Exhibit j.
Custodian and Investment Accounting Agreement
This Agreement between PIMCO FLOATING RATE INCOME FUND, a business trust
organized and existing under the laws of Massachusetts (the "Fund"), and STATE
STREET BANK and TRUST COMPANY, a Massachusetts trust company (the "State
Street"),
Witnesseth: that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
Xxxxxxx 0 Xxxxxxxxxxx xx Xxxxx Xxxxxx as Custodian and Recordkeeper. The Fund
hereby appoints State Street as custodian of its assets consisting of securities
that the Fund desires to be held in places within the United States ("domestic
securities") and securities it desires to be held outside the United States
("foreign securities"). The Fund agrees to deliver to State Street all
securities and cash owned by it, and all payments of income, payments of
principal or capital distributions received by it with respect to all securities
owned by it from time to time, and the cash consideration received by it for
such new or treasury shares of beneficial interest of the Fund ("Shares") as may
be issued or sold from time to time. State Street shall not be responsible for
any property of the Fund which is not received by it or which is delivered out
in accordance with Proper Instructions including, without limitation, Fund
property (i) held by brokers, private bankers or other entities on behalf of the
Fund (each a "Local Agent"), (ii) held by Special Sub-Custodians (as such term
is defined in Section 7 hereof), (iii) held by entities which have advanced
monies to or on behalf of the Fund and which have received Fund property as
security for such advance(s) (each a "Pledgee"), or (iv) delivered or otherwise
removed from the custody of State Street pursuant to Special Instructions (as
such term is defined in Section 7 hereof). With respect to uncertificated shares
(the "Underlying Shares") of registered "investment companies" (as defined in
Section 3(a)(1) of the Investment Company Act of 1940, as amended (the "1940
Act")), whether in the same "group of investment companies" (as defined in
Section 12(d)(1)(G)(ii) of the 0000 Xxx) or otherwise, including pursuant to
Section 12(d)(1)(F) of the 1940 Act (hereinafter sometimes referred to as the
"Underlying Portfolios") the holding of confirmation statements that identify
the shares as being recorded in State Street's name on behalf of the Fund will
be deemed custody for purposes hereof.
Upon receipt of Proper Instructions, State Street shall on behalf of the Fund
from time to time appoint one or more sub-custodians located in the United
States, but only in accordance with an applicable vote by the Board of Trustees
of the Fund (the "Board"). State Street may appoint as sub-custodian for Fund's
foreign securities the foreign banking institutions and foreign securities
depositories designated in Schedules A and B hereto, but only in accordance with
the applicable provisions of Sections 4 and 5. State Street shall have no more
or less responsibility or liability to Fund on account of any actions or
omissions of any sub-custodian so appointed than any such sub-custodian has to
State Street.
Fund hereby appoints State Street to perform certain investment accounting and
recordkeeping functions relating to portfolio transactions required of a duly
registered investment company under Rule 31a of the 1940 Act and to calculate
the net asset value of the Fund in accordance with the provisions of Section 10
hereof.
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Section 2 Duties of State Street With Respect to Property of the Fund Held in
the United States
Section 2.1 Holding Securities. State Street shall hold and physically
segregate for the account of the Fund all non-cash property, to be held by it in
the United States, including all domestic securities owned by the Fund other
than (a) securities which are maintained pursuant to Section 2.8 in a clearing
agency which acts as a securities depository or in a book-entry system
authorized by the U.S. Department of the Treasury (each, a "U.S. Securities
System") and (b) Underlying Shares owned by each Fund which are maintained
pursuant to Section 2.10 hereof in an account with State Street Bank and Trust
Company or such other entity which may from time to time act as a transfer agent
for the Underlying Portfolios and with respect to which State Street is provided
with Proper Instructions (the "Underlying Transfer Agent").
Section 2.2 Delivery of Securities. State Street shall release and deliver
domestic securities owned by the Fund held by State Street or in a U.S.
Securities System account of State Street ("U.S. Securities System Account") or
in an account at the Underlying Transfer Agent, 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 for the account of the Fund and receipt
of payment therefor;
2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Fund;
3) In the case of a sale effected through a U.S. Securities System, in
accordance with the provisions of Section 2.8 hereof;
4) To the depository agent in connection with tender or other similar
offers for securities of the Fund;
5) To the issuer thereof or its agent when such securities are called,
redeemed, retired or otherwise become payable; provided that, in any
such case, the cash or other consideration is to be delivered to
State Street;
6) To the issuer thereof, or its agent, for transfer into the name of
the Fund or into the name of any nominee or nominees of State Street
or into the name or nominee name of any agent appointed pursuant to
Section 2.7 or into the name or nominee name of any sub-custodian
appointed pursuant to Section 1; 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 are to be delivered to State Street;
7) Upon the sale of such securities for the account of the Fund, to the
broker or its clearing agent, against a receipt, for examination in
accordance with "street delivery" custom; provided that in any such
case, State Street shall have no responsibility or liability for any
loss arising from the delivery of such securities prior to receiving
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payment for such securities except as may arise from State Street's
own negligence or willful misconduct;
8) 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 contained in such securities, or pursuant
to any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are to be delivered to State Street;
9) In the case of warrants, rights or similar securities, the surrender
thereof in 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
State Street;
10) For delivery in connection with any loans of securities made by the
Fund (a) against receipt of collateral, except that in connection
with any loans for which collateral is to be credited to the U.S.
Securities System Account , State Street will not be held liable or
responsible for the delivery of securities owned by the Fund prior
to the receipt of such collateral or (b) to the lending agent, or
the lending agent's custodian, in accordance with written Proper
Instructions (which may not provide for the receipt by State Street
of collateral therefor) agreed upon from time to time by State
Street and the Fund;
11) For delivery as security in connection with any borrowing by the
Fund requiring a pledge of assets by the Fund, but only against
receipt of amounts borrowed;
12) For delivery in accordance with the provisions of any agreement
among the Fund, State Street and a broker-dealer registered under
the Securities Exchange Act of 1934 (the "Exchange Act") and a
member of The National Association of Securities Dealers, Inc.
("NASD"), relating to compliance with the rules of The Options
Clearing Corporation and of any registered national securities
exchange, or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions by the
Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, State Street, and a futures commission merchant
registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission ("CFTC")
and/or any contract market, or any similar organization or
organizations, regarding account deposits in connection with
transactions by the Fund;
14) Upon the sale or other delivery of such investments (including,
without limitation, to one or more (a) Special Sub-Custodians or (b)
additional custodians appointed by a Fund, and communicated to State
Street from time to time via a writing duly executed by an
authorized officer of such Fund, for the purpose of engaging in
repurchase agreement transaction(s), each a "Repo Custodian"), and
prior to receipt of payment therefor, only as set forth in written
Proper Instructions (such delivery in advance of payment, along with
payment in advance of delivery made in accordance
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with Section 2.6(7), as applicable, shall each be referred to herein
as a "Free Trade"), provided that such Proper Instructions shall set
forth (a) the securities of the Fund to be delivered and (b) the
person(s) to whom delivery of such securities shall be made;
15) Upon receipt of instructions from the transfer agent for the Fund
(the "Transfer Agent") for delivery to such Transfer Agent or to the
holders of Shares in connection with distributions in kind, as may
be described from time to time in the Fund's currently effective
prospectus and statement of additional information (the
"Prospectus"), in satisfaction of requests by holders of Shares for
repurchase or redemption; and
16) In the case of a sale processed through the Underlying Transfer
Agent or Underlying Shares, in accordance with Section 2.10 hereof;
17) For any other purpose, but only upon receipt of Proper Instructions
specifying the securities of the Fund to be delivered and naming the
person or persons to whom delivery of such securities shall be made.
Section 2.3 Registration of Securities. Domestic securities held by State
Street (other than bearer securities) shall be registered in the name of the
Fund or in the name of any nominee of the Fund or of any nominee of State Street
which nominee shall be assigned exclusively to the Fund, unless the Fund has
authorized in writing the appointment of a nominee to be used in common with
other registered investment companies having the same investment advisor as the
Fund, or in the name or nominee name of any agent appointed pursuant to Section
2.7 or in the name or nominee name of any sub-custodian appointed pursuant to
Section 1. All securities accepted by State Street on behalf of the Fund under
the terms of this Agreement shall be in "street name" or other good delivery
form, provided that State Street will hold all such assets in an account of
State Street as custodian containing only assets of the Fund or only assets held
by State Street as fiduciary or custodian for its customers; provided, further
that State Street's records will at all times indicate the Fund or the customer
for which such assets are held and their respective interest therein. If,
however, the Fund directs State Street to maintain securities in "street name",
State Street shall utilize its best efforts only to timely collect income due
the Fund on such securities and to notify the Fund on a best efforts basis only
of relevant corporate actions including, without limitation, pendency of calls,
maturities, tender or exchange offers and declaration, record and payment dates
of any dividend.
Section 2.4 Bank Accounts. State Street shall open and maintain a separate
bank account or accounts in the United States in the name of the Fund, subject
only to draft or order by State Street acting pursuant to the terms of this
Agreement, and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the Fund, other than
cash maintained by the Fund in a bank account established and used in accordance
with Rule 17f-3 under the 1940 Act. Monies held by State Street for the Fund may
be deposited by it to its credit as custodian in the banking department of State
Street or in such other banks or trust companies as it 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 1940 Act and that
each such bank or trust company and the monies to be deposited with each such
bank or trust company
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shall be approved by vote of a majority of the Board. Such monies shall be
deposited by State Street in its capacity as custodian and shall be withdrawable
by State Street only in that capacity.
Section 2.5 Collection of Income. Except with respect to Fund property
released and delivered pursuant to Section 2.2(14) or purchased pursuant to
Section 2.6(7), and subject to the provisions of Xxxxxxx 0.0, Xxxxx Xxxxxx shall
collect on a timely basis all income and other payments with respect to
registered domestic securities held hereunder to which the Fund shall be
entitled either by law or pursuant to custom in the securities business, and
shall collect on a timely basis all income and other payments with respect to
bearer domestic securities if, on the date of payment by the issuer, such
securities are held by State Street or its agent thereof and shall credit such
income, as collected, to the Fund's custodian account. Without limiting the
generality of the foregoing, State Street shall detach and present for payment
all coupons and other income items requiring presentation as and when they
become due and shall collect interest when due on securities held hereunder.
Income due the Fund on securities loaned pursuant to the provisions of Section
2.2 (10) shall be the responsibility of the Fund. State Street will have no duty
or responsibility in connection therewith, other than to provide the Fund with
such information or data as may be necessary to assist the Fund in arranging for
the timely delivery to State Street of the income to which the Fund is properly
entitled.
Section 2.6 Payment of Fund Monies. Upon receipt of Proper Instructions,
which may be continuing instructions when deemed appropriate by the parties,
State Street shall pay out monies of the Fund in the following cases only:
1) Upon the purchase of domestic securities, options, futures contracts
or options on futures contracts for the account of the Fund but only
(a) against the delivery of such securities or evidence of title to
such options, futures contracts or options on futures contracts to
State Street (or any bank, banking firm or trust company doing
business in the United States or abroad which is qualified under the
1940 Act to act as a custodian and has been designated by State
Street as its agent for this purpose) registered in the name of the
Fund or in the name of a nominee of State Street referred to in
Section 2.3 hereof or in proper form for transfer; (b) in the case
of a purchase effected through a U.S. Securities System, in
accordance with the conditions set forth in Section 2.8 hereof; (c)
in the case of repurchase agreements entered into between the Fund
and State Street, or another bank, or a broker-dealer which is a
member of NASD, (i) against delivery of the securities either in
certificate form or through an entry crediting State Street's
account at the Federal Reserve Bank with such securities or (ii)
against delivery of the receipt evidencing purchase by the Fund of
securities owned by State Street along with written evidence of the
agreement by State Street to repurchase such securities from the
Fund; or (d) for transfer to a time deposit account of the Fund in
any bank, whether domestic or foreign; such transfer may be effected
prior to receipt of a confirmation from a broker and/or the
applicable bank pursuant to Proper Instructions from the Fund as
defined herein;
2) In connection with conversion, exchange or surrender of securities
owned by the Fund as set forth in Section 2.2 hereof;
3) For the redemption or repurchase of Shares issued as set forth in
Section 6 hereof;
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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: interest, taxes, management, accounting, transfer agent
and legal fees, and 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 on Shares declared pursuant to
the governing documents of the Fund;
6) For payment of the amount of dividends received in respect of
securities sold short;
7) Upon the purchase of domestic investments and prior to receipt of
such investments, as set forth in written Proper Instructions (such
payment in advance of delivery, along with delivery in advance of
payment made in accordance with Section 2.2(14), as applicable,
shall each be referred to herein as a "Free Trade"), provided that
such Proper Instructions shall also set forth (a) the amount of such
payment and (b) the person(s) to whom such payment is made; and
8) For any other purpose, but only upon receipt of Proper Instructions
specifying the amount of such payment and naming the person or
persons to whom such payment is to be made.
Except as specifically stated otherwise in this Agreement, in any and every case
where the payment for purchase of domestic securities for the account of the
Fund is made by State Street in advance of receipt of the securities purchased
in the absence of specific Proper Instructions from the Fund to so pay in
advance, State Street shall be absolutely liable to the Fund for such securities
to the same extent as if the securities had been received by State Street.
Section 2.7 Appointment of Agents. State Street may at any time or times
in its discretion appoint (and may at any time remove) any other bank or trust
company which is itself qualified under the 1940 Act to act as a custodian, as
its agent to carry out such of the provisions of this Section 2 as State Street
may from time to time direct; provided, however, that the appointment of any
agent shall not relieve State Street of its responsibilities or liabilities
hereunder. The Underlying Transfer Agent shall not be deemed an agent or
subcustodian of State Street for purposes of this Section 2.7 or any other
provision of this Agreement.
Section 2.8 Deposit of Fund Assets in U.s. Securities Systems. State
Street may deposit and/or maintain securities owned by the Fund in the U.S.
Securities System Account subject to the following provisions:
1) Such Account shall not include any assets of State Street other than
assets held as a fiduciary, custodian or otherwise for customers;
2) The records of State Street shall identify by book-entry those
securities belonging to the Fund;
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3) State Street shall pay for securities purchased for the account of
the Fund upon (i) receipt of advice from the U.S. Securities System
that such securities have been transferred to the U.S. Securities
System Account, and (ii) the making of an entry on the records of
State Street to reflect such payment and transfer for the account of
the Fund. State Street shall transfer securities sold for the
account of the Fund upon (i) receipt of advice from the U.S.
Securities System that payment for such securities has been
transferred to the U.S. Securities System Account, and (ii) the
making of an entry on the records of State Street to reflect such
transfer and payment for the account of the Fund. Copies of all
advices from the U.S. Securities System of transfers of securities
for the account of the Fund shall identify the Fund, be maintained
for the Fund by State Street and be provided to the Fund at its
request. Upon request, State Street shall furnish the Fund
confirmation of each transfer to or from the account of the Fund in
the form of a written advice or notice and shall furnish to the Fund
copies of daily transaction sheets reflecting each day's
transactions in the U.S. Securities System for the account of the
Fund;
0) Xxxxx Xxxxxx shall provide the Fund with any report obtained by
State Street on the U.S. Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the U.S. Securities System;
5) Anything to the contrary in this Agreement notwithstanding, State
Street shall be liable to the Fund for any loss or damage to the
Fund resulting from use of the U.S. Securities System by reason of
any negligence, misfeasance or misconduct of State Street or any of
its agents or of any of its or their employees or from failure of
State Street or any such agent to enforce effectively such rights as
it may have against the U.S. Securities System; at the election of
the Fund, it shall be entitled to be subrogated to the rights of
State Street with respect to any claim against the U.S. Securities
System or any other person which State Street 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.
Section 2.9 Segregated Account. State Street 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 State
Street pursuant to Section 2.8 hereof, (i) in accordance with the provisions of
any agreement among the Fund, State Street and a broker-dealer registered under
the Exchange Act and a member of the NASD (or any futures commission merchant
registered under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Corporation and of any registered national
securities exchange (or the CFTC or any registered contract market), or of any
similar organization or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating cash
or government securities in connection with options purchased, sold or written
by the Fund or commodity 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 of the U.S. Securities and Exchange Commission (the "SEC"),
or interpretative opinion of the staff of the SEC, relating to the maintenance
of segregated accounts by registered investment companies, and (iv) for any
other purpose upon receipt of Proper Instructions.
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Section 2.10 Deposit of Fund Assets With the Underlying Transfer Agent.
Underlying Shares shall be deposited and/or maintained in an account or accounts
maintained with the Underlying Transfer Agent. The Underlying Transfer Agent
shall be deemed to be acting as if it is a "securities depository" for purposes
of Rule 17f-4 under the 1940 Act. The Fund hereby directs State Street to
deposit and/or maintain such securities with the Underlying Transfer Agent,
subject to the following provisions:
0) Xxxxx Xxxxxx shall keep Underlying Shares owned by the Fund with the
Underlying Transfer Agent provided that such securities are
maintained in an account or accounts on the books and records of the
Underlying Transfer Agent in the name of State Street as custodian
for the Fund.
2) The records of State Street with respect to Underlying Shares which
are maintained with the Underlying Transfer Agent shall identify by
book-entry those Underlying Shares belonging to the Fund;
0) Xxxxx Xxxxxx shall pay for Underlying Shares purchased for the
account of the Fund upon (a) receipt of advice from the Fund's
investment adviser that such Underlying Shares have been purchased
and will be transferred to the account of State Street, on behalf of
the Fund, on the books and records of the Underlying Transfer Agent
and (b) the making of an entry on the records of State Street to
reflect such payment and transfer for the account of the Fund. State
Street shall receive confirmation from the Underlying Transfer Agent
of the purchase of such securities and the transfer of such
securities to State Street's account with the Underlying Transfer
Agent only after such payment is made. State Street shall transfer
Underlying Shares redeemed for the account of the Fund (i) upon
receipt of an advice from the Fund's investment adviser that such
securities have been redeemed and that payment for such securities
will be transferred to State Street and (ii) the making of an entry
on the records of State Street to reflect such transfer and payment
for the account of the Fund. State Street will receive confirmation
from the Underlying Transfer Agent of the redemption of such
securities and payment therefor only after such securities are
redeemed. Copies of all advices from the Fund's investment adviser
of purchases and sales of Underlying Shares for the account of the
Fund shall identify the Fund, be maintained for the Fund by State
Street, and be provided to the Fund's investment adviser at its
request; and
0) Xxxxx Xxxxxx shall be not be liable to the Fund for any loss or
damage to the Fund resulting from maintenance of Underlying Shares
with Underlying Transfer Agent except for losses resulting directly
from the negligence, misfeasance or misconduct of State Street or
any of its agents or of any of its or their employees.
Section 2.11 Ownership Certificates for Tax Purposes. State Street shall
execute ownership and other certificates and affidavits for all federal, state
and local tax purposes in connection with receipt and/or collection of income or
other payments with respect to domestic securities of the Fund held by it and in
connection with transfers of securities.
Section 2.12 Proxies. Except with respect to Fund property released and
delivered pursuant to Section 2.2(14), or purchased pursuant to Section 2.6(7),
State Street shall, with respect
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to the domestic securities held hereunder, cause to be promptly executed by the
registered holder of such securities, if the securities are registered otherwise
than in the name of the Fund or a nominee of the Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and shall
promptly deliver to the Fund such proxies, all proxy soliciting materials and
all notices relating to such securities.
Section 2.13 Communications Relating to Fund Securities. Except with
respect to Fund property released and delivered pursuant to Section 2.2(14), or
purchased pursuant to Section 2.6(7), and subject to the provisions of Xxxxxxx
0.0, Xxxxx Xxxxxx shall transmit promptly to the Fund all written information
(including, without limitation, pendency of calls and maturities of domestic
securities and expirations of rights in connection therewith) received by State
Street from issuers of the securities being held for the Fund. With respect to
tender or exchange offers, State Street shall transmit promptly to the Fund all
written information received by State Street from issuers of the securities
whose tender or exchange is sought and from the party (or its agents) making the
tender or exchange offer. If the Fund desires to take action with respect to any
tender offer, exchange offer or any other similar transaction, the Fund shall
notify State Street at least three business days prior to the date on which
State Street is to take such action.
Section 3 Special Sub-custodians. Upon receipt of Special Instructions (as
such term is defined in Section 7 hereof), State Street shall appoint one or
more banks, trust companies or other entities designated in such Special
Instructions to act as a sub-custodian for the purposes of effecting such
transactions as may be designated by a Fund in Special Instructions. Each such
designated sub-custodian is referred to herein as a "Special Sub-Custodian."
Each such duly appointed Special Sub-Custodian shall be listed on Schedule D
hereto, as it may be amended from time to time by a Fund, with the
acknowledgment of State Street. In connection with the appointment of any
Special Sub-Custodian, and in accordance with Special Instructions, State Street
shall enter into a sub-custodian agreement with the Fund and the Special
Sub-Custodian in form and substance approved by such Fund, provided that such
agreement shall in all events comply with the provisions of the 1940 Act and the
rules and regulations thereunder and the terms and provisions of this Agreement.
Section 4 Provisions Relating to Rules 17F-5 and 17F-7
Section 4.1. Definitions. As used throughout this Agreement, the
capitalized terms set forth below shall have the following meanings:
"Country Risk" means all factors reasonably related to the systemic risk of
holding Foreign Assets in a particular country including, but not limited to,
such country's political environment, economic and financial infrastructure
(including any Eligible Securities Depository operating in the country),
prevailing or developing custody and settlement practices, and laws and
regulations applicable to the safekeeping and recovery of Foreign Assets held in
custody in that country.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5 (as such term may be interpreted or modified by appropriate action of the
U.S. Securities and Exchange Commission (the "SEC")).
"Eligible Securities Depository" has the meaning set forth in section (b)(1) of
Rule 17f-7 (as such term may be interpreted or modified by appropriate action of
the SEC).
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"Foreign Assets" means any of the Fund's investments (including foreign
currencies) for which the primary market is outside the United States, and any
cash and cash equivalents that are reasonably necessary to effect the Fund's
transactions in such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(3) of Rule
17f-5 (as such term may be interpreted or modified by appropriate action of the
SEC).
Section 4.2 State Street as Foreign Custody Manager
4.2.1 Delegation to State Street as Foreign Custody Manager. The Fund,
by resolution adopted by its Board hereby delegates to State Street, subject to
Section (b) of Rule 17f-5, the responsibilities set forth in this Section 4.2
with respect to Foreign Assets of the Fund held outside the United States, and
State Street hereby accepts such delegation as Foreign Custody Manager with
respect to the Fund.
4.2.2 Countries Covered. The Foreign Custody Manager shall be responsible
for performing the delegated responsibilities defined below only with respect to
the countries and custody arrangements for each such country listed on Schedule
A to this Agreement, which list of countries may be amended from time to time by
the Fund with the agreement of the Foreign Custody Manager. The Foreign Custody
Manager shall list on Schedule A the Eligible Foreign Custodians selected by the
Foreign Custody Manager to maintain the assets of the Fund, which list of
Eligible Foreign Custodians may be amended from time to time in the sole
discretion of the Foreign Custody Manager. The Foreign Custody Manager will
provide amended versions of Schedule A in accordance with Section 4.2.5 hereof.
Upon the receipt by the Foreign Custody Manager of Instructions to open an
account or to place or maintain Foreign Assets in a country listed on Schedule
A, and the fulfillment by the Fund of the applicable account opening
requirements for such country, the Foreign Custody Manager shall be deemed to
have been delegated by the Board responsibility as Foreign Custody Manager with
respect to that country and to have accepted such delegation. Execution of this
Amendment by the Fund shall be deemed to be an Instruction to open an account,
or to place or maintain Foreign Assets, of the Fund in each country listed on
Schedule A in which State Street has previously placed or currently maintains
Foreign Assets pursuant to the terms of the Contract. Following the receipt of
Instructions directing the Foreign Custody Manager to close the account of the
Fund with the Eligible Foreign Custodian selected by the Foreign Custody Manager
in a designated country, the delegation by the Board to State Street as Foreign
Custody Manager for that country shall be deemed to have been withdrawn and
State Street shall immediately cease to be the Foreign Custody Manager of the
Fund with respect to that country.
The Foreign Custody Manager may withdraw its acceptance of delegated
responsibilities with respect to a designated country upon written notice to the
Fund. Sixty days (or such longer period to which the parties agree in writing)
after receipt of any such notice by the Fund, State Street shall have no further
responsibility in its capacity as Foreign Custody Manager to the Fund with
respect to the country as to which State Street's acceptance of delegation is
withdrawn.
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4.2.3 Scope of Delegated Responsibilities:
(a) Selection of Eligible Foreign Custodians. Subject to the
provisions of this Section 4.2., the Foreign Custody Manager may
place and maintain the Foreign Assets in the care of the Eligible
Foreign Custodian selected by the Foreign Custody Manager in each
country listed on Schedule A, as amended from time to time. In
performing its delegated responsibilities as Foreign Custody
Manager to place or maintain Foreign Assets with an Eligible
Foreign Custodian, the Foreign Custody Manager shall determine
that the Foreign Assets will be subject to reasonable care, based
on the standards applicable to custodians in the relevant market,
after considering all factors relevant to the safekeeping of such
assets, including without limitation, the factors specified in
Rule 17f-5(c)(1), as amended from time to time.
(b) Contracts With Eligible Foreign Custodians. The Foreign Custody
Manager shall determine that each arrangement with an Eligible
Foreign Custodian is governed by a written contract and that such
contract will satisfy the requirements of Rule 17f-5(c)(2), as
amended from time to time.
(c) Monitoring. In each case in which the Foreign Custody Manager
maintains Foreign Assets with an Eligible Foreign Custodian
selected by the Foreign Custody Manager, the Foreign Custody
Manager shall have established a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such
Eligible Foreign Custodian and (ii) the performance of the
contract governing the custody arrangements established by the
Foreign Custody Manager with the Eligible Foreign Custodian under
Rule 17f-5(c)(2). In the event the Foreign Custody Manager
determines that the custody arrangements with an Eligible Foreign
Custodian it has selected are no longer appropriate or no longer
meet the requirements of Rule 17f-5, the Foreign Custody Manager
shall notify the Board in accordance with Section 4.2.5 hereunder
and State Street shall, upon Instruction, assist the Fund in
withdrawing their assets from such Eligible Foreign Custodian as
soon as reasonably practicable.
4.2.4 Guidelines for the Exercise of Delegated Authority. For purposes
of this Section 4.2, the Board, or at its delegation the Fund's investment
adviser, shall be deemed to have considered and determined to accept such
Country Risk as is incurred by placing and maintaining the Foreign Assets in
each country for which State Street is serving as Foreign Custody Manager of the
Fund.
4.2.5 Reporting Requirements. The Foreign Custody Manager shall report
the withdrawal of the Foreign Assets from an Eligible Foreign Custodian and the
placement of such Foreign Assets with another Eligible Foreign Custodian by
providing to the Board an amended Schedule A at the end of the calendar quarter
in which an amendment to such Schedule has occurred. The Foreign Custody Manager
shall make written quarterly reports notifying the Board of any other material
change in the foreign custody arrangements of the Fund described in this Section
4.2 after the occurrence of the material change.
4.2.6 Standard of Care as Foreign Custody Manager. In performing the
responsibilities delegated to it hereunder, the Foreign Custody Manager agrees
to exercise
11
reasonable care, prudence and diligence such as a person having responsibility
for the safekeeping of the Fund's Foreign Assets would exercise.
4.2.7 Representations With Respect to Rule 17F-5. The Foreign Custody
Manager represents to the Fund that it is a U.S. Bank as defined in section
(a)(7) of Rule 17f-5 and is otherwise eligible to serve as a Foreign Custody
Manager under Rule 17f-5. The Fund represents to State Street that the Board has
determined that it is reasonable for the Board to rely on State Street to
perform the responsibilities delegated pursuant to this Contract to State Street
as the Foreign Custody Manager of the Fund.
4.2.8 Effective Date and Termination of State Street as Foreign Custody
Manager. The Board's delegation to State Street as Foreign Custody Manager of
the Fund shall be effective as of the date hereof and shall remain in effect
until terminated at any time, without penalty, by written notice from the
terminating party to the non-terminating party. Termination of State Street as
Foreign Custody Manager will become effective thirty (30) days after receipt by
the non-terminating party of such notice. The provisions of Section 4.2.2 hereof
shall govern the delegation to and termination of State Street as Foreign
Custody Manager of the Fund with respect to designated countries.
4.2.9 Analysis and Monitoring Under Rule 00X-0. Xxxxx Xxxxxx shall (a)
provide the Fund (or its duly-authorized investment manager or investment
adviser) with an analysis of the custody risks associated with maintaining
assets with the Eligible Securities Depositories set forth on Schedule B hereto,
as amended from time to time, in accordance with section (a)(1)(i)(A) of Rule
17f-7, as amended from time to time, and (b) monitor such risks on a continuing
basis, and promptly notify the Fund (or its duly-authorized investment manager
or investment adviser) of any material change in such risks, in accordance with
section (a)(1)(i)(B) of Rule 17f-7, as amended from time to time.
4.2.10 Standard of Care Under Rule 00X-0. Xxxxx Xxxxxx agrees to exercise
reasonable care, prudence and diligence in performing the requirements and
duties set forth in Section 4.2.9.
4.2.11 Eligible Securities Depositories. State Street has made the
determination that each depository institution listed on Schedule B hereto is an
"Eligible Securities Depository" as defined in section (b)(1) of Rule 00x-0.
Xxxxx Xxxxxx shall promptly inform the Fund if it becomes aware that any of the
factors set forth in section (b)(1) of Rule 17f-7 no long apply to a depository
institution listed on Schedule B hereto, as such factors may be interpreted or
modified by appropriate action of the SEC from time to time, i.e., such
depository institution no longer: (i) acts as or operates a system for the
central handling of securities or equivalent book-entries in the country where
it is incorporated, or acts as a transnational system for the central handling
of securities or equivalent book-entries, (ii) is regulated by a foreign
financial regulatory authority as defined under Section 2(a)(50) of the
Investment Company Act, (iii) holds assets for the custodian that participates
in the system on behalf of the Fund under safekeeping conditions no less
favorable than the conditions that apply to other participants, (iv) maintains
records that identify the assets of each participant and segregates the system's
own assets from the assets of participants, (v) provides periodic reports to its
participants with respect to its safekeeping of assets, including notices of
transfer to or from any participant's account, or (vi) is subject to periodic
examination by regulatory authorities or independent accountants.
12
Section 5 Duties With Respect to Property Held Outside the United States
Section 5.1 Definitions. Capitalized terms in this Section 5.1 shall
have the following meanings:
"Foreign Securities System" means an Eligible Securities Depository
listed on Schedule B hereto.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian hereunder.
Section 5.2 Holding Securities. State Street shall identify on its books
as belonging to Fund the foreign securities placed with and maintained by each
Foreign Sub-Custodian or Foreign Securities System. State Street may hold
foreign securities for all of its customers, including the Fund, with any
Foreign Sub-Custodian in an account that is identified as belonging to State
Street for the benefit of its customers, provided however, that (i) the records
of State Street with respect to foreign securities of Fund which are maintained
in such account shall identify those securities as belonging to the Fund and
(ii), to the extent permitted by law in the market in which the account is
maintained, State Street shall require that securities so held by the Foreign
Sub-Custodian be held separately from any assets of such Foreign Sub-Custodian
or of other customers of such Foreign Sub-Custodian.
Section 5.3 Foreign Securities Systems. Foreign securities shall be
maintained in a Foreign Securities System in a designated country through
arrangements implemented by State Street or a Foreign Sub-Custodian, as
applicable, in such country. (Foreign Securities Systems and U.S. Securities
Systems are collectively referred to herein as "Securities Systems").
Section 5.4 Transactions in Foreign Custody Account.
5.4.1 Delivery of Foreign Assets. State Street or a Foreign
Sub-Custodian shall release and deliver foreign securities of the Fund
held by State Street or such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Instructions, which may
be continuing instructions when deemed appropriate by the parties, and
only in the following cases:
(i) upon the sale of such foreign securities for the Fund in
accordance with commercially reasonable market practice in the
country where such foreign securities are held or traded,
including, without limitation: (A) delivery against expectation of
receiving later payment; or (B) in the case of a sale effected
through a Foreign Securities System, in accordance with the rules
governing the operation of the Foreign Securities System;
(ii) in connection with any repurchase agreement related to foreign
securities;
(iii) to the depository agent in connection with tender or other similar
offers for foreign securities of the Fund;
13
(iv) to the issuer thereof or its agent when such foreign securities
are called, redeemed, retired or otherwise become payable;
(v) to the issuer thereof, or its agent, for transfer into the name of
State Street (or the name of the respective Foreign Sub-Custodian
or of any nominee of State Street or such Foreign Sub-Custodian)
or for exchange for a different number of bonds, certificates or
other evidence representing the same aggregate face amount or
number of units;
(vi) to brokers, clearing banks or other clearing agents for
examination or trade execution in accordance with market custom;
provided that in any such case the Foreign Sub-Custodian shall
have no responsibility or liability for any loss arising from the
delivery of such securities prior to receiving payment for such
securities except as may arise from the Foreign Sub-Custodian's
own negligence, bad faith or willful misconduct;
(vii) 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 contained in such securities, or
pursuant to any deposit agreement;
(viii) in the case of warrants, rights or similar foreign securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities;
(ix) for delivery as security in connection with any borrowing by the
Fund requiring a pledge of assets by the Fund;
(x) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(xi) in connection with the lending of foreign securities; and
(xii) for any other purpose, but only upon receipt of Instructions
specifying the foreign securities to be delivered and naming the
person or persons to whom delivery of such securities shall be
made.
5.4.2 Payment of Fund Monies. Upon receipt of Instructions, which may be
continuing instructions when deemed appropriate by the parties, State
Street shall pay out, or direct the respective Foreign Sub-Custodian or
the respective Foreign Securities System to pay out, monies of the Fund
in the following cases only:
(i) upon the purchase of foreign securities for the Fund, unless
otherwise directed by Instructions, by (A) delivering money to the
seller thereof or to a dealer therefor (or an agent for such
seller or dealer) against expectation of receiving later delivery
of such foreign securities; or (B) in the case of a purchase
effected through a Foreign Securities System, in accordance with
the rules governing the operation of such Foreign Securities
System;
14
(ii) in connection with the conversion, exchange or surrender of
foreign securities of the Fund;
(iii) for the payment of any expense or liability of the Fund, including
but not limited to the following payments: interest, taxes,
investment advisory fees, transfer agency fees, fees hereunder,
legal fees, accounting fees, and other operating expenses;
(iv) for the purchase or sale of foreign exchange or foreign exchange
contracts for the Fund, including transactions executed with or
through State Street or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vi) for payment of part or all of the dividends received in respect of
securities sold short;
(vii) in connection with the borrowing or lending of foreign securities;
and
(viii) for any other purpose, but only upon receipt of Instructions
specifying the amount of such payment and naming the person or
persons to whom such payment is to be made.
5.4.3 Market Conditions. Notwithstanding any provision hereof to the
contrary, settlement and payment for Foreign Assets received for the
account of the Fund and delivery of Foreign Assets maintained for the
account of the Fund may be effected in accordance with the customary
established securities trading or processing practices and procedures in
the country or market in which the transaction occurs, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) with the
expectation of receiving later payment for such Foreign Assets from such
purchaser or dealer.
State Street shall provide to the Board the information described on
Schedule C hereto with respect to custody and settlement practices in
countries in which State Street employs a Foreign Sub-Custodian or uses a
Foreign Securities System at the time or times set forth on such
Schedule. State Street may revise Schedule C from time to time, provided
that no such revision shall result in the Board being provided with
substantively less information than had been previously provided
hereunder.
Section 5.5 Registration of Foreign Securities. Fund's foreign
securities maintained in the custody of a Foreign Sub-Custodian (other than
bearer securities) shall be registered in the name of the Fund or in the name of
State Street or in the name of any Foreign Sub-Custodian or in the name of any
nominee of the foregoing (provided, however, that such registration indicates
such foreign securities as having been held for the benefit of customers and
not, in any event, for the benefit of State Street or a Foreign Sub-Custodian or
any nominee thereof), and the Fund agrees to hold any such nominee harmless from
any liability as a holder of record of such foreign securities. State Street or
a Foreign Sub-Custodian shall not be obligated to accept securities on behalf of
the Fund under the terms hereof unless the form of such securities and the
manner in which they are
15
delivered are in accordance with reasonable market practice.
Section 5.6 Bank Accounts. State Street shall identify on its books as
belonging to the Fund cash (including cash denominated in foreign currencies)
deposited with State Street. Where State Street is unable to maintain, or market
practice does not facilitate the maintenance of, cash on the books of State
Street, a bank account or bank accounts shall be opened and maintained outside
the United States on behalf of the Fund with a Foreign Sub-Custodian. All
accounts referred to in this Section shall be subject only to draft or order by
State Street (or, if applicable, such Foreign Sub-Custodian) acting pursuant to
the terms of this Agreement to hold cash received by or from or for the account
of the Fund. Cash maintained on the books of State Street (including its
branches, subsidiaries and affiliates), regardless of currency denomination, is
maintained in bank accounts established under, and subject to the laws of, The
Commonwealth of Massachusetts.
Section 5.7 Collection of Income. State Street shall use reasonable
commercial efforts to collect all income and other payments with respect to the
Foreign Assets held hereunder to which the Fund shall be entitled and shall
credit such income, as collected, to the Fund. In the event that extraordinary
measures are required to collect such income, the Fund and State Street shall
consult as to such measures and as to the compensation and expenses of State
Street relating to such measures.
Section 5.8 Shareholder Rights. With respect to the foreign securities
held pursuant to this Agreement, State Street will use reasonable commercial
efforts to facilitate the exercise of voting and other shareholder rights,
subject always to the laws, regulations and practical constraints that may exist
in the country where such securities are issued. The Fund acknowledges that
local conditions, including lack of regulation, onerous procedural obligations,
lack of notice and other factors may have the effect of severely limiting the
ability of the Fund to exercise shareholder rights.
Section 5.9 Communications Relating to Foreign Securities. State Street
shall transmit promptly to the Fund written information with respect to
materials received by State Street via the Foreign Sub-Custodians from issuers
of the foreign securities being held for the account of the Fund (including,
without limitation, pendency of calls and maturities of foreign securities and
expirations of rights in connection therewith). With respect to tender or
exchange offers, State Street shall transmit promptly to the Fund written
information with respect to materials so received by State Street from issuers
of the foreign securities whose tender or exchange is sought or from the party
(or its agents) making the tender or exchange offer. Absent State Street's
negligence, misfeasance or misconduct, State Street shall not be liable for any
untimely exercise of any tender, exchange or other right or power in connection
with foreign securities or other property of the Fund at any time held by it
unless (i) State Street or the respective Foreign Sub-Custodian is in actual
possession of such foreign securities or property and (ii) State Street receives
Instructions with regard to the exercise of any such right or power, and both
(i) and (ii) occur at least three business days prior to the date on which State
Street is to take action to exercise such right or power.
Section 5.10 Liability of Foreign Sub-custodians. Each agreement pursuant
to which State Street employs a Foreign Sub-Custodian shall, to the extent
possible, require the Foreign Sub-Custodian to exercise reasonable care in the
performance of its duties, and to indemnify, and hold harmless, State Street,
and the Fund from and against any loss, damage, cost, expense, liability or
claim arising out of or in connection with the Foreign Sub-Custodian's
performance of such obligations. At the Fund's election, the Fund shall be
entitled to be subrogated to the rights of State
16
Street with respect to any claims against a Foreign Sub-Custodian as a
consequence of any such loss, damage, cost, expense, liability or claim if and
to the extent that the Fund has not been made whole for any such loss, damage,
cost, expense, liability or claim.
Section 5.11 Tax Law. State Street shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or State
Street as custodian of the Fund by the tax law of the United States or of any
state or political subdivision thereof unless and to the extent that such
liability or obligation arises due to State Street's negligence, misfeasance or
misconduct. It shall be the responsibility of the Fund to notify State Street of
the obligations imposed on the Fund or State Street as custodian of the Fund by
the tax law of countries other than those mentioned in the above sentence,
including responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of State Street with regard to such tax law shall be to use
reasonable efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of countries for which the Fund has provided such
information.
Section 5.12 Liability of State Street. Except as may arise from State
Street's own negligence, misfeasance or willful misconduct or the negligence,
misfeasance or willful misconduct of a Foreign Sub-Custodian, State Street shall
be without liability to the Fund for any loss, liability, claim or expense to
the extent that such loss, liability, claim or expense results directly from or
is caused directly by Country Risk. State Street shall be liable for the acts or
omissions of a Foreign Sub-Custodian to the same extent as set forth with
respect to sub-custodians generally in the Contract and, regardless of whether
assets are maintained in the custody of a Foreign Sub-Custodian or a Foreign
Securities System, State Street shall not be liable for any loss, damage, cost,
expense, liability or claim resulting from nationalization, expropriation,
currency restrictions, or acts of war or terrorism, or any other loss where the
Sub-Custodian has otherwise acted with reasonable care.
Section 6 Payments for Sales or Repurchases or Redemptions of Shares. State
Street shall receive from the distributor for the Shares or from the Transfer
Agent and deposit into the Fund's such payments as are received for Shares
thereof issued or sold from time to time by the Fund. State Street will provide
timely notification to the Fund and the Transfer Agent of any receipt by it of
payments for Shares of the Fund.
From such funds as may be available for the purpose, State Street shall, upon
receipt of instructions from the Transfer Agent, make funds available for
payment to holders of Shares who have delivered to the Transfer Agent a request
for redemption or repurchase of their Shares. In connection with the redemption
or repurchase of Shares, State Street is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial bank designated
by the redeeming shareholders.
Section 7 Proper Instructions. "Proper Instructions" as used throughout this
Agreement means a writing signed or initialed by one or more person or persons
as the Board shall have from time to time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved. Oral
instructions will be considered Proper Instructions if State Street 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. Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Fund and State Street agree to security
17
procedures, including but not limited to, the security procedures selected by
the Fund in the Funds Transfer Addendum attached hereto. For purposes of this
Section, Proper Instructions shall include instructions received by State Street
pursuant to any three-party agreement which requires a segregated asset account
in accordance with Section 2.9.
"Special Instructions" as used throughout this Agreement, means Proper
Instructions countersigned or confirmed in writing by the Treasurer or any
Assistant Treasurer of the Fund or any other person designated in writing by the
Treasurer of the Fund, which countersignature or confirmation shall be (a)
included on the same instrument containing the Proper Instructions or on a
separate instrument clearly relating thereto and (b) delivered by hand, by
facsimile transmission, or in such other manner as the Fund and State Street
agree in writing.
Concurrently with the execution of this Agreement, and from time to time
thereafter, as appropriate, the Fund shall deliver to State Street, duly
certified by the Fund's Treasurer or Assistant Treasurer, a certificate setting
forth: (i) the names, titles, signatures and scope of authority of all persons
authorized to give Proper Instructions or any other notice, request, direction,
instruction, certificate or instrument on behalf of the Fund and (ii) the names,
titles and signatures of those persons authorized to give Special Instructions.
Such certificate may be accepted and relied upon by State Street as conclusive
evidence of the facts set forth therein and shall be considered to be in full
force and effect until receipt by State Street of a similar certificate to the
contrary.
Section 8 Actions Permitted Without Express Authority. State Street 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 to 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 non-discretionary 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 Board.
Section 9 Evidence of Authority. State Street shall be protected in acting
upon any instructions, notice, request, consent, certificate or other instrument
or paper reasonably believed by it to be genuine and to have been properly
executed by or on behalf of the Fund. State Street may receive and accept a copy
of a resolution of the Board, certified by the Secretary or an Assistant
Secretary of the Fund ("Certified Resolution"), as conclusive evidence (a) of
the authority of any person to act in accordance with such resolution or (b) of
any determination or of any action by the Board as described in such resolution,
and such resolution may be considered as in full force and effect until receipt
by State Street of written notice to the contrary.
Section 10 Duties With Respect to Accounts and Records and Calculation of Net
Asset Value
Section 10.1 Accounts and Records. State Street will prepare and
maintain, with the direction and as interpreted by Fund's accountants and/or
other advisors, in complete, accurate and current form all accounts and records:
(1) required to be maintained by Fund with respect to portfolio transactions
under Section 31(a) of the 1940 Act and the rules and regulations from time to
time adopted thereunder; (2) required to be maintained as a basis for
calculation of the Fund's net asset value; and (3) as otherwise agreed upon by
the parties. Fund will advise State Street in writing
18
of all applicable record retention requirements, other than those set forth in
the 1940 Act or the regulations thereunder. State Street will preserve such
accounts and records in the manner and for the periods prescribed in the 1940
Act or the regulations thereunder or for such longer period as is agreed upon by
the parties. Fund will furnish, in writing or its electronic or digital
equivalent, accurate and timely information needed by State Street to complete
such accounts and records, including corporate actions, when such information is
not readily available from generally accepted securities industry services or
publications.
Section 10.2 Delivery of Accounts and Records. Fund will turn over or
cause to be turned over to State Street all accounts and records needed by State
Street to fully and properly perform its duties and responsibilities hereunder.
State Street may rely conclusively on the completeness and correctness of such
accounts and records.
Section 10.3 Accounts and Records Property of Fund. State Street
acknowledges that all of the accounts and records maintained by State Street
pursuant hereto are the property of the Fund and at all times during State
Street's regular business hours, shall be open for inspection and reproduction
by duly authorized officers, employees and agents of the Fund and employees and
agents of the SEC. State Street will assist Fund's independent auditors, or upon
approval of Fund or upon demand, any regulatory body, in any requested review of
Fund's accounts and records but Fund will reimburse State Street for all
expenses and employee time invested in any such review outside of routine and
normal periodic reviews. Upon receipt from Fund of the necessary information or
instructions, State Street will supply information from the books and records it
maintains for Fund that Fund needs for tax returns, questionnaires, periodic
reports to shareholders and such other reports and information requests as Fund
and State Street agree upon from time to time.
Section 10.4 Adoption of Procedures. State Street and Fund may from time
to time adopt such procedures as they agree upon, and State Street may
conclusively assume that no procedure approved or directed by the Fund,
conflicts with or violates any requirements of the prospectus or registration
statement, articles of incorporation and bylaws or trust instrument, any
applicable law, rule or regulation, or any order, decree or agreement by which
the Fund may be bound. Fund will be responsible for notifying State Street of
any changes in statutes, regulations, rules, requirements or policies which may
impact State Street's performance of its responsibilities hereunder or its
related operational policies and procedures as they relate to the Fund in a
manner different from or in addition to requirements applicable to investment
companies registered under the 1940 Act in general.
Section 10.5 Valuation of Assets. Fund will give Instructions to State
Street specifying the outside pricing sources to be utilized as sources of asset
prices ("Pricing Sources"). State Street will calculate the Fund's net asset
value, in accordance with the Fund's prospectus or registration statement. State
Street will price the assets, including foreign currency holdings, of Fund for
which market quotations are available from the Pricing Sources; all other assets
will be priced in accordance with Fund's Instructions.
