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EXHIBIT C-3
LIQUIDATING AGENT AGREEMENT
This Agreement is made this 31st day of August, 1998 by and between
Xxxxxxx Investor Services, Inc. (the "Liquidating Agent") and Xxxxx Brothers
Xxxxxxxx & Co. (the "Custodian").
W I T N E S S E T H:
WHEREAS, pursuant to a Redemption Right Statement dated Xxxxxxxxx 0,
0000, Xxxxxxx Xxxxx and Portugal Fund, Inc. (the "Fund") has offered to its
shareholders the right to demand the repurchase of their shares in the amount of
up to 4,883,365 of the 6,511,154 outstanding shares of its common stock in
exchange for a pro rata portion of the Fund's assets, including each of the
securities (other than short-term fixed income securities with maturities of
less than one year or securities with transfer restrictions and certain illiquid
securities) held in the Fund's investment portfolio (the "Portfolio
Securities"), including any cash held by the Fund (the "Redemption Right"); and
WHEREAS, the Fund has appointed the Custodian to serve as custodian on
behalf of the shareholders of the Fund who have elected to exercise the
Redemption Right; and
WHEREAS, pursuant to such Redemption Right, redeeming shareholders may
direct that all of the Portfolio Securities received as proceeds from the
repurchase of shares of the Fund be liquidated; and
WHEREAS, the Custodian has established a separate account for the
liquidation of the Portfolio Securities (the "Liquidating Account"); and
WHEREAS, the Fund has designated Xxxxxxx Investor Services, Inc. to
serve as Liquidating Agent on behalf of those shareholders who have directed the
liquidation of their proceeds of the Redemption Right;
NOW THEREFORE, in consideration of the premises and the terms and
provisions hereinafter set forth, and for other good and valuable consideration,
the parties hereto agree as follows:
1. DUTIES OF THE LIQUIDATING AGENT.
(A) The Liquidating Agent, in liquidating the Liquidating Account,
shall effect trades in open-market transactions using executing brokers selected
in its absolute discretion; provided that the Liquidating Agent shall seek best
execution.
(B) During the term of the liquidation, the Liquidating Agent shall
have the authority to vote all proxies solicited by or with respect to the
issuers of securities in which assets of the
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Liquidating Account may be invested. The Liquidating Agent shall use its best
good faith judgment to vote such proxies in a manner which best serves the
interests of the Liquidating Shareholders. In acting upon any rights offerings
involving Portfolio Securities to be liquidated which expire during the
liquidation process, the Liquidating Agent shall sell the right to the extent
possible. Any dividends paid with respect to Portfolio Securities to be
liquidated during the liquidation process shall be credited to the benefit of
shareholders who have requested liquidation of such Portfolio Securities
received.
(C) The Liquidating Agent agrees that it shall sell the Portfolio
Securities in the Liquidating Account so as to prevent, to the extent possible,
any negative effect on the market for such Portfolio Securities and shall have
liquidated all Portfolio Securities in the Liquidating Account by no later than
November 30, 1998.
2. COMPENSATION AND EXPENSES. For it services hereunder, the
Liquidating Agent shall be entitled to reimbursement for all transactional fees
related the disposition of the Liquidating Account and any customary brokerage
commissions. Such expenses shall be deducted from the Liquidating Account and
forwarded to the Liquidating Agent by the Custodian upon the completion of the
liquidation.
3. DUTIES OF THE CUSTODIAN. The Custodian shall segregate on its books
and hold pursuant to the terms of this Agreement a Liquidating Account to
facilitate the liquidation of Portfolio Securities.
(A) Except as specifically set forth in this Agreement, the Custodian shall
perform its duties as custodian under the terms set forth in the
Custodian Agreement governing custody of the Fund ("Custodian
Agreement").
(B) Notwithstanding Section 3(A) the Liquidating Account shall not be a
part of the Fund, but shall be held for benefit of the shareholders
that have elected to demand the repurchase of their shares in the Fund.
(C) In the performance of its duties with respect to the Liquidating
Account, the Custodian shall be entitled to rely on the Instructions of
the Liquidating Agent.
The Custodian shall be entitled to compensation for its services in accordance
with the fee schedule established under the Custodian Agreement.
4. LIMITATION ON LIABILITY
Neither the Custodian nor the Liquidating Agent shall be liable in the
absence of gross negligence or intentional misconduct in the performance of
their duties under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the date first written above.
XXXXXXX INVESTOR SERVICES, INC.
By: _______________________________
Name:
Title:
XXXXX BROTHERS XXXXXXXX & CO.
By: _______________________________
Name:
Title:
