securities to
more accurately reflect their fair value as of the close of regular trading on
the Exchange. The Fund may rely on an independent pricing service in making any
such adjustment. Foreign securities held by the Fund will be valued in U.S.
dollars; such values will be computed by the custodian based on foreign currency
exchange rate quotations supplied by an independent quotation service.

                                PORTFOLIO TRADING

    Decisions concerning the execution of portfolio security transactions,
including the selection of the market and the executing firm, are made by Eaton
Vance, the Fund's Adviser or Rampart as the Sub-Adviser. As used below,
"Adviser" refers to Eaton Vance and Rampart, as applicable. The Adviser is also
responsible for the execution of transactions for all other accounts managed by
it. The Adviser places the portfolio security transactions of the Fund and of
all other accounts managed by it for execution with many firms. The Adviser uses
its best efforts to obtain execution of portfolio security transactions at
prices which are advantageous to the Fund and at reasonably competitive spreads
or (when a disclosed commission is being charged) at reasonably competitive
commission rates. In seeking such execution, the Adviser will use its best
judgment in evaluating the terms of a transaction, and will give consideration
to various relevant factors, including without limitation the full range and
quality of the executing firm's services, the value of the brokerage and
research services provided, the responsiveness of the firm to the Adviser, the
size and type of the transaction, the nature and character of the market for the
security, the confidentiality, speed and certainty of effective execution
required for the transaction, the general execution and operational capabilities
of the executing firm, the reputation, reliability, experience and financial
condition of the firm, the value and quality of the services rendered by the
firm in this and other transactions, and the reasonableness of the spread or
commission, if any.

    Transactions on stock exchanges and other agency transactions involve the
payment of negotiated brokerage commissions. Such commissions vary among
different broker-dealer firms, and a particular broker-dealer may charge
different commissions according to such factors as the difficulty and size of
the transaction and the volume of business done with such broker-dealer.
Transactions in foreign securities often involve the payment of brokerage
commissions, which may be higher than those in the United States. There is
generally no stated commission in the case of securities traded in the over-the-
counter markets, but the price paid or received usually includes an undisclosed
dealer markup or markdown. In an underwritten offering the price paid often
includes a disclosed fixed commission or discount retained by the underwriter or
dealer.

    Although spreads or commissions paid on portfolio security transactions
will, in the judgment of the Adviser, be reasonable in relation to the value of
the services provided, commissions exceeding those which another firm might
charge may be paid to broker-dealers who were selected to execute transactions
on behalf of the Adviser's clients in part for providing brokerage and research
services to the Adviser.

    As authorized in Section 28(e) of the Securities Exchange Act of 1934, as
amended, a broker or dealer who executes a portfolio transaction on behalf of
the Fund may receive a commission which is in excess of


                                       18

<PAGE>

the amount of commission another broker or dealer would have charged for
effecting that transaction if the Adviser determines in good faith that such
compensation was reasonable in relation to the value of the brokerage and
research services provided. This determination may be made on the basis of that
particular transaction or on the basis of overall responsibilities which the
Adviser and its affiliates have for accounts over which they exercise investment
discretion. In making any such determination, the Adviser will not attempt to
place a specific dollar value on the brokerage and research services provided or
to determine what portion of the commission should be related to such services.
Brokerage and research services may include advice as to the value of
securities, the advisability of investing in, purchasing, or selling securities,
and the availability of securities or purchasers or sellers of securities;
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy and the performance of accounts;
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement); and the "Research Services" referred to in
the next paragraph.

    It is a common practice of the investment advisory industry and of the
advisers of investment companies, institutions and other investors to receive
research, analytical, statistical and quotation services, data, information and
other services, products and materials which assist such advisers in the
performance of their investment responsibilities ("Research Services") from
broker-dealer firms which execute portfolio transactions for the clients of such
advisers and from affiliates of executing broker-dealers. Advisers also commonly
receive Research Services from research providers that are not affiliated with
an executing broker-dealer, but which have entered into payment arrangements
involving an executing broker-dealer ("Third Party Research Services"). Under a
typical Third Party Research Services payment arrangement, the research provider
agrees to provide services to an Adviser in exchange for specified payments to
the research provider by a broker-dealer that executes portfolio transactions
for clients of the Adviser. The Adviser and the executing broker-dealer enter
into a related agreement specifying the amount of brokerage business the Adviser
will direct to the executing broker-dealer to offset payments made by the
executing broker-dealer for Third Party Research Services received by the
Adviser. For example, the Adviser may agree to direct brokerage business
generating $45,000 in commissions on portfolio transactions to a broker-dealer
firm as consideration for the executing broker-dealer making payments of $30,000
to a provider of Third Party Research Services. The ratio of the commissions to
be paid to an executing broker-dealer as consideration for Third Party Research
Services over the cost borne by the executing broker-dealer in connection with
providing such services to the Adviser is referred to herein as the "Third Party
Research Services Payment Ratio."

    Consistent with the foregoing practices, the Adviser receives Research
Services from many broker-dealer firms with which the Adviser places the Fund's
transactions and from third parties with which these broker-dealers have
arrangements. The Fund and the Adviser may also receive Research Services from
underwriters and dealers in fixed-price offerings, which Research Services are
reviewed and evaluated by the Adviser in connection with its investment
responsibilities.

    Research Services received by the Advisers may include such matters as
general economic, political, business and market information, industry and
company reviews, evaluations of securities and portfolio strategies and
transactions, proxy voting data and analysis services, technical analysis of
various aspects of the securities market, recommendations as to the purchase and
sale of securities and other portfolio transactions, financial, industry and
trade publications, news and information services, pricing and quotation
equipment and services, and research oriented computer hardware, software,
databases and services. Any particular Research Service obtained through a
broker-dealer may be used by the Adviser in connection with client accounts
other than those accounts which pay commissions to such broker-dealer. Any such
Research Service may be broadly useful and of value to the Adviser in rendering
investment advisory services to all or a significant portion of its clients, or
may be relevant and useful for the management of only one client's account or of
a few clients' accounts, or may be useful for the management of merely a segment
of certain clients' accounts, regardless of whether any such account or accounts
paid commissions to the broker-dealer through which such Research Service was
obtained. The advisory fee paid by the Fund is not reduced because the Adviser
receives such Research Services. The Adviser evaluates the nature and quality of
the various Research Services obtained through broker-dealer


                                       19

<PAGE>

firms and attempts to allocate sufficient portfolio security transactions to
such firms to ensure the continued receipt of Research Services which the
Adviser believes are useful or of value to it in rendering investment advisory
services to its clients.

    In the event that the Adviser executes Fund securities transactions with a
broker-dealer and the associated commission is consideration for Third Party
Research Services (as described above), the Adviser has agreed to reduce the
advisory fee payable by the Fund by an amount equal to the commission payment
associated with the transaction divided by the applicable Third Party Research
Services Payment Ratio.

    Some executing broker-dealers develop and make available directly to their
brokerage customers proprietary Research Services ("Proprietary Research
Services"). As a general matter, broker-dealers bundle the cost of Proprietary
Research Services with trade execution services rather than charging separately
for each. In such circumstances, the independent cost or other value of the
Proprietary Research Services cannot be determined. The advisory fee paid by the
Fund will not be reduced in connection with the receipt of Proprietary Research
Services by the Adviser.

    The investment companies sponsored by the Adviser or its affiliates may
allocate brokerage commissions to acquire information relating to the
performance, fees and expenses of such companies and other mutual funds, which
information is used by the Directors or Trustees of such companies to fulfill
their responsibility to oversee the quality of the services provided by various
entities, including the Adviser. Such companies may also pay cash for such
information.

    Securities considered as investments for the Fund may also be appropriate
for other investment accounts managed by the Adviser or its affiliates. Whenever
decisions are made to buy or sell securities by the Fund and one or more of such
other accounts simultaneously, the Adviser will allocate the security
transactions (including "hot" issues) in a manner which it believes to be
equitable under the circumstances. As a result of such allocations, there may be
instances where the Fund will not participate in a transaction that is allocated
among other accounts. If an aggregated order cannot be filled completely,
allocations will generally be made on a pro rata basis. An order may not be
allocated on a pro rata basis where, for example: (i) consideration is given to
portfolio managers who have been instrumental in developing or negotiating a
particular investment; (ii) consideration is given to an account with
specialized investment policies that coincide with the particulars of a specific
investment; (iii) pro rata allocation would result in odd-lot or de minimis
amounts being allocated to a portfolio or other client; or (iv) where the
Adviser reasonably determines that departure from a pro rata allocation is
advisable. While these aggregation and allocation policies could have a
detrimental effect on the price or amount of the securities available to the
Fund from time to time, it is the opinion of the Trustees of the Fund that the
benefits from the Adviser's organization outweigh any disadvantage that may
arise from exposure to simultaneous transactions.

                                      TAXES

    The following discussion of federal income tax matters is based on the
advice of Kirkpatrick & Lockhart Nicholson Graham LLP, counsel to the Fund. The
Fund intends to elect to be treated and to qualify each year as a regulated
investment company ("RIC") under the Code.

    Qualification as a RIC requires, among other things, that the Fund: (i)
derive in each taxable year at least 90% of its gross income from: (a)
dividends, interest, payments with respect to certain securities loans, and
gains from the sale or other disposition of stock, securities or foreign
currencies, or other income (including but not limited to gain from options,
futures and forward contracts) derived with respect to its business of investing
in such stock, securities or foreign currencies; and (b) net income derived from
interests in certain publicly traded partnerships that are treated as
partnerships for United States federal income tax purposes and that derive less
than 90% of their gross income from the items described in (a) above (each a
"Qualified Publicly Traded Partnership"); and (ii) diversify its holdings so
that, at the end of each quarter of each taxable year: (a) at least 50% of the
value of the Fund's total assets is represented by (I) cash and cash items,
United States government securities, the securities of other regulated
investment companies and (II) other securities, with such other securities
limited, in respect to any one issuer, to an


                                       20

<PAGE>

amount not greater than 5% of the value of the Fund's total assets and not more
than 10% of the outstanding voting securities of such issuer and (b) not more
than 25% of the value of the Fund's total assets is invested in the securities
(other than United States government securities and the securities of other
regulated investment companies) of (I) any one issuer, (II) any two or more
issuers that the Fund controls and that are determined to be engaged in the same
or similar trades or businesses or related trades or businesses or (III) any one
or more Qualified Publicly Traded Partnerships.

    As a RIC, the Fund generally will not be subject to United States federal
income tax on its investment company taxable income (as that term is defined in
the Code, but without regard to the deductions for dividend paid) and net
capital gain (the excess of net long-term capital gain over net short-term
capital loss), if any, that it distributes in each taxable year to its
shareholders, provided that it distributes at least 90% of its investment
company taxable income for such taxable year. The Fund intends to distribute to
its shareholders, at least annually, substantially all of its investment company
taxable income and net capital gain. In order to avoid incurring a nondeductible
4% federal excise tax obligation, the Code requires that the Fund distribute (or
be deemed to have distributed) by December 31 of each calendar year an amount at
least equal to the sum of (i) 98% of its ordinary income for such year, (ii) 98%
of its capital gain net income (which is the excess of its realized net long-
term capital gain over its realized net short-term capital loss), generally
computed on the basis of the one-year period ending on October 31 of such year,
after reduction by any available capital loss carryforwards and (iii) 100% of
any ordinary income and capital gain net income from the prior year (as
previously computed) that were not paid out during such year and on which the
Fund paid no United States federal income tax. Under current law, provided that
the Fund qualifies as a RIC for United States federal income tax purposes, the
Fund should not be liable for any income, corporate excise or franchise tax in
The Commonwealth of Massachusetts.

    If the Fund does not qualify as a RIC or fails to satisfy the 90%
distribution requirement for any taxable year, the Fund's taxable income will be
subject to corporate income taxes, and all distributions from earnings and
profits, including distributions of net capital gain (if any), will be taxable
to the shareholder as ordinary income. Such distributions generally would be
eligible (i) to be treated as qualified dividend income in the case of
individual and other noncorporate shareholders and (ii) for the dividends
received deduction ("DRD") in the case of corporate shareholders. In addition,
in order to requalify for taxation as a RIC, the Fund may be required to
recognize unrealized gains, pay substantial taxes and interest, and make certain
distributions.

    For United States federal income tax purposes, distributions paid out of the
Fund's current or accumulated earnings and profits will, except in the case of
distributions of qualified dividend income and capital gain dividends described
below, be taxable as ordinary dividend income. Under the "Jobs and Growth Tax
Relief Reconciliation Act of 2003" (the "Tax Act"), certain income distributions
paid by the Fund (whether paid in cash or reinvested in additional Fund shares)
to individual taxpayers are taxed at rates applicable to net long-term capital
gains (15%, or 5% for individuals in the 10% or 15% tax brackets). This tax
treatment applies only if certain holding period requirements and other
requirements are satisfied by the shareholder and the dividends are attributable
to qualified dividend income received by the Fund itself. For this purpose,
"qualified dividend income" means dividends received by the Fund from United
States corporations and "qualified foreign corporations," provided that the Fund
satisfies certain holding period and other requirements in respect of the stock
of such corporations. These special rules relating to the taxation of ordinary
income dividends paid by RICs generally apply to taxable years beginning before
January 1, 2011. Thereafter, the Fund's dividends, other than capital gain
dividends, will be fully taxable at ordinary income tax rates unless further
Congressional action is taken. There can be no assurance as to what portion of
the Fund's dividend distributions will qualify for favorable treatment under the
Tax Act.

    Shareholders receiving any distribution from the Fund in the form of
additional shares pursuant to the dividend reinvestment plan will be treated as
receiving a taxable distribution in an amount equal to the fair market value of
the shares received, determined as of the reinvestment date.

    Dividends of investment company taxable income designated by the Fund and
received by corporate shareholders of the Fund will qualify for the DRD to the
extent of the amount of qualifying dividends

                                       21

<PAGE>

received by the Fund from domestic corporations for the taxable year. A dividend
received by the Fund will not be treated as a qualifying dividend (i) to the
extent the stock on which the dividend is paid is considered to be "debt-
financed" (generally, acquired with borrowed funds), (ii) if the Fund fails to
meet certain holding period requirements for the stock on which the dividend is
paid or (iii) to the extent that the Fund is under an obligation (pursuant to a
short sale or otherwise) to make related payments with respect to positions in
substantially similar or related property. Moreover, the DRD may be disallowed
or reduced if the corporate shareholder fails to satisfy the foregoing
requirements with respect to its shares of the Fund or by application of the
Code.

    Distributions of net capital gain, if any, designated as capital gains
dividends are taxable to a shareholder as long-term capital gains, regardless of
how long the shareholder has held Fund shares. A distribution of an amount in
excess of the Fund's current and accumulated earnings and profits will be
treated by a shareholder as a return of capital which is applied against and
reduces the shareholder's basis in his or her shares. To the extent that the
amount of any such distribution exceeds the shareholder's basis in his or her
shares, the excess will be treated by the shareholder as gain from a sale or
exchange of the shares. Distributions of gains from the sale of investments that
the Fund owned for one year or less will be taxable as ordinary income.

    The Fund may elect to retain its net capital gain or a portion thereof for
investment and be taxed at corporate rates on the amount retained. In such case,
it may designate the retained amount as undistributed capital gains in a notice
to its shareholders who will be treated as if each received a distribution of
his pro rata share of such gain, with the result that each shareholder will (i)
be required to report his pro rata share of such gain on his tax return as long-
term capital gain, (ii) receive a refundable tax credit for his pro rata share
of tax paid by the Fund on the gain and (iii) increase the tax basis for his
shares by an amount equal to the deemed distribution less the tax credit.

    Selling shareholders will generally recognize gain or loss in an amount
equal to the difference between the shareholder's adjusted tax basis in the
shares sold and the sale proceeds. If the shares are held as a capital asset,
the gain or loss will be a capital gain or loss. The maximum tax rate applicable
to net capital gains recognized by individuals and other non-corporate taxpayers
is (i) the same as the maximum ordinary income tax rate for gains recognized on
the sale of capital assets held for one year or less, or (ii) 15% for gains
recognized on the sale of capital assets held for more than one year (as well as
certain capital gain distributions) (5% for individuals in the 10% or 15% tax
brackets) but only for taxable years beginning on or before December 31, 2010.
Thereafter, the maximum rate will increase to 20%, unless Congress enacts
legislation providing otherwise.

    Any loss realized upon the sale or exchange of Fund shares with a holding
period of six months or less will be treated as a long-term capital loss to the
extent of any capital gain distributions received (or amounts designated as
undistributed capital gains) with respect to such shares. In addition, all or a
portion of a loss realized on a sale or other disposition of Fund shares may be
disallowed under "wash sale" rules to the extent the shareholder acquires other
shares of the same Fund (whether through the reinvestment of distributions or
otherwise) within a period of 61 days beginning 30 days before and ending 30
days after the date of disposition of the common shares. Any disallowed loss
will result in an adjustment to the shareholder's tax basis in some or all of
the other shares acquired.

    Sales charges paid upon a purchase of shares cannot be taken into account
for purposes of determining gain or loss on a sale of the shares before the 91st
day after their purchase to the extent a sales charge is reduced or eliminated
in a subsequent acquisition of shares of the Fund (or of another fund) pursuant
to the reinvestment or exchange privilege. Any disregarded amounts will result
in an adjustment to the shareholder's tax basis in some or all of any other
shares acquired.

    Dividends and distributions on the Fund's shares are generally subject to
federal income tax as described herein to the extent they do not exceed the
Fund's realized income and gains, even though such dividends and distributions
may economically represent a return of a particular shareholder's investment.
Such distributions are likely to occur in respect of shares purchased at a time
when the Fund's net asset value reflects gains that are either unrealized, or
realized but not distributed. Such realized gains may be


                                       22

<PAGE>

required to be distributed even when the Fund's net asset value also reflects
unrealized losses. Certain distributions declared in October, November or
December to Shareholders of record of such month and paid in the following
January will be taxed to shareholders as if received on December 31 of the year
in which they were declared. In addition, certain other distributions made after
the close of a taxable year of the Fund may be "spilled back" and treated as
paid by the Fund (except for purposes of the non-deductible 4% federal excise
tax) during such taxable year. In such case, shareholders will be treated as
having received such dividends in the taxable year in which the distributions
were actually made.

    The Fund will inform shareholders of the source and tax status of all
distributions promptly after the close of each calendar year.

    The benefits of the reduced tax rates applicable to long-term capital gains
and qualified dividend income may be impacted by the application of the
alternative minimum tax to individual shareholders.

    For the Fund's index call options that qualify as section 1256 contracts,
Code Section 1256 generally will require any gain or loss arising from the
lapse, closing out or exercise of such positions to be treated as 60% long-term
and 40% short-term capital gain or loss. In addition, the Fund generally will be
required to "mark to market" (i.e., treat as sold for fair market value) each
outstanding index option position which it holds at the close of each taxable
year (and on October 31 of each year for excise tax purposes). If a section 1256
contract held by the Fund at the end of a taxable year is sold in the following
year, the amount of any gain or loss realized on such sale will be adjusted to
reflect the gain or loss previously taken into account under the "mark to
market" rules. In addition to most index call options, section 1256 contracts
include certain other options contracts, certain regulated futures contracts,
and certain other financial contracts.

    The Fund's index call options that do not qualify as "section 1256
contracts" generally will be treated as equity options governed by Code Section
1234. Pursuant to Code Section 1234, if a written option expires unexercised,
the premium received is short-term capital gain to the Fund. If the Fund enters
into a closing transaction, the difference between the amount paid to close out
its position and the premium received for writing the option is short-term
capital gain or loss. If a call option written by the Fund that is not a
"section 1256 contract" is cash settled, any resulting gain or loss will be
short-term capital gain or loss.

    The Code contains special rules that apply to "straddles," defined generally
as the holding of "offsetting positions with respect to personal property." For
example, the straddle rules normally apply when a taxpayer holds stock and an
offsetting option with respect to such stock or substantially identical stock or
securities. In general, investment positions will be offsetting if there is a
substantial diminution in the risk of loss from holding one position by reason
of holding one or more other positions. The Fund expects that the index call
options it writes will not be considered straddles for this purpose because the
Fund's portfolio of common stocks will be sufficiently dissimilar from the
components of the indices on which it has outstanding options positions under
applicable guidance established by the Internal Revenue Service (the "Service").
Under certain circumstances, however, the Fund may enter into options
transactions or certain other investments that may constitute positions in a
straddle. If two or more positions constitute a straddle, recognition of a
realized loss from one position must generally be deferred to the extent of
unrecognized gain in an offsetting position. In addition, long-term capital gain
may be recharacterized as short-term capital gain, or short-term capital loss as
long-term capital loss. Interest and other carrying charges allocable to
personal property that is part of a straddle are not currently deductible but
must instead be capitalized. Similarly, "wash sale" rules apply to prevent the
recognition of loss by the Fund from the disposition of stock or securities at a
loss in a case in which identical or substantially identical stock or securities
(or an option to acquire such property) is or has been acquired within a
prescribed period.

    The Code allows a taxpayer to elect to offset gains and losses from
positions that are part of a "mixed straddle." A "mixed straddle" is any
straddle in which one or more but not all positions are section 1256 contracts.
The Fund may be eligible to elect to establish one or more mixed straddle
accounts for certain of its mixed straddle trading positions. The mixed straddle
account rules require a daily "marking to market"


                                       23

<PAGE>

of all open positions in the account and a daily netting of gains and losses
from all positions in the account. At the end of a taxable year, the annual net
gains or losses from the mixed straddle account are recognized for tax purposes.
The net capital gain or loss is treated as 60% long-term and 40% short-term
capital gain or loss if attributable to the section 1256 contract positions, or
all short-term capital gain or loss if attributable to the non-section 1256
contract positions.

    The Fund may recognize gain (but not loss) from a constructive sale of
certain "appreciated financial positions" if the Fund enters into a short sale,
offsetting notional principal contract, or forward contract transaction with
respect to the appreciated position or substantially identical property.
Appreciated financial positions subject to this constructive sale treatment
include interests (including options and forward contracts and short sales) in
stock and certain other instruments. Constructive sale treatment does not apply
if the transaction is closed out not later than thirty days after the end of the
taxable year in which the transaction was initiated, and the underlying
appreciated securities position is held unhedged for at least the next sixty
days after the hedging transaction is closed.

    Gain or loss from a short sale of property is generally considered as
capital gain or loss to the extent the property used to close the short sale
constitutes a capital asset in the Fund's hands. Except with respect to certain
situations where the property used to close a short sale has a long-term holding
period on the date the short sale is entered into, gains on short sales
generally are short-term capital gains. A loss on a short sale will be treated
as a long-term capital loss if, on the date of the short sale, "substantially
identical property" has been held by the Fund for more than one year. In
addition, entering into a short sale may result in suspension of the holding
period of "substantially identical property" held by the Fund.

    Gain or loss on a short sale will generally not be realized until such time
as the short sale is closed. However, as described above in the discussion of
constructive sales, if the Fund holds a short sale position with respect to
securities that have appreciated in value, and it then acquires property that is
the same as or substantially identical to the property sold short, the Fund
generally will recognize gain on the date it acquires such property as if the
short sale were closed on such date with such property. Similarly, if the Fund
holds an appreciated financial position with respect to securities and then
enters into a short sale with respect to the same or substantially identical
property, the Fund generally will recognize gain as if the appreciated financial
position were sold at its fair market value on the date it enters into the short
sale. The subsequent holding period for any appreciated financial position that
is subject to these constructive sale rules will be determined as if such
position were acquired on the date of the constructive sale.

    The Fund's transactions in futures contracts and options will be subject to
special provisions of the Code that, among other things, may affect the
character of gains and losses realized by the Fund (i.e., may affect whether
gains or losses are ordinary or capital, or short-term or long-term), may
accelerate recognition of income to the Fund and may defer Fund losses. These
rules could, therefore, affect the character, amount and timing of distributions
to shareholders. These provisions also (a) will require the Fund to mark-to-
market certain types of the positions in its portfolio (i.e., treat them as if
they were closed out), and (b) may cause the Fund to recognize income without
receiving cash with which to make distributions in amounts necessary to satisfy
the 90% distribution requirement for qualifying to be taxed as a RIC and the 98%
distribution requirement for avoiding excise taxes. The Fund will monitor its
transactions, will make the appropriate tax elections and will make the
appropriate entries in its books and records when it acquires any futures
contract, option or hedged investment in order to mitigate the effect of these
rules and prevent disqualification of the Fund from being taxed as a regulated
investment company.

    Further, certain of the Fund's investment practices are subject to special
and complex federal income tax provisions that may, among other things, (i)
convert dividends that would otherwise constitute qualified dividend income into
short-term capital gain or ordinary income taxed at the higher rate applicable
to ordinary income, (ii) treat dividends that would otherwise be eligible for
the corporate dividends received deduction as ineligible for such treatment,
(iii) disallow, suspend or otherwise limit the allowance of certain losses or
deductions, (iv) convert long-term capital gain into short-term capital gain or
ordinary income, (v) convert an ordinary loss or deduction into a capital loss
(the deductibility of which is more limited),


                                       24

<PAGE>

(vi) cause the Fund to recognize income or gain without a corresponding receipt
of cash, (vii) adversely affect the time as to when a purchase or sale of stock
or securities is deemed to occur, (viii) adversely alter the characterization of
certain complex financial transactions, and (ix) produce income that will not
qualify as good income for purposes of the 90% annual gross income requirement
described above. While it may not always be successful in doing so, the Fund
will seek to avoid or minimize any adverse tax consequences of its investment
practices.

    Dividends and interest received, and gains realized, by the Fund on foreign
securities may be subject to income, withholding or other taxes imposed by
foreign countries and United States possessions (collectively "foreign taxes")
that would reduce the return on its securities. Tax conventions between certain
countries and the United States, however, may reduce or eliminate foreign taxes,
and many foreign countries do not impose taxes on capital gains in respect of
investments by foreign investors. Shareholders will generally not be entitled to
claim a credit or deduction with respect to foreign taxes paid by the Fund.

    The Fund may invest in the stock of "passive foreign investment companies"
("PFICs"). A PFIC is any foreign corporation (with certain exceptions) that, in
general, meets either of the following tests: (1) at least 75% of its gross
income is passive or (2) an average of at least 50% of its assets produce, or
are held for the production of, passive income. Under certain circumstances, the
Fund will be subject to United States federal income tax on a portion of any
"excess distribution" received on the stock of a PFIC or of any gain from
disposition of that stock (collectively "PFIC income"), plus interest thereon,
even if the Fund distributes the PFIC income as a taxable dividend to its
shareholders. The balance of the PFIC income will be included in the Fund's
investment company taxable income and, accordingly, will not be taxable to it to
the extent it distributes that income to its shareholders.

    If the Fund invests in a PFIC and elects to treat the PFIC as a "qualified
electing fund" ("QEF"), then in lieu of the foregoing tax and interest
obligation, the Fund will be required to include in income each year its pro
rata share of the QEF's annual ordinary earnings and net capital gain -- which
it may have to distribute to satisfy the distribution requirement and avoid
imposition of the excise tax -- even if the QEF does not distribute those
earnings and gain to the Fund. In most instances it will be very difficult, if
not impossible, to make this election because of certain of its requirements.

    The Fund may elect to "mark to market" its stock in any PFIC. "Marking-to-
market," in this context, means including in ordinary income each taxable year
the excess, if any, of the fair market value of a PFIC's stock over the Fund's
adjusted basis therein as of the end of that year. Pursuant to the election, the
Fund also would be allowed to deduct (as an ordinary, not capital, loss) the
excess, if any, of its adjusted basis in PFIC stock over the fair market value
thereof as of the taxable year-end, but only to the extent of any net mark-to-
market gains (reduced by any prior deductions) with respect to that stock
included by the Fund for prior taxable years under the election. The Fund's
adjusted basis in each PFIC's stock with respect to which it has made this
election will be adjusted to reflect the amounts of income included and
deductions taken thereunder.

    Under Section 988 of the Code, gains or losses attributable to fluctuations
in exchange rates between the time the Fund accrues income or receivables or
expenses or other liabilities denominated in a foreign currency and the time the
Fund actually collects such income or receivables or pays such liabilities are
generally treated as ordinary income or loss. Similarly, gains or losses on
foreign currency forward contracts and the disposition of debt securities
denominated in a foreign currency, to the extent attributable to fluctuations in
exchange rate between the acquisition and disposition dates, are also treated as
ordinary income or loss.

    Amounts paid by the Fund to individuals and certain other shareholders who
have not provided the Fund with their correct taxpayer identification number
("TIN") and certain certifications required by the Service as well as
shareholders with respect to whom the Fund has received certain information from
the Service or a broker may be subject to "backup" withholding of federal income
tax arising from the Fund's taxable dividends and other distributions as well as
the gross proceeds of sales of shares, at a rate of 28% for amounts paid during
2006. An individual's TIN is generally his or her social security number. Backup
withholding is not an additional tax. Any amounts withheld under the backup
withholding rules from


                                       25

<PAGE>

payments made to a shareholder may be refunded or credited against such
shareholder's United States federal income tax liability, if any, provided that
the required information is furnished to the Service.

    The foregoing briefly summarizes some of the important federal income tax
consequences to common shareholders of investing in common shares, reflects the
United States federal tax law as of the date of this Statement of Additional
Information, and does not address special tax rules applicable to certain types
of investors, such as corporate and foreign investors. Unless otherwise noted,
this discussion assumes that an investor is a United States person and holds
Common Shares as a capital asset. This discussion is based upon present
provisions of the Code, the regulations promulgated thereunder, and judicial and
administrative ruling authorities, all of which are subject to change or
differing interpretations by the courts or the Service retroactively or
prospectively. Investors should consult their tax advisors regarding other
federal, state or local tax considerations that may be applicable to their
particular circumstances, as well as any proposed tax law changes.

                                OTHER INFORMATION

    The Fund is an organization of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, shareholders of such a trust may, in
certain circumstances, be held personally liable as partners for the obligations
of the trust. The Declaration of Trust contains an express disclaimer of
shareholder liability in connection with Fund property or the acts, obligations
or affairs of the Fund. The Declaration of Trust, together with the Fund's By-
laws, also provides for indemnification out of Fund property of any shareholder
held personally liable for the claims and liabilities to which a shareholder may
become subject by sole reason of being or having been a shareholder. Thus, the
risk of a shareholder incurring financial loss on account of shareholder
liability is limited to circumstances in which the Fund itself is unable to meet
its obligations. The Fund has been advised by its counsel that the risk of any
shareholder incurring any liability for the obligations of the Fund is remote.

    The Declaration of Trust provides that the Trustees will not be liable for
errors of judgment or mistakes of fact or law; but nothing in the Declaration of
Trust protects a Trustee against any liability to the Fund or its shareholders
to which he or she would otherwise be subject by reason of willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties involved in the
conduct of his or her office. Voting rights are not cumulative, which means that
the holders of more than 50% of the shares voting for the election of Trustees
can elect 100% of the Trustees and, in such event, the holders of the remaining
less than 50% of the shares voting on the matter will not be able to elect any
Trustees.

    The Declaration of Trust provides that no person shall serve as a Trustee if
shareholders holding two-thirds of the outstanding shares have removed him from
that office either by a written declaration filed with the Fund's custodian or
by votes cast at a meeting called for that purpose. The Declaration of Trust
further provides that the Trustees of the Fund shall promptly call a meeting of
the shareholders for the purpose of voting upon a question of removal of any
such Trustee or Trustees when requested in writing to do so by the record
holders of not less than 10% of the outstanding shares.

    The Fund's Prospectus and this SAI do not contain all of the information set
forth in the Registration Statement that the Fund has filed with the SEC. The
complete Registration Statement may be obtained from the SEC upon payment of the
fee prescribed by its Rules and Regulations.

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

    Deloitte & Touche LLP, Boston, Massachusetts, is the independent registered
public accounting firm for the Fund, providing audit services, tax return
preparation, and assistance and consultation with respect to the preparation of
filings with the SEC.



                                       26

<PAGE>

             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

                           TO BE PROVIDED BY AMENDMENT



                                       27

<PAGE>

             EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND

                       STATEMENT OF ASSETS AND LIABILITIES
                             AS OF           , 2006



<Table>
<S>                                                                      <C>

ASSETS
  Cash.................................................................  $
  Offering costs.......................................................
  Receivable from Adviser..............................................
                                                                         ------
  Total assets.........................................................       $
                                                                         ======

LIABILITIES
  Accrued offering costs...............................................       $
                                                                         ------
  Accrued organizational costs.........................................
                                                                         ------
  Total liabilities....................................................       $
                                                                         ======
Net assets applicable to            common shares of beneficial
  interest issued and outstanding......................................       $
                                                                         ======
NET ASSET VALUE AND OFFERING PRICE PER SHARE...........................       $
                                                                         ======

</Table>


                             STATEMENT OF OPERATIONS
  PERIOD FROM           , 2005 (DATE OF ORGANIZATION) THROUGH            , 2006


<Table>
<S>                                                                      <C>

INVESTMENT INCOME......................................................  $  --
                                                                         -----
EXPENSES
  Organization costs...................................................    $
  Expense reimbursement................................................    $
                                                                         -----
     Net expenses......................................................    $--
                                                                         -----
NET INVESTMENT INCOME..................................................    $--
                                                                         =====

</Table>



                       See notes to financial statements.



                                       28

<PAGE>

                          NOTES TO FINANCIAL STATEMENTS

NOTE 1:  ORGANIZATION

    The Eaton Vance Tax-Managed Diversified Equity Income Fund (the "Fund") was
organized as a Massachusetts business trust on October 5, 2005 and has been
inactive since that date except for matters relating to its organization and
registration as a diversified, closed-end management investment company under
the Investment Company Act of 1940, as amended, and the Securities Act of 1933,
as amended, and the sale of           common shares to Eaton Vance Management,
the Fund's Investment Adviser.

    Eaton Vance Management, or an affiliate, has agreed to reimburse all
organizational costs, estimated at approximately $          . Eaton Vance
Management, or an affiliate, directly provided certain organizational services
to the Fund at no expense. The costs of such services are not material.

    Eaton Vance Management, or an affiliate, has agreed to pay all offering
costs (other than sales loads) that exceed $      per common share. The total
estimated fund offering costs are $     , of which the Fund would pay $      and
Eaton Vance Management would pay $      based on such estimate.

    The Fund's primary investment objective is to provide current income and
gains, with a secondary objective of capital appreciation. The Fund will seek to
generate current earnings in part by employing an option strategy of writing
(selling) index call options on a portion of the value of the Fund's total
assets under normal market conditions. Writing index call options is a
specialized investment practice that involves certain related risks and tax
consequences. Upon the writing of a call option, an amount equal to the premium
received by the Fund is included in the Statement of Assets and Liabilities as a
liability. The amount of the liability is subsequently marked-to-market to
reflect the current value of the option written in accordance with the Fund's
policies on investment valuation. Premiums received from writing options which
expire are treated as realized gains. Premiums received from writing options
which are exercised or are closed are added to or offset against the proceeds or
amount paid on the transaction to determine the realized gain or loss. When a
call option is exercised, the Fund will be required to deliver an amount of cash
determined by the excess of the value of the applicable index at contract
termination over the exercise price of the option. Thus, the exercise of index
call options sold by the Fund may require the Fund to sell portfolio securities
to generate cash at inopportune times or for unattractive prices.

    Although, the Fund has no current intention to do so, the Fund is authorized
and reserves the flexibility to use leverage through the issuance of preferred
shares and/or borrowings, including the issuance of debt securities. The costs
of issuing preferred shares and/or a borrowing program would be borne by Common
Shareholders and consequently would result in a reduction of net asset value of
Common Shares. In addition, the fee paid to Eaton Vance will be calculated on
the basis of the Fund's average daily gross assets, including proceeds from the
issuance of preferred shares and/or borrowings, so the fees will be higher when
leverage is utilized.

NOTE 2:  ACCOUNTING POLICIES

    The Fund's financial statements are prepared in accordance with accounting
principles generally accepted in the United States of America which require
management to make estimates. Actual results may differ from those estimates.

    The Fund's share of offering costs will be recorded within paid in capital
as a reduction of the proceeds from the sale of common shares upon the
commencement of Fund operations. The offering costs reflected above assume the
sale of 12,500,000 common shares.

NOTE 3:  INVESTMENT MANAGEMENT AGREEMENT

    Pursuant to an investment advisory agreement between the Adviser and the
Fund, the Fund has agreed to pay an investment advisory fee, payable on a
monthly basis, at an annual rate of 1.00% of the average daily gross assets of
the Fund. Gross assets of the Fund shall be calculated by deducting accrued


                                       29

<PAGE>

                  NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)


liabilities of the Fund not including the amount of any preferred shares
outstanding or the principal amount of any indebtedness for money borrowed.

    Pursuant to a sub-advisory agreement between the Adviser and Rampart
Investment Management Company, Inc. ("Rampart"), the Adviser has agreed to pay a
sub-advisory fee to Rampart, in an annual amount equal to 0.05% of the value of
the Fund's average daily gross assets that is subject to written call options.

NOTE 4:  FEDERAL INCOME TAXES

    The Fund intends to comply with the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income, including any net realized gain on investments.


                                       30

<PAGE>

                                                                      APPENDIX A

                                EATON VANCE FUNDS
                       PROXY VOTING POLICY AND PROCEDURES

I.  OVERVIEW

    The Boards of Trustees (the "Boards") of the Eaton Vance Funds (the "Funds")
recognize that it is their fiduciary responsibility to actively monitor the
Funds' operations. The Boards have always placed paramount importance on their
oversight of the implementation of the Funds' investment strategies and the
overall management of the Funds' investments. A critical aspect of the
investment management of the Funds continues to be the effective assessment and
voting of proxies relating to the Funds' portfolio securities. While the Boards
will continue to delegate the day-to-day responsibilities relating to the
management of the proxy-voting process to the relevant investment adviser or
sub-adviser, if applicable, of the Fund (or its underlying portfolio in the case
of a master-feeder arrangement), the Boards have determined that it is in the
interests of the Funds' shareholders to adopt these written proxy voting policy
and procedures (the "Policy"). For purposes of this Policy the term "Fund" shall
include a Fund's underlying portfolio in the case of a master-feeder arrangement
and the term "Adviser" shall mean the adviser to a Fund or its sub-adviser if a
sub-advisory relationship exists.

II.  DELEGATION OF PROXY VOTING RESPONSIBILITIES

    Pursuant to investment advisory agreements between each Fund and its
Adviser, the Adviser has long been responsible for reviewing proxy statements
relating to Fund investments and, if the Adviser deems it appropriate to do so,
to vote proxies on behalf of the Funds. The Boards hereby formally delegate this
responsibility to the Adviser, except as otherwise described in this Policy. In
so doing, the Boards hereby adopt on behalf of each Fund the proxy voting
policies and procedures of the Adviser(s) to each Fund as the proxy voting
policies and procedures of the Fund. The Boards recognize that the Advisers may
from time to time amend their policies and procedures. The Advisers will report
material changes to the Boards in the manner set forth in Section IV below. In
addition, the Boards will annually review and approve the Advisers' proxy voting
policies and procedures.

III.  DELEGATION OF PROXY VOTING DISCLOSURE RESPONSIBILITIES

    The Securities and Exchange Commission (the "Commission") recently enacted
certain new reporting requirements for registered investment companies. The
Commission's new regulations require that funds (other than those which invest
exclusively in non-voting securities) make certain disclosures regarding their
proxy voting activities. The most significant disclosure requirement for the
Funds is the duty pursuant to Rule 30b1-4 promulgated under the Investment
Company Act of 1940, as amended (the "1940 Act"), to file Form N-PX no later
than August 31st of each year beginning in 2004. Under Form N-PX, each Fund will
be required to disclose, among other things, information concerning proxies
relating to the Fund's portfolio investments, whether or not the Fund (or its
Adviser) voted the proxies relating to securities held by the Fund and how it
voted in the matter and whether it voted for or against management.

    The Boards hereby delegate to each Adviser the responsibility for recording,
compiling and transmitting in a timely manner all data required to be filed on
Form N-PX to Eaton Vance Management, which acts as administrator to each of the
Funds (the "Administrator"), for each Fund that such Adviser manages. The Boards
hereby delegate the responsibility to file Form N-PX on behalf of each Fund to
the Administrator.

IV.  CONFLICTS OF INTEREST

    The Boards expect each Adviser, as a fiduciary to the Fund(s) it manages, to
put the interests of each Fund and its shareholders above those of the Adviser.
In the event that in connection with its proxy voting responsibilities a
material conflict of interest arises between a Fund's shareholders and the
Fund's Adviser


                                       A-1

<PAGE>

or the Administrator (or any of their affiliates) or any affiliated person of
the Fund and the Proxy Administrator intends to vote the proxy in a manner
inconsistent with the guidelines approved by the Board, the Adviser, to the
extent it is aware or reasonably should have been aware of the material
conflict, will refrain from voting any proxies related to companies giving rise
to such material conflict until it notifies and consults with the appropriate
Board(s), or a committee or sub-committee of such Board, concerning the material
conflict.

    Once the Adviser notifies the relevant Board(s), committee or sub-committee
of the Board, of the material conflict, the Board(s), committee or sub-
committee, shall convene a meeting to review and consider all relevant materials
related to the proxies involved. In considering such proxies, the Adviser shall
make available all materials requested by the Board, committee or sub-committee
and make reasonably available appropriate personnel to discuss the matter upon
request. The Board, committee or sub-committee will instruct the Adviser on the
appropriate course of action. If the Board, committee or sub-committee is unable
to meet and the failure to vote a proxy would have a material adverse impact on
the Fund(s) involved, each Adviser will have the right to vote such proxy,
provided that it discloses the existence of the material conflict to the Board,
committee or sub-committee at its next meeting. Any determination regarding the
voting of proxies of each Fund that is made by the committee or sub-committee
shall be deemed to be a good faith determination regarding the voting of proxies
by the full Board.

V.  REPORTS

    The Administrator shall make copies of each Form N-PX filed on behalf of the
Funds available for the Boards' review upon the Boards' request. The
Administrator (with input from the Adviser for the relevant Fund(s)) shall also
provide any reports reasonably requested by the Boards regarding the proxy
voting records of the Funds.

    Each Adviser shall annually report any material changes to such Adviser's
proxy voting policies and procedures to the relevant Board(s) and the relevant
Board(s) will annually review and approve the Adviser's proxy voting policies
and procedures. Each Adviser shall report any changes to such Adviser's proxy
voting policies and procedures to the Administrator prior to implementing such
changes in order to enable the Administrator to effectively coordinate the
Funds' disclosure relating to such policies and procedures.

                             EATON VANCE MANAGEMENT
                         BOSTON MANAGEMENT AND RESEARCH
                      PROXY VOTING POLICIES AND PROCEDURES

I.  INTRODUCTION

    Eaton Vance Management, Boston Management and Research and Eaton Vance
Investment Counsel (each an "Adviser" and collectively the "Advisers") have each
adopted and implemented policies and procedures that each Adviser believes are
reasonably designed to ensure that proxies are voted in the best interest of
clients, in accordance with its fiduciary duties and Rule 206(4)-6 under the
Investment Advisers Act of 1940, as amended. The Advisers' authority to vote the
proxies of their clients is established by their advisory contracts or similar
documentation, such as the Eaton Vance Funds Proxy Voting Policy and Procedures.
These proxy policies and procedures reflect the U.S. Securities and Exchange
Commission ("SEC") requirements governing advisers and the long-standing
fiduciary standards and responsibilities for ERISA accounts set out in the
Department of Labor Bulletin 94-2 C.F.R. 2509.94-2 (July 29, 1994).

II.  OVERVIEW

    Each Adviser manages its clients' assets with the overriding goal of seeking
to provide the greatest possible return to such clients consistent with
governing laws and the investment policies of each client. In pursuing that
goal, each Adviser seeks to exercise its clients' rights as shareholders of
voting securities to


                                       A-2

<PAGE>

support sound corporate governance of the companies issuing those securities
with the principle aim of maintaining or enhancing the companies' economic
value.

    The exercise of shareholder rights is generally done by casting votes by
proxy at shareholder meetings on matters submitted to shareholders for approval
(for example, the election of directors or the approval of a company's stock
option plans for directors, officers or employees). Each Adviser is adopting the
formal written Guidelines described in detail below and will utilize such
Guidelines in voting proxies on behalf of its clients. These Guidelines are
designed to promote accountability of a company's management and board of
directors to its shareholders and to align the interests of management with
those of shareholders.

    Each Adviser will vote any proxies received by a client for which it has
sole investment discretion through a third-party proxy voting service ("Agent")
in accordance with customized policies, as approved by the Boards of Trustees of
the Eaton Vance Funds and, with respect to proxies referred back to the Adviser
by the Agent pursuant to the Guidelines, in a manner that is reasonably designed
to eliminate any potential conflicts of interest, as described more fully below.
The Agent is currently Institutional Shareholder Services Inc. Proxies will be
voted in accordance with client-specific guidelines and an Eaton Vance Fund's
sub-adviser's proxy voting policies and procedures, if applicable.

    No set of Guidelines can anticipate all situations that may arise. In
special cases, the Proxy Administrator (the person specifically charged with the
responsibility to oversee the Agent and coordinate the voting of proxies
referred back to the Adviser by the Agent) may seek insight from the Proxy Group
established by the Advisers. The Proxy Group will assist in the review of the
Agent's recommendation when a proxy voting issue is referred to the Proxy Group
through the Proxy Administrator. The members of the Proxy Group, which may
include employees of the Advisers' affiliates, may change at the Advisers'
discretion.

III.  ROLES AND RESPONSIBILITIES

A.  PROXY ADMINISTRATOR

    The Proxy Administrator will assist in the coordination of the voting of
each client's proxy in accordance with the Guidelines below and the Funds' Proxy
Voting Policy and Procedures. The Proxy Administrator is authorized to direct
the Agent to vote a proxy in accordance with the Guidelines. Responsibilities
assigned herein to the Proxy Administrator, or activities in support thereof,
may be performed by such members of the Proxy Group or employees of the
Advisers' affiliates as are deemed appropriate by the Proxy Group.

B.  AGENT

    An independent proxy voting service (the "Agent"), as approved by the Board
of each Fund, shall be engaged to assist in the voting of proxies. The Agent is
currently Institutional Shareholder Services Inc. The Agent is responsible for
coordinating with the clients' custodians and the Advisers to ensure that all
proxy materials received by the custodians relating to the portfolio securities
are processed in a timely fashion. The Agent is required to vote and/or refer
all proxies in accordance with the Guidelines below. The Agent shall retain a
record of all proxy votes handled by the Agent. Such record must reflect all of
the information required to be disclosed in a Fund's Form N-PX pursuant to Rule
30b1-4 under the Investment Company Act of 1940, as amended. In addition, the
Agent is responsible for maintaining copies of all proxy statements received by
issuers and to promptly provide such materials to an Adviser upon request.

    Subject to the oversight of the Advisers, the Agent shall establish and
maintain adequate internal controls and policies in connection with the
provision of proxy voting services to the Advisers, including methods to
reasonably ensure that its analysis and recommendations are not influenced by a
conflict of interest, and shall disclose such controls and policies to the
Advisers when and as provided for herein. Unless otherwise specified, references
herein to recommendations of the Agent shall refer to those in which no conflict
of interest has been identified.



                                       A-3

<PAGE>

C.  PROXY GROUP

    The Adviser shall establish a Proxy Group which shall assist in the review
of the Agent's recommendations when a proxy voting issue has been referred to
the Proxy Administrator by the Agent. The members of the Proxy Group, which may
include employees of the Advisers' affiliates, may be amended from time to time
at the Advisers' discretion.

    For each proposal referred to the Proxy Group, the Proxy Group will review
the (i) Guidelines, (ii) recommendations of the Agent, and (iii) any other
resources that any member of the Proxy Group deems appropriate to aid in a
determination of the recommendation.

    If the Proxy Group recommends a vote in accordance with the Guidelines, or
the recommendation of the Agent, where applicable, it shall instruct the Proxy
Administrator to so advise the Agent.

    If the Proxy Group recommends a vote contrary to the Guidelines, or the
recommendation of the Agent, where applicable, or if the proxy statement relates
to a conflicted company of the Agent, as determined by the Advisers, it shall
follow the procedures for such voting outlined below.

    The Proxy Administrator shall use best efforts to convene the Proxy Group
with respect to all matters requiring its consideration. In the event the Proxy
Group cannot meet in a timely manner in connection with a voting deadline, the
Proxy Administrator shall follow the procedures for such voting outlined below.

IV.  PROXY VOTING GUIDELINES ("GUIDELINES")

A.  GENERAL POLICIES

    It shall generally be the policy of the Advisers to take no action on a
proxy for which no client holds a position or otherwise maintains an economic
interest in the relevant security at the time the vote is to be cast.

    In all cases except those highlighted below, it shall generally be the
policy of the Advisers to vote in accordance with the recommendation by the
Agent, Institutional Shareholder Services Inc.

    When a fund client participates in the lending of its securities and the
securities are on loan at the record date, proxies related to such securities
generally will not be forwarded to the relevant Adviser by the fund's custodian
and therefore will not be voted. In the event that the Adviser determines that
the matters involved would have a material effect on the applicable fund's
investment in the loaned securities, the fund will exercise its best efforts to
terminate the loan in time to be able to cast such vote or exercise such
consent.

    Interpretation and application of these Guidelines is not intended to
supersede any law, regulation, binding agreement or other legal requirement to
which an issuer may be or become subject. The Guidelines relate to the types of
proposals that are most frequently presented in proxy statements to
shareholders. Absent unusual circumstances, each Adviser will utilize these
Guidelines when voting proxies on behalf of its clients. The Guidelines may be
revised at any time, provided such revisions are reported to the Boards of
Trustees of the Eaton Vance Funds.

B.  PROPOSALS REGARDING MERGERS AND CORPORATE RESTRUCTURINGS

    The Agent shall be directed to refer proxy proposals accompanied by its
written analysis and voting recommendation to the Proxy Administrator for all
proposals relating to Mergers and Corporate Restructurings.

C.  PROPOSALS REGARDING MUTUAL FUND PROXIES -- DISPOSITION OF
    ASSETS/TERMINATION/LIQUIDATION AND MERGERS

    The Agent shall be directed to refer proxy proposals accompanied by its
written analysis and voting recommendation to the Proxy Administrator for all
proposals relating to the Disposition of Assets/ Termination/Liquidation and
Mergers contained in mutual fund proxies.



                                       A-4

<PAGE>

D.  CORPORATE STRUCTURE MATTERS/ANTI-TAKEOVER DEFENSES

    As a general matter, the Advisers will normally vote against anti-takeover
measures and other proposals designed to limit the ability of shareholders to
act on possible transactions (except in the case of closed-end management
investment companies).

E.  SOCIAL AND ENVIRONMENTAL ISSUES

    The Advisers generally support management on social and environmental
proposals.

F.  VOTING PROCEDURES

    Upon receipt of a referral from the Agent or upon advice from an Eaton Vance
investment professional, the Proxy Administrator may solicit additional research
from the Agent, as well as from any other source or service.

    1.  WITHIN-GUIDELINES VOTES: Votes in Accordance with the Guidelines and/or,
where applicable, Agent Recommendation

    In the event the Proxy Administrator recommends a vote within the Guidelines
and/or, where applicable, in accordance with the Agent's recommendation, the
Proxy Administrator will instruct the Agent to vote in this manner.

    2.  NON-VOTES: Votes in Which No Action is Taken

    The Proxy Administrator may recommend that a client refrain from voting
under the following circumstances: (i) if the economic effect on shareholders'
interests or the value of the portfolio holding is indeterminable or
insignificant, e.g., proxies in connection with securities no longer held in the
portfolio of a client or proxies being considered on behalf of a client that is
no longer in existence; or (ii) if the cost of voting a proxy outweighs the
benefits, e.g., certain international proxies, particularly in cases in which
share blocking practices may impose trading restrictions on the relevant
portfolio security. In such instances, the Proxy Administrator may instruct the
Agent not to vote such proxy.

    Reasonable efforts shall be made to secure and vote all other proxies for
the clients, but, particularly in markets in which shareholders' rights are
limited, Non-Votes may also occur in connection with a client's related
inability to timely access ballots or other proxy information in connection with
its portfolio securities.

    Non-Votes may also result in certain cases in which the Agent's
recommendation has been deemed to be conflicted, as provided for herein.

    3.  OUT-OF-GUIDELINES VOTES: Votes Contrary to the Guidelines, or Agent
Recommendation, where applicable, Where No Recommendation is Provided by Agent,
or Where Agent's Recommendation is Conflicted

    If the Proxy Administrator recommends that a client vote contrary to the
Guidelines, or the recommendation of the Agent, where applicable, if the Agent
has made no recommendation on a matter requiring case-by-case consideration and
the Guidelines are silent, or the Agent's recommendation on a matter requiring
case-by-case consideration is deemed to be conflicted, the Proxy Administrator
will forward the Agent's analysis and recommendation and any research obtained
from the Agent or any other source to the Proxy Group. The Proxy Group may
consult with the Agent as it deems necessary. The Proxy Administrator will
instruct the Agent to vote the proxy as recommended by the Proxy Group. The
Adviser will provide a report to the Boards of Trustees of the Eaton Vance Funds
reflecting any votes cast contrary to the Guidelines or Agent Recommendation, as
applicable, and shall do so no less than annually.

    The Proxy Administrator will maintain a record of all proxy questions that
have been referred by the Agent, all applicable recommendations, analysis and
research received and any resolution of the matter.



                                       A-5

<PAGE>

V.  RECORDKEEPING

    The Advisers will maintain records relating to the proxies they vote on
behalf of their clients in accordance with Section 204-2 of the Investment
Advisers Act of 1940, as amended. Those records will include:

    - A copy of the Advisers' proxy voting policies and procedures;

    - Proxy statements received regarding client securities. Such proxy
      statements received from issuers are either in the SEC's EDGAR database or
      are kept by the Agent and are available upon request;

    - A record of each vote cast;

    - A copy of any document created by the Advisers that was material to making
      a decision on how to vote a proxy for a client or that memorializes the
      basis for such a decision; and

    - Each written client request for proxy voting records and the Advisers'
      written response to any client request (whether written or oral) for such
      records.

    All records described above will be maintained in an easily accessible place
for five years and will be maintained in the offices of the Advisers or their
Agent for two years after they are created.

VI.  ASSESSMENT OF AGENT AND IDENTIFICATION AND RESOLUTION OF CONFLICTS WITH
     CLIENTS

A.  ASSESSMENT OF AGENT

    The Advisers shall establish that the Agent (i) is independent from the
Advisers, (ii) has resources that indicate it can competently provide analysis
of proxy issues, and (iii) can make recommendations in an impartial manner and
in the best interests of the clients and, where applicable, their beneficial
owners. The Advisers shall utilize, and the Agent shall comply with, such
methods for establishing the foregoing as the Advisers may deem reasonably
appropriate and shall do so not less than annually as well as prior to engaging
the services of any new proxy voting service. The Agent shall also notify the
Advisers in writing within fifteen (15) calendar days of any material change to
information previously provided to an Adviser in connection with establishing
the Agent's independence, competence or impartiality.

B.  CONFLICTS OF INTEREST

    As fiduciaries to their clients, each Adviser puts the interests of its
clients ahead of its own. In order to ensure that relevant personnel of the
Advisers are able to identify potential material conflicts of interest, each
Adviser will take the following steps:

    - Quarterly, the Eaton Vance Legal and Compliance Department will seek
      information from the department heads of each department of the Advisers
      and of Eaton Vance Distributors, Inc. ("EVD") (an affiliate of the
      Advisers and principal underwriter of certain Eaton Vance Funds). Each
      department head will be asked to provide a list of significant clients or
      prospective clients of the Advisers or EVD.

    - A representative of the Legal and Compliance Department will compile a
      list of the companies identified (the "Conflicted Companies") and provide
      that list to the Proxy Administrator.

    - The Proxy Administrator will compare the list of Conflicted Companies with
      the names of companies for which he or she has been referred a proxy
      statement (the "Proxy Companies"). If a Conflicted Company is also a Proxy
      Company, the Proxy Administrator will report that fact to the Proxy Group.

    - If the Proxy Administrator expects to instruct the Agent to vote the proxy
      of the Conflicted Company strictly according to the Guidelines contained
      in these Proxy Voting Policies and Procedures (the "Policies") or the
      recommendation of the Agent, as applicable, he or she will


                                       A-6

<PAGE>

      (i) inform the Proxy Group of that fact, (ii) instruct the Agent to vote
      the proxies and (iii) record the existence of the material conflict and
      the resolution of the matter.

    - If the Proxy Administrator intends to instruct the Agent to vote in a
      manner inconsistent with the Guidelines contained herein or, the
      recommendation of the Agent, as applicable, the Proxy Group, in
      consultation with Eaton Vance senior management, will then determine if a
      material conflict of interest exists between the relevant Adviser and its
      clients. If the Proxy Group, in consultation with Eaton Vance senior
      management, determines that a material conflict exists, prior to
      instructing the Agent to vote any proxies relating to these Conflicted
      Companies the Adviser will seek instruction on how the proxy should be
      voted from:

     - The client, in the case of an individual or corporate client;

     - In the case of a Fund its board of directors, or any committee or sub-
       committee identified by the board; or

     - The adviser, in situations where the Adviser acts as a sub-adviser to
       such adviser.

    The Adviser will provide all reasonable assistance to each party to enable
such party to make an informed decision.

    If the client, Fund board or adviser, as the case may be, fails to instruct
the Adviser on how to vote the proxy, the Adviser will generally instruct the
Agent, through the Proxy Administrator, to abstain from voting in order to avoid
the appearance of impropriety. If however, the failure of the Adviser to vote
its clients' proxies would have a material adverse economic impact on the
Advisers' clients' securities holdings in the Conflicted Company, the Adviser
may instruct the Agent, through the Proxy Administrator, to vote such proxies in
order to protect its clients' interests. In either case, the Proxy Administrator
will record the existence of the material conflict and the resolution of the
matter.

    The Advisers shall also identify and address conflicts that may arise from
time to time concerning the Agent. Upon the Advisers' request, which shall be
not less than annually, and within fifteen (15) calendar days of any material
change to such information previously provided to an Adviser, the Agent shall
provide the Advisers with such information as the Advisers deem reasonable and
appropriate for use in determining material relationships of the Agent that may
pose a conflict of interest with respect to the Agent's proxy analysis or
recommendations. Such information shall include, but is not limited to, a
monthly report from the Agent detailing the Agent's Corporate Securities
Division clients and related revenue data. The Advisers shall review such
information on a monthly basis. The Proxy Administrator shall instruct the Agent
to refer any proxies for which a material conflict of the Agent is deemed to be
present to the Proxy Administrator. Any such proxy referred by the Agent shall
be referred to the Proxy Group for consideration accompanied by the Agent's
written analysis and voting recommendation. The Proxy Administrator will
instruct the Agent to vote the proxy as recommended by the Proxy Group.



                                       A-7

<PAGE>

             EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND

                       STATEMENT OF ADDITIONAL INFORMATION
                                NOVEMBER   , 2006


                                  -------------


                      INVESTMENT ADVISER AND ADMINISTRATOR
                             Eaton Vance Management
                                255 State Street
                                Boston, MA 02109

                                   SUB-ADVISER
                   Rampart Investment Management Company, Inc.
                             One International Place
                                Boston, MA 02110

                                    CUSTODIAN
                         Investors Bank & Trust Company
                              200 Clarendon Street
                                Boston, MA 02116

                                 TRANSFER AGENT
                                    PFPC Inc.
                                 P.O. Box 43027
                            Providence, RI 02940-3027

                  INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
                              Deloitte & Touche LLP
                               200 Berkeley Street
                                Boston, MA 02116

<PAGE>

                                     PART C

                                OTHER INFORMATION

ITEM 25. FINANCIAL STATEMENTS AND EXHIBITS

(1)            FINANCIAL STATEMENTS:

               Included in Part A:
               Not applicable.

               Included in Part B:
               Report of Independent Registered Public Accounting Firm*
               Statement of Assets and Liabilities*
               Notes to Financial Statement*

----------------------------
*To be added by amendment.

(2)      EXHIBITS:

         (a)      (1)      Agreement and Declaration of Trust dated October 5,
                           2005 is incorporated herein by reference to the
                           Registrant's initial Registration Statement on Form
                           N-2 (File Nos. 333-129692 and 811-21832) as to the
                           Registrant's common shares of beneficial interest
                           ("Common Shares") filed with the Securities and
                           Exchange Commission on November 15, 2005 (Accession
                           No. 0000898432-05-000931) ("Initial Common Shares
                           Registration Statement").

                  (2)      Amendment to Agreement and Declaration of Trust dated
                           November 9, 2005 incorporated herein by reference to
                           the Registrant's Initial Common Shares Registration
                           Statement.

                  (3)      Amendment to Agreement and Declaration of Trust dated
                           October 16, 2006 filed herewith.

         (b)      (1)      By-Laws dated October 5, 2005 are incorporated herein
                           by reference to the Registrant's Initial Common
                           Shares Registration Statement.

                  (2)      Amendment to By-Laws dated November 9, 2005
                           incorporated herein by reference to the Registrant's
                           Initial Common Shares Registration Statement.

                  (3)      Amendment to By-Laws dated October 16, 2006 filed
                           herewith.

         (c)      Not applicable.

         (d)      Form of Specimen Certificate for Common Shares of Beneficial
                  Interest filed herewith.

         (e)      Dividend Reinvestment Plan filed herewith.


<PAGE>

         (f)      Not applicable.

         (g)      (1)      Investment Advisory Agreement dated November 14, 2005
                           filed herewith.

                  (2)      Investment Sub-Advisory Agreement with Rampart
                           Investment Management Company, Inc. dated November
                           14, 2005 to be filed by amendment.

         (h)      (1)      Form of Underwriting Agreement filed herewith.

                  (2)      Form of Master Agreement Among Underwriters 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)      (1)      Master Custodian Agreement with Investors Bank &
                           Trust Company dated November 14, 2005 filed herewith.

                  (2)      Extension Agreement dated August 31, 2005 to Master
                           Custodian Agreement with Investors Bank & Trust
                           Company filed as Exhibit (j)(2) to the Pre-Effective
                           Amendment No. 2 of Eaton Vance Tax-Managed Global
                           Buy-Write Opportunities Fund (File Nos. 333-123961,
                           811-21745) filed with the Commission on September 26,
                           2005 (Accession No. 0000950135-05-005528) and
                           incorporated herein by reference.

                  (3)      Delegation Agreement dated December 11, 2000, with
                           Investors Bank & Trust Company filed as Exhibit
                           (j)(e) to the Eaton Vance Prime Rate Reserves N-2,
                           Amendment No. 5 (File Nos. 333-32267, 811-05808)
                           filed April 3, 2001 (Accession No.
                           0000940394-01-500126) and incorporated herein by
                           reference.

         (k)      (1)      Transfer Agency and Services Agreement as amended and
                           restated on June 16, 2005 filed as Exhibit (k)(2) to
                           the Pre-Effective Amendment No. 1 of Eaton Vance
                           Tax-Managed Global Buy-Write Opportunities Fund (File
                           Nos. 333-123961 and 811-21745) filed August 24, 2005
                           (Accession No. 0000950135-05-004937) and incorporated
                           herein by reference.

                  (2)      Supplement to the Transfer Agency and Services
                           Agreement dated November 14, 2005 filed herewith.

                  (3)      Administration Agreement dated November 14, 2005
                           filed herewith.

                  (4)      Organizational and Expense Reimbursement Agreement to
                           be filed by amendment.

                  (5)      Form of Structuring Fee Agreement filed herewith.

         (l)      Opinion and Consent of Kirkpatrick & Lockhart Nicholson Graham
                  LLP as to Registrant's Common Shares to be filed by amendment.

<PAGE>

         (m)      Not applicable.

         (n)      Consent of Independent Registered Public Accounting Firm filed
                  herewith.

         (o)      Not applicable.

         (p)      Letter Agreement with Eaton Vance Management to be filed by
                  amendment.

         (q)      Not applicable.

         (r)      (1)      Code of Ethics adopted by Eaton Vance Corp., Eaton
                           Vance Management Boston Management and Research,
                           Eaton Vance Distributors, Inc. and the Eaton Vance
                           Funds effective September 1, 2000, as revised
                           February 1, 2006 filed as Exhibit (p)(1) to Post
                           Effective Amendment No. 94 of Eaton Vance Growth
                           Trust (File Nos. 2-22019, 811-1241) filed January 27
                           , 2006 (Accession No. 0000940394-06-000125) and
                           incorporated herein by reference.

                  (2)      Code of Ethics for Rampart Investment Management
                           Company, Inc. effective September 1, 2004, as
                           modified February 1, 2005, filed as Exhibit (r)(2) to
                           Pre-Effective Amendment No. 2 of Eaton Vance Tax-
                           Managed Global Buy-Write Opportunities Fund (File
                           Nos. 333-123961, 811-21745) filed September 26, 2005
                           (Accession No. 0000950135-05- 005528) and
                           incorporated herein by reference.

         (s)      Power of Attorney dated November 14, 2005 filed herewith.

ITEM 26. MARKETING ARRANGEMENTS

         See Form of Underwriting Agreement filed herewith.

ITEM 27. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

         The approximate expenses in connection with the offering are as
follows:

<TABLE>
<S>                                                        <C>
Registration and Filing Fees                               $_________________
National Association of Securities Dealers, Inc. Fees
New York Stock Exchange Fees
Costs of Printing and Engraving
Accounting Fees and Expenses
Legal Fees and Expenses
                                                           ==================
Total                                                      $_________________
</TABLE>


ITEM 28. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL

         None.

ITEM 29. NUMBER OF HOLDERS OF SECURITIES

         Set forth below is the number of record holders as of October 23, 2006,
of each class of securities of the Registrant:

<PAGE>

<TABLE>
<CAPTION>
Title of Class                                 Number of Record Holders
--------------                                 ------------------------
<S>                                            <C>
Common Shares of Beneficial interest,
par value $0.01 per share                               0
</TABLE>

ITEM 30. INDEMNIFICATION

         The Registrant's By-Laws filed in the Registrant's Initial Common
Shares Registration Statement contain, and the Form of Underwriting Agreement
filed herewith contain, provisions limiting the liability, and providing for
indemnification, of the Trustees and officers under certain circumstances.

         Registrant's Trustees and officers are insured under a standard
investment company errors and omissions insurance policy covering loss incurred
by reason of negligent errors and omissions committed in their official
capacities as such. Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers and controlling persons of the Registrant pursuant to the
provisions described in this Item 30, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.

ITEM 31. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

         Reference is made to: (i) the information set forth under the caption
"Investment advisory and other services" in the Statement of Additional
Information; (ii) the Eaton Vance Corp. 10-K filed under the Securities Exchange
Act of 1934 (File No. 001-8100); and (iii) the Form ADV of Eaton Vance
Management (File No. 801-15930) filed with the Commission, all of which are
incorporated herein by reference.

ITEM 32. LOCATION OF ACCOUNTS AND RECORDS

         All applicable accounts, books and documents required to be maintained
by the Registrant by Section 31(a) of the Investment Company Act of 1940 and the
Rules promulgated thereunder are in the possession and custody of the
Registrant's custodian, Investors Bank & Trust Company, 200 Clarendon Street,
16th Floor, Boston, MA 02116, and its transfer agent, PFPC Inc., 4400 Computer
Drive, Westborough, MA 01581-5120, with the exception of certain corporate
documents and portfolio trading documents which are in the possession and
custody of Eaton Vance Management, The Eaton Vance Building, 255 State Street,
Boston, MA 02109. Registrant is informed that all applicable accounts, books and
documents required to be maintained by registered investment advisers are in the
custody and possession of Eaton Vance Management.

<PAGE>

ITEM 33. MANAGEMENT SERVICES

         Not applicable.

ITEM 34. UNDERTAKINGS

         1. The Registrant undertakes to suspend offering of Common Shares until
the prospectus is amended if (1) subsequent to the effective date of this
Registration Statement, the net asset value declines more than 10 percent from
its net asset value as of the effective date of this Registration Statement or
(2) the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.

         2. Not applicable.

         3. Not applicable.

         4. Not applicable.

         5. The Registrant undertakes that:

                  a. for the purpose of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed as
part of this Registration Statement in reliance upon Rule 430A and contained in
the form of prospectus filed by the Registrant pursuant to 497(h) under the
Securities Act shall be deemed to be part of the Registration Statement as of
the time it was declared effective; and

                  b. for the purpose of determining any liability under the
Securities Act, each post- effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.

         6. The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery, within two business days of receipt
of an oral or written request, its Statement of Additional Information.

<PAGE>

                                     NOTICE

         A copy of the Agreement and Declaration of Trust of Eaton Vance
Tax-Managed Diversified Equity Income Fund, as amended, is on file with the
Secretary of State of the Commonwealth of Massachusetts and notice is hereby
given that this instrument is executed on behalf of the Registrant by an officer
of the Registrant as an officer and not individually and that the obligations of
or arising out of this instrument are not binding upon any of the Trustees,
officers or shareholders individually, but are binding only upon the assets and
property of the Registrant.

<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Securities Act of 1933, as amended
and the Investment Company Act of 1940, as amended the Registrant has duly
caused this Pre-Effective Amendment No. 1 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized in the City
of Boston and the Commonwealth of Massachusetts, on the 23rd day of October
2006.

                         EATON VANCE TAX-MANAGED DIVERSIFIED
                               EQUITY INCOME FUND


                         By:     /s/ Duncan W. Richardson
                                 -------------------------------------
                                 Duncan W. Richardson
                                 President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, as amended this
Pre-Effective Amendment No. 1 Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
Signature                 Title                               Date
---------                 -----                               ----
<S>                       <C>                                 <C>
/s/ Duncan W. Richardson  President and Chief Executive       October 23, 2006
------------------------  Officer
Duncan W. Richardson

/s/ Barbara E. Campbell   Treasurer (and Principal Financial  October 23, 2006
-----------------------   and Accounting Officer)
Barbara E. Campbell

/s/ James B. Hawkes       Trustee                             October 23, 2006
-------------------

Benjamin C. Esty*         Trustee                             October 23, 2006
-----------------
Benjamin C. Esty

Samuel L. Hayes, III*     Trustee                             October 23, 2006
---------------------
Samuel L. Hayes, III

William H. Park*          Trustee                             October 23, 2006
----------------
William H. Park

Ronald A. Pearlman*       Trustee                             October 23, 2006
-------------------
Ronald A. Pearlman

Norton H. Reamer*         Trustee                             October 23, 2006
-----------------
Norton H. Reamer

Lynn A. Stout*            Trustee                             October 23, 2006
--------------
Lynn A. Stout

Ralph F. Verni*           Trustee                             October 23, 2006
---------------
Ralph F. Verni

*By: /s/Alan R. Dynner
----------------------
Alan R. Dynner
(As Attorney-in-Fact)
</TABLE>


<PAGE>

                                INDEX TO EXHIBITS

(a)(3)   Amendment to Agreement and Declaration of Trust dated October 16, 2006

(b)(3)   Amendment to By-Laws dated October 16, 2006

(d)      Form of Specimen Certificate for Common Shares of Beneficial Interest

(e)      Dividend Reinvestment Plan

(g)(1)   Investment Advisory Agreement

(h)(1)   Form of Underwriting Agreement

(h)(2)   Form of Master Agreement Among Underwriters

(j)(1)   Master Custodian Agreement

(k)(2)   Supplement to the Transfer Agency and Services Agreement

(k)(3)   Administration Agreement

(k)(5)   Form of Structuring Fee Agreement

(n)      Consent of Independent Registered Public Accounting Firm

(s)      Power of Attorney dated November 14, 2005

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(A)(3)
<SEQUENCE>2
<FILENAME>b62570a1exv99wxayx3y.txt
<DESCRIPTION>AMENDMENT TO AGREEMENT AND DECLARATION OF TRUST
<TEXT>
<PAGE>
                                                                  Exhibit (a)(3)

            EATON VANCE TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND

                        AMENDMENT TO DECLARATION OF TRUST

AMENDMENT, made, to the Agreement and Declaration of Trust made October 5, 2005,
as amended November 9, 2005 (hereinafter called the "Declaration") of EATON
VANCE TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND, a Massachusetts business
trust (hereinafter called the "Trust"), by the undersigned being at least a
majority of the Trustees of the Trust in office.

WHEREAS, Section 8.3 of Article VIII of the Declaration empowers the Trustees of
the Trust to amend the Declaration without the vote or consent of Shareholders
to change the name of the Trust;

WHEREAS, the Trustees of the Trust have deemed it desirable to amend the
Declaration in the following manner to change the name of the Trust, and a
majority of the Trustees are empowered to make, execute and file this Amendment
to the Declaration;

NOW, THEREFORE, the undersigned Trustees do hereby amend the Declaration in the
following manner:

1. The caption at the head of the Declaration is hereby amended to read as
follows:

             EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND

2. Article I Section 1.1 of the Declaration is hereby amended to read as
follows:

                                    ARTICLE I

Section 1.1. Name. The name of the trust created hereby is Eaton Vance
Tax-Managed Diversified Equity Income Fund.

This amendment shall be effective upon execution by all of the Trustees.
<PAGE>
IN WITNESS WHEREOF, the undersigned Trustees have executed this instrument in
full this 16th day of October, 2006.

/s/ Benjamin C. Esty           /s/ Ronald A. Pearlman
-------------------------      --------------------------------
Benjamin C. Esty               Ronald A. Pearlman

/s/ James B. Hawkes           /s/ Norton H. Reamer
-------------------------     --------------------------------
James B. Hawkes               Norton H. Reamer

/s/ Samuel L. Hayes, III      /s/ Lynn A. Stout
-------------------------     --------------------------------
Samuel L. Hayes, III           Lynn A. Stout

/s/ William H. Park           /s/ Ralph F. Verni
-------------------------     --------------------------------
William H. Park               Ralph F. Verni


2

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(B)(3)
<SEQUENCE>3
<FILENAME>b62570a1exv99wxbyx3y.txt
<DESCRIPTION>AMENDMENT TO BY-LAWS
<TEXT>
<PAGE>
                                                                  Exhibit (b)(3)



                              AMENDMENT TO BY-LAWS

                                       OF

            EATON VANCE TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND


                                October 16, 2006



Pursuant to ARTICLE XIII of the BY-LAWS of Eaton Vance Tax-Managed Premium and
Dividend Income Fund (the "Trust"), upon the unanimous written consent of the
Trustees of the Trust, the BYLAWS of the Trust are amended to reflect the change
of name of the Trust to Eaton Vance Tax-Managed Diversified Equity Income Fund.


                               *******************







</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(D)
<SEQUENCE>4
<FILENAME>b62570a1exv99wxdy.txt
<DESCRIPTION>FORM OF SPECIMEN CERTIFICATE
<TEXT>
<PAGE>

                                                                     EXHIBIT (d)

SPECIMEN CERTIFICATE ONLY


CERTIFICATE                                                           NUMBER OF
  NUMBER                                                                SHARES

------------


             EATON VANCE TAX-MANAGED DIVERSIFIED EQUITY INCOME FUND
         Organized Under the Laws of The Commonwealth of Massachusetts
                                 Common Shares
                            $.01 Par Value Per Share

                                                     Cusip No. _________________


         This certifies that is the owner of fully paid and non-assessable
shares of Common Shares, $.01 par value per share, of Eaton Vance Tax-Managed
Diversified Equity Income Fund (the "Fund") transferable only on the books of
the Fund by the holder thereof in person or by duly authorized Attorney upon
surrender of this Certificate properly endorsed. This Certificate is not valid
unless countersigned by the transfer agent and registrar.

         A statement in full, of all the designations, preferences,
qualifications, limitations, restrictions and special or relative rights of the
shares of each class authorized to be issued, will be furnished by the Fund to
any shareholders upon request and without charge.

         IN WITNESS WHEREOF, the Fund has caused this Certificate to be signed
by its duly authorized officers and its Seal to be hereunto affixed
this___day___of A.D. 2005.

INVESTORS BANK & TRUST COMPANY          EATON VANCE TAX-MANAGED
FUND As Transfer Agent and Registrar    DIVERSIFIED EQUITY INCOME


By:                                     By:
     ----------------------------             ---------------------------------
     Authorized Signature                     President

                                        Attest:
                                                  -----------------------------
                                                  Secretary


<PAGE>


               FOR VALUE RECEIVED, __________________________ hereby sells,
assigns and transfers unto _____________________________ Shares represented by
this Certificate, and do hereby irrevocably constitute and appoint
__________________________ Attorney to transfer the said Shares on the books of
the within named Fund with full power of substitution in the premises.

Dated ____________________, ________________

In presence of

--------------------------                      --------------------------

         Shares of Common Shares evidenced by this Certificate may be sold,
         transferred, or otherwise disposed of only pursuant to the provisions
         of the Fund's Agreement and Declaration of Trust, as amended, a copy of
         which may be at the office of the Secretary of The Commonwealth of
         Massachusetts.

         The Fund will furnish to any shareholder, upon request and without
         charge, a full statement of the designations, preferences, limitations
         and relative rights of the shares of each class of series of capital
         stock of the Fund authorized to be issued, so far as they have been
         determined, and the authority of the Board of Trustees to determine the
         relative rights and preferences of subsequent classes or series. Any
         such request should be addressed to the Secretary of the Fund.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(E)
<SEQUENCE>5
<FILENAME>b62570a1exv99wxey.txt
<DESCRIPTION>DIVIDEND REINVESTMENT PLAN
<TEXT>
<PAGE>
                                                                     Exhibit (e)



            Eaton Vance Tax-Managed Premium and Dividend Income Fund

               Terms and Conditions of Dividend Reinvestment Plan

Holders of common shares (the "Shares") of Eaton Vance Tax-Managed  Premium  and
Dividend Income Fund (the "Fund") who participate (the  "Participants")  in  the
Fund's Dividend Reinvestment Plan (the "Plan") are advised as follows:

1. The Plan Agent. PFPC Inc. (the "Agent") will act as Agent for each
Participant. The Agent will open an account for each Participant under the Plan
in the same name as his or her outstanding Shares are registered.

2. Election to Participate. A Shareholder may elect to receive all distributions
("Distributions") payable with respect to his or her Shares in additional
Shares. To participate in the Plan and receive all Distributions in Shares, a
Shareholder must indicate his or her election to do so by completing and
returning to the Plan Agent a Dividend Reinvestment Plan Application Form.
Shareholders who do not elect to participate in the Plan by completing and
returning such Form will receive Distributions in cash paid directly by the Plan
Agent as dividend disbursing agent for the applicable Fund.

3. Market Premium Issuances. If on the payment date for a Distribution, the net
asset value per Share is equal to or less than the market price per Share plus
estimated brokerage commissions, the Agent shall receive newly issued

                                     Page 1

<PAGE>

Shares, including fractions, from the Fund for each Participant's account. The
number of additional Shares to be credited shall be determined by dividing the
dollar amount of the Distribution by the greater of the net asset value per
Share on the payment date, or 95% of the then current market price per Share.

4. Market Discount Purchases. If the net asset value per Share exceeds the
market price plus estimated brokerage commissions on the payment date for a
Distribution, the Agent (or a broker-dealer selected by the Agent) shall
endeavor, for a purchase period of 30 days, to apply the amount of such
Distribution on each Participant's Shares (less their pro rata share of
brokerage commissions incurred) to purchase Shares on the open market. The
weighted average price (including brokerage commissions) of all Shares purchased
by the Agent as Agent shall be the price per Share allocable to each
Participant. If, at the close of business on any day during the purchase period
on which net asset value per Share is calculated such net asset value equals or
is less than the market price per Share plus estimated brokerage commissions,
the Agent will cease open-market purchases, and the uninvested portion of such
Distribution shall be filled through the issuance of new Shares from the Fund at
the price set forth in Paragraph 3 above. Open-market purchases may be made on
any securities exchange where Shares are traded, in the over-the-counter market
or in negotiated transactions, and may be on such terms as to price,
delivery and otherwise as the Agent shall determine.

                                     Page 2

<PAGE>

5. Valuation. The market price of Shares on a particular date shall be the last
sales price on the Exchange where the Shares are listed on that date, or, if
there is no sale on such Exchange on that date, then the mean between the
closing bid and asked quotations on such Exchange on such date. The net asset
value per Share on a particular date shall be the amount most recently
calculated by or on behalf of the Fund as required by law.

6. Liability of Agent. The Agent shall at all times act in good faith and agree
to use its best efforts within reasonable limits to ensure the accuracy of all
services performed under this Agreement and to comply with applicable law, but
assumes no responsibility and shall not be liable for loss or damage due to
errors unless such error is caused by the Agent's negligence, bad faith, or
willful misconduct or that of its employees. Each Participant's uninvested funds
held by the Agent will not bear interest. The Agent shall have no liability in
connection with any inability to purchase Shares within the time provided, or
with the timing of any purchases effected. The Agent shall have no
responsibility for the value of Shares acquired. For the purpose of cash
investments, the Agent may commingle Participants' funds (of the same Fund).

7. Recordkeeping. The Agent may hold each Participant's Shares acquired pursuant
to the Plan together with the Shares of other shareholders of the Fund acquired
pursuant to the Plan in noncertificated form in the Agent's name

                                     Page 3

<PAGE>

or that of the Agent's nominee. Upon a Participant's written request, the Agent
will deliver to the Participant, without charge, a certificate or certificates
for the full shares. Each Participant will be sent a confirmation by the Agent
of each acquisition made for their account as soon as practicable, but not later
than 60 days after the date thereof. Although each Participant may from time to
time have an undivided fractional interest in a share of the Fund, no
certificates for a fractional share will be issued. Distributions on fractional
shares will be credited to each Participant's account. In the event of
termination of a Participant's account under the Plan, the Agent will adjust for
any such undivided fractional interest in cash at the market value of Shares at
the time of termination.

Any share dividends or split shares distributed by the Fund on Shares held by
the Agent for Participants will be credited to their accounts. In the event that
the Fund makes available to its shareholders rights to purchase additional
shares of other securities, the Shares held for each Participant under the Plan
will be added to other shares held by the Participant in calculating the number
of rights to be issued to each Participant.

8. Proxy Materials. The Agent will forward to each Participant any proxy
solicitation material and will vote any shares so held for each Participant
first in accordance with the instructions set forth on proxies returned by the
Participant to the Fund, and then with respect to any proxies not returned by

                                     Page 4

<PAGE>

the Participant to the Fund in the same portion as the Agent votes proxies
returned by the Participants to the Fund.

9. Fees. The Agent's service fee for handling Distributions will be paid by the
Fund. Each Participant will be charged their pro rata share of brokerage
commissions on all open-market purchases. If a Participant elects by notice to
the Agent to have the Agent sell part or all of his or her Shares and remit the
proceeds, the Agent is authorized to deduct a $5.00 fee plus brokerage
commissions from the proceeds.

10. Termination in the Plan. Each registered Participant may terminate his or
her account under the Plan by notifying the Agent in writing at P.O. Box 43027,
Providence, RI 02940-3027, or by telephone at 800-331-1710. Such termination
will be effective with respect to a Distribution if the Participant's notice is
received by the Agent prior to the Distribution record date. The Plan may be
terminated by the Agent or the Fund upon notice in writing mailed to each
Participant at least 30 days prior to any record date for the payment of any
Distribution. Upon any termination, the Agent will cause a certificate or
certificates to be issued for the full shares held for each Participant under
the Plan and cash adjustment for any fraction to be delivered to them without
charge.

11. Amendment of the Plan. These terms and conditions may be amended by the
Agent, or the Fund at any time or times but, except when necessary or

                                     Page 5

<PAGE>

appropriate to comply with applicable law or the rules or policies of the
Securities and Exchange Commission or any other regulatory authority, only by
mailing to each Participant appropriate written notice at least 30 days prior to
the effective date thereof. The amendment shall be deemed to be accepted by each
Participant unless, prior to the effective date thereof, the Agent receives
notice of the termination of the Participant's account under the Plan. Any such
amendment may include an appointment by the Agent of a successor Agent.

12. Applicable Law. These terms and conditions shall be governed by the laws of
The Commonwealth of Massachusetts.



                                     Page 6
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(G)(1)
<SEQUENCE>6
<FILENAME>b62570a1exv99wxgyx1y.txt
<DESCRIPTION>INVESTMENT ADVISORY AGREEMENT
<TEXT>
<PAGE>

                                                                  Exhibit (g)(1)


            EATON VANCE TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND

                          INVESTMENT ADVISORY AGREEMENT



AGREEMENT made this 14th day of November, 2005, between Eaton Vance Tax-Managed
Premium and Dividend Income Fund, a Massachusetts business trust (the "Trust"),
and Eaton Vance Management, a Massachusetts business trust (the "Adviser").

1. Duties of the Adviser. The Trust hereby employs the Adviser to act as
investment adviser for and to manage the investment and reinvestment of the
assets of the Trust and to administer its affairs, subject to the supervision of
the Trustees of the Trust, for the period and on the terms set forth in this
Agreement.

The Adviser hereby accepts such employment, and undertakes to afford to the
Trust the advice and assistance of the Adviser's organization in the choice of
investments and in the purchase and sale of securities for the Trust and to
furnish for the use of the Trust office space and all necessary office
facilities, equipment and personnel for servicing the investments of the Trust
and to pay the salaries and fees of all officers and Trustees of the Trust who
are members of the Adviser's organization and all personnel of the Adviser
performing services relating to research and investment activities. The Adviser
shall for all purposes herein be deemed to be an independent contractor and

                                     Page 1

<PAGE>

shall, except as otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be deemed an agent of
the Trust.

The Adviser shall provide the Trust with such investment management and
supervision as the Trust may from time to time consider necessary for the proper
supervision of the Trust. As investment adviser to the Trust, the Adviser shall
furnish continuously an investment program and shall determine from time to time
what securities and other investments shall be acquired, disposed of or
exchanged and what portion of the Trust's assets shall be held uninvested,
subject always to the applicable restrictions of the Declaration of Trust,
By-Laws and registration statement of the Trust. Should the Trustees of the
Trust at any time, however, make any specific determination as to investment
policy for the Trust and notify the Adviser thereof in writing, the Adviser
shall be bound by such determination for the period, if any, specified in such
notice or until similarly notified that such determination has been revoked. The
Adviser shall take, on behalf of the Trust, all actions that it deems necessary
or desirable to implement the investment policies of the Trust.

The Adviser shall place all orders for the purchase or sale of portfolio
securities for the account of the Trust either directly with the issuer or with
brokers or dealers selected by the Adviser, and, to that end, the Adviser is
authorized, as the agent of the Trust, to give instructions to the custodian of

                                     Page 2

<PAGE>

the Trust as to deliveries of securities and payments of cash for the account of
the Trust. In connection with the selection of such brokers or dealers and the
placing of such orders, the Adviser shall adhere to procedures adopted by the
Board of Trustees of the Trust.

The Adviser shall not be responsible for providing certain special
administrative services to the Trust under this Agreement. Eaton Vance
Management, in its capacity as Administrator of the Trust, shall be responsible
for providing such services to the Trust under the Trust's separate
Administration Agreement.

2. Compensation of the Adviser. For the services, payments and facilities to be
furnished hereunder by the Adviser, the Adviser shall be entitled to receive
from the Trust compensation in an amount equal to 1.00% annually of the average
daily gross assets of the Trust. (For purposes of this calculation, "gross
assets" of the Trust shall mean total assets of the Trust, including any form of
investment leverage, minus all accrued expenses incurred in the normal course of
operations, but not excluding any liabilities or obligations attributable to
investment leverage obtained through (i) indebtedness of any type (including,
without limitation, borrowing through a credit facility or the issuance debt
securities), (ii) the issuance of preferred stock or other similar preference
securities, (iii) the reinvestment of collateral received for securities loaned
in accordance with the Trust's investment objectives

                                     Page 3

<PAGE>

and policies, and/or (iv) any other means.)

Such compensation shall be paid monthly in arrears on the last business day of
each month. The Trust's net assets shall be computed in accordance with the
Declaration of Trust of the Trust and any applicable votes and determinations of
the Trustees of the Trust.

In case of initiation or termination of the Agreement during any month, the fee
for that month shall be reduced proportionately on the basis of the number of
calendar days during which the Agreement is in effect and the fee shall be
computed upon the basis of the average gross assets for the business days the
Agreement is so in effect for that month.

The Adviser may, from time to time, waive all or a part of the above
compensation.

3. Allocation of Charges and Expenses. It is understood that the Trust will pay
all expenses other than those expressly stated to be payable by the Adviser
hereunder, which expenses payable by the Trust shall include, without implied
limitation (i) expenses of maintaining the Trust and continuing its existence;
(ii) registration of the Trust under the Investment Company Act of 1940; (iii)
commissions, spreads, fees and other expenses connected with the acquisition,
holding and disposition of securities and other investments; (iv) auditing,
accounting and legal expenses; (v) taxes and interest; (vi) governmental fees;

                                     Page 4

<PAGE>

(vii) expenses of listing shares of the Trust with a stock exchange, and
expenses of issue, sale, repurchase and redemption (if any) of interests in the
Trust, including expenses of conducting tender offers for the purpose of
repurchasing Trust interests; (viii) expenses of registering and qualifying the
Trust and its shares under federal and state securities laws and of preparing
and filing registration statements and amendments for such purposes; (ix)
expenses of reports and notices to shareholders and of meetings of shareholders
and proxy solicitations therefore; (x) expenses of reports to governmental
officers and commissions; (xi) insurance expenses; (xii) association membership
dues; (xiii) fees, expenses and disbursements of custodians and subcustodians
for all services to the Trust (including, without limitation, safekeeping of
funds, securities and other investments, keeping of books, accounts and records,
and determination of net asset values); (xiv) fees, expenses and disbursements
of transfer agents, dividend disbursing agents, shareholder servicing agents and
registrars for all services to the Trust; (xv) expenses for servicing
shareholder accounts; (xvi) any direct charges to shareholders approved by the
Trustees of the Trust; (xvii) compensation and expenses of Trustees of the Trust
who are not members of the Adviser's organization; (xviii) pricing and valuation
services employed by the Trust; (xix) all expenses incurred in connection with
leveraging of Trust's assets through a line of credit, or issuing and
maintaining preferred shares; and (xx) such non-recurring items as may arise,
including expenses incurred in connection with litigation, proceedings and
claims and the obligation of the Trust to indemnify its Trustees, officers and
shareholders with respect thereto.

                                     Page 5

<PAGE>

4. Other Interests. It is understood that Trustees and officers of the Trust and
shareholders of the Trust are or may be or become interested in the Adviser as
trustees, officers, employees, shareholders or otherwise and that trustees,
officers and shareholders of the Adviser are or may be or become similarly
interested in the Trust, and that the Adviser may be or become interested in the
Trust as a shareholder or otherwise. It is also understood that trustees,
officers, employees and shareholders of the Adviser may be or become interested
(as directors, trustees, officers, employees, shareholders or otherwise) in
other companies or entities (including, without limitation, other investment
companies) that the Adviser may organize, sponsor or acquire, or with which it
may merge or consolidate, and which may include the words "Eaton Vance" or any
combination thereof as part of their name, and that the Adviser or its
subsidiaries or affiliates may enter into advisory or management agreements or
other contracts or relationships with such other companies or entities.

5. Limitation of Liability of the Adviser. The services of the Adviser to the
Trust are not to be deemed to be exclusive, the Adviser being free to render

                                     Page 6

<PAGE>

services to others and engage in other business activities. In the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of
obligations or duties hereunder on the part of the Adviser, the Adviser shall
not be subject to liability to the Trust or to any shareholder of the Trust for
any act or omission in the course of, or connected with, rendering services
hereunder or for any losses that may be sustained in the acquisition, holding or
disposition of any interest in a Loan or of any security, investment or other
asset.

6. Sub-Investment Advisers. The Adviser may employ one or more sub-investment
advisers from time to time to perform such of the acts and services of the
Adviser provided for by this Agreement, including the selection of brokers or
dealers to execute the Trust's portfolio security transactions, and upon such
terms and conditions as may be agreed upon between the Adviser and such
sub-investment adviser and approved by the Trustees of the Trust, all as
permitted by the Investment Company Act of 1940. This provision does not limit
the Adviser's ability, pursuant to this Agreement, to provide the services
contemplated without the assistance of a sub-investment adviser. Moreover,
subject to approval of the Trust's Board of Trustees, the Adviser retains
complete authority at any time immediately to assume direct responsibility for
any function delegated to a sub-investment adviser pursuant to this Section 6
without the need for any approval by the holders of the voting securities of the
Trust.

                                     Page 7

<PAGE>

7. Duration and Termination of this Agreement. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including November
14, 2007 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after November 14, 2007 is specifically
approved at least annually (i) by the Board of Trustees of the Trust or by vote
of a majority of the outstanding voting securities of the Trust and (ii) by the
vote of a majority of those Trustees of the Trust who are not interested persons
of the Adviser or the Trust cast in person at a meeting called for the purpose
of voting on such approval.

Either party hereto may, at any time on sixty (60) days' prior written notice to
the other, terminate this Agreement without the payment of any penalty, by
action of Trustees of the Trust or the trustees of the Adviser, as the case may
be, and the Trust may, at any time upon such written notice to the Adviser,
terminate this Agreement by vote of a majority of the outstanding voting
securities of the Trust. This Agreement shall terminate automatically in the
event of its assignment.

8. Amendments of the Agreement. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Trust who are not interested persons of the Adviser or the Trust
cast in person at a meeting called for the purpose of voting on such approval,
and (ii) by vote of a majority of the outstanding voting securities of the
Trust, except for any such amendment as may be effected in the absence of such
approval without violating the Investment Company Act of 1940.

                                     Page 8

<PAGE>

9. Limitation of Liability. The Adviser expressly acknowledges the provision in
the Declaration of Trust of the Trust limiting the personal liability of the
Trustees, officers and shareholders of the Trust, and the Adviser hereby agrees
that it shall have recourse to the Trust for payment of claims or obligations as
between the Trust and the Adviser arising out of this Agreement and shall not
seek satisfaction from any Trustee, officer or shareholders of the Trust.

10. Use of the Name "Eaton Vance". The Adviser hereby consents to the use by the
Trust of the name "Eaton Vance" as part of the Trust's name; provided, however,
that such consent shall be conditioned upon the employment of the Adviser or one
of its affiliates as the investment adviser of the Trust. The name "Eaton Vance"
or any variation thereof may be used from time to time in other connections and
for other purposes by the Adviser and its affiliates and other investment
companies that have obtained consent to the use of the name "Eaton Vance". The
Adviser shall have the right to require the Trust to cease

                                     Page 9

<PAGE>

using the name "Eaton Vance" as part of the Trust's name if the Trust ceases,
for any reason, to employ the Adviser or one of its affiliates as the Trust's
investment adviser. Future names adopted by the Trust for itself, insofar as
such names include identifying words requiring the consent of the Adviser, shall
be the property of the Adviser and shall be subject to the same terms and
conditions.

11. Certain Definitions. The terms "assignment" and "interested persons" when
used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote, at a meeting of
shareholders, of the lesser of (a) 67 per centum or more of the shares of the
Trust present or represented by proxy at the meeting if the shareholders of more
than 50 per centum of the shares of the Trust are present or represented by
proxy at the meeting, or (b) more than 50 per centum of the shares of the Trust.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
on the day and year first above written.

                                    Page 10

<PAGE>

                EATON VANCE TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND


                By:  /s/ Duncan W. Richardson
                     -----------------------------------------
                     Duncan W. Richardson
                     President, and not Individually


                EATON VANCE MANAGEMENT


                By:  /s/ Frederick S. Marius
                     -----------------------------------------
                     Frederick S. Marius
                     Vice President, and not Individually

                                    Page 11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(H)(1)
<SEQUENCE>7
<FILENAME>b62570a1exv99wxhyx1y.txt
<DESCRIPTION>FORM OF UNDERWRITING AGREEMENT
<TEXT>
<PAGE>
                                                                  EXHIBIT (h)(1)


            EATON VANCE TAX-MANAGED DIVIDEND AND PREMIUM INCOME FUND


                 __________ Common Shares of Beneficial Interest
                                $20.00 per Share


                             UNDERWRITING AGREEMENT

Dated: November [  ], 2006

<PAGE>

                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                               Page
                                                                                                               ----
<S>                                                                                                            <C>
SECTION 1. Representations and Warranties.........................................................................3

SECTION 2. Sale and Delivery to Underwriters; Closing............................................................12

SECTION 3. Covenants of the Fund and the Advisers................................................................14

SECTION 4. Payment of Expenses...................................................................................16

SECTION 5. Conditions of Underwriters' Obligations...............................................................17

SECTION 6. Indemnification.......................................................................................21

SECTION 7. Contribution..........................................................................................24

SECTION 8. Representations, Warranties and Agreements to Survive Delivery........................................25

SECTION 9. Termination of Agreement..............................................................................25

SECTION 10. Default by One or More of the Underwriters...........................................................26

SECTION 11. Notices..............................................................................................27

SECTION 12. Parties..............................................................................................27

SECTION 13. GOVERNING LAW AND TIME...............................................................................27

SECTION 14. Effect of Headings...................................................................................27

SECTION 15. Definitions..........................................................................................27

SECTION 16. Absence of Fiduciary Relationship....................................................................30

SECTION 17. Disclaimer of Liability of Trustees and Beneficiaries................................................31
</TABLE>

                                    EXHIBITS

Exhibit A     -- Initial Securities to be Sold
Exhibit B     -- Form of Opinion of Fund Counsel
Exhibit C     -- Form of Opinion of Adviser Counsel
Exhibit D     -- Form of Opinion of Subadviser Counsel
Exhibit E     -- Price-Related Information

                                       i
<PAGE>

            EATON VANCE TAX-MANAGED DIVIDEND AND PREMIUM INCOME FUND

                  ____,000 Common Shares of Beneficial Interest

                             UNDERWRITING AGREEMENT

                                                              November [ ], 2006

Wachovia Capital Markets, LLC
[Co-Managers]
As Representatives of the several Underwriters
c/o Wachovia Capital Markets, LLC
375 Park Avenue
New York, New York 10152

Ladies and Gentlemen:

      Eaton Vance Tax-Managed Dividend and Premium Income Fund, a voluntary
association with transferable shares established and existing under the laws of
the Commonwealth of Massachusetts, commonly referred to as a Massachusetts
business trust (the "Fund"), Eaton Vance Management, a voluntary association
with transferable shares established and existing under the laws of the
Commonwealth of Massachusetts, commonly referred to as a Massachusetts business
trust (the "Adviser"), Rampart Investment Management Company, Inc., a
Massachusetts corporation (the "Subadviser" and together with the Adviser, the
"Advisers"), confirm their respective agreements with Wachovia Capital Markets,
LLC ("Wachovia") and each of the other Underwriters named in Exhibit A hereto
(collectively, the "Underwriters," which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom Wachovia and
____________________ are acting as representatives (in such capacity, the
"Representatives"), with respect to the issue and sale by the Fund of a total of
__________ common shares of beneficial interest, par value $.01 per share (the
"Initial Securities"), and the purchase by the Underwriters, acting severally
and not jointly, of the respective numbers of Initial Securities set forth in
said Exhibit A hereto, and with respect to the grant by the Fund to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of ____ additional common shares
of beneficial interest to cover over-allotments, if any. The Initial Securities
to be purchased by the Underwriters and all or any part of the ____ common
shares of beneficial interest subject to the option described in Section 2(b)
hereof (the "Option Securities") are hereinafter called, collectively, the
"Securities." Certain terms used in this Agreement are defined in Section 15
hereof.

      The Fund understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.

      The Fund has entered into (i) an Investment Advisory Agreement with the
Adviser dated as of ______, 2006, (ii) an Administration Agreement with the
Adviser dated as of _________, 2006, (iii) a Letter Agreement, dated as of
______, 2006, whereby the Fund adopts and agrees to become party to that certain
Master Custodian Agreement with Investors Bank & Trust

                                       1
<PAGE>

Company and (iv) a Letter Agreement, dated as of _______, 2006, whereby the Fund
adopts and agrees to become party to that certain Amended and Restated Transfer
Agency and Services Agreement with PFPC, Inc. dated as of June 16, 2005, and
such agreements are herein referred to as the "Advisory Agreement," the
"Administration Agreement", the "Custodian Agreement" and the "Transfer Agency
Agreement" respectively, and collectively as the "Fund Agreements."

      The Adviser has entered into a Sub-Advisory Agreement with the Subadviser,
dated as of _______, 2006, and such agreement is herein referred to as the
"Sub-Advisory Agreement." The Adviser has also entered into a Structuring Fee
Agreement with Wachovia, dated as of ______, 2006, [and a Structuring Fee
Agreement with __________, dated as of _____, 2006], and such agreement[s] are
herein referred to as "Structuring Fee Agreement[s]," [and an Additional
Compensation Agreement with ______________, dated as of ________, 2006, and such
agreement is herein referred to as "Additional Compensation Agreement"]. In
addition, the Fund has adopted a dividend reinvestment plan pursuant to which
holders of common shares of beneficial interest shall have their dividends
automatically reinvested in additional common shares of beneficial interest of
the Fund unless they elect to receive such dividends in cash, and such plan is
herein referred to as "Dividend Reinvestment Plan."

      The Fund has prepared and filed with the Commission a registration
statement (file numbers 333-129692 and 811-21832) on Form N-2, including a
related preliminary prospectus (including the statement of additional
information incorporated by reference therein), for registration under the Act
and the 1940 Act of the offering and sale of the Securities. The Fund may have
filed one or more amendments thereto, including a related preliminary prospectus
(including the statement of additional information incorporated by reference
therein), each of which has previously been furnished to you.

      The Fund will next file with the Commission one of the following: either
(1) prior to the effective date of the registration statement, a further
amendment to the registration statement (including the form of final prospectus
(including the statement of additional information incorporated by reference
therein)) or (2) after the effective date of the registration statement, a final
prospectus (including the statement of additional information incorporated by
reference therein) in accordance with Rules 430A and 497. In the case of clause
(2), the Fund has included or incorporated by reference in the Registration
Statement, as amended at the effective date, all information (other than Rule
430A Information) required by the 1933 Act and the 1940 Act and the Rules and
Regulations to be included in the registration statement and the Prospectus. As
filed, such amendment and form of final prospectus (including the statement of
additional information incorporated by reference therein), or such final
prospectus (including the statement of additional information incorporated by
reference therein), shall contain all Rule 430A Information, together with all
other such required information, and, except to the extent the Representatives
shall agree in writing to a modification, shall be in all substantive respects
in the form furnished to you prior to the Applicable Time or, to the extent not
completed at the Applicable Time, shall contain only such specific additional
information and other changes (beyond that contained in the latest preliminary
prospectus) as the Fund has advised you, prior to the Applicable Time, will be
included or made therein.

                                       2
<PAGE>

      SECTION 1. Representations and Warranties.

      (a) Representations and Warranties by the Fund and the Advisers. The Fund
and the Advisers, jointly and severally, represent and warrant to each
Underwriter as of the date hereof, as of the Applicable Time, as of the Closing
Date referred to in Section 2(c) hereof, and as of each Option Closing Date (if
any) referred to in Section 2(b) hereof, and agree with each Underwriter, as
follows:

            (1) Compliance with Registration Requirements. The Securities have
      been duly registered under the 1933 Act and the 1940 Act pursuant to the
      Registration Statement. Each of the Initial Registration Statement and any
      Rule 462(b) Registration Statement has become effective under the 1933 Act
      and the 1940 Act, and no stop order suspending the effectiveness of the
      Initial Registration Statement or any Rule 462(b) Registration Statement
      has been issued under the 1933 Act or the 1940 Act, and no proceedings for
      that purpose have been instituted or are pending or, to the knowledge of
      the Fund or the Advisers, are contemplated by the Commission, and any
      request on the part of the Commission for additional information has been
      complied with. The Preliminary Prospectus and the Prospectus complied when
      filed with the Commission in all material respects with the requirements
      of the 1933 Act, the 1940 Act and the Rules and Regulations, and the
      Preliminary Prospectus and the Prospectus and any amendments or
      supplements thereto delivered to the Underwriters for use in connection
      with the offering of the Securities was identical to the electronically
      transmitted copy thereof filed with the Commission pursuant to EDGAR,
      except to the extent permitted by Regulation S-T.

            At the respective times the Initial Registration Statement, any Rule
      462(b) Registration Statement and any post-effective amendments thereto
      became or become effective and at the Closing Date (and, if any Option
      Securities are purchased, at the applicable Option Closing Date), the
      Initial Registration Statement, any Rule 462(b) Registration Statement
      will, and the 1940 Act Notification when originally filed with the
      Commission and any amendments and supplements thereto did or will, comply
      in all material respects with the requirements of the 1933 Act, the 1940
      Act and the Rules and Regulations and did not and will not contain 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. Neither the Prospectus nor any amendments or supplements
      thereto, as of its date, at the Closing Date (and, if any Option
      Securities are purchased, at the applicable Option Closing Date), and at
      any time when a prospectus is required by applicable law to be delivered
      in connection with sales of Securities, included or will include an untrue
      statement of a material fact or omitted or will omit to state a material
      fact necessary in order to make the statements therein, in the light of
      the circumstances under which they were made, not misleading. The
      Preliminary Prospectus and the information included on Exhibit E hereto,
      all considered together (collectively, the "General Disclosure Package")
      did not or will not contain any untrue statement of a material fact or
      omit to state any material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading; provided, however, that the Fund makes no representations or
      warranties as to the information contained in or omitted from the
      Preliminary Prospectus or the Prospectus in

                                       3
<PAGE>

      reliance upon and in conformity with information furnished in writing to
      the Fund by or on behalf of any Underwriter specifically for inclusion
      therein, it being understood and agreed that the only such information
      furnished by any Underwriter consists of the information described as such
      in Section 6(b) hereof.

            The Fund's registration statement on Form 8-A under the 1934 Act is
      effective.

            (2) Independent Accountants. Deloitte & Touche LLP who certified and
      audited the financial statements and supporting schedules included in the
      Registration Statement, the Preliminary Prospectus and the Prospectus are
      independent public accountants as required by the 1933 Act, the 1940 Act
      and the Rules and Regulations.

            (3) Financial Statements. The financial statements of the Fund
      included in the Registration Statement, the Preliminary Prospectus and the
      Prospectus, together with the related schedules (if any) and notes,
      present fairly the financial position of the Fund at the dates indicated
      and the results of operations and cash flows of the Fund for the periods
      specified; and all such financial statements have been prepared in
      conformity with GAAP applied on a consistent basis throughout the periods
      involved and comply in all material respects with all applicable
      accounting requirements under the 1933 Act, the 1940 Act and the Rules and
      Regulations. The supporting schedules, if any, included in the
      Registration Statement present fairly, in accordance with GAAP, the
      information required to be stated therein, and the other financial and
      statistical information and data included in the Registration Statement,
      the Preliminary Prospectus and the Prospectus are accurately derived from
      such financial statements and the books and records of the Fund.

            (4) No Material Adverse Change in Business. Since the respective
      dates as of which information is given in the Preliminary Prospectus and
      the Prospectus, except as otherwise stated therein, (A) there has been no
      Fund Material Adverse Effect and (B) there have been no transactions
      entered into by the Fund which are material with respect to the Fund other
      than those in the ordinary course of its business as described in the
      Preliminary Prospectus and the Prospectus.

            (5) Legal Existence of the Fund. The Fund has been duly created and
      is validly existing a voluntary association with transferable shares
      established and existing under the laws of the Commonwealth of
      Massachusetts, with full power and authority to own, lease and operate its
      properties and to conduct its business as described in the Preliminary
      Prospectus and the Prospectus, and to enter into and perform its
      obligations under this Agreement and the Fund Agreements; and the Fund is
      duly qualified to do business as a foreign trust.

            (6) No Subsidiaries. The Fund has no subsidiaries.

            (7) Investment Company Status. The Fund is duly registered under the
      1940 Act as a closed-end, diversified management investment company under
      the 1940 Act, the Rules and Regulations and the 1940 Act Notification has
      become effective. The Fund has not received any notice from the Commission
      pursuant to Section 8(e) of the 1940 Act with respect to the 1940 Act
      Notification or the Registration Statement.

                                       4
<PAGE>

            (8) Officers and Trustees. No person is serving or acting as an
      officer, trustee or investment adviser of the Fund except in accordance
      with the provisions of the 1940 Act and the Rules and Regulations and the
      Advisers Act. Except as disclosed in the Registration Statement, the
      Preliminary Prospectus and the Prospectus, no trustee of the Fund is (A)
      an "interested person" (as defined in the 1940 Act) of the Fund or (B) an
      "affiliated person" (as defined in the 1940 Act) of any Underwriter. For
      purposes of this Section 1(a)(8), the Fund and the Advisers shall be
      entitled to rely on representations from such officers and trustees.

            (9) Capitalization. The authorized, issued and outstanding common
      shares of beneficial interest of the Fund are as set forth in the
      Preliminary Prospectus and in the Prospectus. All issued and outstanding
      common shares of beneficial interest of the Fund have been duly authorized
      and validly issued and are fully paid and non-assessable, except that, as
      set forth in the Registration Statement and the Prospectus, shareholders
      of a Massachusetts business trust may under certain circumstances be held
      personally liable for its obligations and have been offered and sold or
      exchanged by the Fund in compliance with all applicable laws (including,
      without limitation, federal and state securities laws); none of the
      outstanding common shares of beneficial interest of the Fund was issued in
      violation of the preemptive or other similar rights of any security holder
      of the Fund; the Securities have been duly and validly authorized, and,
      when issued and delivered to and paid for by the Underwriters pursuant to
      this Agreement, will be fully paid and nonassessable, except that, as set
      forth in the Registration Statement and the Prospectus, shareholders of a
      Massachusetts business trust may under certain circumstances be held
      personally liable for its obligations; the certificates for the Securities
      are in valid and sufficient form;

            (10) Power and Authority. The Fund has full power and authority to
      enter into this Agreement and the Fund Agreements; the execution and
      delivery of, and the performance by the Fund of its obligations under this
      Agreement and the Fund Agreements have been duly and validly authorized by
      the Fund; the Sub-Advisory Agreement has been duly and validly authorized
      by the Fund; this Agreement and the Fund Agreements have been duly
      executed and delivered by the Fund and constitute the valid and legally
      binding agreements of the Fund, enforceable against the Fund in accordance
      with their terms, except as rights to indemnity and contribution hereunder
      may be limited by federal or state securities laws and subject to the
      qualification that the enforceability of the Fund's obligations hereunder
      and thereunder may be limited by bankruptcy, insolvency, reorganization,
      moratorium and other laws relating to or affecting creditors' rights
      generally and by general equitable principles.

            (11) Agreements' Compliance with Law. This Agreement, each of the
      Fund Agreements and the Sub-Advisory Agreement complies in all material
      respects with all applicable provisions of the 1940 Act, the 1940 Act
      Rules and Regulations, the Advisers Act and the Advisers Act Rules and
      Regulations.

            (12) Absence of Defaults and Conflicts. The Fund is not (i) in
      violation of its Declaration of Trust or bylaws, (ii) in breach or default
      in the performance of the terms of any indenture, contract, lease,
      mortgage, declaration of trust, note agreement, loan

                                       5
<PAGE>

      agreement or other agreement, obligation, condition, covenant or
      instrument to which it is a party or bound or to which its property is
      subject or (iii) in violation of any law, ordinance, administrative or
      governmental rule or regulation applicable to the Fund or of any decree of
      the Commission, the NASD, any state securities commission, any foreign
      securities commission, any national securities exchange, any arbitrator,
      any court or any other governmental, regulatory, self-regulatory or
      administrative agency or any official having jurisdiction over the Fund.

            (13) Absence of Proceedings. There is no action, suit, proceeding,
      inquiry or investigation before or brought by any court or governmental
      agency or body, domestic or foreign, now pending, or, to the knowledge of
      the Fund, threatened, against or affecting the Fund which is required to
      be disclosed in the Preliminary Prospectus and Prospectus (other than as
      disclosed therein), or that could reasonably be expected to result in a
      Fund Material Adverse Effect, or that could reasonably be expected to
      materially and adversely affect the properties or assets of the Fund or
      the consummation of the transactions contemplated in this Agreement or the
      performance by the Fund of its obligations under this Agreement or the
      Fund Agreements; the aggregate of all pending legal or governmental
      proceedings to which the Fund is a party or of which any of its property
      or assets is the subject which are not described in the Preliminary
      Prospectus or the Prospectus or to be filed as an exhibit to the
      Registration Statement that are not described or filed as required by the
      1933 Act, the 1940 Act or the Rules and Regulations, including ordinary
      routine litigation incidental to the business, could not reasonably be
      expected to result in a Fund Material Adverse Effect.

            (14) Accuracy of Descriptions and Exhibits. The statements set forth
      under the headings "Description of Capital Structure " in the Preliminary
      Prospectus and the Prospectus, and "Anti-Takeover Provisions in the
      Agreement and Declaration of Trust" and "Federal Income Tax Matters" in
      the Preliminary Prospectus, the Prospectus and Statement of Additional
      Information, insofar as such statements purport to summarize certain
      provisions of the 1940 Act, Massachusetts law, the common shares or the
      Fund's Declaration of Trust, United States federal income tax law and
      regulations or legal conclusions with respect thereto, fairly and
      accurately summarize such provisions in all material respects; all
      descriptions in the Registration Statement, the Preliminary Prospectus and
      the Prospectus of any Fund documents are accurate in all material
      respects; and there are no franchises, contracts, indentures, mortgages,
      deeds of trust, loan or credit agreements, bonds, notes, debentures,
      evidences of indebtedness, leases or other instruments or agreements
      required to be described or referred to in the Registration Statement, the
      Preliminary Prospectus or the Prospectus or to be filed as exhibits to the
      Registration Statement that are not described or filed as required by the
      1933 Act, the 1940 Act or the Rules and Regulations which have not been so
      described and filed as required.

            (15) Absence of Further Requirements. (A) No filing with, or
      authorization, approval, consent, license, order, registration,
      qualification or decree of, any court or governmental authority or agency,
      domestic or foreign, and (B) no authorization, approval, vote or other
      consent of any other person or entity, is necessary or required for the
      performance by the Fund of its obligations under this Agreement or the
      Fund

                                       6
<PAGE>

      Agreements, for the offering, issuance, sale or delivery of the Securities
      hereunder, or for the consummation of any of the other transactions
      contemplated by this Agreement or the Fund Agreements, in each case on the
      terms contemplated by the Registration Statement, the Preliminary
      Prospectus and the Prospectus, except such as have been already obtained
      and under the 1933 Act, the 1940 Act, the Rules and Regulations, the rules
      and regulations of the NASD and the NYSE and such as may be required under
      state securities laws.

            (16) Non-Contravention. Neither the execution, delivery or
      performance of this Agreement, the Fund Agreements nor the consummation by
      the Fund of the transactions herein or therein contemplated (i) conflicts
      or will conflict with or constitutes or will constitute a breach of the
      Declaration of Trust or bylaws of the Fund, (ii) conflicts or will
      conflict with or constitutes or will constitute a breach of or a default
      under, any agreement, indenture, lease or other instrument to which the
      Fund is a party or by which it or any of its properties may be bound or
      (iii) violates or will violate any statute, law, regulation or filing or
      judgment, injunction, order or decree applicable to the Fund or any of its
      properties or will result in the creation or imposition of any lien,
      charge or encumbrance upon any property or assets of the Fund pursuant to
      the terms of any agreement or instrument to which the Fund is a party or
      by which the Fund may be bound or to which any of the property or assets
      of the Fund is subject.

            (17) Possession of Licenses and Permits. The Fund has such licenses,
      permits, and authorizations of governmental or regulatory authorities
      ("permits"), if any, as are necessary to own its property and to conduct
      its business in the manner described in the Preliminary Prospectus and the
      Prospectus; the Fund has fulfilled and performed all its material
      obligations with respect to such permits and no event has occurred which
      allows or, after notice or lapse of time, would allow, revocation or
      termination thereof or results in any other material impairment of the
      rights of the Fund under any such permit, subject in each case to such
      qualification as may be set forth in the Preliminary Prospectus and the
      Prospectus; and, except as described in the Preliminary Prospectus and the
      Prospectus, none of such permits contains any restriction that is
      materially burdensome to the Fund.

            (18) Distribution of Offering Material. The Fund has not distributed
      and, prior to the later to occur of (i) the Closing Date and (ii)
      completion of the distribution of the Securities, will not distribute any
      offering material in connection with the offering and sale of the
      Securities other than the Registration Statement, the Preliminary
      Prospectus, the Prospectus, the sales material or other materials
      permitted by the Act, the 1940 Act or the Rules and Regulations.

            (19) Absence of Registration Rights. There are no persons with
      registration rights or other similar rights to have any securities (debt
      or equity) (A) registered pursuant to the Registration Statement or
      included in the offering contemplated by this Agreement or (B) otherwise
      registered by the Fund under the 1933 Act or the 1940 Act. There are no
      persons with tag-along rights or other similar rights to have any
      securities (debt or equity) included in the offering contemplated by this
      Agreement or sold in connection with the sale of Securities by the Fund
      pursuant to this Agreement.

                                       7
<PAGE>

            (20) NYSE. The Securities are duly listed and admitted and
      authorized for trading, subject to official notice of issuance and
      evidence of satisfactory distribution, on the NYSE.

            (21) NASD Matters. All of the information provided to the
      Underwriters or to counsel for the Underwriters by the Fund, its officers
      and Trustees in connection with letters, filings or other supplemental
      information provided to NASD Regulation Inc. pursuant to the NASD's
      conduct rules is true, complete and correct.

            (22) Tax Returns. The Fund has filed all tax returns that are
      required to be filed and has paid all taxes required to be paid by it and
      any other assessment, fine or penalty levied against it, to the extent
      that any of the foregoing is due and payable, except for any such tax,
      assessment, fine or penalty that is currently being contested in good
      faith by appropriate actions and except for such taxes, assessments, fines
      or penalties the nonpayment of which would not, individually or in the
      aggregate, have a Fund Material Adverse Effect.

            (23) Subchapter M. The Fund is currently in compliance with the
      requirements of Subchapter M of the Internal Revenue Code of 1986, as
      amended (the "Code") to qualify as a regulated investment company under
      the Code and intends to direct the investment of the net proceeds of the
      offering of the Securities in such a manner as to comply with the
      requirements of Subchapter M of the Code.

            (24) Insurance. The Fund's trustees and officers/errors and
      omissions insurance policy and its fidelity bond required by Rule 17g-1 of
      the 1940 Act Rules and Regulations are in full force and effect; the Fund
      is in compliance with the terms of such policy and fidelity bond in all
      material respects; and there are no claims by the Fund under any such
      policy or fidelity bond as to which any insurance company is denying
      liability or defending under a reservation of rights clause; the Fund has
      not been refused any insurance coverage sought or applied for; and the
      Fund has no reason to believe that it will not be able to renew its
      existing insurance coverage as and when such coverage expires or to obtain
      similar coverage from similar insurers as may be necessary to continue its
      business at a cost that would not have a Fund Material Adverse Effect,
      except as set forth in or contemplated in the Preliminary Prospectus and
      Prospectus (exclusive of any supplement thereto).

            (25) Accounting Controls and Disclosure Controls. The Fund maintains
      a system of internal accounting controls sufficient to provide reasonable
      assurances that (A) transactions are executed in accordance with
      management's general or specific authorizations and with the investment
      objectives, policies and restrictions of the Fund and the applicable
      requirements of the 1940 Act, the 1940 Act Rules and Regulations and the
      Code; (B) transactions are recorded as necessary to permit preparation of
      financial statements in conformity with GAAP and to maintain asset
      accountability to calculate net asset value and to maintain material
      compliance with the books and records requirements under the 1940 Act and
      the 1940 Act Rules and Regulations; (C) access to assets is permitted only
      in accordance with management's general or specific authorization; and (D)
      the recorded accountability for assets is compared with the existing
      assets at

                                       8
<PAGE>

      reasonable intervals and appropriate action is taken with respect to any
      differences. The Fund employs "disclosure controls and procedures" (as
      such term is defined in Rule 30a-3 under the 1940 Act); such disclosure
      controls and procedures are effective.

            (26) Compliance with the Sarbanes-Oxley Act. There is and has been
      no failure on the part of the Fund or any of the Fund's trustees or
      officers, in their capacities as such, to comply with any provision of the
      Sarbanes-Oxley Act and the rules and regulations promulgated in connection
      therewith, including Sections 302 and 906 related to certifications.

            (27) Fund Compliance Policies and Procedures. The Fund has adopted
      and implemented written policies and procedures reasonably designed to
      prevent violation of the Federal Securities Laws (as that term is defined
      in Rule 38a-1 under the 1940 Act) by the Fund, including policies and
      procedures that provide oversight of compliance for each investment
      adviser, administrator and transfer agent of the Fund.

            (28) Absence of Manipulation. The Fund has not taken and will not
      take, directly or indirectly, any action designed to or that would
      constitute or that might reasonably be expected to cause or result in the
      stabilization or manipulation of the price of any security issued by the
      Fund to facilitate the sale or resale of the Securities, and the Fund is
      not aware of any such action taken or to be taken by any affiliates of the
      Fund, other than such actions as taken by the Underwriters that are
      affiliates of the Fund, so long as such actions are in compliance with all
      applicable law.

            (29) Statistical, Demographic or Market-Related Data. Any
      statistical, demographic or market-related data included in the
      Registration Statement, the Preliminary Prospectus or the Prospectus is
      based on or derived from sources that the Fund believes to be reliable and
      accurate and all such data included in the Registration Statement, the
      Preliminary Prospectus or the Prospectus accurately reflects the materials
      upon which it is based or from which it was derived.

            (30) Advertisements. All advertising, sales literature or other
      promotional material (including "prospectus wrappers", "broker kits",
      "road show slides" and "road show scripts"), whether in printed or
      electronic form, authorized in writing by or prepared by or at the
      direction of the Fund or the Advisers for use in connection with the
      offering and sale of the Securities (collectively, "sales material")
      complied and comply in all material respects with the applicable
      requirements of the 1933 Act, the 1940 Act, the Rules and Regulations and
      the rules and interpretations of the NASD and if required to be filed with
      the NASD under the NASD's conduct rules were provided to Simpson Thacher &
      Bartlett LLP, counsel for the Underwriters, for filing. No sales material
      contained or contains an untrue statement of a material fact or omitted or
      omits to state a material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading.

      (b) Representations and Warranties by the Advisers. Each of the Adviser
and the Subadviser, severally as to itself only and not jointly or as to any
other party, represents and

                                       9
<PAGE>

warrants to each Underwriter as of the date hereof, as of the Applicable Time,
as of the Closing Date and as of each Option Closing Date (if any), and agrees
with each Underwriter, as follows:

            (1) Investment Adviser Status. Such Adviser is duly registered as an
      investment adviser under the Advisers Act and is not prohibited by the
      Advisers Act, the 1940 Act, the Advisers Act Rules and Regulations or the
      1940 Act Rules and Regulations from acting under the Advisory Agreement,
      the Administration Agreement, the Sub-Advisory Agreement, the Structuring
      Fee Agreement[s] [or the Additional Compensation Agreement] to which it is
      a party, as contemplated by the Preliminary Prospectus and the Prospectus.

            (2) Capitalization. Such Adviser has the financial resources
      available to it necessary for the performance of its services and
      obligations as contemplated in the Preliminary Prospectus and the
      Prospectus and under this Agreement, the Advisory Agreement, the
      Administration Agreement, the Sub-Advisory Agreement, the Structuring Fee
      Agreement[s] [or the Additional Compensation Agreement] to which it is a
      party.

            (3) No Material Adverse Change in Business. Since the respective
      dates as of which information is given in the Preliminary Prospectus and
      the Prospectus, except as otherwise stated therein, (A) there has been no
      Adviser Material Adverse Effect and (B) there have been no transactions
      entered into by such Adviser which are material with respect to such
      Adviser other than those in the ordinary course of its business as
      described in the Preliminary Prospectus and the Prospectus.

            (4) Legal Existence of the Adviser and the Sub-Adviser. Such Adviser
      has been duly formed and is validly existing in good standing under the
      laws of its state of formation, such Sub-Adviser has been duly
      incorporated and is validly existing in good standing under the laws of
      its state of organization, with full power and authority to own, lease and
      operate their properties and to conduct their business as described in the
      Registration Statement, the Preliminary Prospectus and the Prospectus, and
      is duly qualified to do business and are in good standing under the laws
      of each jurisdiction which requires such qualification.

            (5) Power and Authority. Such Adviser has full power and authority
      to enter into this Agreement, the Advisory Agreement, the Administration
      Agreement, the Sub-Advisory Agreement, the Structuring Fee Agreement[s]
      [and the Additional Compensation Agreement] to which such Adviser is a
      party; the execution and delivery of, and the performance by such Adviser
      of its obligations under this Agreement, the Advisory Agreement, the
      Sub-Advisory Agreement, the Structuring Fee Agreement[s] [and the
      Additional Compensation Agreement] to which it is a party have been duly
      executed and delivered by such Adviser constitute the valid and legally
      binding agreements of such Adviser, enforceable against such Adviser in
      accordance with their terms, except as rights to indemnity and
      contribution hereunder may be limited by federal or state securities laws
      and subject to the qualification that the enforceability of such Adviser's
      obligations hereunder and thereunder may be limited by bankruptcy,
      insolvency, reorganization, moratorium and other laws relating to or
      affecting creditors' rights generally and by general equitable principles.

                                       10
<PAGE>

            (6) Description of the Advisers. The description of such Adviser and
      its business and the statements attributable to such Adviser in the
      Preliminary Prospectus and Prospectus complied and comply in all material
      respects with the provisions of the 1933 Act, the 1940 Act, the Advisers
      Act, the 1940 Act Rules and Regulations and the Advisers Act Rules and
      Regulations and did not and will not contain an untrue statement of a
      material fact or omit to state a material fact necessary in order to make
      the statements therein, in light of the circumstances under which they
      were made, not misleading.

            (7) Non-Contravention. Neither the execution, delivery or
      performance of this Agreement, the Advisory Agreement, the Sub-Advisory
      Agreement, the Structuring Fee Agreement[s], [the Additional Compensation
      Agreement] to which such Adviser is a party nor the consummation by the
      Fund or such Adviser of the transactions herein or therein contemplated
      (i) conflicts or will conflict with or constitutes or will constitute a
      breach of the charter or bylaws of such Adviser, (ii) conflicts or will
      conflict with or constitutes or will constitute a breach of or a default
      under, any agreement, indenture, lease or other instrument to which such
      Adviser is a party or by which it or any of its properties may be bound or
      (iii) violates or will violate any statute, law, regulation or filing or
      judgment, injunction, order or decree applicable to such Adviser or any of
      its properties or will result in the creation or imposition of any
      material lien, charge or encumbrance upon any property or assets of such
      Adviser pursuant to the terms of any agreement or instrument to which such
      Adviser is a party or by which such Adviser may be bound or to which any
      of the property or assets of such Adviser is subject.

            (8) Agreements' Compliance with Laws. This Agreement, the Advisory
      Agreement, the Sub-Advisory Agreement, the Structuring Fee Agreement[s]
      [and the Additional Compensation Agreement] comply in all material
      respects with all applicable provisions of the 1940 Act, the 1940 Act
      Rules and Regulations, the Advisers Act, and the Advisers Act Rules and
      Regulations.

            (9) Absence of Proceedings. There is no action, suit, proceeding,
      inquiry or investigation before or brought by any court or governmental
      agency or body, domestic or foreign, now pending, or, to the knowledge of
      such Adviser, threatened, against or affecting such Adviser which is
      required to be disclosed in the Preliminary Prospectus and Prospectus
      (other than as disclosed therein), or that could reasonably be expected to
      result in an Adviser Material Adverse Effect, or that could reasonably be
      expected to materially and adversely affect the properties or assets
      thereof or the consummation of the transactions contemplated in this
      Agreement or the performance by such Adviser of its obligations under this
      Agreement, the Advisory Agreement, the Sub-Advisory Agreement, the
      Structuring Fee Agreement[s] [or the Additional Compensation Agreement] to
      which it is a party; the aggregate of all pending legal or governmental
      proceedings to which such Adviser is a party or of which any of its
      property or assets is the subject which are not described in the
      Preliminary Prospectus or the Prospectus, including ordinary routine
      litigation incidental to the business, could not reasonably be expected to
      result in an Adviser Material Adverse Effect.

            (10) Absence of Further Requirements. (A) No filing with, or
      authorization, approval, consent, license, order, registration,
      qualification or decree of, any court or

                                       11
<PAGE>

      governmental authority or agency, domestic or foreign, and (B) no
      authorization, approval, vote or other consent of any other person or
      entity, is necessary or required for the performance by such Adviser of
      its obligations under this Agreement, the Advisory Agreement, the
      Sub-Advisory Agreement, the Structuring Fee Agreement[s] [or the
      Additional Compensation Agreement], except such as have been already
      obtained under the 1933 Act, the 1940 Act, the Rules and Regulations, the
      rules and regulations of the NASD and the NYSE and such as may be required
      under state securities laws.

            (11) Possession of Permits. Such Adviser has such licenses, permits
      and authorizations of governmental or regulatory authorities ("permits"),
      if any, as are necessary to own its property and to conduct its business
      in the manner described in the Preliminary Prospectus and the Prospectus;
      such Adviser has fulfilled and performed all its material obligations with
      respect to such permits and no event has occurred which allows, or after
      notice or lapse of time would allow, revocation or termination thereof or
      results in any other material impairment of the rights of such Adviser
      under any such permit.

            (12) Adviser Compliance Policies and Procedures. Such Adviser has
      adopted and implemented written policies and procedures under Rule
      206(4)-7 of the Advisers Act reasonably designed to prevent violation of
      the Advisers Act and the Advisers Act Rules by such adviser.

            (13) Absence of Manipulation. Such Adviser has not taken and will
      not take, directly or indirectly, any action designed to or that would
      constitute or that might reasonably be expected to cause or result in the
      stabilization or manipulation of the price of any security issued by the
      Fund to facilitate the sale or resale of the Securities, and the Adviser
      is not aware of any such action taken or to be taken by any affiliates of
      the Adviser, other than such actions as taken by the Underwriters that are
      affiliates of the Adviser, so long as such actions are in compliance with
      all applicable law.

      (c) Certificates. Any certificate signed by any officer of the Fund or
such Adviser and delivered to the Representatives or to counsel for the
Underwriters shall be deemed a representation and warranty by the Fund or such
Adviser, as the case may be, to each Underwriter as to the matters covered
thereby.

      SECTION 2. Sale and Delivery to Underwriters; Closing.

      (a) Initial Securities. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Fund agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Fund, at a
purchase price of $____ per share, the amount of the Initial Securities set
forth opposite such Underwriter's name in Exhibit A hereto. The Fund is advised
that the Underwriters intend to (i) make a public offering of their respective
portions of the Securities as soon after the Applicable Time as is advisable and
(ii) initially to offer the Securities upon the terms set forth in the
Preliminary Prospectus and the Prospectus.

                                       12
<PAGE>

      (b) Option Securities. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Fund hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to _____ Option Securities at the same purchase price per share as the
Underwriters shall pay for the Initial Securities. Said option may be exercised
only to cover over-allotments in the sale of the Initial Securities by the
Underwriters. Said option may be exercised in whole or in part at any time and
from time to time on or before the 45th day after the date of the Prospectus
upon written or telegraphic notice by the Representatives to the Fund setting
forth the number of shares of the Option Securities as to which the several
Underwriters are exercising the option and the settlement date. The number of
Option Securities to be purchased by each Underwriter shall be the same
percentage of the total number of shares of the Option Securities to be
purchased by the several Underwriters as such Underwriter is purchasing of the
Initial Securities, subject to such adjustments as you in your absolute
discretion shall make to eliminate any fractional shares. Any such time and date
of delivery (an "Option Closing Date") shall be determined by the
Representatives, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Date, as
hereinafter defined.

      (c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Simpson
Thacher & Bartlett LLP, 425 Lexington Avenue, New York, New York 10017, or at
such other place as shall be agreed upon by the Representatives and the Fund, at
9:00 A.M. (Eastern time) on November __, 2006 (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten
business days after such date as shall be agreed upon by the Representatives and
the Fund (such time and date of payment and delivery being herein called
"Closing Date").

      In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Fund, on each Option Closing Date as specified in the notice from the
Representatives to the Fund.

      Delivery of the Securities shall be made to the Representatives for the
respective accounts of the several Underwriters against payment by the several
Underwriters through the Representatives of the purchase price thereof to or
upon the order of the Fund by Federal Funds wire transfer payable in same-day
funds to an account specified by the Fund. Delivery of the Initial Securities
and the Option Securities shall be made through the facilities of The Depository
Trust Company unless the Representatives shall otherwise instruct. Wachovia,
individually and not as Representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Initial Securities
or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Date or the relevant Option Closing Date,
as the case may be, but such payment shall not relieve such Underwriter from its
obligations hereunder.

                                       13
<PAGE>

      (d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Date or the relevant Option Closing Date, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than noon (Eastern time) on
the business day prior to the Closing Date or the relevant Option Closing Date,
as the case may be.

      SECTION 3. Covenants of the Fund and the Advisers. The Fund and the
Advisers, jointly and severally, covenant with each Underwriter as follows:

            (a) Compliance with Securities Regulations and Commission Requests.
      The Fund, subject to Section 3(a)(ii), will comply with the requirements
      of Rule 430A and will notify the Representatives immediately, and confirm
      the notice in writing, (i) when any post-effective amendment to the
      Registration Statement shall become effective, or any supplement to the
      Prospectus or any amended Prospectus shall have been filed, (ii) of the
      receipt of any comments from the Commission, (iii) of any request by the
      Commission for any amendment to the Registration Statement or any
      amendment or supplement to the Prospectus or for additional information,
      (iv) of the issuance by the Commission of any stop order suspending the
      effectiveness of the Registration Statement or of any order preventing or
      suspending the use of any preliminary prospectus, or of the suspension of
      the qualification of the Securities for offering or sale in any
      jurisdiction, or of the initiation or threatening of any proceedings for
      any of such purposes, or of any examination pursuant to Section 8(e) of
      the 1940 Act concerning the Registration Statement and (v) if the Fund
      becomes the subject of a proceeding under Section 8A of the 1933 Act in
      connection with the offering of the Securities. The Fund will uses its
      best efforts to prevent the issuance of any stop order or the suspension
      of any such qualification and, if issued, to obtain as soon as possible
      the withdrawal thereof.

            (b) Filing of Amendments. The Fund will give the Representatives
      notice of its intention to file or prepare any amendment to the
      Registration Statement (including any filing under Rule 462(b)) or any
      amendment, supplement or revision to either the prospectus included in the
      Registration Statement at the time it became effective or to the
      Prospectus, whether pursuant to the 1933 Act or otherwise, or will furnish
      the Representatives with copies of any such documents within a reasonable
      amount of time prior to such proposed filing or use, as the case may be,
      and will not file or use any such document to which the Representatives or
      counsel for the Underwriters shall object.

            (c) Delivery of Registration Statements. The Fund has furnished or
      will deliver to the Representatives and counsel for the Underwriters,
      without charge, signed copies of the Registration Statement as originally
      filed and of each amendment thereto (including exhibits filed therewith)
      and signed copies of all consents and certificates of experts. The copies
      of the Registration Statement and each amendment thereto furnished to the
      Underwriters will be identical to the electronically transmitted copies
      thereof filed with the Commission pursuant to EDGAR, except to the extent
      permitted by Regulation S-T.

                                       14
<PAGE>

            (d) Delivery of Prospectuses. The Fund has delivered to each
      Underwriter, without charge, as many copies of each preliminary prospectus
      prepared prior to the date of this Agreement as such Underwriter
      reasonably requested, and the Fund hereby consents to the use of such
      copies for purposes permitted by the 1933 Act. The Fund will furnish to
      each Underwriter, without charge, such number of copies of the documents
      constituting the General Disclosure Package prepared on or after the date
      of this Agreement and the Prospectus (and any amendments or supplements
      thereto) as such Underwriter may reasonably request. The Preliminary
      Prospectus and the Prospectus and any amendments or supplements thereto
      furnished to the Underwriters is or will be, as the case may be, identical
      to the electronically transmitted copies thereof filed with the Commission
      pursuant to EDGAR, except to the extent permitted by Regulation S-T.

            (e) Continued Compliance with Securities Laws. The Fund will comply
      with the 1933 Act, the 1940 Act and the Rules and Regulations so as to
      permit the completion of the distribution of the Securities as
      contemplated in this Agreement and in the Prospectus. If at any time when
      a prospectus is required by the 1933 Act to be delivered in connection
      with sales of the Securities (including, without limitation, pursuant to
      Rule 172), any event shall occur or condition shall exist as a result of
      which it is necessary, in the opinion of counsel for the Underwriters or
      for the Fund, to amend the Registration Statement or amend or supplement
      the Prospectus in order that the Prospectus will not include any untrue
      statement of a material fact or omit to state a material fact necessary in
      order to make the statements therein not misleading in the light of the
      circumstances existing at the time it is delivered to a purchaser, or if
      it shall be necessary, in the opinion of such counsel, at any such time to
      amend the Registration Statement or amend or supplement the Prospectus in
      order to comply with the requirements of the 1933 Act, the 1940 Act or the
      Rules and Regulations, the Fund will promptly prepare and file with the
      Commission, subject to Section 3(b) hereof, such amendment or supplement
      as may be necessary to correct such statement or omission or to make the
      Registration Statement or the Prospectus comply with such requirements,
      and the Fund will furnish to the Underwriters such number of copies of
      such amendment or supplement as the Underwriters may reasonably request.

            (f) Blue Sky Qualifications. The Fund will use its best efforts, in
      cooperation with the Underwriters, to qualify the Securities for offering
      and sale under the applicable securities laws of states of the United
      States, the District of Columbia, Guam, Puerto Rico and the U.S. Virgin
      Islands as the Representatives may designate and to maintain such
      qualifications in effect for a period of not less than one year from the
      date of this Agreement; provided, however, that the Fund shall not be
      obligated to file any general consent to service of process or to qualify
      as a foreign corporation or as a dealer in securities in any jurisdiction
      in which it is not so qualified or to subject itself to taxation in
      respect of doing business in any jurisdiction in which it is not otherwise
      so subject.

            (g) Rule 158. The Fund will timely file such reports pursuant to the
      1934 Act as are necessary in order to make generally available to its
      security holders as soon as practicable an earnings statement for the
      purposes of, and to provide to the Underwriters the benefits contemplated
      by, the last paragraph of Section 11(a) of the 1933 Act.

                                       15
<PAGE>

            (h) Use of Proceeds. The Fund will use the net proceeds received by
      it from the sale of the Securities in the manner specified in the
      Prospectus under "Use of Proceeds."

            (i) Reporting Requirements. The Fund, during the period when the
      Prospectus is required to be delivered under the 1933 Act, the 1940 Act or
      the Rules and Regulations, will file all documents required to be filed
      with the Commission pursuant to the 1933 Act, the 1940 Act or the Rules
      and Regulations within the time periods required by the 1934 Act, the 1940
      Act or the Rules and Regulations.

            (j) Subchapter M. The Fund will comply with the requirements of
      Subchapter M of the Code to qualify as a regulated investment company
      under the Code.

            (k) Absence of Manipulation. The Fund and the Advisers have not
      taken and will not take, directly or indirectly, any action designed to or
      that would constitute or that might reasonably be expected to cause or
      result in the stabilization or manipulation of the price of any security
      issued by the Fund to facilitate the sale or resale of the Securities, and
      the Fund and the Advisers are not aware of any such action taken or to be
      taken by any affiliates of the Fund or the Advisers, other than such
      actions as taken by the Underwriters that are affiliates of the Fund or
      the Advisers, so long as such actions are in compliance with all
      applicable law.

            (l) Restriction on Sale of Securities. The Fund will not, without
      the prior written consent of Wachovia Capital Markets, LLC, offer, sell,
      contract to sell, pledge, or otherwise dispose of, or enter into any
      transaction which is designed to, or might reasonably be expected to,
      result in the disposition (whether by actual disposition or effective
      economic disposition due to cash settlement or otherwise) by the Fund or
      any affiliate of the Fund or any person in privity with the Fund, directly
      or indirectly, including the filing (or participation in the filing) of a
      registration statement with the Commission in respect of, or establish or
      increase a put equivalent position or liquidate or decrease a call
      equivalent position within the meaning of Section 16 of the Exchange Act,
      any other Securities or any securities convertible into, or exercisable,
      or exchangeable for, Securities; or publicly announce an intention to
      effect any such transaction for a period of 180 days following the
      Execution Time, provided, however, that the Fund may issue and sell
      Securities pursuant to any dividend reinvestment plan of the Fund in
      effect at the Execution Time.

      SECTION 4. Payment of Expenses.

      (a) Expenses. The Fund will pay all expenses incident to the performance
of its obligations under this Agreement, including (i) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii) the word
processing, printing and delivery to the Underwriters of this Agreement, any
Agreement among Underwriters and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the
Securities, (iii) the preparation, issuance and delivery of the certificates for
the Securities to the Underwriters, including any stock or other transfer taxes
and any stamp or other duties payable

                                       16
<PAGE>

upon the sale, issuance or delivery of the Securities to the Underwriters, (iv)
the fees and disbursements of the counsel, accountants and other Advisers to the
Fund, (v) the qualification of the Securities under securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the reasonable fees and disbursements of counsel for the Underwriters in
connection therewith and in connection with the preparation of the Blue Sky
Survey and any supplements thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus, the documents
constituting the General Disclosure Package, the Prospectus and the 1940 Act
Notification, any sales material and any amendments or supplements thereto,
(vii) the preparation and delivery to the Underwriters of copies of the Blue Sky
Survey and any supplements thereto, (viii) the fees and expenses of the
custodian and the transfer agent and registrar for the Securities, (ix) the
filing fees incident to, and the reasonable fees and disbursements of counsel to
the Underwriters in connection with, the review by the NASD of the terms of the
sale of the Securities, (x) the transportation and other expenses incurred by
Fund and Adviser personnel in connection with presentations to prospective
purchasers of the Securities, (xi) the fees and expenses incurred in connection
with the listing of the Securities on the NYSE and (xii) all other costs and
expenses incident to the performance by the Fund of its obligations hereunder.
To the extent that the foregoing costs and expenses incidental to the
performance of the obligations of the Fund under this Agreement exceed $0.04 per
share, the Adviser will pay all such costs and expenses.

      (b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) or (v) hereof, the Fund and the Advisers, jointly and severally, agree
that they shall reimburse the Underwriters for all of their out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriters.

      SECTION 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase the Initial Securities and the Option Securities, as
the case may be, shall be subject to the accuracy of the representations and
warranties on the part of the Fund and the Advisers contained herein as of the
Applicable Time, the Closing Date and any Option Closing Date pursuant to
Section 4 hereof, to the accuracy of the statements of the Fund and the Advisers
made in any certificates pursuant to the provisions hereof, to the performance
by the Fund and the Advisers of their respective covenants and other obligations
hereunder and to the following additional conditions:

            (a) Effectiveness of Registration Statement. The Registration
      Statement, including any Rule 462(b) Registration Statement, has become
      effective and at the Closing Date (or the applicable Option Closing Date,
      as the case may be) no stop order suspending the effectiveness of the
      Registration Statement shall have been issued under the 1933 Act or any
      notice objecting to its use or order pursuant to Section 8(e) of the 1940
      Act shall have been issued and proceedings therefor initiated or, to the
      knowledge of the Fund, threatened by the Commission, and any request on
      the part of the Commission for additional information shall have been
      complied with to the reasonable satisfaction of counsel to the
      Underwriters. A prospectus containing the Rule 430A Information shall have
      been filed with the Commission in accordance with Rule 497 or a
      post-effective amendment providing such information shall have been filed
      and declared effective in accordance with the requirements of Rule 430A.

                                       17
<PAGE>

            (b) Opinion of Counsel for Fund. At the Closing Date, the
      Representatives shall have received the favorable opinion, dated as of the
      Closing Date, of Kirkpatrick & Lockhart Nicholson Graham LLP, counsel for
      the Fund ("Fund Counsel"), in form and substance satisfactory to counsel
      for the Underwriters, together with signed or reproduced copies of such
      letter for each of the other Underwriters, to the effect set forth in
      Exhibit B hereto and to such further effect as counsel to the Underwriters
      may reasonably request. The opinion of Fund Counsel shall state that
      Simpson Thacher & Bartlett LLP, counsel for the Underwriters, may rely on
      such opinion as to matters of Massachusetts law for the purposes of
      rendering its opinion referenced in Section 5(c).

            (c) Opinion of Counsel for Underwriters. At the Closing Date, the
      Representatives shall have received the favorable opinion, dated as of the
      Closing Date, of Simpson Thacher & Bartlett LLP, counsel for the
      Underwriters, together with signed or reproduced copies of such letter for
      each of the other Underwriters, in form and substance satisfactory to the
      Representatives. Insofar as the opinion expressed above relates to or is
      dependent upon matters governed by Massachusetts, Simpson Thacher &
      Bartlett LLP will be permitted to rely on the opinion of Fund Counsel.

            (d) Certificate of the Fund. At the Closing Date or the applicable
      Option Closing Date, as the case may be, there shall not have been, since
      the date hereof or since the respective dates as of which information is
      given in the Prospectus or the General Disclosure Package (exclusive of
      any amendments or supplements thereto subsequent to the date of this
      Agreement), any Fund Material Adverse Effect, and, at the Closing Date,
      the Representatives shall have received a certificate of the Chairman, the
      President, the Chief Executive Officer or an Executive Vice President,
      Senior Vice President, or such other authorized officer as is acceptable
      to the Underwriters, of the Fund and of the Chief Financial Officer or
      Chief Accounting Officer, or such other authorized officer as is
      acceptable to the Underwriters, of the Fund dated as of the Closing Date,
      to the effect that (i) there has been no such Fund Material Adverse
      Effect, (ii) the representations and warranties of the Fund in this
      Agreement are true and correct with the same force and effect as though
      expressly made at and as of the Closing Date, (iii) the Fund has complied
      with all agreements and satisfied all conditions on its part to be
      performed or satisfied at or prior to the Closing Date under or pursuant
      to this Agreement, and (iv) no stop order suspending the effectiveness of
      the Registration Statement or order of suspension or revocation of
      registration pursuant to Section 8(e) of the 1940 Act has been issued, and
      no proceedings for that purpose have been instituted or are pending or, to
      their knowledge, are contemplated by the Commission.

            (e) Opinion of Counsel for the Adviser. At the Closing Date, the
      Representatives shall have received the favorable opinion, dated as of the
      Closing Date, of Frederick S. Marius, counsel for the Adviser, in form and
      substance satisfactory to counsel for the Underwriters, together with
      signed or reproduced copies of such letter for each of the other
      Underwriters, to the effect set forth in Exhibit C hereto and to such
      further effect as counsel to the Underwriters may reasonably request.

            (f) Certificate of the Adviser. At the Closing Date or the
      applicable Option Closing Date, as the case may be, there shall not have
      been, since the date hereof or since

                                       18
<PAGE>

      the respective dates as of which information is given in the Prospectus or
      the General Disclosure Package (exclusive of any amendments or supplements
      thereto subsequent to the date of this Agreement), any Adviser Material
      Adverse Effect, and, at the Closing Date, the Representatives shall have
      received a certificate of the Chairman, the President, the Chief Executive
      Officer or an Executive Vice President, Senior Vice President, or such
      other authorized officer as is acceptable to the Underwriters, of such
      Adviser and of the Chief Financial Officer of Chief Accounting Officer, or
      such other authorized officer as is acceptable to the Underwriters, of
      such Adviser dated as of the Closing Date, to the effect that (i) there
      has been no such Adviser Material Adverse Effect, (ii) the representations
      and warranties of such Adviser in this Agreement are true and correct with
      the same force and effect as though expressly made at and as of the
      Closing Date, (iii) such Adviser has complied with all agreements and
      satisfied all conditions on its part to be performed or satisfied at or
      prior to the Closing Date under or pursuant to this Agreement, and (iv) no
      stop order suspending the effectiveness of the Registration Statement or
      order of suspension or revocation of registration pursuant to Section 8(e)
      of the 1940 Act has been issued and no proceedings for that purpose have
      been instituted or are pending or, to their knowledge, are contemplated by
      the Commission.

            (g) Opinion of Counsel for the Subadviser. At the Closing Date, the
      Representatives shall have received the favorable opinion, dated as of the
      Closing Date, of Kirkpatrick & Lockhart Nicholson Graham LLP, counsel for
      the Subadviser.

            (h) Certificate of the Subadviser. At the Closing Date or the
      applicable Option Closing Date, as the case may be, there shall not have
      been, since the date hereof or since the respective dates as of which
      information is given in the Prospectus or the General Disclosure Package
      (exclusive of any amendments or supplements thereto subsequent to the date
      of this Agreement), any Adviser Material Adverse Effect, and, at the
      Closing Date, the Representatives shall have received a certificate of the
      Chairman, the President, the Chief Executive Officer or an Executive Vice
      President, Senior Vice President, or such other authorized officer as is
      acceptable to the Underwriters, of the Subadviser and of the Chief
      Financial Officer of Chief Accounting Officer, or such other authorized
      officer as is acceptable to the Underwriters, of the Subadviser, dated as
      of the Closing Date, to the effect that (i) there has been no such Adviser
      Material Adverse Effect, (ii) the representations and warranties of such
      Subadviser in this Agreement are true and correct with the same force and
      effect as though expressly made at and as of the Closing Date, (iii) such
      Subadviser has complied with all agreements and satisfied all conditions
      on its part to be performed or satisfied at or prior to the Closing Date
      under or pursuant to this Agreement, and (iv) no stop order suspending the
      effectiveness of the Registration Statement or order of suspension or
      revocation of registration pursuant to Section 8(e) of the 1940 Act has
      been issued and no proceedings for that purpose have been instituted or
      are pending or, to such Subadviser's knowledge, are contemplated by the
      Commission.

            (i) Accountant's Comfort Letter. At the time of the execution of
      this Agreement, the Representatives shall have received from Deloitte &
      Touche LLP a letter, dated the date of this Agreement and in form and
      substance satisfactory to the Representatives, together with signed or
      reproduced copies of such letter for each of the

                                       19
<PAGE>

      other Underwriters, containing statements and information of the type
      ordinarily included in accountants' "comfort letters" to underwriters with
      respect to the financial statements and certain financial information of
      the Fund contained in the Registration Statement or the Prospectus.

            (j) Bring-down Comfort Letter. At the Closing Date, the
      Representatives shall have received from Deloitte & Touche LLP a letter,
      dated as of the Closing Date and in form and substance satisfactory to the
      Representatives, to the effect that they reaffirm the statements made in
      the letter furnished pursuant to subsection (e) of this Section, except
      that the specified date referred to shall be a date not more than three
      business days prior to the Closing Date.

            (k) No Objection. Prior to the date of this Agreement, NASD
      Regulation Inc. shall have confirmed that it has no objection with respect
      to the fairness and reasonableness of the underwriting terms and
      arrangements.

            (l) Conditions to Purchase of Option Securities. In the event that
      the Underwriters exercise their option provided in Section 2(b) hereof to
      purchase all or any portion of the Option Securities on any Option Closing
      Date that is after the Closing Date, the obligations of the several
      Underwriters to purchase the applicable Option Securities shall be subject
      to the conditions specified in the introductory paragraph of this Section
      5 and to the further condition that, at the applicable Option Closing
      Date, the Representatives shall have received:

                  (1) Officers' Certificate. A certificate, dated such Option
            Closing Date, to the effect set forth in, and signed by two of the
            officers specified in, Section 5(d) hereof, except that the
            references in such certificate to the Closing Date shall be changed
            to refer to such Option Closing Date.

                  (2) Opinion of Counsel for Fund. The favorable opinion of Fund
            Counsel in form and substance satisfactory to counsel for the
            Underwriters, dated such Option Closing Date, relating to the Option
            Securities to be purchased on such Option Closing Date and otherwise
            to the same effect as the opinion required by Section 5(b) hereof.

                  (3) Opinion of Counsel for Underwriters. The favorable opinion
            of Simpson Thacher & Bartlett LLP, counsel for the Underwriters,
            dated such Option Closing Date, relating to the Option Securities to
            be purchased on such Option Closing Date and otherwise to the same
            effect as the opinion required by Section 5(c) hereof.

                  (4) Opinion of Counsel for the Adviser. The favorable opinion
            of Frederick S. Marius, counsel for the Adviser, dated such Option
            Closing Date, relating to the Option Securities to be purchased on
            such Option Closing Date and otherwise to the same effect as the
            opinion required by Section 5(e) hereof.

                  (5) Certificate of the Adviser. A certificate, dated such
            Option Closing Date, to the effect set forth in, and signed by two
            of the officers specified

                                       20
<PAGE>

            in, Section 5(f) hereof, except that the references in such
            certificate to the Closing Date shall be changed to refer to such
            Option Closing Date.

                  (6) Opinion of Counsel for the Subadviser. The favorable
            opinion of Kirkpatrick & Lockhart Nicholson Graham LLP, counsel for
            the Subadviser, dated such Option Closing Date, relating to the
            Option Securities to be purchased on such Option Closing Date and
            otherwise to the same effect as the opinion required by Section 5(g)
            hereof.

                  (7) Certificate of the Subadviser. A certificate, dated such
            Option Closing Date, to the effect set forth in, and signed by two
            of the officers specified in, Section 5(h) hereof, except that the
            references in such certificate to the Closing Date shall be changed
            to refer to such Option Closing Date.

                  (8) Bring-down Comfort Letter. A letter from Deloitte & Touche
            LLP, in form and substance satisfactory to the Representatives and
            dated such Option Closing Date, substantially in the same form and
            substance as the letter furnished to the Representatives pursuant to
            Section 5(j) hereof, except that the "specified date" in the letter
            furnished pursuant to this paragraph shall be a date not more than
            five days prior to such Option Closing Date.

            (m) Additional Documents. At the Closing Date and at each Option
      Closing Date, counsel for the Underwriters shall have been furnished with
      such documents and opinions as they may require for the purpose of
      enabling them to pass upon the issuance and sale of the Securities as
      herein contemplated, or in order to evidence the accuracy of any of the
      representations or warranties, or the fulfillment of any of the
      conditions, contained in this Agreement; and all proceedings taken by the
      Fund and the Advisers in connection with the issuance and sale of the
      Securities as herein contemplated and in connection with the other
      transactions contemplated by this Agreement shall be satisfactory in form
      and substance to the Representatives and counsel for the Underwriters.

            (n) Delivery of Documents. The documents required to be delivered by
      this Section 5 shall be delivered at the office of Simpson Thacher &
      Bartlett LLP, counsel for the Underwriters, at 425 Lexington Avenue, New
      York, New York, 10017, on the Closing Date and at each Option Closing
      Date.

            (o) Termination of Agreement. If any condition specified in this
      Section 5 shall not have been fulfilled when and as required to be
      fulfilled, this Agreement, or, in the case of any condition to the
      purchase of Option Securities on an Option Closing Date which is after the
      Closing Date, the obligations of the several Underwriters to purchase the
      relevant Option Securities, may be terminated by the Representatives by
      notice to the Fund.

      SECTION 6. Indemnification.

      (a) Indemnification by the Fund and the Advisers. The Fund and the
Advisers, jointly and severally, agree to indemnify and hold harmless each
Underwriter and each person, if any,

                                       21
<PAGE>

who controls any Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:

            (i) against any and all loss, liability, claim, damage and expense
      whatsoever, as incurred, arising out of any untrue statement or alleged
      untrue statement of a material fact contained in the Registration
      Statement (or any amendment thereto), or the omission or alleged omission
      therefrom of a material fact required to be stated therein or necessary to
      make the statements therein not misleading, or arising out of any untrue
      statement or alleged untrue statement of a material fact included in any
      preliminary prospectus, any sales material, the Preliminary Prospectus or
      the Prospectus (or any amendment or supplement thereto), or the omission
      or alleged omission therefrom of a material fact necessary in order to
      make the statements therein, in the light of the circumstances under which
      they were made, not misleading;

            (ii) against any and all loss, liability, claim, damage and expense
      whatsoever, as incurred, to the extent of the aggregate amount paid in
      settlement of any litigation, or any investigation or proceeding by any
      governmental agency or body, commenced or threatened, or of any claim
      whatsoever based upon any such untrue statement or omission, or any such
      alleged untrue statement or omission; provided that (subject to Section
      6(e) below) any such settlement is effected with the written consent of
      the Fund and the Advisers; and

            (iii) against any and all expense whatsoever, as incurred (including
      the fees and disbursements of counsel chosen by Wachovia), reasonably
      incurred in investigating, preparing or defending against any litigation,
      or any investigation or proceeding by any governmental agency or body,
      commenced or threatened, or any claim whatsoever based upon any such
      untrue statement or omission, or any such alleged untrue statement or
      omission, to the extent that any such expense is not paid under (i) or
      (ii) above,

provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Fund or the
Advisers by any Underwriter through Wachovia expressly for use in the
Registration Statement (or any amendment thereto), or in any preliminary
prospectus, any sales material, the Preliminary Prospectus or the Prospectus (or
any amendment or supplement thereto).

      (b) Indemnification by the Underwriters. Each Underwriter severally agrees
to indemnify and hold harmless each of the Fund and the Advisers, each of their
directors, trustees, members, each of their officers who signed the Registration
Statement, and each person, if any, who controls the Fund or the Advisers within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section 6, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto), or any
preliminary prospectus, any sales material, the Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Fund or the

                                       22
<PAGE>

Advisers by such Underwriter through Wachovia expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary
prospectus, any sales material, the Preliminary Prospectus or the Prospectus (or
any amendment or supplement thereto). The Fund and the Advisers acknowledge that
the statements set forth in the last paragraph of the cover page regarding
delivery of the Securities and, under the heading "Underwriting", (i) the list
of Underwriters and their respective participation in the sale of the
Securities, (ii) the sentences related to concessions and reallowances and (iii)
the paragraph related to stabilization, syndicate covering transactions and
penalty bids in any Preliminary Prospectus and the Prospectus constitute the
only information furnished in writing by or on behalf of the several
Underwriters for inclusion in any Preliminary Prospectus or the Prospectus.

      (c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. Counsel to the indemnified parties shall be selected as follows:
counsel to the Underwriters and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall be selected by Wachovia; counsel to the Fund, its directors,
trustees, members, each of its officers who signed the Registration Statement
and each person, if any, who controls the Fund within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall be selected by the Fund; and
counsel to each Adviser and each person, if any, who controls such Adviser
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
shall be selected by such Adviser. An indemnifying party may participate at its
own expense in the defense of any such action; provided, however, that counsel
to the indemnifying party shall not (except with the consent of the indemnified
party) also be counsel to the indemnified party. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
the Underwriters and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, the
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for the Fund, each of their directors, trustees,
members, each of its officers who signed the Registration Statement and each
person, if any, who controls the Fund within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act, the fees and expenses of more than one
counsel (in addition to any local counsel) separate from their own counsel for
each of the Advisers, and the fees and expenses of more than one counsel, in
each case in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 6 or Section 7 hereof (whether or not the indemnified parties
are actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or claim and
(ii) does not include a statement as

                                       23
<PAGE>

to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.

      (d) Settlement Without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.

      (e) Other Agreements with Respect to Indemnification and Contribution. The
provisions of this Section 6 and in Section 7 hereof shall not affect any
agreements among the Fund and the Advisers with respect to indemnification of
each other or contribution between themselves.

      SECTION 7. Contribution. If the indemnification provided for in Section 6
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Fund and the
Advisers on the one hand and the Underwriters on the other hand from the
offering of the Securities pursuant to this Agreement or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Fund and the Advisers on the one
hand and of the Underwriters on the other hand in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.

      The relative benefits received by the Fund and the Advisers on the one
hand and the Underwriters on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Fund and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth on the cover of the Prospectus, bear to
the aggregate initial public offering price of the Securities as set forth on
such cover.

      The relative fault of the Fund and the Advisers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Fund, by the Advisers or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

                                       24
<PAGE>

      The Fund, the Advisers and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.

      Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.

      No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.

      For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each trustees, officer, employee and agent of an Underwriter
shall have the same rights to contributions as such Underwriters, and each
person who controls the Fund or the Adviser within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act, each officer of the Fund and the
Advisers and each trustee, director or member of the Fund and the Advisers shall
have the same rights to contribution as the Fund and the Advisers. The
Underwriters' respective obligations to contribute pursuant to this Section 7
are several in proportion to the number of Initial Securities set forth opposite
their respective names in Exhibit A hereto and not joint.

      SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Fund or signed by or on behalf of the Advisers
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or
controlling person, or by or on behalf of the Fund, or by or on behalf of the
Advisers, and shall survive delivery of the Securities to the Underwriters.

      SECTION 9. Termination of Agreement.

      (a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Fund or the Advisers, at any time on or prior to the
Closing Date (and, if any Option Securities are to be purchased on an Option
Closing Date which occurs after the Closing Date, the Representatives may
terminate the obligations of the several Underwriters to purchase such Option
Securities, by notice to the Fund, at any time on or prior to such Option
Closing Date) (i) if there has been, since the time of execution of this
Agreement or since the respective dates as of which information is given in the
Prospectus or the General Disclosure Package, any Fund

                                       25
<PAGE>

Material Adverse Effect or Adviser Material Adverse Effect, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States, or the international financial markets, any outbreak of hostilities or
escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial
or economic conditions, in each case the effect of which is such as to make it,
in the judgment of the Representatives, impracticable or inadvisable to market
the Securities or to enforce contracts for the sale of the Securities, or (iii)
if trading in any securities of the Fund has been suspended or materially
limited by the Commission or the NYSE, or if trading generally on the NYSE or in
the Nasdaq National Market has been suspended or materially limited, or minimum
or maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the NASD or any other governmental authority, or a material
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or (iv) if a banking moratorium has been
declared by either Federal or New York authorities.

      (b) Liabilities. If this Agreement is terminated pursuant to this Section
9, such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7, 8, and 12 hereof shall survive such termination and remain in full force and
effect.

      SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Date or an Option Closing Date to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:

            (a) if the number of Defaulted Securities does not exceed 10% of the
      number of Securities to be purchased on such date, each of the
      non-defaulting Underwriters shall be obligated, severally and not jointly,
      to purchase the full amount thereof in the proportions that their
      respective underwriting obligations hereunder bear to the underwriting
      obligations of all non-defaulting Underwriters; or

            (b) if the number of Defaulted Securities exceeds 10% of the number
      of Securities to be purchased on such date, this Agreement or, with
      respect to any Option Closing Date which occurs after the Closing Date,
      the obligation of the Underwriters to purchase and of the Fund to sell the
      Option Securities that were to have been purchased and sold on such Option
      Closing Date, shall terminate without liability on the part of any
      non-defaulting Underwriter.

      No action taken pursuant to this Section 10 shall relieve any defaulting
Underwriter from liability in respect of its default.

      In the event of any such default which does not result in a termination of
this Agreement or, in the case of an Option Closing Date which is after the
Closing Date, which does not result

                                       26
<PAGE>

in a termination of the obligation of the Underwriters to purchase and the Fund
to sell the relevant Option Securities, as the case may be, the Representatives
shall have the right to postpone the Closing Date or the relevant Option Closing
Date, as the case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.

      SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at Wachovia Capital
Markets, LLC, 375 Park Avenue, New York, New York 10152 Attention: Equity
Syndicate; notices to the Fund and the Adviser shall be directed to them at 225
State Street, Boston, Massachusetts 02109, Attention: Alan R. Dynner, Esq., with
a copy to Kirkpatrick & Lockhart Nicholson Graham LLP, One Lincoln Street,
Boston, Massachusetts 02111, Attention: Mark P. Goshko, Esq.; notices to the
Subadviser shall be directed to it at Rampart Investment Management Company,
Inc., One International Place, 14th Floor, Boston, Massachusetts 02110,
Attention: Ronald Egalka, Esq..

      SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Fund and the Advisers and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Fund and the Advisers and their respective successors and the
controlling persons and directors, officers, members and trustees referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Fund and the Advisers and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Securities from any Underwriter shall be deemed to be a successor
by reason merely of such purchase.

      SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

      SECTION 14. Effect of Headings. The Section and Exhibit headings herein
are for convenience only and shall not affect the construction hereof.

      SECTION 15. Definitions. As used in this Agreement, the following terms
have the respective meanings set forth below:

      "Advisers Act" means the Investment Advisers Act of 1940, as amended.

      "Advisers Act Rules and Regulations" means the rules and regulations of
the Commission under the Advisers Act.

                                       27
<PAGE>

      "Adviser Material Adverse Effect" means a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Adviser or the Subadviser, as the case may be, whether
or not arising in the ordinary course of business.

      "Agreement and Declaration of Trust" means the Declaration of Trust of
Eaton Vance Tax-Managed Dividend and Premium Income Fund dated as of November 9,
2005.

      "Applicable Time" means the date and time that this Agreement is executed
and delivered by the parties hereto.

      "Commission" means the Securities and Exchange Commission.

      "EDGAR" means the Commission's Electronic Data Gathering, Analysis and
Retrieval System.

      "Fund Material Adverse Effect" means a material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Fund, whether or not arising in the ordinary course of
business.

      "GAAP" means generally accepted accounting principles.

      "Initial Registration Statement" means the Fund's registration statement
(File Nos. 333-129692 and 811-21832) on Form N-2 (including the statement of
additional information incorporated by reference therein), as amended (if
applicable), at the time it became effective, including the Rule 430A
Information.

      "NASD" means the National Association of Securities Dealers, Inc.

      "NYSE" means the New York Stock Exchange.

      "Organizational Documents" means (a) in the case of a corporation, its
charter and bylaws; (b) in the case of a limited or general partnership, its
partnership certificate, certificate of formation or similar organizational
document and its partnership agreement; (c) in the case of a corporation, its
articles of organization, certificate of formation or similar organizational
documents and its operating agreement, corporation agreement, membership
agreement or other similar agreement; (d) in the case of a trust, its agreement
and declaration of trust, certificate of trust, certificate of formation or
similar organizational document and its trust agreement or other similar
agreement; and (e) in the case of any other entity, the organizational and
governing documents of such entity.

      "preliminary prospectus" means any prospectus (including the statement of
additional information incorporated by reference therein) used in connection
with the offering of the Securities that was used before the Initial
Registration Statement became effective, or that was used after such
effectiveness and prior to the execution and delivery of this Agreement, or that
omitted the Rule 430A Information or that was captioned "Subject to Completion".

      "Preliminary Prospectus" shall mean the preliminary prospectus (including
the statement of additional information incorporated by reference therein) dated
November__, 2006 and any

                                       28
<PAGE>

preliminary prospectus (including the statement of additional information
incorporated by reference therein) included in the Registration Statement at the
Applicable Time that omits Rule 430A Information.

      "Prospectus" shall mean the prospectus (including the statement of
additional information incorporated by reference therein) relating to the
Securities that is first filed pursuant to Rule 497 after the Applicable Time.

      "Registration Statement" means the Initial Registration Statement;
provided that, if a Rule 462(b) Registration Statement is filed with the
Commission, then the term "Registration Statement" shall also include such Rule
462(b) Registration Statement.

      "Rule 172," "Rule 497," "Rule 430A," "Rule 433" and "Rule 462(b)" refer to
such rules under the 1933 Act.

      "Rule 430A Information" means the information included in the Prospectus
that was omitted from the Initial Registration Statement at the time it became
effective but that is deemed to be a part of the Initial Registration Statement
at the time it became effective pursuant to Rule 430A.

      "Rule 462(b) Registration Statement" means a registration statement filed
by the Fund pursuant to Rule 462(b) for the purpose of registering any of the
Securities under the 1933 Act, including the Rule 430A Information.

      "Rules and Regulations" means, collectively, the 1933 Act Rules and
Regulations and the 1940 Act Rules and Regulations.

      "Sarbanes-Oxley Act" means the Sarbanes-Oxley Act of 2002 and the rules
and regulations promulgated thereunder or implementing the provisions thereof.

      "1933 Act" means the Securities Act of 1933, as amended.

      "1933 Act Rules and Regulations" means the rules and regulations of the
Commission under the 1933 Act.

      "1934 Act" means the Securities Exchange Act of 1934, as amended.

      "1934 Act Rules and Regulations" means the rules and regulations of the
Commission under the 1934 Act.

      "1940 Act" means the Investment Company Act of 1940, as amended.

      "1940 Act Notification" means a notification of registration of the Fund
as an investment company under the 1940 Act on Form N-8A, as the 1940 Act
Notification may be amended from time to time.

      "1940 Act Rules and Regulations" means the rules and regulations of the
Commission under the 1940 Act.

                                       29
<PAGE>

      All references in this Agreement to the Registration Statement, the
Initial Registration Statement, any Rule 462(b) Registration Statement, any
preliminary prospectus, the Preliminary Prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to EDGAR.

      SECTION 16. Absence of Fiduciary Relationship. Each of the Fund and the
Advisers acknowledges and agrees that:

      (a) Each of the Underwriters is acting solely as an underwriter in
connection with the public offering of the Securities and no fiduciary, advisory
or agency relationship between the Fund or the Advisers, on the one hand, and
any of the Underwriters, on the other hand, has been or will be created in
respect of any of the transactions contemplated by this Agreement, irrespective
of whether or not any of the Underwriters have advised or is advising the Fund
or the Advisers on other matters and none of the Underwriters has any obligation
to the Fund or the Advisers with respect to the transactions contemplated by
this Agreement except the obligations expressly set forth in this Agreement;

      (b) the public offering price of the Securities and the price to be paid
by the Underwriters for the Securities set forth in this Agreement were
established by the Fund following discussions and arms-length negotiations with
the Representatives;

      (c) it is capable of evaluating and understanding, and understands and
accepts, the terms, risks and conditions of the transactions contemplated by
this Agreement;

      (d) in connection with each transaction contemplated by this Agreement and
the process leading to such transactions, each Underwriter is and has been
acting solely as principal and not as fiduciary, Adviser or agent of the Fund or
the Advisers or any of their respective affiliates;

      (e) none of the Underwriters has provided any legal, accounting,
regulatory or tax advice to the Fund or the Advisers with respect to the
transactions contemplated by this Agreement and it has consulted its own legal,
accounting, regulatory and tax advisers to the extent it has deemed appropriate;

      (f) it is aware that the Underwriters and their respective affiliates are
engaged in a broad range of transactions which may involve interests that differ
from those of the Fund and the Advisers, and that none of the Underwriters has
any obligation to disclose such interests and transactions to the Fund or the
Advisers by virtue of any fiduciary, Advisory or agency relationship; and

      (g) in connection with each transaction contemplated by this Agreement and
the process leading to such transactions, it waives, to the fullest extent
permitted by law, any claims it may have against any of the Underwriters for
breach of fiduciary duty or alleged breach of fiduciary duty and agrees that
none of the Underwriters shall have any liability (whether direct or indirect,
in contract, tort or otherwise) to it in respect of such a fiduciary duty claim
or to any person asserting a fiduciary duty claim on its behalf or on behalf of
the Fund or the Advisers.

                                       30
<PAGE>

      SECTION 17. Disclaimer of Liability of Trustees and Beneficiaries. A copy
of the Agreement and Declaration of Trust of each of the Fund and the Adviser is
on file with the Secretary of State of The Commonwealth of Massachusetts, and
notice hereby is given that this Underwriting Agreement is executed on behalf of
the Fund and the Adviser, respectively, by an officer or Trustee of the Fund or
the Adviser, as the case may be, in his or her capacity as an officer or Trustee
of the Fund or the Adviser, as the case may be, and not individually and that
the obligations under or arising out of this Underwriting Agreement are not
binding upon any of the Trustees, officers or shareholders individually but are
binding only upon the assets and properties of the Fund or the Adviser, as the
case may be.

                            [SIGNATURE PAGE FOLLOWS]

                                       31
<PAGE>

         If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Fund and the Advisers a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, the Fund and the Advisers in
accordance with its terms.

                                        Very truly yours,

                                        EATON VANCE TAX-MANAGED PREMIUM DIVIDEND
                                        & INCOME FUND

                                        By
                                          --------------------------------------
                                             Name:
                                             Title:


                                        EATON VANCE MANAGEMENT

                                        By
                                          --------------------------------------
                                             Name:
                                             Title:


                                        RAMPART INVESTMENT MANAGEMENT COMPANY,
                                        INC.

                                        By
                                          --------------------------------------
                                             Name:
                                             Title:

                                       32
<PAGE>

CONFIRMED AND ACCEPTED, as of the
  date first above written:

WACHOVIA CAPITAL MARKETS, LLC
[CO-MANAGERS]

By: WACHOVIA CAPITAL MARKETS, LLC

By
  --------------------------------------
          Authorized Signatory

For themselves and as Representatives of the Underwriters named in Exhibit A
hereto.

                                       33
<PAGE>

                                   EXHIBIT A
<Table>
<Caption>
                                                           Number of Initial
                   Name of Underwriter                        Securities
                   -------------------                        ----------
<S>                                                        <C>
Wachovia Capital Markets, LLC............................
[OTHER UNDERWRITERS].....................................
                                                           ------------------
Total....................................................
                                                           ==================
</Table>

                                      A-1

<PAGE>

                                    EXHIBIT B

                         FORM OF OPINION OF FUND COUNSEL

                  (a) The Fund has been duly created and is validly existing a
            voluntary association with transferable shares established and
            existing under the laws of the Commonwealth of Massachusetts, with
            full power and authority to own, lease and operate its properties
            and to conduct its business as described in the Preliminary
            Prospectus and the Prospectus, and to enter into and perform its
            obligations under this Agreement and the Fund Agreements; and the
            Fund is duly qualified to do business as a foreign trust.

                  (b) The Fund has full power and authority to enter into the
            Underwriting Agreement and the Fund Agreements; the execution and
            delivery of, and the performance by the Fund of its obligations
            under the Underwriting Agreement and the Fund Agreements have been
            duly and validly authorized by the Fund; the Sub-Advisory Agreement
            has been duly and validly authorized by the Fund; the Underwriting
            Agreement and the Fund Agreements have been duly executed and
            delivered by the Fund and constitute the valid and legally binding
            agreements of the Fund, enforceable against the Fund in accordance
            with their terms, except as rights to indemnity and contribution
            hereunder may be limited by federal or state securities laws and
            subject to the qualification that the enforceability of the Fund's
            obligations hereunder and thereunder may be limited by bankruptcy,
            insolvency, reorganization, moratorium and other laws relating to or
            affecting creditors' rights generally and by general equitable
            principles.

                  (c) Each of the Fund Agreements constitutes the valid and
            binding obligation of the Fund enforceable against the Fund in
            accordance with its terms, except as rights to indemnity and
            contribution in the Fund Agreements may be limited by federal or
            state securities laws or principles of public policy and subject to
            the qualification that the enforceability of the Fund's obligations
            thereunder may be limited by bankruptcy, fraudulent conveyance,
            insolvency, reorganization, moratorium, and other laws relating to
            or affecting creditors' rights generally and by general principles
            of equity.

                  (d) The execution and delivery by the Fund of the Underwriting
            Agreement, each of the Fund Agreements and the performance by the
            Fund of its obligations under the Underwriting Agreement, each of
            the Fund Agreements, each in accordance with its terms, do not and
            will not (i) conflict with the Declaration of Trust or bylaws of the
            Fund, (ii) constitute a violation of, or a default under, any
            applicable contract, indenture, lease or other instrument to which
            the Fund is a party or by which it or any of its properties may be
            bound or (iii) violate any statute, law, regulation or filing or
            judgment, injunction, order or decree applicable to the Fund or any
            of its properties or cause the creation of any security interest or
            lien upon any of the property of the Fund pursuant to any applicable
            contract.

                                      B-1
<PAGE>

                  (e) (A) No filing with, or authorization, approval, consent,
            license, order, registration, qualification or decree of, any court
            or governmental authority or agency, domestic or foreign, and (B) no
            authorization, approval, vote or other consent of any other person
            or entity, is necessary or required for the performance by the Fund
            of its obligations under the Underwriting Agreement or the Fund
            Agreements, for the offering, issuance, sale or delivery of the
            Securities hereunder, or for the consummation of any of the other
            transactions contemplated by the Underwriting Agreement or the Fund
            Agreements, in each case on the terms contemplated by the
            Registration Statement, the Preliminary Prospectus and the
            Prospectus, except such as have been already obtained and under the
            1933 Act, the 1940 Act, the Rules and Regulations, the rules and
            regulations of the NASD and the NYSE and such as may be required
            under state securities laws.

                  (f) Neither the execution, delivery or performance of the
            Underwriting Agreement, the Fund Agreements nor the consummation by
            the Fund of the transactions herein or therein contemplated (i)
            conflicts or will conflict with or constitutes or will constitute a
            breach of the Declaration of Trust or bylaws of the Fund, (ii)
            conflicts or will conflict with or constitutes or will constitute a
            breach of or a default under, any agreement, indenture, lease or
            other instrument to which the Fund is a party or by which it or any
            of its properties may be bound or (iii) violates or will violate any
            statute, law, regulation or filing or judgment, injunction, order or
            decree applicable to the Fund or any of its properties or will
            result in the creation or imposition of any lien, charge or
            encumbrance upon any property or assets of the Fund pursuant to the
            terms of any agreement or instrument to which the Fund is a party or
            by which the Fund may be bound or to which any of the property or
            assets of the Fund is subject.

                  (g) No governmental approval, which has not been obtained or
            taken and is not in full force and effect, is required to authorize,
            or is required in connection with, the execution and delivery of the
            Underwriting Agreement, any of the Fund Agreements or the
            enforceability of any of the Fund Agreements against the Fund.

                  (h) Neither the execution, delivery nor performance by the
            Fund of its obligations under the Underwriting Agreement, the Fund
            Agreements nor compliance by the Fund with the terms and provisions
            thereof will contravene any applicable order.

                  (i) The Fund is registered with the Commission pursuant to
            Section 8 of the 1940 Act as a diversified, closed-end management
            investment company; and the Fund has not received any notice from
            the Commission with respect to the 1940 Act Notification or the
            Registration Statement; and the Fund's Declaration of Trust and
            bylaws comply in all material respects with the 1940 Act and the
            1940 Act Rules and Regulations.

                  (j) The Fund has an authorized, issued and outstanding
            capitalization as set forth in the Preliminary Prospectus and the
            Prospectus (without giving

                                      B-2
<PAGE>

            effect to the issuance and sale of the Securities to the
            Underwriters pursuant to the Underwriting Agreement) and the
            authorized capitalization of the Fund conforms to the description
            thereof contained in the Registration Statement, the Preliminary
            Prospectus and the Prospectus; all of the outstanding common shares
            of beneficial interest have been duly authorized and validly issued,
            and are fully paid and non-assessable, except that, as set forth in
            the Registration Statement and the Prospectus, shareholders of a
            Massachusetts business trust may under certain circumstances be held
            personally liable for its obligations and have been offered and sold
            or exchanged by the Fund in compliance with all applicable laws
            (including, without limitation, federal and state securities laws);
            the Securities have been duly authorized by all necessary action of
            the Fund under Massachusetts law and, when issued to and paid for by
            the Underwriters in accordance with the Underwriting Agreement, will
            be validly issued, fully paid and non-assessable except that, as set
            forth in the Registration Statement and the Prospectus, shareholders
            of a Massachusetts business trust may under certain circumstances be
            held personally liable for its obligations and have been offered and
            sold or exchanged by the Fund in compliance with all applicable laws
            (including, without limitation, federal and state securities laws)
            representing undivided beneficial ownership interests in the assets
            of the Fund; the form of certificate that may be used to evidence
            the common shares of beneficial interest complies in all material
            respects with the applicable requirements of the Fund's Declaration
            of Trust, the bylaws, the laws of the Commonwealth of Massachusetts
            and the rules of the NYSE, in each case as in effect on the date
            hereof.

                  (k) No holders of outstanding common shares of beneficial
            interest are entitled as such to any preemptive or other rights to
            subscribe for any common shares of beneficial interest under any
            applicable contract, under the Fund's Declaration of Trust or the
            bylaws or under laws of the Commonwealth of Massachusetts.

                  (l) The statements set forth under the headings "Description
            of Capital Structure" in the Preliminary Prospectus and the
            Prospectus, "Anti-Takeover Provisions in the Agreement and
            Declaration of Trust" and "Federal Income Tax Matters" in the
            Preliminary Prospectus, the Prospectus and Statement of Additional
            Information, insofar as such statements purport to summarize certain
            provisions of the 1940 Act, laws of the Commonwealth of
            Massachusetts, the common shares of beneficial interest or the
            Fund's Declaration of Trust, United States federal income tax law
            and regulations or legal conclusions with respect thereto, fairly
            and accurately summarize such provisions in all material respects.

                  (m) To counsel's knowledge there are no legal or governmental
            proceedings pending or threatened to which the Fund is a party that
            are required to be described in the Registration Statement, the
            Preliminary Prospectus or the Prospectus and are not so described
            therein, and no contract, indenture, lease, agreement or other
            document is required to be described in the Registration

                                      B-3
<PAGE>

            Statement, the Preliminary Prospectus or Prospectus or to be filed
            as an exhibit to the Registration Statement that is not described
            therein or filed as required.

                  (n) Such counsel has been orally advised that the Registration
            Statement has become effective under the 1933 Act and, to the best
            knowledge of such counsel after reasonable inquiry, no stop order
            suspending the effectiveness of the Registration Statement or order
            pursuant to Section 8(e) of the 1940 Act has been issued and no
            proceedings for that purpose are pending before or contemplated by
            the Commission. The filing of the Preliminary Prospectus or the
            Prospectus pursuant to Rule 497 under the Act Rules and Regulations
            has been made in the manner and within the time period required by
            Rule 497(h) of the Act Rules and Regulations.

                  (o) The Registration Statement, the Preliminary Prospectus and
            the Prospectus and the 1940 Act Notification (in each case, other
            than the financial statements and the other financial and/or
            statistical information contained therein or incorporated therein by
            reference and other than any exhibits, schedules or appendices
            included or incorporated by reference therein, as to which such
            counsel expresses no opinion) appear on their face to be
            appropriately responsive in all material respects with the
            applicable requirements of the Act, the Act Rules and Regulations,
            the 1940 Act and the 1940 Act Rules and Regulations.

      Nothing has come to such counsel's attention that would lead it to believe
that:

            (1) the Registration Statement, at the time it became effective,
      contained an untrue statement of a material fact or omitted to state a
      material fact required to be stated therein or necessary to make the
      statements therein not misleading, or

            (2) the Preliminary Prospectus, as of the Applicable Time, contained
      an untrue statement of a material fact or omitted to state a material fact
      required to be stated therein or necessary to make the statements therein,
      in the light of circumstances under which they were made, not misleading,
      or

            (3) the Prospectus, as of its date and as of the Closing Date,
      contained or contains an untrue statement of a material fact or omitted or
      omits to state a material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading (in each case, other than the financial statements and other
      financial and statistical information contained therein, as to which such
      counsel need express no opinion).

      In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York, the Commonwealth of Massachusetts, the Federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriters and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Fund and public officials. References to the Preliminary Prospectus or the
Prospectus shall also include any supplements thereto at the Closing Date.

                                      B-4
<PAGE>
                                    EXHIBIT C

                      FORM OF OPINION OF ADVISER'S COUNSEL

            (a) The Adviser has been duly formed and is validly existing in good
      standing under the laws of its state of formation, with full power and
      authority to own, lease and operate its properties and to conduct its
      business as described in the Registration Statement, the Preliminary
      Prospectus and the Prospectus, and is duly qualified to do business and is
      in good standing under the laws of each jurisdiction which requires such
      qualification.

                  (b) The Adviser is duly registered with the Commission as an
            investment adviser under the Advisers Act, and is not prohibited by
            the Advisers Act, the 1940 Act or the Advisers Act Rules and
            Regulations or the 1940 Act Rules and Regulations from acting under
            the Advisory Agreement, the Sub-Advisory Agreement, the Structuring
            Fee Agreement[s] or [the Additional Compensation Agreement] and, to
            the best of such counsel's knowledge after reasonable inquiry, there
            does not exist any proceeding which should reasonably be expected to
            adversely affect the registration of the Adviser with the
            Commission;

                  (c) The Adviser has full power and authority to enter into the
            Underwriting Agreement, the Advisory Agreement, the Administration
            Agreement, the Sub-Advisory Agreement, the Structuring Fee
            Agreement[s] [and the Additional Compensation Agreement]; the
            execution and delivery of, and the performance by such Adviser of
            its obligations under the Underwriting Agreement, the Advisory
            Agreement, the Sub-Advisory Agreement, the Structuring Fee
            Agreement[s] [and the Additional Compensation Agreement] have been
            duly executed and delivered by such Adviser constitute the valid and
            legally binding agreements of such Adviser, enforceable against such
            Adviser in accordance with their terms, except as rights to
            indemnity and contribution hereunder may be limited by federal or
            state securities laws and subject to the qualification that the
            enforceability of such Adviser's obligations hereunder and
            thereunder may be limited by bankruptcy, insolvency, reorganization,
            moratorium and other laws relating to or affecting creditors' rights
            generally and by general equitable principles.

                  (d) Each of the Advisory Agreement and the Sub-Advisory
            Agreement complies in all material respects with all applicable
            provisions of the Advisers Act, the 1940 Act and the Advisers Act
            Rules and Regulations and the 1940 Act Rules and Regulations;

                  (e) Neither the execution, delivery or performance of the
            Underwriting Agreement, the Advisory Agreement, the Sub-Advisory
            Agreement, the Structuring Fee Agreement[s], [the Additional
            Compensation Agreement] to


                                       C-1
<PAGE>
            which such Adviser is a party nor the consummation by such Adviser
            of the transactions therein contemplated (i) conflicts or will
            conflict with or constitutes or will constitute a breach of the
            charter or bylaws of such Adviser, (ii) conflicts or will conflict
            with or constitutes or will constitute a breach of or a default
            under, any agreement, indenture, lease or other instrument to which
            such Adviser is a party or by which it or any of its properties may
            be bound or (iii) violates or will violate any statute, law,
            regulation or filing or judgment, injunction, order or decree
            applicable to such Adviser or any of its properties or will result
            in the creation or imposition of any material lien, charge or
            encumbrance upon any property or assets of such Adviser pursuant to
            the terms of any agreement or instrument to which such Adviser is a
            party or by which such Adviser may be bound or to which any of the
            property or assets of such Adviser is subject;

                  (f) The description of the Adviser and its business in the
            Preliminary Prospectus and the Prospectus complies in all material
            respects with all requirements of the Act, the 1940 Act and the
            Rules and Regulations.

                  (g) (A) No filing with, or authorization, approval, consent,
            license, order, registration, qualification or decree of, any court
            or governmental authority or agency, domestic or foreign, and (B) no
            authorization, approval, vote or other consent of any other person
            or entity, is necessary or required for the performance by such
            Adviser of its obligations under the Underwriting Agreement, the
            Advisory Agreement, the Sub-Advisory Agreement, the Structuring Fee
            Agreement[s] [or the Additional Compensation Agreement], except such
            as have been already obtained under the 1933 Act, the 1940 Act, the
            Rules and Regulations, the rules and regulations of the NASD and the
            NYSE and such as may be required under state securities laws.

                  (h) To the best of such counsel's knowledge after reasonable
            inquiry, there is not pending or, to the best of such counsel's
            knowledge, after due inquiry, threatened any action, suit,
            proceeding, inquiry or investigation, to which the Adviser is a
            party, or to which the property of the Adviser is subject, before or
            brought by any court or governmental body, domestic or foreign,
            which might reasonably be expected to result in any Material Adverse
            Effect, materially and adversely affect the properties or assets of
            the Adviser or materially impair or adversely affect the ability of
            the Adviser to function as an investment adviser or perform its
            obligations under the Advisory Agreement or the Sub-Advisory
            Agreement, or which is required to be disclosed in the Registration
            Statement, the Preliminary Prospectus and the Prospectus but are not
            disclosed as required;

                  (i) To the best of such counsel's knowledge, after due
            inquiry, there are no franchises, contracts, indentures, mortgages,
            loan agreements, notes, leases or other instruments required to be
            described or referred to in the Registration Statement, or to be
            filed as exhibits thereto, other than those described or referred to
            therein or filed or incorporated by reference as exhibits thereto,
            and the descriptions thereof or references thereto are correct in
            all respects; and


                                      C-2
<PAGE>
                  (j) The Adviser has all material permits, licenses, franchises
            and authorizations of governmental or regulatory authorities as are
            necessary to own its properties and to conduct its business in the
            manner described in the Prospectus (and any amendment or supplement
            thereto), and to perform its obligations under the Advisory
            Agreement and the Sub-Advisory Agreement.

            Nothing has come to such counsel's attention that would lead it to
      believe that:

            (1) the Registration Statement, at the time it became effective,
      contained an untrue statement of a material fact or omitted to state a
      material fact required to be stated therein or necessary to make the
      statements therein not misleading, or

            (2) the Preliminary Prospectus, as of the Applicable Time, contained
      an untrue statement of a material fact or omitted to state a material fact
      necessary in order to make the statements therein, in the light of
      circumstances under which they were made, not misleading, or

            (3) the Prospectus, as of its date and as of the Closing Date,
      contained or contains an untrue statement of a material fact or omitted or
      omits to state a material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading (in each case, other than the financial statements and other
      statements and other financial and statistical information contained
      therein, as to which such counsel need express no opinion).

      In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York and the Commonwealth of Massachusetts, the Federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriters and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Fund and public officials. References to the Preliminary Prospectus and the
Prospectus shall also include any supplements thereto at the Closing Date.



                                      C-3
<PAGE>
                                    EXHIBIT D

                     FORM OF OPINION OF SUBADVISER'S COUNSEL

            (k) The Subadviser is duly incorporated and validly existing in good
      standing under the laws of the Commonwealth of Massachusetts, with all
      necessary power and authority to own, lease and operate its properties and
      to conduct its business as described in the Preliminary Prospectus and the
      Prospectus. The Subadviser is duly registered and qualified to conduct its
      business and is in good standing in each jurisdiction or place where the
      nature of its properties or the conduct of its business requires such
      registration or qualification, except where the failure to so register and
      qualify does not have a material adverse effect on the ability of the
      Subadviser to perform its obligations under the Underwriting Agreement and
      the Sub-Advisory Agreement;

                  (l) The Subadviser is duly registered with the Commission as
            an investment adviser under the Advisers Act, and is not prohibited
            by the Advisers Act, the 1940 Act or the Advisers Act Rules and
            Regulations or the 1940 Act Rules and Regulations from acting under
            the Underwriting Agreement, the Sub-Advisory Agreement; and, to the
            best of such counsel's knowledge after reasonable inquiry, there
            does not exist any proceeding which should reasonably be expected to
            adversely affect the registration of the Subadviser with the
            Commission;

                  (m) The Subadviser has corporate power and authority to enter
            into the Underwriting Agreement and the Sub-Advisory Agreement, and
            the Underwriting Agreement and the Sub-Advisory Agreement have been
            duly authorized, executed and delivered by the Subadviser, and each
            of the Underwriting Agreement and the Sub-Advisory Agreement is a
            valid and legally binding agreement of the Subadviser, enforceable
            against the Subadviser in accordance with its terms except as rights
            to indemnity and contribution in the Underwriting Agreement or the
            Sub-Advisory Agreement may be limited by federal or state securities
            laws or principles of public policy and subject to the qualification
            that the enforceability of the Subadviser's obligations thereunder
            may be limited by bankruptcy, fraudulent conveyance, insolvency,
            reorganization, moratorium, and other laws relating to or affecting
            creditors' rights generally and by general principles of equity
            (whether enforcement is considered in a proceeding in equity or at
            law);

                  (n) The Sub-Advisory Agreement to which the Subadviser is a
            party complies in all material respects with all applicable
            provisions of the Advisers Act, the 1940 Act and the Advisers Act
            Rules and Regulations and the 1940 Act Rules and Regulations.

                  (o) Neither the execution, delivery or performance of the
            Underwriting Agreement or the Sub-Advisory Agreement nor the
            consummation by the Subadviser of the transactions therein
            contemplated (i) conflicts with or will conflict with or constitutes
            or will constitute a breach of the charter or bylaws of the
            Subadviser, (ii) conflicts with or will conflict with or constitutes
            or will

                                       D-1
<PAGE>
            constitute a breach of or a default under, any agreement, indenture,
            lease or other instrument to which such Subadviser is a party or by
            which it or any of its properties may be bound or (iii) violates or
            will violate any statute, law, regulation or filing or judgment,
            injunction, order or decree applicable to such Subadviser or any of
            its properties or will result in the creation or imposition of any
            material lien, charge or encumbrance upon any property or assets of
            such Subadviser pursuant to the terms of any agreement or instrument
            to which such Subadviser is a party or by which such Subadviser may
            be bound or to which any of the property or assets of such
            Subadviser is subject;

                  (p) The description of the Subadviser and its business in the
            Preliminary Prospectus and the Prospectus complies in all material
            respects with all requirements of the Act, the 1940 Act and the
            Rules and Regulations.

                  (q) (A) No filing with, or authorization, approval, consent,
            license, order, registration, qualification or decree of, any court
            or governmental authority or agency, domestic or foreign, and (B) no
            authorization, approval, vote or other consent of any other person
            or entity, is necessary or required for the performance by such
            Subadviser of its obligations under the Underwriting Agreement or
            the Sub-Advisory Agreement, except such as have been already
            obtained under the 1933 Act, the 1940 Act, the Rules and
            Regulations, the rules and regulations of the NASD and the NYSE and
            such as may be required under state securities laws.

                  (r) To the best of such counsel's knowledge after reasonable
            inquiry, there is not pending or, to the best of such counsel's
            knowledge, after due inquiry, threatened any action, suit,
            proceeding, inquiry or investigation, to which the Subadviser is a
            party, or to which the property of the Subadviser is subject, before
            or brought by any court or governmental body, domestic or foreign,
            which might reasonably be expected to result in any Material Adverse
            Effect, materially and adversely affect the properties or assets of
            the Subadviser or materially impair or adversely affect the ability
            of the Subadviser to function as an investment adviser or perform
            its obligations under the Sub-Advisory Agreement, or which is
            required to be disclosed in the Registration Statement, the
            Preliminary Prospectus and the Prospectus but are not disclosed as
            required;

                  (s) To the best of such counsel's knowledge, after due
            inquiry, there are no franchises, contracts, indentures, mortgages,
            loan agreements, notes, leases or other instruments relating to the
            Subadviser required to be described or referred to in the
            Registration Statement, or to be filed as exhibits thereto, other
            than those described or referred to therein or filed or incorporated
            by reference as exhibits thereto, and the descriptions thereof or
            references thereto are correct in all respects; and perform its
            obligations under the Sub-Advisory Agreement.

                  (t) The Subadviser has all material permits, licenses,
            franchises and authorizations of governmental or regulatory
            authorities as are necessary to own its properties and to conduct
            its business in the manner described in the

                                      D-2
<PAGE>
            Preliminary Prospectus and the Prospectus (and any amendment or
            supplement thereto), and to perform its obligations under the
            Sub-Advisory Agreement.

Nothing has come to such counsel's attention that would lead it to believe that:

            (1) the Registration Statement, at the time the Registration
      Statement became effective, contained an untrue statement of a material
      fact or omitted to state a material fact required to be stated therein or
      necessary to make the statements therein not misleading, or

            (2) the Preliminary Prospectus, as of the Applicable Time, contained
      an untrue statement of a material fact or omitted to state a material fact
      necessary in order to make the statements therein, in the light of
      circumstances under which they were made, not misleading, or

            (3) the Prospectus, as of its date and as of the Closing Date,
      contained or contains an untrue statement of a material fact or omitted or
      omits to state a material fact necessary in order to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading (in each case, other than the financial statements and other
      statements and other financial and statistical information contained
      therein, as to which such counsel need express no opinion).

      In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
New York and the Commonwealth of Massachusetts, the Federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be reliable and
who are satisfactory to counsel for the Underwriters and (B) as to matters of
fact, to the extent they deem proper, on certificates of responsible officers of
the Fund and public officials. References to the Preliminary Prospectus and the
Prospectus shall also include any supplements thereto at the Closing Date.



                                      D-3
<PAGE>
                                    EXHIBIT E

                            PRICE-RELATED INFORMATION

            EATON VANCE TAX-MANAGED DIVIDEND AND PREMIUM INCOME FUND


Public offering price:  $___________ per share

Underwriting discounts and commissions:  $___________ per share

Proceeds, before expenses to the Fund:  $___________ per share

Shares offered:  _____

Over-allotment option: _____


                                       E-1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(H)(2)
<SEQUENCE>8
<FILENAME>b62570a1exv99wxhyx2y.txt
<DESCRIPTION>FORM OF MASTER AGREEMENT AMONG UNDERWRITERS
<TEXT>
<PAGE>

                                                                  EXHIBIT (h)(2)

                                                              ____________, 2005


                       MASTER AGREEMENT AMONG UNDERWRITERS


Wachovia Capital Markets, LLC
301 S. College Street, NC0602
Charlotte, NC  28202-6000

Ladies and Gentlemen:

1. We understand that Wachovia Capital Markets, LLC ("WCM") is entering into
this Master Agreement Among Underwriters in counterparts with us and other firms
that may be Underwriters (as defined below) for issues of Securities (as defined
below) in which WCM is acting as Representative or one of the Representatives.
Irrespective of whether we have executed this Master Agreement Among
Underwriters, this Master Agreement Among Underwriters shall apply to any
offering of Securities in which we elect to act as an Underwriter after receipt
of an Invitation (as defined below) from WCM identifying the Issuer (as defined
below), any applicable terms of the Securities proposed to be offered by such
Issuer, the amount of our proposed participation and the names of the other
Representatives, if any, and stating that our participation as an Underwriter in
the proposed offering shall be subject to the provisions of this Master
Agreement Among Underwriters.

Your invitation will include instructions for our acceptance of such invitation.
At or prior to the time of an offering, you will advise us, to the extent
applicable, as to (i) the expected offering date, (ii) the expected closing
date, (iii) the initial offering price, (iv) the interest or dividend rate (or
the method by which such rate is to be determined), (v) the conversion, (vi)
exercise or exchange price or rate, (vii) the redemption or liquidation price,
(viii) the underwriting discount or commission, (ix) the management fee, (x) the
selling concession and (xi) the reallowance, except that if the offering price
of the Securities is to be determined as contemplated by Rule 430A under the
Securities Act of 1933, as amended (the "Act"), such procedure being hereinafter
referred to as "430A Pricing", you shall so advise us and shall specify the
maximum underwriting discount or commission, management fee and selling
concession. Such information may be conveyed by you in one or more written or
verbal communications (such communications received by us with respect to an
offering being hereinafter collectively referred to as the "Invitation"). If the
Underwriting Agreement (as defined below) provides for the granting of an option
to purchase additional Securities to cover over-allotments or otherwise (an
"over allotment option"), you will notify us in the Invitation of such option
and of our maximum obligation upon exercise of such option.

This Master Agreement Among Underwriters, as amended or supplemented by the
Invitation, shall become binding upon us and the Representatives with respect to
such offering if you receive our written or verbal acceptance and you do not
receive a written communication

<PAGE>

revoking our acceptance prior to the time and date specified in the Invitation
(our unrevoked acceptance after expiration of such time and date being
hereinafter referred to as our "Acceptance"). If we have not previously executed
this Master Agreement Among Underwriters, by our Acceptance we shall be deemed
to be signatories hereof with respect to the offering to which the Acceptance
relates. To the extent that any terms contained in the Invitation are
inconsistent with any provisions herein, such terms shall supersede any such
provisions. Our Acceptance will also constitute our confirmation that, except as
otherwise stated in such Acceptance, each applicable statement included in the
Master Underwriters' Questionnaire attached as Annex A hereto (or otherwise
furnished to us) is correct. We agree to notify you immediately of any
development before the termination of the offering provisions referred to in
Section 10(a) with respect to any particular offering of Securities which makes
untrue or incomplete any information that we have given or are deemed to have
given in response to the Master Underwriters' Questionnaire. The obligations of
each underwriter shall be several and not joint. The securities offered in any
offering of securities made pursuant to this Master Agreement Among
Underwriters, including any guarantees relating to such securities or any other
securities into which such securities are convertible or exchangeable into or
exercisable for and any securities that may be purchased upon exercise of an
over-allotment option, are hereinafter referred to as the "Securities". The
issuer or issuers of the Securities are hereinafter referred to as the "Issuer".
All references herein to "you" or the "Representatives" shall include WCM and
the other firms, if any, which are named as Representatives in the Invitation,
it being understood and agreed that WCM is authorized to act on behalf of all
Representatives. Any underwriters of Securities under this Master Agreement
Among Underwriters, including the Representatives, are hereinafter collectively
referred to as the "Underwriters". Except as otherwise provided in Section
10(c), the following provisions of this Master Agreement Among Underwriters
shall apply separately to each individual offering of Securities.

2. The Representatives shall determine which signatories or other parties deemed
to be signatories to this Master Agreement Among Underwriters will be invited to
become Underwriters for the Securities. Changes may be made by the
Representatives in those who are to be Underwriters and in the respective
amounts of Securities to be purchased by them, provided that, notwithstanding
anything to the contrary contained in this Master Agreement Among Underwriters,
our consent shall be required for any increase in the amount of Securities to be
purchased by us, except in the following cases: (i) an increase in the amount of
Securities to be purchased by us as may be required by the underwriting or
purchase agreement or any associated terms or similar agreement with the Issuer
or any selling securityholders or any amendment or supplement thereto
(collectively, the "Underwriting Agreement") covering the Securities in the
event of a default by one or more of the Underwriters; (ii) an increase in the
amount of such Securities as a result of (a) an increase in the aggregate amount
of such Securities proposed to be purchased by the Underwriters as a whole; (b)
a reallotment of Securities among the Underwriters; or (c) any other cause,
which in any such case of (a) through (c) results in an aggregate net change of
25% or less in the amount of Securities to be purchased by us. We authorize you
on our behalf to execute and deliver the Underwriting Agreement or any agreement
between or among Underwriters (as defined in the next sentence), on the one
hand, and one or more groups of underwriters for the Securities not acting as
such pursuant to this

                                       2

<PAGE>

Master Agreement Among Underwriters, on the other hand (an "Intersyndicate
Agreement"), in such forms as you determine and to take such action as you deem
advisable in connection with the performance of the Underwriting Agreement, any
Intersyndicate Agreement and this Master Agreement Among Underwriters and the
purchase, carrying, sale and distribution of the Securities. We further
authorize you to take such action as you deem necessary or advisable to carry
out this Master Agreement Among Underwriters, the Underwriting Agreement and the
purchase and sale of the Securities. You may waive performance or satisfaction
by the Issuer, any selling securityholders or any other party to the
Underwriting Agreement of certain of its or their obligations or conditions
included in the Underwriting Agreement, if in your judgment such waiver will not
have a material adverse effect upon the interests of the Underwriters. With
respect to offerings of Securities using 430A Pricing, you are also authorized
to determine the initial public offering price and the price at which the
Securities are to be purchased in accordance with the Underwriting Agreement.

It is understood that, if so specified in the Invitation for the issue,
arrangements may be made for the sale of Securities by the Issuer or selling
securityholders pursuant to delayed delivery contracts. Such Securities are
hereinafter referred to as "Delayed Delivery Securities", and such contracts as
"Delayed Delivery Contracts". Securities for which such contracts are not
entered into by the Issuer or selling securityholders are hereinafter referred
to as "Immediate Delivery Securities". References herein to delayed delivery and
Delayed Delivery Contracts apply only to offerings in which delayed delivery is
authorized. The term "underwriting obligation", as used in this Master Agreement
Among Underwriters with respect to any Underwriter, shall refer to the principal
amount or number of shares or units of the Securities (plus such additional
Securities as may be required by the Underwriting Agreement to be purchased by
such Underwriter in the event of a default by one or more of the Underwriters)
which such Underwriter is obligated to purchase pursuant to the provisions of
the Underwriting Agreement, without regard to any reduction in such obligation
as a result of Delayed Delivery Contracts which are entered into by the Issuer.

If the Securities consist in whole or in part of debt obligations maturing
serially, the serial Securities being purchased by each Underwriter pursuant to
the Underwriting Agreement will consist, subject to adjustment as provided in
the Underwriting Agreement, of serial Securities of each maturity in a principal
amount that bears the same proportion to the aggregate principal amount of the
serial Securities of such maturity to be purchased by all the Underwriters as
the respective principal amount of serial Securities set forth opposite such
Underwriter's name in the Underwriting Agreement bears to the aggregate
principal amount of the serial Securities to be purchased by all Underwriters.

As compensation for your services to each of the Underwriters in connection with
the Underwriting Agreement and this Master Agreement Among Underwriters we will
pay a management fee as specified in the Invitation for the offering (without
deduction in respect of Delayed Delivery Securities), and you may charge our
account therefore. If there is more than one Representative, such compensation
will be divided among the Representatives in such proportions as they determine.

                                       3

<PAGE>

3. We understand and acknowledge that if registration of the offer and sale of
the Securities as contemplated by the Underwriting Agreement is required by the
Issuer under the Act on a registration statement or statements to be filed with
the Securities and Exchange Commission (the "Commission"), you will either
provide us with the file number or numbers of such registration statement or
statements with respect to the Securities or, as soon as practicable after the
later of the date of the Invitation or the date made available to you by the
Issuer, furnish to us (or make available for our review in your office) a copy
of such registration statement or statements (other than any documents
incorporated therein by reference and any exhibits) and any amendments thereto.
In any event you will furnish to us, as soon as practicable after sufficient
quantities thereof are made available to you by the Issuer, copies of the
Prospectus or supplemented Prospectus (excluding any documents incorporated by
reference herein) to be used in connection with the offering of the Securities.
As used herein "Prospectus" means the form of prospectus (including any
supplements and any documents incorporated by reference therein) authorized for
use in connection with the offering of such Securities, and "Registration
Statement" means the registration statement filed by the Issuer with the
Commission, as amended and including any documents incorporated by reference
therein, under which the offer and sale of the Securities are registered under
the Act.

We understand and acknowledge that if the offer and sale of the Securities are
exempt from the registration requirements of the Act, no registration statement
will be filed with the Commission. In any such case involving an offering
circular or other offering materials to be used in connection with the offering
of the Securities (any such circular or materials, as it or they may be amended
or supplemented, being hereinafter referred to as the "Offering Circular"), you
will either provide us with information as to the availability of a preliminary
offering circular through a specified regulatory authority or, as soon as
practicable after the later of the date of the Invitation or the date made
available to you by the Issuer, furnish to us (or make available for our review
in your office) a copy of any preliminary offering circular or a proof of the
Offering Circular. In any event, in any such offering involving an Offering
Circular you will furnish to us, as soon as practicable after sufficient
quantities thereof are made available to you by the Issuer, copies of the final
Offering Circular. The Prospectus or Offering Circular, as the case may be,
relating to an offering of Securities is herein referred to as the "Offering
Document".

We understand and acknowledge that we are not authorized to give any information
or make any representation not contained in the Offering Document, as amended or
supplemented, or in any document incorporated by reference therein in connection
with the offering of the Securities. Our Acceptance of an invitation shall
constitute our agreement that, if requested by you, we will furnish a copy of
any amendment or supplement to any preliminary or final Offering Document to
each person to whom we have furnished a previous preliminary or final Offering
Document. Our Acceptance of an Invitation relating to an offering of Securities
registered under the Act shall constitute (i) our acknowledgement that we are
familiar with the Registration Statement, including the documents incorporated
by reference therein and the forms of Underwriting Agreement and indenture or
other documents describing the terms of the Securities filed as exhibits thereto
or otherwise made available to us, with any preliminary prospectus, preliminary

                                        4

<PAGE>

supplemented prospectus or Prospectus relating to the Securities theretofore
filed with the Commission, and with the information to be set forth in an
amendment to the Registration Statement or in the Prospectus proposed to be
filed with the Commission and (ii) our confirmation that we have delivered, and
our agreement that we will deliver, all preliminary and final Prospectuses
required for compliance with Rule 15c2-8 (or any successor provision) under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Our Acceptance
of an Invitation relating to an offering of Securities exempt from registration
under the Act shall constitute (i) our acknowledgment that we are familiar with
the information set forth in any preliminary offering circular or proof of the
Offering Circular made available to us and with the information to be set forth
in the Offering Circular, (ii) our confirmation that we have delivered, and our
agreement that we will deliver, all preliminary and final Offering Circulars
required for compliance with the applicable Federal and state laws and the
applicable rules and regulations of any regulatory body promulgated thereunder
governing the use and distribution of offering circulars by underwriters, and
(iii) to the extent consistent with such laws, rules and regulations, our
confirmation that we have delivered and our agreement that we will deliver all
preliminary and final Offering Circulars that would be required if Rule 15c2-8
(or any successor provision) under the Exchange Act applied to such offering. We
hereby consent to being named in the Offering Document as one of the
Underwriters of the Securities.

4. (a) In connection with the public offering of the Securities, we authorize
you, in your discretion, to determine the time of the initial public offering,
to determine the amount of Securities, if any, to be purchased by the
Underwriters pursuant to the over-allotment option, if any, to change the price
and/or size of the initial public offering, to furnish the Issuer with the
information to be included in the Registration Statement or Offering Circular
with respect to the terms of offering, and to determine all matters relating to
advertising and communications with dealers or others. Each Underwriter also
authorizes us to reserve for sale, and authorizes us or any Underwriter
designated by us to sell and deliver for its account to such retail purchasers
as we may select, at the public offering price, such number as we may determine
of the Securities that such Underwriter agrees to purchase under the
Underwriting Agreement. Such reservations and sales to retail purchasers shall
be made for the respective accounts of the Underwriters in the same proportions,
as nearly as may be practicable and so long as Securities of the respective
Underwriters are available therefor, as the respective underwriting obligations
of the Underwriters.

We also authorize you, in your discretion, to reserve for sale, and to sell and
deliver to securities dealers and others, which may include any Underwriters,
selected by you ("Selected Dealers"), and to reserve for sale pursuant to
Delayed Delivery Contracts arranged by you through Selected Dealers, all or any
portion of the Securities to be purchased by us under the Underwriting
Agreement, all as you shall determine. Any such sales to Selected Dealers may be
made pursuant to the terms and conditions of your Master Selected Dealers
Agreement or otherwise and shall be made for the respective accounts of the
Underwriters in such proportions as you may determine. Each Selected Dealer
shall be a person (a "Dealer") who is (a) a broker or dealer (as defined in the
By-Laws of the National Association of Securities Dealers, Inc. (the "NASD"))
actually engaged in the investment banking or securities business and (i) a
member in good

                                        5

<PAGE>

standing of the NASD that makes the representations and agreements applicable to
such a member contained in Section 17 hereof or (ii) a foreign bank, broker,
dealer or other institution not eligible for membership in the NASD that makes
the representations and agreements applicable to such foreign institutions
contained in Section 17 hereof, or (b) a "bank" as defined in Section 3(a)(6) of
the Exchange Act (a "Bank") that is not a member of the NASD and that makes the
representations and agreements applicable to Banks contained in Section 17
hereof. Reservations for sales to Selected Dealers for our account need not be
in proportion to our underwriting obligation, but sales of Securities reserved
for our account for sale to Selected Dealers shall be made as nearly as
practicable in the ratio which the amount of Securities reserved for our account
bears to the aggregate amount of Securities reserved for the account of all
Underwriters, as calculated from day-to-day. Sales to Selected Dealers shall
initially be at the public offering price, less a concession not in excess of
the Selected Dealers' concession set forth in the Invitation and the price to
persons other than Selected Dealers shall be at the public offering price. With
your consent, the Underwriters may allow, and Selected Dealers may re-allow, a
discount on sales to Dealers in an amount not in excess of the amount set forth
in the Invitation. Upon your request, we will advise you of the identity of any
Dealer to whom we allow such a discount and any Underwriter or Selected Dealer
from whom we receive such a discount.

We also authorize you, in your discretion, to buy Immediate Delivery Securities
for our account from Selected Dealers at the public offering price less such
amount not in excess of the Selected Dealers' concession as you may determine.

At or before the time the Securities are released for sale, you shall notify us
of the amount of Securities that has been reserved for our account for sale to
Selected Dealers and for sale pursuant to Delayed Delivery Contracts and the
amount that is to be retained by us for direct sale. After advice from you that
the Securities are released for public offering, we will offer to the public, in
conformity with the terms of the offering set forth in the Offering Document,
such of our Securities, as you advise are not reserved. In connection with any
offering of Securities that are registered under the Act and issued by an Issuer
that was not, immediately prior to the filing of the Registration Statement,
subject to the requirements of Section 13(a) or 15(d) of the Exchange Act, we
agree that unless otherwise advised by you and disclosed in the Prospectus we
will not make sales to any account over which we exercise discretionary
authority with respect to that sale.

We agree that we will from time to time, upon your request, report to you the
amount of Securities retained by us for direct sale that remain unsold. Upon
your request, we will deliver to you for our account, or sell to you for the
account of one or more of the Underwriters, such amount of unsold Securities as
you may designate at the public offering price less, in the case of sales or
deliveries for the account of Selected Dealers, an amount determined by you not
in excess of the concession to Selected Dealers. You may also repurchase
Securities from other Underwriters and Selected Dealers, for the account of one
or more of the other Underwriters, at the public offering price less, in the
case of purchases for the account of Selected Dealers, an amount determined by
you not in excess of the concession to Selected Dealers.

                                       6

<PAGE>

You may from time to time deliver to any Underwriter, for carrying purposes or
for sale by such Underwriter, any of the Securities then reserved for sale
pursuant to Delayed Delivery Contracts or for sale to, but not purchased and
paid for by, Selected Dealers, all as above; provided, however, to the extent
that Securities are so delivered for sale by such Underwriter, the amount of
Securities then reserved for the account of such Underwriter shall be
correspondingly reduced. Securities delivered for carrying purposes only shall
be redelivered to you upon demand.

If, in accordance with the terms of offering set forth in the Offering Document,
the offering of the Securities is not at a fixed price but at varying prices set
by individual Underwriters based on market prices or at negotiated prices, the
provisions of the first paragraph of this Section relating to your right to
change the public offering price and concessions and discounts to dealers shall
not apply, and other references in this Section and elsewhere in this Master
Agreement among Underwriters to the public offering price or Selected Dealers'
concession shall be deemed to mean the prices and concessions determined by you
from time to time in your discretion.

Any Securities sold or loaned by us (otherwise than through you) which you
purchase in the open market for the account of any Underwriter will be
repurchased by us on demand at the cost of such purchase plus commissions and
taxes on redelivery. Securities delivered on such repurchase need not be
represented by the identical certificates so purchased. In lieu of such action
you may in your discretion sell for our account the Securities so purchased and
debit or credit our account for the loss or profit resulting from such sale, or
charge our account with an amount not in excess of the Selected Dealers'
concession with respect to such Securities.

(b) We authorize you to act on our behalf in making all arrangements for the
solicitation of offers to purchase Delayed Delivery Securities from the Issuer
pursuant to Delayed Delivery Contracts and we agree that all such arrangements
will be made only through you, directly or through Selected Dealers (including
Underwriters acting as Selected Dealers) to whom you may pay a commission as
provided in the Offering document and herein.

The obligation of each of the Underwriters to purchase and pay for securities as
set forth in the Underwriting Agreement shall be reduced in the proportion
provided for therein, except that (i) as to any Delayed Delivery Contract
determined by you, in your discretion, to have been directed and allocated by a
purchaser to a particular Underwriter, such obligation of such Underwriter shall
be reduced by the amount of Delayed Delivery Securities covered thereby, (ii) as
to any Delayed Delivery Contracts for which arrangements are made through
Selected Dealers, such Obligation of each Underwriter shall be reduced as nearly
as practicable in the proportion determined by you that the amount of Securities
of such Underwriter reserved and sold pursuant to Delayed Delivery Contracts
arranged through Selected Dealers bears to the total Securities so reserved and
sold, and (iii) such reductions shall be rounded, as you shall determine, to the
nearest $1,000 principal amount or whole share or unit of the Securities.

The fee payable by the Issuer to each Underwriter with respect to Delayed
Delivery Securities pursuant to the Underwriting Agreement shall be credited to
the account of such Underwriter

                                       7

<PAGE>

based upon the amount by which such Underwriter's underwriting obligation is
reduced as specified in the preceding paragraph.

If the amount of Delayed Delivery Securities applied to reduce an Underwriter's
underwriting obligation and the amount of Immediate Delivery Securities sold by
or for the account of such Underwriter exceeds such Underwriter's underwriting
obligation, there shall be credited to such Underwriter with respect to such
excess amount of Securities only the amount of the Selected Dealers' concession;
provided, however, that no amount shall be credited to such Underwriter with
respect to such excess amount of such Securities if such Underwriter is a Bank
and the Securities do not constitute "exempted securities" within the meaning of
Section 3(a)(12) of the Exchange Act.

The commissions payable to Selected Dealers in respect of Delayed Delivery
Contracts arranged through them shall be charged to each Underwriter in the
proportion which the amount of Securities of such Underwriter reserved and sold
pursuant to Delayed Delivery Contracts arranged through Selected Dealers bears
to the total Securities so reserved and sold.

5. We authorize you to make payment on our behalf to the Issuer or any selling
securityholder of the purchase price of our Securities, to take delivery of our
Securities, registered as you may direct in order to facilitate deliveries, and
to deliver our reserved Securities against sales. At your request we will pay
you an amount equal to the public offering price, less the selling concession,
of either our Securities or our unreserved Securities as you direct, and such
payment will be credited to our account and applied to the payment of the
purchase price. After you receive payment for reserved Securities sold for our
account, you will remit to us the purchase price (if any) paid by us for such
Securities and credit or debit our account with the difference between the sale
prices and the purchase price thereof. You will deliver to us our unreserved
Securities promptly, and our reserved but unsold Securities, against payment of
the purchase price therefor (except in the case of Securities for which payment
has previously been made), as soon as practicable after the termination of the
provisions referred to in Section 10(a), except that if the aggregate amount of
reserved but unsold Securities upon such termination does not exceed 20% of the
total amount of the Securities, you may in your discretion sell such reserved
but unsold Securities for the accounts of the several Underwriters as soon as
practicable after such termination, at such prices and in such manner as you
determine.

In the event that the Underwriting Agreement for an offering provides for the
payment of a commission or other compensation, we authorize you to receive for
our account payments of the commission or other compensation payable to the
Underwriters by the Issuer, as provided in the Underwriting Agreement.

Notwithstanding the foregoing provisions of this Section, if transactions in the
Securities can be settled through the facilities of The Depository Trust Company
("DTC"), if we are a member of DTC we hereby authorize you, in your discretion,
to make appropriate arrangements for payment and/or delivery through the
facilities of DTC of the Securities to be purchased by us, or if we are

                                       8

<PAGE>

not a member of DTC, settlement may be made through a corespondent that is a
member of DTC pursuant to our timely instructions.

6. In connection with the purchase or carrying of our Securities or other
securities purchased for our account, we authorize you, in your discretion, to
advance your funds for our account, charging current interest rates, to arrange
loans for our account, and in connection therewith to execute and deliver any
notes or other instruments and hold or pledge as security any of our Securities
or such other securities. Any lender may rely upon your instructions in all
matters relating to any such loan. Any Securities or such other securities held
by you for our account may be delivered to us for carrying purposes, and if so
delivered will be redelivered to you upon demand.

7. We authorize you, in your discretion, to make purchases and sales of
Securities, and other securities of the Issuer of the same class and series and
any other securities of the Issuer which you may designate in the open market or
otherwise, for long or short account, on such terms as you deem advisable, and
to over-allot in arranging sales to Selected Dealers or others. You may, in your
discretion, liquidate any long position or cover any short position incurred
pursuant to this Section 7 at such prices and on such terms as you may
determine. Such purchases and sales (including over-allotments) will be made for
the accounts of the Underwriters as nearly as practicable in proportion to their
respective underwriting obligations. It is understood that you may have made
purchases of securities of the Issuer for stabilizing purposes prior to the time
when we became one of the Underwriters, and we agree that any such securities so
purchased shall be treated as having been purchased for the respective accounts
of the Underwriters pursuant to the foregoing authorization. We further
authorize you, in your discretion, to cover any short position incurred pursuant
to this Section by purchasing securities on such terms as you deem advisable.
Except as provided in this Section, at no time will our net commitment under the
foregoing provisions of this Section exceed 20% (or such other amount as may be
specified in the Invitation) of our underwriting obligation excluding Securities
which may be purchased upon exercise of an over-allotment option, provided that
such percentage may be increased with the approval of a majority in interest of
the Underwriters. In the case of our net commitment for short account, our net
commitment will be computed assuming that all Securities which may be purchased
upon exercise of an over-allotment option are acquired. We will on demand take
up at cost any securities so purchased and deliver any securities so sold or
over-allotted for our account, and, if any other Underwriter defaults in its
corresponding obligation, we will assume our proportionate share of such
obligation without relieving the defaulting Underwriter from liability. Upon
request, we will advise you of the Securities retained by us and unsold and will
sell to you for the account of one or more of the Underwriters such of our
unsold Securities and at such price, not less than the net price to Selected
Dealers nor more than the public offering price, as you determine.

If you effect any stabilizing purchases pursuant to this Section 7, you shall
promptly notify us of the date and time of the first stabilizing purchase and
the date and time when stabilizing was terminated. You shall prepare and
maintain such records as are required to be maintained by you as manager
pursuant to Rule 17a-2 under the Exchange Act.

                                       9

<PAGE>

8. Unless the Securities are "exempted securities" as defined in Section
3(a)(12) of the Exchange Act, we and you agree not to bid for, purchase, attempt
to induce others to purchase, or sell directly or indirectly, any Securities,
any other securities of the Issuer of the same class and series and any other
securities of the Issuer which you may designate, except as brokers pursuant to
unsolicited orders, except to the extent permitted by Regulation M (subject to
any applicable exemption therefrom) under the Exchange Act as interpreted by the
Commission, and except as otherwise provided in this Master Agreement Among
Underwriters. If the Securities are or include common stock or securities
convertible or exchangeable into or exchangeable for common stock and the
Securities are not "exempted securities" as defined in Section 3(a)(12) of the
Exchange Act, we and you also agree not to effect, or attempt to induce others
to effect, directly or indirectly, any transactions in or relating to put or
call options on any stock of the Issuer, except to the extent permitted by
Regulation M (subject to any applicable exemption therefrom) under the Exchange
Act as interpreted by the Commission.

If the Securities are convertible or exchangeable into or exercisable for shares
of common stock and such common stock is subject to options traded on a
securities exchange, we represent and warrant that we have not, since the day
following the date of the invitation telex, entered into a discount or parity
opening uncovered writing transaction in options to acquire shares of such
common stock for our account or for the account of any customer and we agree
that we will not enter into any such transaction prior to the termination of the
provisions of Section pursuant to Section 10 hereof with respect to such
offering of Securities. The term "discount or parity opening uncovered writing
transaction" means an opening sale transaction where the seller is the writer of
an option to purchase shares of such common stock which he does not then own or
have the right to acquire upon exercise of conversion or option rights, which
option is sold at a price (exclusive of commissions) per optioned share which,
when added to the amount per share payable upon exercise of the option, shall be
equal to or less than the last reported sales price (exclusive of commissions)
per share immediately prior to the time such option is sold.

9. We represent and warrant that the incurrence by us of our obligations under
this Master Agreement Among Underwriters and the Underwriting Agreement in
connection with the offering of the Securities will not place us in violation of
Rule 15c3-1 under the Exchange Act, if such requirements are applicable to us,
or, if we are a financial institution subject to regulation by the Board of
Governors of the Federal Reserve System, the Comptroller of the Currency or the
Federal Deposit Insurance Corporation, will not place us in violation of the
capital requirements of such regulator or any other regulator to which we are
subject. We further represent and warrant that in connection with the offering
of the Securities we have complied, and agree that we will comply, with the
provisions of Regulation M under the Exchange Act with regard, inter alia, to
trading in the Securities by Underwriters. We agree that, for purposes of the
foregoing sentence, in addition to the Securities, any of the Issuer's
securities deemed to be of the same class and series as the Securities shall be
subject to trading restrictions under Regulation M.

                                       10

<PAGE>

10. (a) With respect to any particular offering of Securities, the terms and
conditions of (i) the second and third sentences of the fourth paragraph of
section 4(a), (ii) the last paragraph of Section 4(a), (iii) the first sentence
of Section 7, and (iv) Section 8 (collectively, the "Offering Provisions") will
terminate at the close of business on the 45th day after the date of the initial
public offering of the Securities or at the close of business on the day of the
closing of the purchase of the Securities by the Underwriters pursuant to the
Underwriting Agreement, whichever is later, unless in either such case the
effectiveness of the Offering Provisions is extended or sooner terminated as
hereinafter provided. You may extend the effectiveness of such Offering
Provisions up to an additional 15 days by notice to us to the effect that the
Offering Provisions of this Master Agreement Among Underwriters are extended to
the date or by the number of days indicated in the notice. You may terminate
such Offering Provisions, other than the last paragraph of Section 4(a), at any
time by notice to us to the effect that the Offering Provisions of this Master
Agreement Among Underwriters are terminated and you may terminate the provisions
of the last paragraph of Section 4(a) at any time at or subsequent to the
termination of the other provisions by notice to us to the effect that the
penalty bid provisions of this Master Agreement Among Underwriters are
terminated. All other provisions of this Master Agreement Among Underwriters
shall remain operative and in full force and effect with respect to such
offering of Securities.

(b) This Master Agreement Among Underwriters may be terminated by either party
hereto upon five business days' written notice to the other party; provided,
however, that with respect to any particular offering of Securities, if you
receive any such notice from us after our Acceptance for such offering, this
Master Agreement Among Underwriters shall remain in full force and effect as to
such offering and shall terminate with respect to such offering and all previous
offerings only in accordance with and to the extent provided in subsection (a)
of this Section.

(c) This Master Agreement Among Underwriters may be supplemented or amended by
you by notice to us by written communication and, except for supplements or
amendments set forth in an Invitation, any such supplement or amendment to this
Master Agreement Among Underwriters shall be effective with respect to any
offering to which this Master Agreement Among Underwriters applies after the
date of such supplement or amendment. Each reference to "this Master Agreement
Among Underwriters" herein shall, as appropriate, be to this Master Agreement
Among Underwriters as so supplemented and amended.

11. Except as otherwise provided herein, you may charge our account with any
transfer taxes on sales made by you of Securities purchased by us under the
Underwriting Agreement and with our proportionate share (based upon our
underwriting obligation) of all other expenses incurred by you under this Master
Agreement Among Underwriters or in connection with the purchase, carrying, sale
or distribution of the Securities. The accounts hereunder will be settled as
promptly as practicable after the termination of the Offering Provisions
referred to in the first sentence of Section 10(a), but you may reserve such
amount as you deem advisable for additional expenses. Your determination of the
amount to be paid to or by us will be conclusive. You may at any time make
partial distributions of credit balances or call for payment of debit balances.
Any of our funds in your hands may be held with your general funds without

                                       11

<PAGE>

accountability for interest. Notwithstanding any settlement, we will remain
liable for any taxes on transfers for our account, and for our proportionate
share (based upon our underwriting obligation) of all expenses and liabilities
which may be incurred by or for the accounts of the Underwriters.

12. Default by one or more Underwriters hereunder or under the Underwriting
Agreement will not release the other Underwriters from their obligations or
affect the liability of any defaulting Underwriter to the non-defaulting
Underwriters for damages resulting from such default. If one or more
Underwriters default under the Underwriting Agreement, you may arrange for the
purchase by others, including non-defaulting Underwriters, of Securities not
taken up by the defaulting Underwriter or Underwriters.

13. You will be under no liability to us for any act or omission except for
obligations expressly assumed by you herein, and no obligations on your part
will be implied hereby or inferred here. The rights and liabilities of the
Underwriters are several and not joint, and nothing will constitute the
Underwriters a partnership, association or separate entity.

If for Federal income tax purposes the Underwriters should be deemed to
constitute a partnership then we elect to be excluded from the application of
Subchapter K, Chapter 1, Subtitle A, of the Internal Revenue Code of 1986, as
amended, and agree not to take any position inconsistent with such election.
You, as Representative, are authorized, in your discretion, to execute on behalf
of the Underwriters such evidence of such election as may be required by the
Internal Revenue Service.

14. We agree to indemnify, hold harmless and reimburse each other Underwriter
and each person, if any, who controls such other Underwriter within the meaning
of Section 15 of the Act, to the extent, and upon the terms, that such
Underwriter agrees to indemnify, hold harmless and reimburse the Issuer and
certain other persons pursuant to the Underwriting Agreement. This indemnity
agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of such other Underwriter or controlling person or any
statement made to the Commission as to the results thereof.

15. Each Underwriter (including you) agrees to pay upon your request, as
contribution, its proportionate share, based upon its underwriting obligation,
of any losses, claims, damages or liabilities, joint or several, under the Act
or otherwise, paid or incurred by any Underwriter (including you) to any person
other than an Underwriter (including amounts paid by an Underwriter as
contribution), arising out of or based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, any
amendment or supplement thereto, or any related preliminary Offering Document or
any other selling or advertising material approved by you for use by the
Underwriters in connection with the sale of the Securities, or arising out of or
based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading (other than an untrue statement or alleged untrue statement or
omission or alleged omission made in reliance upon and in conformity with
written information furnished to he

                                       12

<PAGE>

Issuer by an Underwriter through you specifically for use therein); and we will
pay such proportionate share of any legal or other expenses reasonably incurred
by you or with your consent in connection with investigating or defending any
such loss, claim, damage or liability, or any action in respect thereof. In
determining the amount of any Underwriter's obligation under this Section,
appropriate adjustment may be made by you to reflect any amounts received by any
one or more Underwriters from any person in respect of such claim from the
Issuer, any selling securityholder or any other person (other than an
Underwriter) pursuant to the Underwriting Agreement or otherwise. In respect of
any claim there shall be credited against any amount paid or payable by us
pursuant to this Section any loss, damage, liability or expense which is
incurred by us as a result of any such claim being asserted against us, and if
such loss, claim, damage, liability or expense is incurred by us subsequent to
any payment by us pursuant to this Section, appropriate provision shall be made
to effect such credit, by refund or otherwise. If any such claim is asserted,
you may take such action in connection therewith as you deem necessary or
desirable, including retention of counsel for the Underwriters, and in your
discretion separate counsel so retained by you shall be included in the amounts
payable pursuant to this Section. In determining amounts payable pursuant to
this Section, any loss, claim, damage, liability or expense paid or incurred,
and any amount received, by any person controlling any Underwriter within the
meaning of Section 15 of the Act which has been paid or incurred or received by
reason of such control relationship shall be deemed to have been paid or
incurred or received by such Underwriter. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. At your discretion, you may consent to being named as the
representatives of a defendant class of underwriters. Any Underwriter may elect
to retain at its own expense its own counsel and, on advice of such counsel and
with your consent, may settle or consent to the settlement of any such claim.
You may settle or consent to the settlement of any such claim, on advice of
counsel retained by you, with the approval of a majority in interest of the
Underwriters. Whenever we receive notice of the assertion of any claim to which
the provisions of this Section would be applicable, we will give prompt notice
thereof to you. Whenever you receive notice of the assertion of any claim to
which the provisions of this Section would be applicable, you will give prompt
notice thereof to each Underwriter. You will also furnish each Underwriter with
periodic reports, at such times as you deem appropriate, as to the status of
such claim and the action taken by you in connection therewith. If any
Underwriter or Underwriters default in their obligation to make any payments
under this Section, each non-defaulting Underwriter shall be obligated to pay
its proportionate share of all defaulted payments, based upon such Underwriter's
underwriting obligation as related to the underwriting obligations of all
non-defaulting Underwriters without, however, relieving such defaulting
Underwriter from its liability therefor.

16. We authorize you to file with the Commission and any other governmental
agency any reports required in connection with any transactions effected by you
for our account pursuant to this Master Agreement Among Underwriters, and we
will furnish any information needed for such reports. We agree to transmit to
you for filing with the Commission any report required to be made by us pursuant
to the Exchange Act as a result of any transactions effected in connection with
the offering of the Securities. You agree to inform us, upon our request, of the

                                       13

<PAGE>

states and other jurisdictions in the United States in which it is believed that
the Securities are qualified for sale under, or are exempt from the requirements
of, their respective securities laws. However, you will not have any
responsibility with respect to the right of any Underwriter or other person to
sell the Securities in any state or jurisdiction, notwithstanding any
information you may furnish in that connection. If we propose to offer
Securities outside the United States, its territories or its possessions, we
will take, at our own expense, such action, if any, as may be necessary to
comply with the laws of each foreign jurisdiction in which we propose to offer
Securities. If applicable, we further authorize you to file on behalf of the
several Underwriters with the NASD such required documents and information, if
any, which have been furnished to you for filing pursuant to the applicable,
rules, statements and interpretations of the NASD. If in your discretion you
deem it necessary, you are further authorized to file with the Department of
State of the State of New York and Further State Notice with respect to the
Securities.

17. You represent and warrant that you are a member in good standing of the
NASD, and we represent and warrant that we are (a) a member in good standing of
the NASD, (b) a Bank that is not a member of the NASD or (c) a foreign bank,
broker, dealer or other institution not eligible for membership in the NASD. If
we are such a member, we agree that in making sales of the Securities we will
comply with all applicable rules of the NASD, including, without limitation,
NASD Rule 2740. If we are not an NASD member, we agree to comply as though we
were a member with NASD Rules 2730, 2740, and 2750 and to comply with the
requirements of the NASD's Interpretation with Respect to Free-Riding and
Withholding. If we are such a foreign bank, broker, dealer or other institution,
we agree not to offer or sell any Securities in the United States of America
except through you and in making sales of Securities we agree to comply with
NASD Rule 2420 as it applies to a nonmember broker or dealer in a foreign
country. If we are a Bank, we agree that we will not accept any portion of the
management fee paid by the Underwriters with respect to the offering of any
Securities or, in connection with the public offering of any Securities that do
not constitute "exempted securities" within the meaning of Section 3(a)(12) of
the Exchange Act, purchase any Securities at a discount from the offering price
from any Underwriter or Selected Dealer or otherwise accept any selling
concession, discount or other allowance from any Underwriter or Selected Dealer,
which in any such case is not permitted under the NASD's Rules of Fair Practice,
and we agree to comply with NASD Rule 2420 as though we were a member.

18. Any notice to us shall be deemed to have been duly given if mailed,
hand-delivered, telephoned (and confirmed in writing), telegraphed, telexed,
telecopied or wired communicated to us at the address set forth on the signature
page hereof, or at such other address as we shall notify you in writing.
Communications by telegram, telex, telecopy, wire or other written form shall be
deemed to be "written" communications.

19. This Master Agreement Among Underwriters shall be governed by, and construed
in accordance with, the laws of the State of New York applicable to agreements
made and to be wholly performed in such State.

                                       14

<PAGE>

20. This Master Agreement Among Underwriters may be executed in any number of
counterparts, each of which shall be deemed an original, which taken together
shall constitute one and the same instrument.

                                   Very truly yours,


                                   ..............................
                                            (Name of Firm)


                                   By............................
                                   Name:.........................
                                   Title:........................
                                   Address:......................
                                   ..............................
                                   Telephone:....................
                                   Telecopy:.....................


Confirmed, as of the date
first above written

WACHOVIA CAPITAL MARKETS, LLC


By..............................................
  Name:
  Title:

                                       15

<PAGE>

                                     ANNEX A

                          WACHOVIA CAPITAL MARKETS, LLC
                       MASTER UNDERWRITERS' QUESTIONNAIRE

         In connection with each offering of securities ("Securities") pursuant
to the Master Agreement Among Underwriters of Wachovia Capital Markets, LLC
("WCM") dated __________, 2003, we confirm that except as set forth in our
Acceptance of an Invitation to participate in such offering or other
communication furnished to WCM prior to the effectiveness of our commitment to
purchase:

                  (a) Neither we nor any of our directors, officers or partners
         have a material relationship (as "material" is defined in Regulation C
         under the Securities Act of 1933) with the Issuer and, if the offer and
         sale of the Securities are to be registered under the Securities Act of
         1933 pursuant to a Registration Statement on Form S-1 or F-1, neither
         we nor any "group" (as that term is used in Section 13(d)(3) of the
         Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
         which we are a member is the beneficial owner (determined in accordance
         with Rule 13d-3 under the Exchange Act), of more than 5% of any class
         of voting securities of the Issuer, nor do we have any knowledge that
         more than 5% of any class of voting securities of the Issuer is held or
         is to be held subject to any voting trust or other similar agreement;

                  (b) Except as described in the Offering Document, we do not
         know of any discounts or commissions to be allowed or paid to dealers,
         including all cash, securities, contracts or other consideration to be
         received by any dealer in connection with the sale of the Securities,
         nor are we aware of any intention to overallot or that the price of any
         security may be stabilized to facilitate the offering of the
         Securities;

                  (c) We have not prepared any report or memorandum for external
         use in connection with the proposed offering and, if the offer and sale
         of the Securities are to be registered under the Securities Act of
         1933, as amended (the "Act") pursuant to a Registration Statement on
         Form S-1 or F-1, we have not within the past twelve months prepared or
         had prepared for us any engineering, management, research or similar
         report or memorandum relating (i) to the broad aspects of the business,
         operations or products of the Issuer, with the exception of reports
         solely comprised of recommendations to buy, sell or hold the Issuer's
         securities, unless such recommendations have changed within the past
         six months or (ii) to information already contained in documents filed
         with the Securities and Exchange Commission;

                  (d) We are not an "affiliate" of the Issuer for purposes of
         NASD Rule 2720 on the understanding that under NASD Rule 2720 (except
         as provided in Rule 2720(b) thereof) two entities are "affiliates" of
         each other if one entity controls, is controlled by, or is under common
         control with, the second entity and that "control" is presumed to exist
         if one entity (or, in the case of an NASD member, the entity and all
         "persons associated

                                       16

<PAGE>

         with" it (as defined in the NASD Rules)) beneficially owns 10% or more
         of the second entity's outstanding voting securities;

                  (e) If the Securities to be offered are debt securities and
         their offer and sale are to be registered under the Act, (i) we are not
         an "affiliate" (as defined in Rule O-2 under the Trust Indenture Act of
         1939, as amended) of the Trustee for Securities or of any parent
         company of such Trustee; (ii) neither such Trustee nor its parent
         company, if any, nor any director or executive officer of either of
         them is a "director, officer, partner, employee, appointee or
         representative" of ours (as those terms are defined in the Trust
         Indenture Act of 1939, as amended, or in the relevant instructions to
         Form T-1 thereunder); and (iii) we and our directors, partners and
         executive officers, taken as a group, do not own beneficially one
         percent or more of the shares of any class of outstanding voting
         securities of such Trustee or of its parent company, if any;

                  (f) If we are a corporation, we do not have outstanding nor
         have we assumed or guaranteed any securities issued otherwise than in
         our present corporate name;

                  (g) If we are, or are affiliated with, any U.S. or non-U.S.
         bank, we hereby represent and warrant that our participation in the
         offering of the Securities on the terms contemplated in the Master
         Agreement Among Underwriters and the proposed Underwriting Agreement
         does not contravene any U.S. or state banking law restricting the
         exercise of securities powers in the United States;

                  (h) If the Securities are not issued by a real estate
         investment trust, then no portion of the net offering proceeds from the
         sale of the Securities will be paid to us or any of our affiliates or
         "persons associated with" us (as defined in the NASD Rules) or members
         of the immediate family of any such person;

                  (i) If the filing with the NASD is required, then neither we
         nor any of our directors, officers, partners or "persons associated
         with" us (as defined in the NASD Rules), nor, to our knowledge, any
         "related person" (defined by the NASD to include counsel, financial
         consultants and advisors, finders, members of the selling or
         distribution group, any NASD member participating in the public
         offering and any other persons associated with or related to, and
         members of the immediate family of, any of the foregoing) or any other
         broker-dealer, (i) within the last 12 months has purchased in private
         transactions, or intends before, at or within 6 months after the
         commencement of the public offering of the Securities to purchase in
         private transactions, any securities of the Issuer or any Issuer
         Related Party (as hereinafter defined, (ii) within the last 12 months
         had any dealings with the Issuer, any of the selling stockholders or
         any parent, subsidiary or controlling stockholder thereof (other than
         relating to the proposed Underwriting Agreement, Master Agreement Among
         Underwriters and selling arrangements), as to which documents or
         information are required to be filed with the NASD pursuant to its
         Corporate Financing Rule or (iii) during the 12 months immediately
         preceding the filing of the registration statement, has entered into
         any

                                       17

<PAGE>

         arrangement which provided or provides for the receipt of any item of
         value (including, but not limited to, cash payments and expense
         reimbursements) and/or the transfer of any warrants, options or other
         securities from the Issuer or any Issuer Related Party to us or any
         related person;

                  (j) If the Securities are not issued by a registered
         investment company, direct participation program or real estate
         investment trust, then there is no association or affiliation between
         us and (i) any officer or director of the Issuer or any Issuer Related
         Party, or (ii) any securityholder of 5% or more of any class of
         securities of the Issuer or an Issuer Related Party; it being
         understood that for purposes of paragraph (k) above and this paragraph
         (l), the term "Issuer Related Party" includes any selling
         securityholder offering securities to the public, any affiliate of the
         Issuer or a selling security holder, and the officers, general
         partners, directors, employees and securityholders thereof;

                  (k) If the Securities are not issued by a registered
         investment company, direct participation program or real estate
         investment trust, then we do not have a "conflict of interest" with the
         Issuer under NASD Rule 2720; it being understood that, except as
         otherwise provided in NASD Rule 2720(b), a conflict of interest would
         exist if we, our "parent" (as defined in the NASD Rules), affiliates
         and "persons associated with" us (as defined in the NASD Rules) in the
         aggregate beneficially owned 10% or more of the Issuer's "common
         equity", "preferred equity" or "subordinated debt" (as each such term
         is defined in NASD Rule 2720);

                  (l) If the Issuer does not have any securities registered
         under Section 12 of Exchange Act and is not otherwise subject to
         Section 15(d) of the Exchange Act, then we do not intend to confirm
         sales of the Securities to any accounts over which we exercise
         discretionary authority; and

                  (m) If the Issuer is a public utility, then we are not a
         "holding company" or a "subsidiary company" or an "affiliate" of a
         "holding company" or of a "public utility", each as defined in the
         Public Utility Holding Company Act of 1935.

                  (n) We are familiar with the rules, regulations and releases
         of the Securities and Exchange Commission dealing with the
         dissemination of information prior to and during registration, and we
         hereby inform you that neither we nor any of our directors, officers or
         partners have disseminated or will disseminate outside our organization
         any information relating to the Company or its securities of a nature
         or under circumstances indicated by those rules, regulations and
         releases to constitute a possible violation of the securities laws.

                  (o) We have no knowledge of any untrue statement of a material
         fact contained in the Registration Statement or any omission to state
         any material fact required therein to be stated or necessary to make
         the statements therein not misleading.

                                       18

<PAGE>

                  (p) Our commitment to purchase Securities, including pursuant
         to an over-allotment option, will not result in the violation by us of
         the financial responsibility requirements of Rule 15c3-1 under the
         Securities Exchange Act of 1934 or a similar provision of a securities
         exchange to which we are subject.

         We will notify you immediately in the event of any development before
         the effective date of the registration statement which makes untrue or
         incomplete any of the above statements as of such effective date. We
         will keep an accurate record of the distribution of copies of the
         preliminary prospectus and agree to deliver any revised preliminary
         prospectus. We also agree to furnish the final prospectus to each
         person who purchases Securities from us and to otherwise comply with
         applicable securities laws.

         We are aware that the staff of the Securities and Exchange Commission
         may not review the registration statement (and we will assume, unless
         advised to the contrary, that the staff of the Commission has not
         reviewed the registration statement) and that the review process of the
         Commission may not be relied upon in any degree to indicate the
         registration statement is true, complete or accurate. We are aware of
         our statutory responsibilities under the Securities Act of 1933, and we
         authorize Wachovia Securities, Inc. on behalf of the Representatives,
         on our behalf to so advise the Commission in writing.

                                            Very truly yours,

                                            ----------------------
                                            (Name of Firm)


                                            By: ______________________
                                            Name:
                                            Title:
                                            Date:

                                       19
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(J)(1)
<SEQUENCE>9
<FILENAME>b62570a1exv99wxjyx1y.txt
<DESCRIPTION>MASTER CUSTODIAN AGREEMENT
<TEXT>
<PAGE>
                                                                  Exhibit (j)(1)

            EATON VANCE TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND

                                                November 14, 2005

Eaton Vance Tax-Managed Premium and  Dividend  Income  Fund  hereby  adopts  and
agrees to become a party to the attached  Custodian  Agreement  as  amended  and
extended with Investors Bank & Trust Company.


                        EATON VANCE TAX-MANAGED PREMIUM AND

                        DIVIDEND INCOME FUND


                        By: /s/ Barbara E. Campbell
                            ---------------------------------
                            Barbara E. Campbell
                            Treasurer, and not Individually




Accepted and agreed to:

INVESTORS BANK & TRUST COMPANY


By: /s/ Stephen DeSalvo
    ---------------------------------
    Investors Bank & Trust Company







<PAGE>














                           MASTER CUSTODIAN AGREEMENT

                                     between

                           EATON VANCE GROUP OF FUNDS

                                       and

                         INVESTORS BANK & TRUST COMPANY
<PAGE>
                                TABLE OF CONTENTS



1.   Definitions............................................................1-2

2.   Employment of Custodian and Property to be held by it..................2-3

3.   Duties of the Custodian with Respect to Property of the Fund.............3

     A.  Safekeeping and Holding of Property..................................3
     B.  Delivery of Securities.............................................3-6
     C.  Registration of Securities...........................................6
     D.  Bank Accounts........................................................6
     E.  Payments for Shares of the Fund....................................6-7
     F.  Investment and Availability of Federal Funds.........................7
     G.  Collections........................................................7-8
     H.  Payment of Fund Moneys.............................................8-9
     I.  Liability for Payment in Advance of Receipt of
         Securities Purchased.................................................9
     J.  Payments for Repurchases of Redemptions of Shares
         of the Fund.......................................................9-10
     K.  Appointment of Agents by the Custodian..............................10
     L.  Deposit of Fund Portfolio Securities in Securities Systems.......10-12
     M.  Deposit of Fund Commercial Paper in an Approved Book-Entry
           System for Commercial Paper....................................12-13
     N.  Segregated Account..................................................14
     O.  Ownership Certificates for Tax Purposes.............................14
     P.  Proxies.............................................................14
     Q.  Communications Relating to Fund Portfolio Securities................14
     R.  Exercise of Rights;  Tender Offers..................................15


                                       -i-
<PAGE>
     S.  Depository Receipts.................................................15
     T.  Interest Bearing Call or Time Deposits...........................15-16
     U.  Options, Futures Contracts and Foreign Currency Transactions.....16-17
     V.  Actions Permitted Without Express Authority.........................17
     W.  Advances by the Bank................................................18

 4.  Duties of Bank with Respect to Books of Account and Calucations
     of Net Asset Value......................................................18

 5.  Records and Miscellaneous Duties.....................................18-19

 6.  Opinion of Fund's Independent Public Accountants........................19

 7.  Compensation and Expenses of Bank.......................................19

 8.  Responsibility of Bank...............................................19-20

 9.  Persons Having Access to Assets of the Fund.............................20

10.  Effective Period, Termination and Amendment; Successor Custodian.....20-21

11.  Interpretive and Additional Provisions..................................21

12.  Notices.................................................................21

13.  Massachusetts Law to Apply..............................................22

14.  Adoption of the Agreement by the Fund...................................22


                                      -ii-
<PAGE>
                           MASTER CUSTODIAN AGREEMENT

     This Agreement is made between each investment company advised by Eaton
Vance Management which has adopted this Agreement in the manner provided herein
and Investors Bank & Trust Company (hereinafter called "Bank", "Custodian" and
"Agent"), a trust company established under the laws of Massachusetts with a
principal place of business in Boston, Massachusetts.

     Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and

     Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;

     Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:

1. DEFINITIONS

     Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:

     (a) "Fund" shall mean the investment company which has adopted this
Agreement. If the Fund is a Massachusetts business trust, it may in the future
establish and designate other separate and distinct series of shares, each of
which may be called a "portfolio"; in such case, the term "Fund" shall also
refer to each such separate series or portfolio.

     (b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.

     (c) "The Depository Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.

     (d) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.

     (e) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository BUT
ONLY if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.

     (f) "Federal Book-Entry System" shall mean the book-entry system referred
to in Rule 17f-4(b) under the Investment Company Act of 1940 for United States
and federal agency securities (i.e., as provided in Subpart O of Treasury
Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the book-entry
regulations of federal agencies substantially in the form of Subpart O).
<PAGE>
     (g) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in Rule 17f-4 under the
Investment Company Act of 1940 for foreign securities BUT ONLY if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.

     (h) "Approved Book-Entry System for Commercial Paper" shall mean a system
maintained by the Custodian or by a subcustodian employed pursuant to Section 2
hereof for the holding of commercial paper in book-entry form BUT ONLY if the
Custodian has received a certified copy of a vote of the Board approving the
participation by the Fund in such system.

     (i) The Custodian shall be deemed to have received "proper instructions" in
respect of any of the matters referred to in this Agreement upon receipt of
written or facsimile instructions signed by such one or more person or persons
as the Board shall have from time to time authorized to give the particular
class of instructions in question. Electronic instructions for the purchase and
sale of securities which are transmitted by Eaton Vance Management to the
Custodian through the Eaton Vance equity trading system and the Eaton Vance
fixed income trading system shall be deemed to be proper instructions; the Fund
shall cause all such instructions to be confirmed in writing. Different persons
may be authorized to give instructions for different purposes. A certified copy
of a vote of the Board may be received and accepted by the Custodian as
conclusive evidence of the authority of any such person to act and may be
considered as in full force and effect until receipt of written notice to the
contrary. Such instructions may be general or specific in terms and, where
appropriate, may be standing instructions. Unless the vote delegating authority
to any person or persons to give a particular class of instructions specifically
requires that the approval of any person, persons or committee shall first have
been obtained before the Custodian may act on instructions of that class, the
Custodian shall be under no obligation to question the right of the person or
persons giving such instructions in so doing. Oral instructions will be
considered proper instructions if the Custodian reasonably believes them to have
been given by a person authorized to give such instructions with respect to the
transaction involved. The Fund shall cause all oral instructions to be confirmed
in writing. The Fund authorizes the Custodian to tape record any and all
telephonic or other oral instructions given to the Custodian. Upon receipt of a
certificate signed by two officers of the Fund as to the authorization by the
President and the Treasurer of the Fund accompanied by a detailed description of
the communication procedures approved by the President and the Treasurer of the
Fund, "proper instructions" may also include communications effected directly
between electromechanical or electronic devices provided that the President and
Treasurer of the Fund and the Custodian are satisfied that such procedures
afford adequate safeguards for the Fund's assets. In performing its duties
generally, and more particularly in connection with the purchase, sale and
exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and votes,
resolutions or proceedings of the shareholders or the Board), but, nevertheless,
except as otherwise expressly provided herein, the Custodian may assume unless
and until notified in writing to the contrary that so-called proper instructions
received by it are not in conflict with or in any way contrary to any provisions
of such governing documents and registration statement, or votes, resolutions or
proceedings of the shareholders or the Board.

2. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT

     The Fund hereby appoints and employs the Bank as its Custodian and Agent in
accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Fund agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned

                                      -2-
<PAGE>
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of its
duties hereunder.

     The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board of Directors. Any such subcustodian so
employed by the Custodian shall be deemed to be the agent of the Custodian, and
the Custodian shall remain primarily responsible for the securities,
participation interests, moneys and other property of the Fund held by such
subcustodian. Any foreign subcustodian shall be a bank or trust company which is
an eligible foreign custodian within the meaning of Rule 17f-5 under the
Investment Company Act of 1940, and the foreign custody arrangements shall be
approved by the Board of Directors and shall be in accordance with and subject
to the provisions of said Rule. For the purposes of this Agreement, any property
of the Fund held by any such subcustodian (domestic or foreign) shall be deemed
to be held by the Custodian under the terms of this Agreement.

3. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND

     A.   SAFEKEEPING AND HOLDING OF PROPERTY. The Custodian shall keep safely
          all property of the Fund and on behalf of the Fund shall from time to
          time receive delivery of Fund property for safekeeping. The Custodian
          shall hold, earmark and segregate on its books and records for the
          account of the Fund all property of the Fund, including all
          securities, participation interests and other assets of the Fund (1)
          physically held by the Custodian, (2) held by any subcustodian
          referred to in Section 2 hereof or by any agent referred to in
          Paragraph K hereof, (3) held by or maintained in The Depository Trust
          Company or in Participants Trust Company or in an Approved Clearing
          Agency or in the Federal Book-Entry System or in an Approved Foreign
          Securities Depository, each of which from time to time is referred to
          herein as a "Securities System", and (4) held by the Custodian or by
          any subcustodian referred to in Section 2 hereof and maintained in any
          Approved Book-Entry System for Commercial Paper.

     B.   DELIVERY OF SECURITIES. The Custodian shall release and deliver
          securities or participation interests owned by the Fund held (or
          deemed to be held) by the Custodian or maintained in a Securities
          System account or in an Approved Book-Entry System for Commercial
          Paper account only upon receipt of proper instructions, which may be
          continuing instructions when deemed appropriate by the parties, and
          only in the following cases:

               1)   Upon sale of such securities or participation interests for
                    the account of the Fund, BUT ONLY against receipt of payment
                    therefor; if delivery is made in Boston or New York City,
                    payment therefor shall be made in accordance with generally
                    accepted clearing house procedures or by use of Federal

                                      -3-
<PAGE>
                    Reserve Wire System procedures; if delivery is made
                    elsewhere payment therefor shall be in accordance with the
                    then current "street delivery" custom or in accordance with
                    such procedures agreed to in writing from time to time by
                    the parties hereto; if the sale is effected through a
                    Securities System, delivery and payment therefor shall be
                    made in accordance with the provisions of Paragraph L
                    hereof; if the sale of commercial paper is to be effected
                    through an Approved Book-Entry System for Commercial Paper,
                    delivery and payment therefor shall be made in accordance
                    with the provisions of Paragraph M hereof; if the securities
                    are to be sold outside the United States, delivery may be
                    made in accordance with procedures agreed to in writing from
                    time to time by the parties hereto; for the purposes of this
                    subparagraph, the term "sale" shall include the disposition
                    of a portfolio security (i) upon the exercise of an option
                    written by the Fund and (ii) upon the failure by the Fund to
                    make a successful bid with respect to a portfolio security,
                    the continued holding of which is contingent upon the making
                    of such a bid;

               2)   Upon the receipt of payment in connection with any
                    repurchase agreement or reverse repurchase agreement
                    relating to such securities and entered into by the Fund;

               3)   To the depository agent in connection with tender or other
                    similar offers for portfolio securities of the Fund;

               4)   To the issuer thereof or its agent when such securities or
                    participation interests are called, redeemed, retired or
                    otherwise become payable; PROVIDED that, in any such case,
                    the cash or other consideration is to be delivered to the
                    Custodian or any subcustodian employed pursuant to Section 2
                    hereof;

               5)   To the issuer thereof, or its agent, for transfer into the
                    name of the Fund or into the name of any nominee of the
                    Custodian or into the name or nominee name of any agent
                    appointed pursuant to Paragraph K hereof or into the name or
                    nominee name of any subcustodian employed pursuant to
                    Section 2 hereof; or for exchange for a different number of
                    bonds, certificates or other evidence representing the same
                    aggregate face amount or number of units; PROVIDED that, in
                    any such case, the new securities or participation interests
                    are to be delivered to the Custodian or any subcustodian
                    employed pursuant to Section 2 hereof;

               6)   To the broker selling the same for examination in accordance
                    with the "street delivery" custom; PROVIDED that the
                    Custodian shall adopt such procedures as the Fund from time
                    to time shall approve to ensure their prompt return to the
                    Custodian by the broker in the event the broker elects not
                    to accept them;

               7)   For exchange or conversion pursuant to any plan of merger,
                    consolidation, recapitalization, reorganization or
                    readjustment of the securities of the Issuer of such
                    securities, or pursuant to provisions for conversion of such
                    securities, or pursuant to any deposit agreement; provided

                                      -4-
<PAGE>
                    that, in any such case, the new securities and cash, if any,
                    are to be delivered to the Custodian or any subcustodian
                    employed pursuant to Section 2 hereof;

               8)   In the case of warrants, rights or similar securities, the
                    surrender thereof in connection with the exercise of such
                    warrants, rights or similar securities, or the surrender of
                    interim receipts or temporary securities for definitive
                    securities; PROVIDED that, in any such case, the new
                    securities and cash, if any, are to be delivered to the
                    Custodian or any subcustodian employed pursuant to Section 2
                    hereof;

               9)   For delivery in connection with any loans of securities made
                    by the Fund (such loans to be made pursuant to the terms of
                    the Fund's current registration statement), BUT ONLY against
                    receipt of adequate collateral as agreed upon from time to
                    time by the Custodian and the Fund, which may be in the form
                    of cash or obligations issued by the United States
                    government, its agencies or instrumentalities; except that
                    in connection with any securities loans for which collateral
                    is to be credited to the Custodian's account in the
                    book-entry system authorized by the U.S. Department of
                    Treasury, the Custodian will not be held liable or
                    responsible for the delivery of securities loaned by the
                    Fund prior to the receipt of such collateral;

               10)  For delivery as security in connection with any borrowings
                    by the Fund requiring a pledge or hypothecation of assets by
                    the Fund (if then permitted under circumstances described in
                    the current registration statement of the Fund), provided,
                    that the securities shall be released only upon payment to
                    the Custodian of the monies borrowed, except that in cases
                    where additional collateral is required to secure a
                    borrowing already made, further securities may be released
                    for that purpose; upon receipt of proper instructions, the
                    Custodian may pay any such loan upon redelivery to it of the
                    securities pledged or hypothecated therefor and upon
                    surrender of the note or notes evidencing the loan;

               11)  When required for delivery in connection with any redemption
                    or repurchase of Shares of the Fund in accordance with the
                    provisions of Paragraph J hereof;

               12)  For delivery in accordance with the provisions of any
                    agreement between the Custodian (or a subcustodian employed
                    pursuant to Section 2 hereof) and a broker-dealer registered
                    under the Securities Exchange Act of 1934 and, if necessary,
                    the Fund, relating to compliance with the rules of The
                    Options Clearing Corporation or of any registered national
                    securities exchange, or of any similar organization or
                    organizations, regarding deposit or escrow or other
                    arrangements in connection with options transactions by the
                    Fund;

                                      -5-
<PAGE>
               13)  For delivery in accordance with the provisions of any
                    agreement among the Fund, the Custodian (or a subcustodian
                    employed pursuant to Section 2 hereof), and a futures
                    commissions merchant, relating to compliance with the rules
                    of the Commodity Futures Trading Commission and/or of any
                    contract market or commodities exchange or similar
                    organization, regarding futures margin account deposits or
                    payments in connection with futures transactions by the
                    Fund;

               14)  For any other proper corporate purpose, BUT ONLY upon
                    receipt of, in addition to proper instructions, a certified
                    copy of a vote of the Board specifying the securities to be
                    delivered, setting forth the purpose for which such delivery
                    is to be made, declaring such purpose to be proper corporate
                    purpose, and naming the person or persons to whom delivery
                    of such securities shall be made.

     C.   REGISTRATION OF SECURITIES. Securities held by the Custodian (other
          than bearer securities) for the account of the Fund shall be
          registered in the name of the Fund or in the name of any nominee of
          the Fund or of any nominee of the Custodian, or in the name or nominee
          name of any agent appointed pursuant to Paragraph K hereof, or in the
          name or nominee name of any subcustodian employed pursuant to Section
          2 hereof, or in the name or nominee name of The Depository Trust
          Company or Participants Trust Company or Approved Clearing Agency or
          Federal Book-Entry System or Approved Book-Entry System for Commercial
          Paper; provided, that securities are held in an account of the
          Custodian or of such agent or of such subcustodian containing only
          assets of the Fund or only assets held by the Custodian or such agent
          or such subcustodian as a custodian or subcustodian or in a fiduciary
          capacity for customers. All certificates for securities accepted by
          the Custodian or any such agent or subcustodian on behalf of the Fund
          shall be in "street" or other good delivery form or shall be returned
          to the selling broker or dealer who shall be advised of the reason
          thereof.

     D.   BANK ACCOUNTS. The Custodian shall open and maintain a separate bank
          account or accounts in the name of the Fund, subject only to draft or
          order by the Custodian acting in pursuant to the terms of this
          Agreement, and shall hold in such account or accounts, subject to the
          provisions hereof, all cash received by it from or for the account of
          the Fund other than cash maintained by the Fund in a bank account
          established and used in accordance with Rule 17f-3 under the
          Investment Company Act of 1940. Funds held by the Custodian for the
          Fund may be deposited by it to its credit as Custodian in the Banking
          Department of the Custodian or in such other banks or trust companies
          as the Custodian may in its discretion deem necessary or desirable;
          provided, however, that every such bank or trust company shall be
          qualified to act as a custodian under the Investment Company Act of
          1940 and that each such bank or trust company and the funds to be
          deposited with each such bank or trust company shall be approved in
          writing by two officers of the Fund. Such funds shall be deposited by
          the Custodian in its capacity as Custodian and shall be subject to
          withdrawal only by the Custodian in that capacity.

     E.   PAYMENT FOR SHARES OF THE FUND. The Custodian shall make appropriate
          arrangements with the Transfer Agent and the principal underwriter of
          the Fund to enable the Custodian to make certain it promptly receives
          the cash or other consideration due to the Fund for such new or
          treasury Shares as may be issued or sold from time to time by the

                                      -6-
<PAGE>
          Fund, in accordance with the governing documents and offering
          prospectus and statement of additional information of the Fund. The
          Custodian will provide prompt notification to the Fund of any receipt
          by it of payments for Shares of the Fund.

     F.   INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS. Upon agreement between
          the Fund and the Custodian, the Custodian shall, upon the receipt of
          proper instructions, which may be continuing instructions when deemed
          appropriate by the parties,

               1)   invest in such securities and instruments as may be set
                    forth in such instructions on the same day as received all
                    federal funds received after a time agreed upon between the
                    Custodian and the Fund; and

               2)   make federal funds available to the Fund as of specified
                    times agreed upon from time to time by the Fund and the
                    Custodian in the amount of checks received in payment for
                    Shares of the Fund which are deposited into the Fund's
                    account.

     G.   COLLECTIONS. The Custodian shall promptly collect all income and other
          payments with respect to registered securities held hereunder to which
          the Fund shall be entitled either by law or pursuant to custom in the
          securities business, and shall promptly collect all income and other
          payments with respect to bearer securities if, on the date of payment
          by the issuer, such securities are held by the Custodian or agent
          thereof and shall credit such income, as collected, to the Fund's
          custodian account.

          The Custodian shall do all things necessary and proper in connection
          with such prompt collections and, without limiting the generality of
          the foregoing, the Custodian shall

               1)   Present for payment all coupons and other income items
                    requiring presentations;

               2)   Present for payment all securities which may mature or be
                    called, redeemed, retired or otherwise become payable;

               3)   Endorse and deposit for collection, in the name of the Fund,
                    checks, drafts or other negotiable instruments;

               4)   Credit income from securities maintained in a Securities
                    System or in an Approved Book-Entry System for Commercial
                    Paper at the time funds become available to the Custodian;
                    in the case of securities maintained in The Depository Trust
                    Company funds shall be deemed available to the Fund not
                    later than the opening of business on the first business day
                    after receipt of such funds by the Custodian.

          The Custodian shall notify the Fund as soon as reasonably practicable
          whenever income due on any security is not promptly collected. In any
          case in which the Custodian does not receive any due and unpaid income
          after it has made demand for the same, it shall immediately so notify
          the Fund in writing, enclosing copies of any demand letter, any

                                      -7-
<PAGE>
          written response thereto, and memoranda of all oral responses thereto
          and to telephonic demands, and await instructions from the Fund; the
          Custodian shall in no case have any liability for any nonpayment of
          such income provided the Custodian meets the standard of care set
          forth in Section 8 hereof. The Custodian shall not be obligated to
          take legal action for collection unless and until reasonably
          indemnified to its satisfaction.

          The Custodian shall also receive and collect all stock dividends,
          rights and other items of like nature, and deal with the same pursuant
          to proper instructions relative thereto.

     H.   PAYMENT OF FUND MONEYS. Upon receipt of proper instructions, which may
          be continuing instructions when deemed appropriate by the parties, the
          Custodian shall pay out moneys of the Fund in the following cases
          only:

               1)   Upon the purchase of securities, participation interests,
                    options, futures contracts, forward contracts and options on
                    futures contracts purchased for the account of the Fund but
                    only (a) against the receipt of

                    (i) such securities registered as provided in Paragraph C
                    hereof or in proper form for transfer or

                    (ii) detailed instructions signed by an officer of the Fund
                    regarding the participation interests to be purchased or

                    (iii) written confirmation of the purchase by the Fund of
                    the options, futures contracts, forward contracts or options
                    on futures contracts

                    by the Custodian (or by a subcustodian employed pursuant to
                    Section 2 hereof or by a clearing corporation of a national
                    securities exchange of which the Custodian is a member or by
                    any bank, banking institution or trust company doing
                    business in the United States or abroad which is qualified
                    under the Investment Company Act of 1940 to act as a
                    custodian and which has been designated by the Custodian as
                    its agent for this purpose or by the agent specifically
                    designated in such instructions as representing the
                    purchasers of a new issue of privately placed securities);
                    (b) in the case of a purchase effected through a Securities
                    System, upon receipt of the securities by the Securities
                    System in accordance with the conditions set forth in
                    Paragraph L hereof; (c) in the case of a purchase of
                    commercial paper effected through an Approved Book-Entry
                    System for Commercial Paper, upon receipt of the paper by
                    the Custodian or subcustodian in accordance with the
                    conditions set forth in Paragraph M hereof; (d) in the case
                    of repurchase agreements entered into between the Fund and
                    another bank or a 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

                                      -8-
<PAGE>
                    the bank or broker-dealer to repurchase such securities from
                    the Fund; or (e) with respect to securities purchased
                    outside of the United States, in accordance with written
                    procedures agreed to from time to time in writing by the
                    parties hereto;

               2)   When required in connection with the conversion, exchange or
                    surrender of securities owned by the Fund as set forth in
                    Paragraph B hereof;

               3)   When required for the redemption or repurchase of Shares of
                    the Fund in accordance with the provisions of Paragraph J
                    hereof;

               4)   For the payment of any expense or liability incurred by the
                    Fund, including but not limited to the following payments
                    for the account of the Fund: advisory fees, distribution
                    plan payments, interest, taxes, management compensation and
                    expenses, accounting, transfer agent and legal fees, and
                    other operating expenses of the Fund whether or not such
                    expenses are to be in whole or part capitalized or treated
                    as deferred expenses;

               5)   For the payment of any dividends or other distributions to
                    holders of Shares declared or authorized by the Board; and

               6)   For any other proper corporate purpose, BUT ONLY upon
                    receipt of, in addition to proper instructions, a certified
                    copy of a vote of the Board, specifying the amount of such
                    payment, setting forth the purpose for which such payment is
                    to be made, declaring such purpose to be a proper corporate
                    purpose, and naming the person or persons to whom such
                    payment is to be made.

     I.   LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES PURCHASED.
          In any and every case where payment for purchase of securities for the
          account of the Fund is made by the Custodian in advance of receipt of
          the securities purchased in the absence of specific written
          instructions signed by two officers of the Fund to so pay in advance,
          the Custodian shall be absolutely liable to the Fund for such
          securities to the same extent as if the securities had been received
          by the Custodian; EXCEPT that in the case of a repurchase agreement
          entered into by the Fund with a bank which is a member of the Federal
          Reserve System, the Custodian may transfer funds to the account of
          such bank prior to the receipt of (i) the securities in certificate
          form subject to such repurchase agreement or (ii) written evidence
          that the securities subject to such repurchase agreement have been
          transferred by book-entry into a segregated non-proprietary account of
          the Custodian maintained with the Federal Reserve Bank of Boston or
          (iii) the safekeeping receipt, PROVIDED that such securities have in
          fact been so transferred by book-entry and the written repurchase
          agreement is received by the Custodian in due course; AND EXCEPT that
          if the securities are to be purchased outside the United States,
          payment may be made in accordance with procedures agreed to in writing
          from time to time by the parties hereto.

     J.   PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND. From
          such funds as may be available for the purpose, but subject to any
          applicable votes of the Board and the current redemption and
          repurchase procedures of the Fund, the Custodian shall, upon receipt
          of written instructions from the Fund or from the Fund's transfer
          agent or from the principal underwriter, make funds and/or portfolio

                                      -9-
<PAGE>
          securities available for payment to holders of Shares who have caused
          their Shares to be redeemed or repurchased by the Fund or for the
          Fund's account by its transfer agent or principal underwriter.

          The Custodian may maintain a special checking account upon which
          special checks may be drawn by shareholders of the Fund holding Shares
          for which certificates have not been issued. Such checking account and
          such special checks shall be subject to such rules and regulations as
          the Custodian and the Fund may from time to time adopt. The Custodian
          or the Fund may suspend or terminate use of such checking account or
          such special checks (either generally or for one or more shareholders)
          at any time. The Custodian and the Fund shall notify the other
          immediately of any such suspension or termination.

     K.   APPOINTMENT OF AGENTS BY THE CUSTODIAN. The Custodian may at any time
          or times in its discretion appoint (and may at any time remove) any
          other bank or trust company (provided such bank or trust company is
          itself qualified under the Investment Company Act of 1940 to act as a
          custodian or is itself an eligible foreign custodian within the
          meaning of Rule 17f-5 under said Act) as the agent of the Custodian to
          carry out such of the duties and functions of the Custodian described
          in this Section 3 as the Custodian may from time to time direct;
          providED, however, that the appointment of any such agent shall not
          relieve the Custodian of any of its responsibilities or liabilities
          hereunder, and as between the Fund and the Custodian the Custodian
          shall be fully responsible for the acts and omissions of any such
          agent. For the purposes of this Agreement, any property of the Fund
          held by any such agent shall be deemed to be held by the Custodian
          hereunder.

     L.   DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
          Custodian may deposit and/or maintain securities owned by the Fund

                    (1)  in The Depository Trust Company;

                    (2)  in Participants Trust Company;

                    (3)  in any other Approved Clearing Agency;

                    (4)  in the Federal Book-Entry System; or

                    (5)  in an Approved Foreign Securities Depository

          in each case only in accordance with applicable Federal Reserve Board
          and Securities and Exchange Commission rules and regulations, and at
          all times subject to the following provisions:


          (a) The Custodian may (either directly or through one or more
          subcustodians employed pursuant to Section 2 keep securities of the
          Fund in a Securities System provided that such securities are
          maintained in a non-proprietary account ("Account") of the Custodian

                                      -10-
<PAGE>
          or such subcustodian in the Securities System which shall not include
          any assets of the Custodian or such subcustodian or any other person
          other than assets held by the Custodian or such subcustodian as a
          fiduciary, custodian, or otherwise for its customers.

          (b) The records of the Custodian with respect to securities of the
          Fund which are maintained in a Securities System shall identify by
          book-entry those securities belonging to the Fund, and the Custodian
          shall be fully and completely responsible for maintaining a
          recordkeeping system capable of accurately and currently stating the
          Fund's holdings maintained in each such Securities System.

          (c) The Custodian shall pay for securities purchased in book-entry
          form for the account of the Fund only upon (i) receipt of notice or
          advice from the Securities System that such securities have been
          transferred to the Account, and (ii) the making of any entry on the
          records of the Custodian to reflect such payment and transfer for the
          account of the Fund. The Custodian shall transfer securities sold for
          the account of the Fund only upon (i) receipt of notice or advice from
          the Securities System that payment for such securities has been
          transferred to the Account, and (ii) the making of an entry on the
          records of the Custodian to reflect such transfer and payment for the
          account of the Fund. Copies of all notices or advices from the
          Securities System of transfers of securities for the account of the
          Fund shall identify the Fund, be maintained for the Fund by the
          Custodian and be promptly provided to the Fund at its request. The
          Custodian shall promptly send to the Fund confirmation of each
          transfer to or from the account of the Fund in the form of a written
          advice or notice of each such transaction, and shall furnish to the
          Fund copies of daily transaction sheets reflecting each day's
          transactions in the Securities System for the account of the Fund on
          the next business day.

          (d) The Custodian shall promptly send to the Fund any report or other
          communication received or obtained by the Custodian relating to the
          Securities System's accounting system, system of internal accounting
          controls or procedures for safeguarding securities deposited in the
          Securities System; the Custodian shall promptly send to the Fund any
          report or other communication relating to the Custodian's internal
          accounting controls and procedures for safeguarding securities
          deposited in any Securities System; and the Custodian shall ensure
          that any agent appointed pursuant to Paragraph K hereof or any
          subcustodian employed pursuant to Section 2 hereof shall promptly send
          to the Fund and to the Custodian any report or other communication
          relating to such agent's or sub custodian's internal accounting
          controls and procedures for safeguarding securities deposited in any
          Securities System. The Custodian's books and records relating to the
          Fund's participation in each Securities System will at all times
          during regular business hours be open to the inspection of the Fund's
          authorized officers, employees or agents.

          (e) The Custodian shall not act under this Paragraph L in the absence
          of receipt of a certificate of an officer of the Fund that the Board
          has approved the use of a particular Securities System; the Custodian
          shall also obtain appropriate assurance from the officers of the Fund
          that the Board has annually reviewed the continued use by the Fund of
          each Securities System, and the Fund shall promptly notify the
          Custodian if the use of a Securities System is to be discontinued; at
          the request of the Fund, the Custodian will terminate the use of any
          such Securities System as promptly as practicable.

                                      -11-
<PAGE>
          (f) Anything to the contrary in this Agreement notwithstanding, the
          Custodian shall be liable to the Fund for any loss or damage to the
          Fund resulting from use of the Securities System by reason of any
          negligence, misfeasance or misconduct of the Custodian or any of its
          agents or subcustodians or of any of its or their employees or from
          any failure of the Custodian or any such agent or subcustodian to
          enforce effectively such rights as it may have against the Securities
          System or any other person; at the election of the Fund, it shall be
          entitled to be subrogated to the rights of the Custodian with respect
          to any claim against the Securities System or any other person which
          the Custodian may have as a consequence of any such loss or damage if
          and to the extent that the Fund has not been made whole for any such
          loss or damage.

     M.   DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM FOR
          COMMERCIAL PAPER. Upon receipt of proper instructions with respect to
          each issue of direct issue commercial paper purchased by the Fund, the
          Custodian may deposit and/or maintain direct issue commercial paper
          owned by the Fund in any Approved Book-Entry System for Commercial
          Paper, in each case only in accordance with applicable Securities and
          Exchange Commission rules, regulations, and no-action correspondence,
          and at all times subject to the following provisions:

          (a) The Custodian may (either directly or through one or more
          subcustodians employed pursuant to Section 2) keep commercial paper of
          the Fund in an Approved Book-Entry System for Commercial Paper,
          provided that such paper is issued in book entry form by the Custodian
          or subcustodian on behalf of an issuer with which the Custodian or
          subcustodian has entered into a book-entry agreement and provided
          further that such paper is maintained in a non-proprietary account
          ("Account") of the Custodian or such subcustodian in an Approved
          Book-Entry System for Commercial Paper which shall not include any
          assets of the Custodian or such subcustodian or any other person other
          than assets held by the Custodian or such subcustodian as a fiduciary,
          custodian, or otherwise for its customers.

          (b) The records of the Custodian with respect to commercial paper of
          the Fund which is maintained in an Approved Book-Entry System for
          Commercial Paper shall identify by book-entry each specific issue of
          commercial paper purchased by the Fund which is included in the System
          and shall at all times during regular business hours be open for
          inspection by authorized officers, employees or agents of the Fund.
          The Custodian shall be fully and completely responsible for
          maintaining a recordkeeping system capable of accurately and currently
          stating the Fund's holdings of commercial paper maintained in each
          such System.

          (c) The Custodian shall pay for commercial paper purchased in
          book-entry form for the account of the Fund only upon contemporaneous
          (i) receipt of notice or advice from the issuer that such paper has
          been issued, sold and transferred to the Account, and (ii) the making
          of an entry on the records of the Custodian to reflect such purchase,
          payment and transfer for the account of the Fund. The Custodian shall
          transfer such commercial paper which is sold or cancel such commercial
          paper which is redeemed for the account of the Fund only upon
          contemporaneous (i) receipt of notice or advice that payment for such
          paper has been transferred to the Account, and (ii) the making of an
          entry on the records of the Custodian to reflect such transfer or
          redemption and payment for the account of the Fund. Copies of all


                                      -12-
<PAGE>
          notices, advices and confirmations of transfers of commercial paper
          for the account of the Fund shall identify the Fund, be maintained for
          the Fund by the Custodian and be promptly provided to the Fund at its
          request. The Custodian shall promptly send to the Fund confirmation of
          each transfer to or from the account of the Fund in the form of a
          written advice or notice of each such transaction, and shall furnish
          to the Fund copies of daily transaction sheets reflecting each day's
          transactions in the System for the account of the Fund on the next
          business day.

          (d) The Custodian shall promptly send to the Fund any report or other
          communication received or obtained by the Custodian relating to each
          System's accounting system, system of internal accounting controls or
          procedures for safeguarding commercial paper deposited in the System;
          the Custodian shall promptly send to the Fund any report or other
          communication relating to the Custodian's internal accounting controls
          and procedures for safeguarding commercial paper deposited in any
          Approved Book-Entry System for Commercial Paper; and the Custodian
          shall ensure that any agent appointed pursuant to Paragraph K hereof
          or any subcustodian employed pursuant to Section 2 hereof shall
          promptly send to the Fund and to the Custodian any report or other
          communication relating to such agent's or sub custodian's internal
          accounting controls and procedures for safeguarding securities
          deposited in any Approved Book-Entry System for Commercial Paper.

          (e) The Custodian shall not act under this Paragraph M in the absence
          of receipt of a certificate of an officer of the Fund that the Board
          has approved the use of a particular Approved Book-Entry System for
          Commercial Paper; the Custodian shall also obtain appropriate
          assurance from the officers of the Fund that the Board has annually
          reviewed the continued use by the Fund of each Approved Book-Entry
          System for Commercial Paper, and the Fund shall promptly notify the
          Custodian if the use of an Approved Book-Entry System for Commercial
          Paper is to be discontinued; at the request of the Fund, the Custodian
          will terminate the use of any such System as promptly as practicable.

          (f) The Custodian (or subcustodian, if the Approved Book-Entry System
          for Commercial Paper is maintained by the subcustodian) shall issue
          physical commercial paper or promissory notes whenever requested to do
          so by the Fund or in the event of an electronic system failure which
          impedes issuance, transfer or custody of direct issue commercial paper
          by book-entry.

          (g) Anything to the contrary in this Agreement notwithstanding, the
          Custodian shall be liable to the Fund for any loss or damage to the
          Fund resulting from use of any Approved Book-Entry System for
          Commercial Paper by reason of any negligence, misfeasance or
          misconduct of the Custodian or any of its agents or subcustodians or
          of any of its or their employees or from any failure of the Custodian
          or any such agent or subcustodian to enforce effectively such rights
          as it may have against the System, the issuer of the commercial paper
          or any other person; at the election of the Fund, it shall be entitled
          to be subrogated to the rights of the Custodian with respect to any
          claim against the System, the issuer of the commercial paper or any
          other person which the Custodian may have as a consequence of any such
          loss or damage if and to the extent that the Fund has not been made
          whole for any such loss or damage.

                                      -13-
<PAGE>
     N.   SEGREGATED ACCOUNT. The Custodian shall upon receipt of proper
          instructions establish and maintain a segregated account or accounts
          for and on behalf of the Fund, into which account or accounts may be
          transferred cash and/or securities, including securities maintained in
          an account by the Custodian pursuant to Paragraph L hereof, (i) in
          accordance with the provisions of any agreement among the Fund, the
          Custodian and any registered broker-dealer (or any futures commission
          merchant), relating to compliance with the rules of the Options
          Clearing Corporation and of any registered national securities
          exchange (or of the Commodity Futures Trading Commission or of any
          contract market or commodities exchange), or of any similar
          organization or organizations, regarding escrow or deposit or other
          arrangements in connection with transactions by the Fund, (ii) for
          purposes of segregating cash or U.S. Government securities in
          connection with options purchased, sold or written by the Fund or
          futures contracts or options thereon purchased or sold by the Fund,
          (iii) for the purposes of compliance by the Fund with the procedures
          required by Investment Company Act Release No. 10666, or any
          subsequent release or releases of the Securities and Exchange
          Commission relating to the maintenance of segregated accounts by
          registered investment companies and (iv) for other proper purposes,
          BUT ONLY, in the case of clause (iv), upon receipt of, in addition to
          proper instructions, a certificate signed by two officers of the Fund,
          setting forth the purpose such segregated account and declaring such
          purpose to be a proper purpose.

     O.   OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian shall execute
          ownership and other certificates and affidavits for all federal and
          state tax purposes in connection with receipt of income or other
          payments with respect to securities of the Fund held by it and in
          connection with transfers of securities.

     P.   PROXIES. The Custodian shall, with respect to the securities held by
          it hereunder, cause to be promptly delivered to the Fund all forms of
          proxies and all notices of meetings and any other notices or
          announcements or other written information affecting or relating to
          the securities, and upon receipt of proper instructions shall execute
          and deliver or cause its nominee to execute and deliver such proxies
          or other authorizations as may be required. Neither the Custodian nor
          its nominee shall vote upon any of the securities or execute any proxy
          to vote thereon or give any consent or take any other action with
          respect thereto (except as otherwise herein provided) unless ordered
          to do so by proper instructions.

     Q.   COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES. The Custodian
          shall deliver promptly to the Fund all written information (including,
          without limitation, pendency of call and maturities of securities and
          participation interests and expirations of rights in connection
          therewith and notices of exercise of call and put options written by
          the Fund and the maturity of futures contracts purchased or sold by
          the Fund) received by the Custodian from issuers and other persons
          relating to the securities and participation interests being held for
          the Fund. With respect to tender or exchange offers, the Custodian
          shall deliver promptly to the Fund all written information received by
          the Custodian from issuers and other persons relating to the
          securities and participation interests whose tender or exchange is
          sought and from the party (or his agents) making the tender or
          exchange offer.

                                      -14-
<PAGE>
     R.   EXERCISE OF RIGHTS; TENDER OFFERS. In the case of tender offers,
          similar offers to purchase or exercise rights (including, without
          limitation, pendency of calls and maturities of securities and
          participation interests and expirations of rights in connection
          therewith and notices of exercise of call and put options and the
          maturity of futures contracts) affecting or relating to securities and
          participation interests held by the Custodian under this Agreement,
          the Custodian shall have responsibility for promptly notifying the
          Fund of all such offers in accordance with the standard of reasonable
          care set forth in Section 8 hereof. For all such offers for which the
          Custodian is responsible as provided in this Paragraph R, the Fund
          shall have responsibility for providing the Custodian with all
          necessary instructions in timely fashion. Upon receipt of proper
          instructions, the Custodian shall timely deliver to the issuer or
          trustee thereof, or to the agent of either, warrants, puts, calls,
          rights or similar securities for the purpose of being exercised or
          sold upon proper receipt therefor and upon receipt of assurances
          satisfactory to the Custodian that the new securities and cash, if
          any, acquired by such action are to be delivered to the Custodian or
          any subcustodian employed pursuant to Section 2 hereof. Upon receipt
          of proper instructions, the Custodian shall timely deposit securities
          upon invitations for tenders of securities upon proper receipt
          therefor and upon receipt of assurances satisfactory to the Custodian
          that the consideration to be paid or delivered or the tendered
          securities are to be returned to the Custodian or subcustodian
          employed pursuant to Section 2 hereof. Notwithstanding any provision
          of this Agreement to the contrary, the Custodian shall take all
          necessary action, unless otherwise directed to the contrary by proper
          instructions, to comply with the terms of all mandatory or compulsory
          exchanges, calls, tenders, redemptions, or similar rights of security
          ownership, and shall thereafter promptly notify the Fund in writing of
          such action.

     S.   DEPOSITORY RECEIPTS. The Custodian shall, upon receipt of proper
          instructions, surrender or cause to be surrendered foreign securities
          to the depository used by an issuer of American Depository Receipts or
          International Depository Receipts (hereinafter collectively referred
          to as "ADRs") for such securities, against a written receipt therefor
          adequately describing such securities and written evidence
          satisfactory to the Custodian that the depository has acknowledged
          receipt of instructions to issue with respect to such securities ADRs
          in the name of a nominee of the Custodian or in the name or nominee
          name of any subcustodian employed pursuant to Section 2 hereof, for
          delivery to the Custodian or such subcustodian at such place as the
          Custodian or such subcustodian may from time to time designate. The
          Custodian shall, upon receipt of proper instructions, surrender ADRs
          to the issuer thereof against a written receipt therefor adequately
          describing the ADRs surrendered and written evidence satisfactory to
          the Custodian that the issuer of the ADRs has acknowledged receipt of
          instructions to cause its depository to deliver the securities
          underlying such ADRs to the Custodian or to a subcustodian employed
          pursuant to Section 2 hereof.

     T.   INTEREST BEARING CALL OR TIME DEPOSITS. The Custodian shall, upon
          receipt of proper instructions, place interest bearing fixed term and
          call deposits with the banking department of such banking institution
          (other than the Custodian) and in such amounts as the Fund may
          designate. Deposits may be denominated in U.S. Dollars or other
          currencies. The Custodian shall include in its records with respect to
          the assets of the Fund appropriate notation as to the amount and
          currency of each such deposit, the accepting banking institution and
          other appropriate details and shall retain such forms of advice or

                                      -15-
<PAGE>
          receipt evidencing the deposit, if any, as may be forwarded to the
          Custodian by the banking institution. Such deposits shall be deemed
          portfolio securities of the applicable Fund for the purposes of this
          Agreement, and the Custodian shall be responsible for the collection
          of income from such accounts and the transmission of cash to and from
          such accounts.

     U.   OPTIONS, FUTURES CONTRACTS AND FOREIGN CURRENCY TRANSACTIONS.

               1. OPTIONS. The Custodians shall, upon receipt of proper
               instructions and in accordance with the provisions of any
               agreement between the Custodian, any registered broker-dealer
               and, if necessary, the Fund, relating to compliance with the
               rules of the Options Clearing Corporation or of any registered
               national securities exchange or similar organization or
               organizations, receive and retain confirmations or other
               documents, if any, evidencing the purchase or writing of an
               option on a security or securities index or other financial
               instrument or index by the Fund; deposit and maintain in a
               segregated account for each Fund separately, either physically or
               by book-entry in a Securities System, securities subject to a
               covered call option written by the Fund; and release and/or
               transfer such securities or other assets only in accordance with
               a notice or other communication evidencing the expiration,
               termination or exercise of such covered option furnished by the
               Options Clearing Corporation, the securities or options exchange
               on which such covered option is traded or such other organization
               as may be responsible for handling such options transactions. The
               Custodian and the broker-dealer shall be responsible for the
               sufficiency of assets held in each Fund's segregated account in
               compliance with applicable margin maintenance requirements.

               2. FUTURES CONTRACTS. The Custodian shall, upon receipt of proper
               instructions, receive and retain confirmations and other
               documents, if any, evidencing the purchase or sale of a futures
               contract or an option on a futures contract by the Fund; deposit
               and maintain in a segregated account, for the benefit of any
               futures commission merchant, assets designated by the Fund as
               initial, maintenance or variation "margin" deposits (including
               mark-to-market payments) intended to secure the Fund's
               performance of its obligations under any futures contracts
               purchased or sold or any options on futures contracts written by
               Fund, in accordance with the provisions of any agreement or
               agreements among the Fund, the Custodian and such futures
               commission merchant, designed to comply with the rules of the
               Commodity Futures Trading Commission and/or of any contract
               market or commodities exchange or similar organization regarding
               such margin deposits or payments; and release and/or transfer
               assets in such margin accounts only in accordance with any such
               agreements or rules. The Custodian and the futures commission
               merchant shall be responsible for the sufficiency of assets held
               in the segregated account in compliance with the applicable
               margin maintenance and mark-to-market payment requirements.

                                      -16-
<PAGE>
               3. FOREIGN EXCHANGE TRANSACTIONS. The Custodian shall, pursuant
               to proper instructions, enter into or cause a subcustodian to
               enter into foreign exchange contracts or options to purchase and
               sell foreign currencies for spot and future delivery on behalf
               and for the account of the Fund. Such transactions may be
               undertaken by the Custodian or subcustodian with such banking or
               financial institutions or other currency brokers, as set forth in
               proper instructions. Foreign exchange contracts and options shall
               be deemed to be portfolio securities of the Fund; and
               accordingly, the responsibility of the Custodian therefor shall
               be the same as and no greater than the Custodian's responsibility
               in respect of other portfolio securities of the Fund. The
               Custodian shall be responsible for the transmittal to and receipt
               of cash from the currency broker or banking or financial
               institution with which the contract or option is made, the
               maintenance of proper records with respect to the transaction and
               the maintenance of any segregated account required in connection
               with the transaction. The Custodian shall have no duty with
               respect to the selection of the currency brokers or banking or
               financial institutions with which the Fund deals or for their
               failure to comply with the terms of any contract or option.
               Without limiting the foregoing, it is agreed that upon receipt of
               proper instructions and insofar as funds are made available to
               the Custodian for the purpose, the Custodian may (if determined
               necessary by the Custodian to consummate a particular transaction
               on behalf and for the account of the Fund) make free outgoing
               payments of cash in the form of U.S. dollars or foreign currency
               before receiving confirmation of a foreign exchange contract or
               confirmation that the counter value currency completing the
               foreign exchange contact has been delivered or received. The
               Custodian shall not be responsible for any costs and interest
               charges which may be incurred by the Fund or the Custodian as a
               result of the failure or delay of third parties to deliver
               foreign exchange; provided that the Custodian shall nevertheless
               be held to the standard of care set forth in, and shall be liable
               to the Fund in accordance with, the provisions of Section 8.

     V.   ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY. The Custodian may in its
          discretion, without express authority from the Fund:

               1)   make payments to itself or others for minor expenses of
                    handling securities or other similar items relating to its
                    duties under this Agreement, PROVIDED, that all such
                    payments shall be accounted for by the Custodian to the
                    Treasurer of the Fund;

               2)   surrender securities in temporary form for securities in
                    definitive form;

               3)   endorse for collection, in the name of the Fund, checks,
                    drafts and other negotiable instruments; and

               4)   in general, attend to all nondiscretionary details in
                    connection with the sale, exchange, substitution, purchase,
                    transfer and other dealings with the securities and property
                    of the Fund except as otherwise directed by the Fund.

                                      -17-
<PAGE>
     W.   ADVANCES BY THE BANK. The Bank may, in its sole discretion, advance
          funds on behalf of the Fund to make any payment permitted by this
          Agreement upon receipt of any proper authorization required by this
          Agreement for such payments by the Fund. Should such a payment or
          payments, with advanced funds, result in an overdraft (due to
          insufficiencies of the Fund's account with the Bank, or for any other
          reason) this Agreement deems any such overdraft or related
          indebtedness a loan made by the Bank to the Fund payable on demand.
          Such overdraft shall bear interest at the current rate charged by the
          Bank for such secured loans unless the Fund shall provide the Bank
          with agreed upon compensating balances. The Fund agrees that the Bank
          shall have a continuing lien and security interest to the extent of
          any overdraft or indebtedness or the extent required by law, whichever
          is greater, in and to any property at any time held by it for the
          Fund's benefit or in which the Fund has an interest and which is then
          in the Bank's possession or control (or in the possession or control
          of any third party acting on the Bank's behalf). The Fund authorizes
          the Bank, in the Bank's sole discretion, at any time to charge any
          overdraft or indebtedness, together with interest due thereon, against
          any balance of account standing to the credit of the Fund on the
          Bank's books.

4.   DUTIES OF BANK WITH RESPECT TO BOOKS OF ACCOUNT AND CALCULATIONS OF NET
     ASSET VALUE

     The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account (including records showing the adjusted tax costs of the Fund's
portfolio securities) and render as at the close of business on each day a
detailed statement of the amounts received or paid out and of securities
received or delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any executive officer of
the Fund; and shall compute and determine, as of the close of business of the
New York Stock Exchange, or at such other time or times as the Board may
determine, the net asset value of a Share in the Fund, such computation and
determination to be made in accordance with the governing documents of the Fund
and the votes and instructions of the Board at the time in force and applicable,
and promptly notify the Fund and its investment adviser and such other persons
as the Fund may request of the result of such computation and determination. In
computing the net asset value the Custodian may rely upon security quotations
received by telephone or otherwise from sources or pricing services designated
by the Fund by proper instructions, and may further rely upon information
furnished to it by any authorized officer of the Fund relative (a) to
liabilities of the Fund not appearing on its books of account, (b) to the
existence, status and proper treatment of any reserve or reserves, (c) to any
procedures established by the Board regarding the valuation of portfolio
securities, and (d) to the value to be assigned to any bond, note, debenture,
Treasury bill, repurchase agreement, subscription right, security, participation
interests or other asset or property for which market quotations are not readily
available.

5.   RECORDS AND MISCELLANEOUS DUTIES

     The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of

                                      -18-
<PAGE>
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, to the Securities and
Exchange Commission, including Forms N-SAR and N-1Q, to state "blue sky"
authorities and to others, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.

6.   OPINION OF FUND'S INDEPENDENT PUBLIC ACCOUNTANTS

     The Custodian shall take all reasonable action, as the Fund may from time
to time request, to enable the Fund to obtain from year to year favorable
opinions from the Fund's independent public accountants with respect to its
activities hereunder in connection with the preparation of the Fund's
registration statement and Form N-SAR or other periodic reports to the
Securities and Exchange Commission and with respect to any other requirements of
such Commission.

7.   COMPENSATION AND EXPENSES OF BANK

     The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.

8.   RESPONSIBILITY OF BANK

     So long as and to the extent that it is in the exercise of reasonable care,
the Bank as Custodian and Agent shall be held harmless in acting upon any
notice, request, consent, certificate or other instrument reasonably believed by
it to be genuine and to be signed by the proper party or parties.

     The Bank as Custodian and Agent shall be entitled to rely on and may act
upon advice of counsel (who may be counsel for the Fund) on all matters, and
shall be without liability for any action reasonably taken or omitted pursuant
to such advice.

     The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in

                                      -19-
<PAGE>
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.

     The Custodian shall be liable for the acts or omissions of a foreign
banking institution to the same extent as set forth with respect to
subcustodians generally in Section 2 hereof, provided that, regardless of
whether assets are maintained in the custody of a foreign banking institution, a
foreign securities depository or a branch of a U.S. bank, the Custodian shall
not be liable for any loss, damage, cost, expense, liability or claim resulting
from, or caused by, the direction of or authorization by the Fund to maintain
custody of any securities or cash of the Fund in a foreign county including, but
not limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.

     If the Fund requires the Bank in any capacity to take any action with
respect to securities, which action involves the payment of money or which
action may, in the opinion of the Bank, result in the Bank or its nominee
assigned to the Fund being liable for the payment of money or incurring
liability of some other form, the Fund, as a prerequisite to requiring the
Custodian to take such action, shall provide indemnity to the Custodian in an
amount and form satisfactory to it.

9.   PERSONS HAVING ACCESS TO ASSETS OF THE FUND

     (i) No trustee, director, general partner, officer, employee or agent of
the Fund shall have physical access to the assets of the Fund held by the
Custodian or be authorized or permitted to withdraw any investments of the Fund,
nor shall the Custodian deliver any assets of the Fund to any such person. No
officer or director, employee or agent of the Custodian who holds any similar
position with the Fund or the investment adviser of the Fund shall have access
to the assets of the Fund.

     (ii) Access to assets of the Fund held hereunder shall only be available to
duly authorized officers, employees, representatives or agents of the Custodian
or other persons or entities for whose actions the Custodian shall be
responsible to the extent permitted hereunder, or to the Fund's independent
public accountants in connection with their auditing duties performed on behalf
of the Fund.

     (iii) Nothing in this Section 9 shall prohibit any officer, employee or
agent of the Fund or of the investment adviser of the Fund from giving
instructions to the Custodian or executing a certificate so long as it does not
result in delivery of or access to assets of the Fund prohibited by paragraph
(i) of this Section 9.

10.  EFFECTIVE PERIOD, TERMINATION AND AMENDMENT; SUCCESSOR CUSTODIAN

     This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated by either party after August 31, 2000
by an instrument in writing delivered or mailed, postage prepaid to the other
party, such termination to take effect not sooner than sixty (60) days after the
date of such delivery or mailing; PROVIDED, that the Fund may at any time by
action of its Board, (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian in the event the
Custodian assigns this Agreement to another party without consent of the
noninterested Trustees of the Funds, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian by the Federal Deposit Insurance Corporation or by the Banking
Commissioner of The Commonwealth of Massachusetts or upon the happening of a
like event at the direction of an appropriate regulatory agency or court of
competent jurisdiction. Upon termination of the Agreement, the Fund shall pay to

                                      -20-
<PAGE>
the Custodian such compensation as may be due as of the date of such termination
(and shall likewise reimburse the Custodian for its costs, expenses and
disbursements).

     This Agreement may be amended at any time by the written agreement of the
parties hereto. If a majority of the non-interested trustees of any of the Funds
determines that the performance of the Custodian has been unsatisfactory or
adverse to the interests of shareholders of any Fund or Funds or that the terms
of the Agreement are no longer consistent with publicly available industry
standards, then the Fund or Funds shall give written notice to the Custodian of
such determination and the Custodian shall have 60 days to (1) correct such
performance to the satisfaction of the non-interested trustees or (2)
renegotiate terms which are satisfactory to the non-interested trustees of the
Funds. If the conditions of the preceding sentence are not met then the Fund or
Funds may terminate this Agreement on sixty (60) days written notice.

     The Board of the Fund shall, forthwith, upon giving or receiving notice of
termination of this Agreement, appoint as successor custodian, a bank or trust
company having the qualifications required by the Investment Company Act of 1940
and the Rules thereunder. The Bank, as Custodian, Agent or otherwise, shall,
upon termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no written order designating a
successor custodian shall have been delivered to the Bank on or before the date
when such termination shall become effective, then the Bank shall not deliver
the securities, funds and other properties of the Fund to the Fund but shall
have the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection meeting the above required qualifications,
all funds, securities and properties of the Fund held by or deposited with the
Bank, and all books of account and records kept by the Bank pursuant to this
Agreement, and all documents held by the Bank relative thereto. Thereafter such
bank or trust company shall be the successor of the Custodian under this
Agreement.

11.  INTERPRETIVE AND ADDITIONAL PROVISIONS

     In connection with the operation of this Agreement, the Custodian and the
Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision of
the governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment of
this Agreement.

12.  NOTICES

     Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to 24 Federal Street, Boston, Massachusetts 02110, or to such other
address as the Fund may have designated to the Bank, in writing, or to Investors
Bank & Trust Company, 24 Federal Street, Boston, Massachusetts 02110, shall be
deemed to have been properly delivered or given hereunder to the respective
addressees.

13.  MASSACHUSETTS LAW TO APPLY

     This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with the laws of The Commonwealth of Massachusetts.

                                      -21-
<PAGE>
     If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of Trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.

14.  ADOPTION OF THE AGREEMENT BY THE FUND

     The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement, such adoption to be evidenced by a
letter agreement between the Fund and the Bank reflecting such adoption, which
letter agreement shall be dated and signed by a duly authorized officer of the
Fund and duly authorized officer of the Bank. This Agreement shall be deemed to
be duly executed and delivered by each of the parties in its name and behalf by
its duly authorized officer as of the date of such letter agreement, and this
Agreement shall be deemed to supersede and terminate, as of the date of such
letter agreement, all prior agreements between the Fund and the Bank relating to
the custody of the Fund's assets.




                                    * * * * *














                                      -22-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(K)(2)
<SEQUENCE>10
<FILENAME>b62570a1exv99wxkyx2y.txt
<DESCRIPTION>SUPPLEMENT TO THE TRANSFER AGENCY & SERVICES AGREEMENT
<TEXT>
<PAGE>
                                                                  Exhibit (k)(2)


(LOGO)   Eaton Vance Tax-Managed Premium and Dividend Income Fund
         ---------------------------------------------------------------------
         The Eaton Vance Building
         255 State Street
         Boston, MA 02109
         (617) 482-8260




                                                 November 14, 2005



PFPC Inc.
4400 Computer Drive
Westborough, MA 01581-5120
Attn: President

 Re: Eaton Vance Tax-Managed Premium and Dividend Income Fund

Dear Sirs:

Please be advised that, pursuant to Trustee action taken on November  14,  2005,
your firm was appointed transfer and dividend disbursing agent for  Eaton  Vance
Tax-Managed Premium and Dividend Income Fund. Accordingly, pursuant to  Sections
10(e) and 12(a) of  that  certain  Amended  and  Restated  Transfer  Agency  and
Services Agreement dated as of June 16, 2005, by and between PFPC Inc. and  each
of the various Eaton Vance Funds listed on Exhibit 1 thereto (the  "Agreement"),
you are hereby notified  that  Eaton  Vance  Tax-Managed  Premium  and  Dividend
Income Fund has been added as a party to the Agreement and that  Exhibit  1  and
Schedule B to the Agreement (as attached hereto) are hereby  restated  in  their
entirety.


                 Eaton Vance Tax-Managed Premium and Dividend
                 Income Fund


                 By:  /s/ Duncan W. Richardson
                      -------------------------------------
                      Duncan W. Richardson
                      President



Accepted and Acknowledged:

PFPC Inc.


By:  /s/ Michael G. McCarthy
     -------------------------------------
     Michael G. McCarthy
     Authorized Officer

<PAGE>
                                                                       Exhibit 1


                                  LIST OF FUNDS

                           Restated November 14, 2005



Eaton Vance California Municipal Income Trust

Eaton Vance Enhanced Equity Income Fund

Eaton Vance Enhanced Equity Income Fund II

Eaton Vance Global Enhanced Equity Income Fund

Eaton Vance Floating-Rate Income Trust

Eaton Vance Florida Municipal Income Trust

Eaton Vance Insured California Municipal Bond Fund

Eaton Vance Insured California Municipal Bond Fund II

Eaton Vance Insured Florida Municipal Bond Fund

Eaton Vance Insured Massachusetts Municipal Bond Fund

Eaton Vance Insured Michigan Municipal Bond Fund

Eaton Vance Insured Municipal Bond Fund

Eaton Vance Insured Municipal Bond Fund II

Eaton Vance Insured New Jersey Municipal Bond Fund

Eaton Vance Insured New York Municipal Bond Fund

Eaton Vance Insured New York Municipal Bond Fund II

Eaton Vance Insured Ohio Municipal Bond Fund

Eaton Vance Insured Pennsylvania Municipal Bond Fund

Eaton Vance Limited Duration Income Fund

Eaton Vance Massachusetts Municipal Income Trust

Eaton Vance Michigan Municipal Income Trust

Eaton Vance Municipal Income Trust

Eaton Vance New Jersey Municipal Income Trust

Eaton Vance New York Municipal Income Trust

Eaton Vance Ohio Municipal Income Trust

Eaton Vance Pennsylvania Municipal Income Trust

Eaton Vance Senior Floating-Rate Trust

Eaton Vance Senior Income Trust

Eaton Vance Short Duration Diversified Income Fund

Eaton Vance Tax-Advantaged Dividend Income Fund

Eaton Vance Tax-Advantaged Global Dividend Income Fund

Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund

Eaton Vance Tax-Managed Buy-Write Income Fund

Eaton Vance Tax-Managed Buy-Write Opportunities Fund

Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund

Eaton Vance Credit Opportunities Fund

Eaton Vance Tax-Managed Buy-Write Research Fund

Eaton Vance Tax-Managed Premium and Dividend Income Fund

<PAGE>

                                   SCHEDULE B

                           Restated November 14, 2005


                                  FEE SCHEDULE


1. Initial Public Offering Fees

IPO Project Administration Fee: $3,000 per Fund

IPO Project Administration Fee covers:

Issuance of up to 1,000 certificates -- Issuance of certificates  in  excess  of
1,000 to be billed at $2.00 per certificate

Administration   coordination   with   IPO   client,   underwriter   and   legal
representatives

Attendance at closing (out of pocket expenses associated  with  such  attendance
will be billed as incurred)

Set-up, testing and implementation of  electronic  settlement  and  delivery  of
shares through The Depository Trust Company

2. Over-allotment Fee: $1,000 per Fund

Applies in the event that the underwriters elect to exercise  an  over-allotment
option which requires a second closing

3. Standard Service Fee:

(a) The following standard service fees shall apply with respect to  the  shares
offered by:

  Eaton Vance Insured Municipal Bond Fund;

  Eaton Vance Insured California Municipal Bond Fund;

  Eaton Vance Insured New York Municipal Bond Fund;

  Eaton Vance Limited Duration Income Fund;

  Eaton Vance Enhanced Equity Income Fund;

  Eaton Vance Enhanced Equity Income Fund II;

  Eaton Vance Floating-Rate Income Trust;

  Eaton Vance Senior Floating-Rate Trust;

  Eaton Vance Senior Income Trust;

  Eaton Vance Short Duration Diversified Income Fund;

  Eaton Vance Tax-Advantaged Dividend Income Fund;

  Eaton Vance Tax-Advantaged Global Dividend Income Fund;

  Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund;

  Eaton Vance Global Enhanced Equity Income Fund;

  Eaton Vance Tax-Managed Buy-Write Income Fund;

  Eaton Vance Tax-Managed Buy-Write Opportunities Fund;

  Eaton Vance Tax-Managed Global Buy-Write Opportunities Fund;



<PAGE>

  Eaton Vance Credit Opportunities Fund;

  Eaton Vance Tax-Managed Buy-Write Research Fund; and

  Eaton Vance Tax-Managed Premium and Dividend Income Fund.

Annual Service Fee:   $15.00 Per Account

Monthly Minimum Fee: $5,000.00

(b) The following standard service fees shall apply with respect to the shares
offered by:

  Eaton Vance Municipal Income Trust;

  Eaton Vance California Municipal Income Trust;

  Eaton Vance Florida Municipal Income Trust;

  Eaton Vance Massachusetts Municipal Income Trust;

  Eaton Vance Michigan Municipal Income Trust;

  Eaton Vance New Jersey Municipal Income Trust;

  Eaton Vance New York Municipal Income Trust;

  Eaton Vance Ohio Municipal Income Trust; and

  Eaton Vance Pennsylvania Municipal Income Trust.

Each Fund shall pay 9 basis points annually on the average daily net assets,
paid monthly, in arrears, with respect to the shares offered by the Fund.

(c) The following standard service fees shall apply with respect to the shares
offered by:

  Eaton Vance Insured Municipal Bond Fund II;

  Eaton Vance Insured California Municipal Bond Fund II;

  Eaton Vance Insured Florida Municipal Bond Fund;

  Eaton Vance Insured Massachusetts Municipal Bond Fund;

  Eaton Vance Insured Michigan Municipal Bond Fund;

  Eaton Vance Insured New Jersey Municipal Bond Fund;

  Eaton Vance Insured New York Municipal Bond Fund II;

  Eaton Vance Insured Ohio Municipal Bond Fund; and

  Eaton Vance Insured Pennsylvania Municipal Bond Fund.

Each Fund shall pay 7.5 basis points annually on the average daily net assets,
paid monthly, in arrears, with respect to the shares offered by the Fund.

After the one year anniversary of the effective date of this Agreement, PFPC may
adjust the above fees once per calendar year, upon thirty (30) days prior
written notice in an amount not to exceed the cumulative percentage increase in
the Consumer Price Index for All Urban Consumers (CPI-U) U.S. City Average, All
items (unadjusted) -- (1982-84=100), published by the U.S. Department of Labor
since the last such adjustment in the Fund's monthly fees (or the Effective Date
absent a prior such adjustment).





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(K)(3)
<SEQUENCE>11
<FILENAME>b62570a1exv99wxkyx3y.txt
<DESCRIPTION>ADMINISTRATION AGREEMENT
<TEXT>
<PAGE>
                                                                  Exhibit (k)(3)



            EATON VANCE TAX-MANAGED PREMIUM AND DIVIDEND INCOME FUND

                            ADMINISTRATION AGREEMENT



AGREEMENT  made  this  14th  day  of  November,  2005,   between   Eaton   Vance
Tax-Managed Premium and Dividend Income Fund,  a  Massachusetts  business  trust
(the "Fund"), and Eaton Vance Management, a Massachusetts  business  trust  (the
"Administrator").



     1. Duties of the Administrator. The Fund hereby employs the Administrator
to act as administrator for and to administer the affairs of the Fund, subject
to the supervision of the Trustees of the Fund for the period and on the terms
set forth in this Agreement.



The Administrator hereby accepts such employment, and agrees to  administer  the
Fund's business affairs and, in connection therewith, to furnish for the use  of
the Fund office  space  and  all  necessary  office  facilities,  equipment  and
personnel for administering the affairs of the  Fund.  The  Administrator  shall
also pay the salaries and compensation of all officers and Trustees of the  Fund
who are members of the Administrator's organization  and  who  render  executive
and administrative services to the Fund, and the salaries  and  compensation  of
all  other  personnel   of   the   Administrator   performing   management   and
administrative services for the Fund. The Administrator shall for  all  purposes
herein be deemed to be an independent contractor and shall, except as  otherwise
expressly provided or authorized, have no authority to act for or represent  the
Fund in any way or otherwise be deemed an agent of the Fund.



In connection with its  responsibilities  as  Administrator  of  the  Fund,  the
Administrator (i) will assist in preparing all  annual,  semi-annual  and  other
reports required to be sent to Fund shareholders, and arrange for  the  printing
and dissemination of  such  reports  to  shareholders;  (ii)  will  prepare  and
assemble all reports required to be filed by the Fund with  the  Securities  and
Exchange Commission ("SEC") on Forms N-SAR and N-CSR, or on such other  form  as
the SEC may substitute for Form N-SAR or N-CSR, and file such reports  with  the
SEC; (iii) will review the provision  of  services  by  the  Fund's  independent
accountants, including, but not limited to, the preparation by such  accountants
of audited financial statements of the Fund and the Fund's  federal,  state  and
local tax returns; and make such reports and recommendations to the Trustees  of
the Fund concerning the  performance  of  the  independent  accountants  as  the
Trustees  deem  appropriate;  (iv)  will  arrange  for  the  filing   with   the
appropriate authorities all required federal, state and local tax  returns;  (v)
will  arrange  for  the  dissemination  to  shareholders  of  the  Fund's  proxy
materials, and will oversee the tabulation of proxies  by  the  Fund's  transfer
agent or other duly authorized proxy tabulator; (vi) will review  and  supervise
the provision of custodian services to the  Fund;  and  make  such  reports  and
recommendations to the Trustees concerning the provision  of  such  services  as
the Trustees deem appropriate; (vii) will value all such  portfolio  investments
and other assets of the Fund as may be designated by the  Trustees  (subject  to
any guidelines, directions and instructions of the  Trustees),  and  review  and
supervise the calculation of the net asset value of the  Fund's  shares  by  the
custodian; (viii) will negotiate the terms and conditions under  which  transfer
agency and dividend disbursing services will be provided to the  Fund,  and  the
fees to be paid by the Fund in connection therewith; review  and  supervise  the
provision of transfer agency and dividend disbursing services to the  Fund;  and
make  such  reports  and  recommendations  to  the   Trustees   concerning   the
performance of  the  Fund's  transfer  and  dividend  disbursing  agent  as  the
Trustees deem appropriate; (ix) will establish the accounting  policies  of  the
Fund; reconcile accounting issues which may arise with  respect  to  the  Fund's
operations; and consult with the Fund's independent accountants, legal  counsel,
custodian,  accounting  and  bookkeeping  agents  and  transfer   and   dividend
disbursing agent as necessary in connection therewith; (x)  will  determine  the
amount of all distributions to be paid by the Fund to its shareholders;  prepare
and  arrange  for  the  printing  of  notices  to  shareholders  regarding  such
distributions and provide the Fund's transfer and dividend disbursing agent  and
custodian with such information as is required for such parties  to  effect  the
payment of distributions and to implement



<PAGE>

the Fund's dividend reinvestment plan; (xi) will review the  Fund's  bills  and
authorize payments of such bills by  the  Fund's  custodian;  (xii)  will  make
recommendations to the Trustees as to whether the Fund should  make  repurchase
or tender offers for its own shares; arrange for the preparation and filing  of
all documents required to be filed by the Fund with the SEC;  arrange  for  the
preparation and dissemination of all appropriate  repurchase  or  tender  offer
documents and papers on behalf of the  Fund;  and  supervise  and  conduct  the
Fund's periodic repurchase or tender offers for its own shares; (xiii)  monitor
any variance between the market value  and  net  asset  value  per  share,  and
periodically report to the Trustees available actions  that  may  conform  such
values; (xiv)  monitor  the  activities  of  any  shareholder  servicing  agent
retained by the Administrator and periodically report  to  the  Trustees  about
such activities; (xv) will arrange for the preparation and filing of all  other
reports, forms, registration statements and documents required to be  filed  by
the Fund with the SEC, the National Association of Securities Dealers, Inc. and
any securities exchange where Fund shares are listed; and (xvi) will provide to
the Fund such other  internal  legal,  auditing  and  accounting  services  and
internal executive management and administrative services as the Trustees  deem
appropriate to conduct the Fund's business affairs.



     Notwithstanding the foregoing, the Administrator shall not be deemed to
have assumed any duties with respect to, and shall not be responsible for, the
management of the Fund's assets or the rendering of investment advice and
supervision with respect thereto or the distribution of shares of the Fund, nor
shall the Administrator be deemed to have assumed or have any responsibility
with respect to functions specifically assumed by any transfer agent, custodian
or shareholder servicing agent of the Fund.

     Sub-Administrators. The Administrator may employ one or more
sub-administrators from time to time to perform such of the acts and services of
the Administrator and upon such terms and conditions as may be agreed upon
between the Administrator and such sub-administrators and approved by the
Trustees of the Fund.

     2. Compensation of the Administrator. The Board of Trustees of the Fund
have currently determined that, based on the current level of compensation
payable to Eaton Vance Management by the Fund under the Fund's present
Investment Advisory Agreement with Eaton Vance Management, the Administrator
shall receive no compensation from the Fund in respect of the services to be
rendered and the facilities to be provided by the Administrator under this
Agreement. If the Trustees subsequently determine that the Fund should
compensate the Administrator for such services and facilities, such compensation
shall be set forth in a new agreement or in an amendment to this Agreement to be
entered into by the parties hereto.

     3. Allocation of Charges and Expenses. It is understood that the Fund will
pay all its expenses other than those expressly stated to be payable by the
Administrator hereunder, which expenses payable by the Fund shall include,
without implied limitation, (i) expenses of maintaining the Fund and continuing
its existence; (ii) registration of the Fund under the Investment Company Act of
1940; (iii) commissions, fees and other expenses connected with the acquisition,
holding and disposition of securities and other investments; (iv) auditing,
accounting and legal expenses; (v) taxes and interest; (vi) governmental fees;
(vii) expenses of repurchase and redemption (if any) of shares, including all
expenses incurred in conducting repurchase and tender offers for the purpose of
repurchasing Fund shares; (viii) expenses of registering and qualifying the Fund
and its shares under federal and state securities laws and of preparing
registration statements and amendments for such purposes; (ix) expenses of
reports and notices to shareholders and of meetings of shareholders and proxy
solicitations therefor; (x) expenses of reports to governmental officers and
commissions; (xi) insurance expenses; (xii) association membership dues; (xiii)
fees, expenses and disbursements of custodians and subcustodians for all
services to the Fund (including without limitation safekeeping of funds and
securities, keeping of books and accounts and determination of net asset value);
(xiv) fees, expenses and disbursements of transfer agents, dividend disbursing
agents,


2
<PAGE>
shareholder servicing agents and registrars for all services to the Fund;  (xv)
expenses of listing shares with a stock exchange; (xvi) any direct  charges  to
shareholders approved by the Trustees of the Fund; (xvii) compensation  of  and
any expenses of Trustees of the Fund who are not members of the Administrator's
organization; (xviii) all payments to be made and expenses to be assumed by the
Fund in connection with the distribution of Fund shares; (xix) any pricing  and
valuation services employed by the  Fund;  (xx)  any  investment  advisory  fee
payable to an investment adviser; (xxi) all  expenses  incurred  in  connection
with leveraging the Fund's assets through a line  of  credit,  or  issuing  and
maintaining preferred shares; and (xxii) such non-recurring items as may arise,
including expenses incurred in  connection  with  litigation,  proceedings  and
claims and obligations of the Fund to  indemnify  its  shareholders,  Trustees,
officers and employees with respect thereto.



     4. Other Interests. It is understood that Trustees, officers and
shareholders of the Fund are or may be or become interested in the Administrator
as trustees, officers, employees, shareholders or otherwise and that trustees,
officers, employees and shareholders of the Administrator are or may be or
become similarly interested in the Fund, and that the Administrator may be or
become interested in the Fund as a shareholder or otherwise. It is also
understood that trustees, officers, employees and shareholders of the
Administrator may be or become interested (as directors, trustees, officers,
employees, stockholders or otherwise) in other companies or entities (including,
without limitation, other investment companies) that the Administrator may
organize, sponsor or acquire, or with which it may merge or consolidate, and
that the Administrator or its subsidiaries or affiliates may enter into
advisory, management or administration agreements or other contracts or
relationship with such other companies or entities.

     5. Limitation of Liability of the Administrator. The services of the
Administrator to the Fund are not to be deemed to be exclusive, the
Administrator being free to render services to others and engage in other
business activities. In the absence of willful misfeasance, bad faith, gross
negligence or reckless disregard of obligations or duties hereunder on the part
of the Administrator, the Administrator shall not be subject to liability to the
Fund or to any shareholder of the Fund for any act or omission in the course of,
or connected with, rendering services hereunder or for any losses which may be
sustained in the acquisition, holding or disposition of any security or other
investment.

     6. Duration and Termination of this Agreement. This Agreement shall become
effective upon the date of its execution, and, unless terminated as herein
provided, shall remain in full force and effect through and including November
14, 2007 and shall continue in full force and effect indefinitely thereafter,
but only so long as such continuance after November 14, 2007 is specifically
approved at least annually (i) by the Board of Trustees of the Fund, and (ii) by
the vote of a majority of those Trustees of the Fund who are not interested
persons of the Administrator or the Fund.

     Either party hereto may, at any time on sixty (60) days' prior written
notice to the other, terminate this Agreement by action of the Trustees of the
Fund or the trustees of the Administrator, and the Fund may, at any time upon
such written notice to the Administrator, terminate the Agreement by vote of a
majority of the outstanding voting securities of the Fund. This Agreement shall
terminate automatically in the event of its assignment.

     7. Amendments of the Agreement. This Agreement may be amended by a writing
signed by both parties hereto, provided that no amendment to this Agreement
shall be effective until approved (i) by the vote of a majority of those
Trustees of the Fund who are not interested persons of the Administrator or the
Fund, and (ii) by vote of the Board of Trustees of the Fund.


3
<PAGE>

     8. Limitation of Liability. Each party expressly acknowledges the provision
in the other party's Agreement and Declaration of Trust limiting the personal
liability of its shareholders officers, and Trustees, and each party hereby
agrees that it shall have recourse to the other party for payment of claims or
obligations as between the Fund and the Administrator arising out of this
Agreement and shall not seek satisfaction from the Trustees, officers or
shareholders of the other party.

     9. Use of the Name "Eaton Vance." The Administrator hereby consents to the
use by the Fund of the name "Eaton Vance" as part of the Fund's name; provided,
however, that such consent shall be conditioned upon the employment of the
Administrator or one of its affiliates as the administrator of the Fund. The
name "Eaton Vance" or any variation thereof may be used from time to time in
other connections and for other purposes by the Administrator and its affiliates
and other investment companies that have obtained consent to the use of the name
"Eaton Vance." The Administrator shall have the right to require the Fund to
cease using the name "Eaton Vance" as part of the Fund's name if the Fund
ceases, for any reason, to employ the Administrator or one of its affiliates as
the Fund's administrator. Future names adopted by the Fund for itself, insofar
as such names include identifying words requiring the consent of the
Administrator, shall be the property of the Administrator and shall be subject
to the same terms and conditions.

     10. Certain Definitions. The terms "assignment" and "interested persons"
when used herein shall have the respective meanings specified in the Investment
Company Act of 1940 as now in effect or as hereafter amended subject, however,
to such exemptions as may be granted by the Securities and Exchange Commission
by any rule, regulation or order. The term "vote of a majority of the
outstanding voting securities" shall mean the vote of the lesser of (a) 67 per
centum or more of the shares of the Fund present or represented by proxy at the
meeting if the holders of more than 50 per centum of the outstanding shares of
the Fund are present or represented by proxy at the meeting, or (b) more than 50
per centum of the outstanding shares of the Fund.


EATON VANCE TAX-MANAGED PREMIUM         EATON VANCE MANAGEMENT
AND DIVIDEND INCOME FUND


By: /s/ Duncan W. Richardson            By: /s/ Jeffrey P. Beale
    ---------------------------------       --------------------------------
    Duncan W. Richardson                    Jeffrey P. Beale
    President, and not Individually         Vice President, and not Individually


4



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(K)(5)
<SEQUENCE>12
<FILENAME>b62570a1exv99wxkyx5y.txt
<DESCRIPTION>EX-99.(K)(5) FORM OF STRUCTURING FEE AGREEMENT
<TEXT>
<PAGE>
                                                                  Exhibit (k)(5)


                            STRUCTURING FEE AGREEMENT



                                                             November ____, 2006

Wachovia Capital Markets, LLC
375 Park Avenue
New York, NY 10152

Ladies and Gentlemen:

      Reference is made to the Underwriting Agreement dated the date hereof (the
"Underwriting Agreement"), by and among Eaton Vance Tax-Managed Premium and
Dividend Income Fund (the "Fund"), Eaton Vance Management (the "Adviser") and
each of the Underwriters named therein, with respect to the issue and sale of
the Fund's Common Shares, as described therein. Capitalized terms used herein
and not otherwise defined shall have the meanings given to them in the
Underwriting Agreement.

      1. Fee. In consideration of your services in offering advice to the
Advisor relating to the structure and design of the Fund and the organization of
the Fund as well as services related to the sale and distribution of the Fund's
Common Shares, the Adviser shall pay a fee to you in the aggregate amount of
$____________ (the "Fee"). The Fee shall be paid by wire transfer to the order
of Wachovia Capital Markets, LLC.

      2. Term. This Agreement shall terminate upon the payment of the entire
amount of the Fee, as specified in Section 1 hereof.

      3. Indemnification. The Adviser agrees to the indemnification and other
agreements set forth in the Indemnification Agreement attached hereto, the
provisions of which are incorporated herein by reference and shall survive the
termination, expiration or supersession of this Agreement.

      4. Not an Investment Adviser; No Fiduciary Duty. The Adviser acknowledges
that you are not providing any advice hereunder as to the value of securities or
regarding the advisability of purchasing or selling any securities for the
Fund's portfolio. No provision of this Agreement shall be considered as
creating, nor shall any provision create, any obligation on the part of you, and
you are not agreeing hereby, to: (i) furnish any advice or make any
recommendations regarding the purchase or sale of portfolio securities; or (ii)
render any opinions, valuations or recommendations of any kind or to perform any
such similar services. The Adviser hereby acknowledges that your engagement
under this Agreement is as an independent contractor and not in any other
capacity, including as a fiduciary. Furthermore, the Adviser agrees that it is
solely responsible for making its own judgments in connection with the

<PAGE>

matters covered by this Agreement (irrespective of whether you have advised or
are currently advising the Adviser on related or other matters).

      5. Not Exclusive. Nothing herein shall be construed as prohibiting you or
your affiliates from acting as an underwriter or financial adviser or in any
other capacity for any other persons (including other registered investment
companies or other investment managers).

      6. Assignment. This Agreement may not be assigned by any party without
prior written consent of the other party.

      7. Amendment; Waiver. No provision of this Agreement may be amended or
waived except by an instrument in writing signed by the parties hereto.

      8. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.

      9. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, and all of which, when taken
together, shall constitute one agreement. Delivery of an executed signature page
of this Agreement by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.

      10. Disclaimer of Liability of Trustees and Beneficiaries. A copy of the
Agreement and Declaration of Trust of each of the Fund and the Adviser is on
file with the Secretary of State of The Commonwealth of Massachusetts, and
notice hereby is given that this Structuring Fee Agreement is executed on behalf
of the Fund and the Adviser, respectively, by an officer or Trustee of the Fund
or the Adviser, as the case may be, in his or her capacity as an officer or
Trustee of the Fund or the Adviser, as the case may be, and not individually and
that the obligations under or arising out of this Structuring Fee Agreement are
not binding upon any of the Trustees, officers or shareholders individually but
are binding only upon the assets and properties of the Fund or the Adviser, as
the case may be.


                               [END OF TEXT]


                                       2
<PAGE>
      This Agreement shall be effective as of the date first written above.


                                    EATON VANCE MANAGEMENT


                                    By:
                                       ------------------------------------
                                       Name:
                                       Title:


Agreed and Accepted:


WACHOVIA CAPITAL MARKETS, LLC



By:
    --------------------------------
    Name:
    Title:


                           [Structuring Fee Agreement]


<PAGE>

                            INDEMNIFICATION AGREEMENT


                                                              November ___, 2006
Wachovia Capital Markets, LLC
375 Park Avenue
New York, NY 10152

Ladies and Gentlemen:

In connection with the engagement of Wachovia Capital Markets, LLC (the "Bank")
to advise and assist the undersigned (together with its affiliates and
subsidiaries, referred to as the "Company") with the matters set forth in the
Structuring Fee Agreement dated November ___, 2006 between the Company and the
Bank (the "Agreement"), in the event that the Bank becomes involved in any
capacity in any claim, suit, action, proceeding, investigation or inquiry
(including, without limitation, any shareholder or derivative action or
arbitration proceeding) (collectively, a "Proceeding") with respect to the
services performed pursuant to and in accordance with the Agreement, the Company
agrees to indemnify, defend and hold the Bank harmless to the fullest extent
permitted by law, from and against any losses, claims, damages, liabilities and
expenses with respect to the services performed pursuant to and in accordance
with the Agreement, except to the extent that it shall be determined by a court
of competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review, that such losses, claims, damages,
liabilities and expenses resulted primarily from the gross negligence or willful
misconduct of the Bank. In addition, in the event that the Bank becomes involved
in any capacity in any Proceeding with respect to the services performed
pursuant to and in accordance with the Agreement, the Company will reimburse the
Bank for its legal and other expenses (including the cost of any investigation
and preparation) as such expenses are incurred by the Bank in connection
therewith. Promptly after receipt by the Bank of notice of the commencement of
any Proceeding, the Bank will, if a claim in respect thereof is to be made
against the Bank under this paragraph, notify the Company in writing of the
commencement thereof; but the failure so to notify the Company (i) will not
relieve the Company from liability under this paragraph unless and to the extent
the Company did not otherwise learn of such Proceeding and such failure results
in the forfeiture by the Company of substantial rights and defenses and (ii)
will not, in any event, relieve the Company from any obligations to the Bank
other than the indemnification obligation provided above. The Company shall be
entitled to appoint counsel of the Company's choice at the Company's expense to
represent the Bank in any Proceeding for which indemnification is sought (in
which case the Company shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the Bank or parties except as set
forth below); provided, however, that such counsel shall be reasonably
satisfactory to the Bank. Notwithstanding the Company's election to appoint
counsel to represent the Bank in a Proceeding, the Bank shall have the right to
employ one separate counsel (in addition to any local counsel), and the Company
shall bear the reasonable fees, costs and expenses of such separate counsel if
(i) the use of counsel chosen by the Company to represent the Bank would present
such counsel with a conflict of interest, (ii) the


                                       4
<PAGE>

actual or potential defendants in, or targets of, any such Proceeding include
both the Bank and the Company and the Bank shall have reasonably concluded that
there may be legal defenses available to it and/or other indemnified parties
which are different from or additional to those available to the Company, (iii)
the Company shall not have employed counsel satisfactory to the Bank to
represent the Bank within a reasonable time after notice of the institution of
such Proceeding or (iv) the Company shall authorize the Bank to employ separate
counsel at the expense of the Company. In no event shall the Company be liable
for the fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for the Bank and/or the other
Underwriters (as defined in the Underwriting Agreement) (taken as a group) that
have entered into a structuring fee agreement, an additional compensation
agreement or similar agreement pursuant to which the Company pays additional
compensation to the respective Underwriter in connection with the offering
contemplated in the Underwriting Agreement, in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances.

      If such indemnification were not to be available for any reason, the
Company agrees to contribute to the losses, claims, damages, liabilities and
expenses involved (i) in the proportion appropriate to reflect the relative
benefits received or sought to be received by the Company and its stockholders
and affiliates, on the one hand, and the Bank, on the other hand, in the matters
contemplated by the Agreement or (ii) if (but only if and to the extent) the
allocation provided for in clause (i) is for any reason held unenforceable, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) but also the relative fault of the Company and its
stockholders and affiliates, on the one hand, and the party entitled to
contribution, on the other hand, as well as any other relevant equitable
considerations. The Company agrees that for the purposes of this paragraph the
relative benefits received, or sought to be received, by the Company and its
stockholders and affiliates, on the one hand, and the party entitled to
contribution, on the other hand, of a transaction as contemplated shall be
deemed to be in the same proportion that the total value received or paid or
contemplated to be received or paid by the Company or its stockholders or
affiliates, as the case may be, as a result of or in connection with the
transaction (whether or not consummated) for which the Bank has been retained to
perform services bears to the fees paid to the Bank under the Agreement;
provided, that in no event shall the Company contribute less than the amount
necessary to assure that the Bank is not liable for losses, claims, damages,
liabilities and expenses in excess of the amount of fees actually received by
the Bank pursuant to the Agreement. Relative fault shall be determined by
reference to, among other things, whether any alleged untrue statement or
omission or any other alleged conduct relates to information provided by the
Company or other conduct by the Company (or its employees or other agents), on
the one hand, or by the Bank, on the other hand. Notwithstanding the provisions
of this paragraph, the Bank shall not be entitled to contribution from the
Company if it is determined that the Bank was guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) and the
Company was not guilty of such fraudulent misrepresentation. The Company will
not settle any Proceeding in respect of which indemnity may be sought hereunder,
whether or not the Bank is an actual or potential party to such Proceeding,
without the Bank's prior written consent (which consent shall not be
unreasonably withheld). For purposes of this Indemnification Agreement, the Bank
shall include the Bank, any of its affiliates, each other person, if any,
controlling the Bank or any of its affiliates, their respective officers,
current and former directors, employees and agents, and the


                                       5
<PAGE>

successors and assigns of all of the foregoing persons. The foregoing indemnity
and contribution agreement shall be in addition to any rights that any
indemnified party may have at common law or otherwise.

      The Company will not be liable to the Bank for any such losses, claims,
damages, liabilities or expenses arising from the sale of securities by Eaton
Vance Tax-Managed Premium and Dividend Income Fund to any person if a copy of a
prospectus required to be delivered in connection with such sale which has been
furnished to the underwriters of the offering of the securities (within a
reasonable amount of time prior to such sale) shall not have been sent, mailed
or given to such person, at or prior to the written confirmation of the sale of
such securities to such person, but only if and to the extent that such
prospectus, if so sent or delivered, would have cured the defect giving rise to,
and been a complete defense against the person asserting, such loss, claim,
damage or liability.

      The Company agrees that neither the Bank nor any of its affiliates,
directors, agents, employees or controlling persons shall have any liability to
the Company or any person asserting claims on behalf of or in right of the
Company with respect to the services performed pursuant to and in accordance
with the Agreement, except to the extent that it shall be determined by a court
of competent jurisdiction in a judgment that has become final in that it is no
longer subject to appeal or other review that any losses, claims, damages,
liabilities or expenses incurred by the Company resulted primarily from the
gross negligence or willful misconduct of the Bank in performing the services
that are the subject of the Agreement.

      THIS INDEMNIFICATION AGREEMENT AND ANY CLAIM, COUNTERCLAIM OR DISPUTE OF
ANY KIND OR NATURE WHATSOEVER WITH RESPECT TO THE SERVICES PERFORMED PURSUANT TO
AND IN ACCORDANCE WITH THE AGREEMENT ("CLAIM"), DIRECTLY OR INDIRECTLY, SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
EXCEPT AS SET FORTH BELOW, NO CLAIM MAY BE COMMENCED, PROSECUTED OR CONTINUED IN
ANY COURT OTHER THAN THE COURTS OF THE STATE OF NEW YORK LOCATED IN THE CITY AND
COUNTY OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK, WHICH COURTS SHALL HAVE EXCLUSIVE JURISDICTION OVER THE
ADJUDICATION OF SUCH MATTERS, AND THE COMPANY AND THE BANK CONSENT TO THE
JURISDICTION OF SUCH COURTS AND PERSONAL SERVICE WITH RESPECT THERETO. THE
COMPANY HEREBY CONSENTS TO PERSONAL JURISDICTION, SERVICE AND VENUE IN ANY COURT
IN WHICH ANY CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT IS
BROUGHT BY ANY THIRD PARTY AGAINST THE BANK OR ANY INDEMNIFIED PARTY. EACH OF
THE BANK AND THE COMPANY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING OR
CLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR IN ANY
WAY RELATING TO THIS AGREEMENT. THE COMPANY AGREES THAT A FINAL JUDGMENT IN ANY
PROCEEDING OR CLAIM ARISING OUT OF OR IN ANY WAY RELATING TO THIS AGREEMENT
BROUGHT IN ANY SUCH COURT SHALL BE CONCLUSIVE AND BINDING UPON THE COMPANY AND
MAY BE ENFORCED IN ANY OTHER COURTS TO THE


                                       6
<PAGE>

JURISDICTION OF WHICH THE COMPANY IS OR MAY BE SUBJECT, BY SUIT UPON SUCH
JUDGMENT.


                                       7
<PAGE>

      The foregoing Indemnification Agreement shall remain in full force and
effect notwithstanding any termination of the Bank's engagement. This
Indemnification Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same agreement.

                                          Very truly yours,
                                          EATON VANCE MANAGEMENT


                                          By:
                                                -------------------------------
                                          Name:
                                          Title:


Accepted and agreed to as of
the date first above written:

WACHOVIA CAPITAL MARKETS, LLC


By:
      -------------------------------
      Name:
      Title:




                           [Structuring Fee Agreement]


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(N)
<SEQUENCE>13
<FILENAME>b62570a1exv99wxny.txt
<DESCRIPTION>EX-99.(N) CONSENT OF DELOITTE & TOUCHE LLP
<TEXT>
<PAGE>
                                                                     Exhibit (n)


CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the references to our Firm in this Pre-Effective Amendment No. 1
to the Registration Statement of Eaton Vance Tax-Managed Diversified Equity
Income Fund (the "Fund") on form N-2 filed by the Fund under the Securities Act
of 1933, as amended (Registration No. 333-129692) and under the Investment
Company Act of 1940, as amended (Registration No. 811-21832) under the heading
"Independent Registered Public Account Firm" in the Prospectus and Statement of
Additional Information.


/s/ Deloitte & Touche LLP
-------------------------
Boston, Massachusetts
October 20, 2006


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.(S)
<SEQUENCE>14
<FILENAME>b62570a1exv99wxsy.txt
<DESCRIPTION>EX-99.(S) POWER OF ATTORNEY
<TEXT>
<PAGE>
                                                                     Exhibit (s)



                                POWER OF ATTORNEY



We, the undersigned officers and Trustees of Eaton Vance Tax-Managed Premium and
Dividend Income Fund, a Massachusetts business trust, do hereby severally
constitute and appoint Barbara E. Campbell, Alan R. Dynner, Thomas E. Faust Jr.
or James B. Hawkes, or any of them, to be true, sufficient and lawful attorneys,
or attorney for each of us, to sign for each of us, in the name of each of us in
the capacities indicated below, Registration Statements and any and all
amendments (including post-effective amendments) to such Registration Statements
on Form N-2 filed by Eaton Vance Tax-Managed Premium and Income Opportunities
Fund with the Securities and Exchange Commission in respect of any class of
shares of beneficial interest and other documents and papers relating thereto.



IN WITNESS WHEREOF we have hereunto set our hands  on  the  dates  set  opposite
our respective signatures.



<TABLE>
<S>                              <C>                                     <C>
Signature                        Title                                   Date


/s/ Duncan W. Richardson         President and Principal                 November 14, 2005
-----------------------------    Executive Officer
Duncan W. Richardson


/s/ Barbara E. Campbell          Treasurer and Principal Financial       November 14, 2005
-----------------------------    and Accounting Officer
Barbara E. Campbell


/s/ Benjamin C. Esty             Trustee                                 November 14, 2005
-----------------------------
Benjamin C. Esty


/s/ James B. Hawkes              Trustee                                 November 14, 2005
-----------------------------
James B. Hawkes


/s/ Samuel L. Hayes, III         Trustee                                 November 14, 2005
-----------------------------
Samuel L. Hayes, III


/s/ William H. Park              Trustee                                 November 14, 2005
-----------------------------
William H. Park


/s/ Ronald A. Pearlman           Trustee                                 November 14, 2005
-----------------------------
Ronald A. Pearlman


/s/ Norton H. Reamer             Trustee                                 November 14, 2005
-----------------------------
Norton H. Reamer
</TABLE>


                                     Page 1
<PAGE>

<TABLE>
<S>                              <C>                                     <C>
Signature                        Title                                   Date

/s/ Lynn A. Stout                Trustee                                 November 14, 2005
-----------------------------
Lynn A. Stout


/s/ Ralph F. Verni               Trustee                                 November 14, 2005
-----------------------------
Ralph F. Verni
</TABLE>


                                     Page 2




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>COVER
<SEQUENCE>15
<FILENAME>filename15.txt
<TEXT>
<PAGE>
              [KIRKPATRICK & LOCKHART NICHOLSON GRAHAM LETTERHEAD]


State Street Financial Center
One Lincoln Street, 16th Floor
Boston, MA 02111
Tel.: (617) 261-3246
Fax.: (617) 261-3175


October 24, 2006

VIA EDGAR

Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549


      Re:   Eaton Vance Tax-Managed Diversified Equity Income Fund
            Registration Statement on Form N-2 (333-129692; 811-21832)

Dear Mr. DiStefano:

      Transmitted electronically with this letter for filing pursuant to the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended, on behalf of Eaton Vance Tax-Managed Diversified Equity Income Fund
(the "Fund") is Pre-Effective Amendment No. 1 to the Fund's registration
statement on Form N-2 relating to Registrant's initial issuance of common shares
of beneficial interest, par value $.01 per share ("Pre-Effective Amendment No.
1").

      It is expected that the Fund will file a pre-effective amendment
responding to any comments and registering additional shares promptly after the
resolution of any comments, along with a request for acceleration of
effectiveness of the Registration Statement.

      Questions should be directed to the undersigned at (617) 261-3246.

                                       Sincerely,

                                       \s\ Clair E. Pagnano
                                       -------------------------------
                                       Clair E. Pagnano
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