Section 10.6 Responsibility of State Street as Recordkeeper. So long as
and to the extent that it is in the exercise of reasonable care and good faith,
State Street shall not be responsible or liable for, and Fund will indemnify and
hold State Street harmless from and against, any and all costs, expenses,
losses, damages, charges, counsel fees, payments and liabilities which may be
asserted against or incurred by State Street or for which State Street may be
held to be liable, arising
19
out of or attributable to any error, omission, inaccuracy or other deficiency in
the Fund's accounts and records or other information provided by or on behalf of
the Fund to State Street, including the accuracy of the prices quoted by the
Pricing Sources or for the information supplied by Fund to price the assets, or
the failure of Fund to provide, or provide in a timely manner, any accounts,
records, or information needed by State Street to perform hereunder.
Section 10.7 Investment With Underlying Transfer Agent. The Fund
acknowledges and agrees that, with respect to investments maintained with the
Underlying Transfer Agent, the Underlying Transfer Agent is the sole source of
information on the number of shares of a fund held by it on behalf of the Fund
and that State Street has the right to rely on holdings information furnished by
the Underlying Transfer Agent to State Street in performing its duties under
this Agreement, including without limitation, the duties set forth in this
Section 10; provided, however, that State Street shall be obligated to reconcile
information as to purchases and sales of Underlying Shares contained in trade
instructions and confirmations received by State Street and to report promptly
any discrepancies to the Underlying Transfer Agent and the Fund.
Section 11 Opinion of Fund's Independent Accountant. State Street shall take
all reasonable action, as the Fund may from time to time request, to obtain from
year to year favorable opinions from the Fund's independent accountants with
respect to its activities hereunder in connection with the preparation of the
Fund's Form N-2, and Form N-SAR or other periodic reports to the SEC and with
respect to any other requirements thereof.
Section 12 Reports to Fund by Independent Public Accountants. State Street
shall provide the Fund, at such times as the Fund may reasonably require, with
reports by independent public accountants on the accounting system, internal
accounting control and procedures for safeguarding securities, futures contracts
and options on futures contracts, including securities deposited and/or
maintained in a Securities System, relating to the services provided by State
Street under this Agreement; such reports, shall be of sufficient scope and in
sufficient detail, as may reasonably be required by the Fund to provide
reasonable assurance that any material inadequacies would be disclosed by such
examination, and, if there are no such inadequacies, the reports shall so state.
Section 13 Compensation of State Street. State Street shall be entitled to
reasonable compensation for its services and expenses as custodian and
recordkeeper, as agreed upon from time to time between the Fund and State
Street.
Section 14 Responsibility of State Street. So long as and to the extent that
it is in the exercise of reasonable care and good faith, State Street shall not
be responsible for the title, validity or genuineness of any property or
evidence of title thereto received by it or delivered by it pursuant to this
Agreement and 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, including any futures
commission merchant acting pursuant to the terms of a three-party futures or
options agreement. State Street shall be held to the exercise of reasonable care
and good faith in carrying out the provisions of this Agreement, but shall be
kept indemnified by and shall be without liability to the Fund for any action
taken or omitted by it in good faith without negligence, including, without
limitation, acting in accordance with any Proper Instruction or Special
Instruction. It shall be entitled to rely on and may act upon advice of counsel
(who may be counsel for the Fund)
20
on all matters, and shall be without liability for any action reasonably taken
or omitted in good faith pursuant to such advice.
Except as may arise from State Street's own negligence, willful misconduct or
bad faith or the negligence or willful misconduct of a sub-custodian or agent,
State Street shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or circumstances beyond
the reasonable control of State Street or any sub-custodian or Securities System
or any agent or nominee of any of the foregoing, including, without limitation,
the interruption, suspension or restriction of trading on or the closure of any
securities market, power or other mechanical or technological failures or
interruptions, computer viruses or communications disruptions, work stoppages,
natural disasters, or other similar events or acts; (ii) errors by the Fund or
its duly-authorized investment manager or investment advisor in their
instructions to State Street provided such instructions, and State Street's
reliance upon them, have been in accordance with this Agreement; (iii) the
insolvency of or acts or omissions by a Securities System; (iv) any act or
omission of a Special Sub-Custodian including, without limitation, reliance on
reports prepared by a Special Sub-Custodian; (v) any delay or failure of any
broker, agent or intermediary, central bank or other commercially prevalent
payment or clearing system to deliver to State Street's sub-custodian or agent
securities purchased or in the remittance or payment made in connection with
securities sold; (vi) any delay or failure of any company, corporation, or other
body (other than an affiliate of State Street) in charge of registering or
transferring securities in the name of State Street, the Fund, State Street's
sub-custodians, nominees or agents or any consequential losses arising out of
such delay or failure to transfer such securities including non-receipt of
bonus, dividends and rights and other accretions or benefits; (vii) delays or
inability to perform its duties due to any disorder in market infrastructure
with respect to any particular security or Securities System; and (viii) any
provision of any present or future law or regulation or order of the United
States of America, or any state thereof, or any other country, or political
subdivision thereof or of any court of competent jurisdiction.
If the Fund requires State Street to take any action with respect to securities,
which action involves the payment of money or which action may, in the opinion
of State Street, result in State Street 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 State Street to take such action, shall
provide indemnity to State Street in an amount and form satisfactory to it.
If the Fund requires State Street, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or in
the event that State Street or its nominee shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay State Street promptly, State Street
shall be entitled to utilize available cash and to dispose of the Fund's assets
to the extent necessary to obtain reimbursement.
Except as may arise from State Street's own negligence, willful misconduct or
bad faith, the Fund shall indemnify and hold State Street harmless from and
against any and all costs, expenses, losses, damages, charges, counsel fees,
payments and liabilities which may be asserted against State Street (a) acting
in accordance with any Proper Instruction or Special Instruction including,
without
21
limitation, any Proper Instruction with respect to Free Trades including, but
not limited to, cost, expense, loss, damage, liability, tax, charge, assessment
or claim resulting from (i) the failure of the Fund to receive income with
respect to purchased investments, (ii) the failure of the Fund to recover
amounts invested on maturity of purchased investments, (iii) the failure of
State Street to respond to or be aware of notices or other corporate
communications with respect to purchased investments, or (iv) State Street's
reliance upon information provided by the Fund, the Fund's counterparty(ies) or
the agents of either of them with respect to Fund property released, delivered
or purchased pursuant to either of Section 2.2(14) or Section 2.6(7) hereof; (b)
for the acts or omissions of any Special Sub-Custodian; or (c) for the acts or
omissions of any Local Agent or Pledgee.
In no event shall either party be liable for indirect, special or consequential
damages.
Section 15 Term and Termination. This Agreement shall become effective as of its
execution, shall continue in full force and effect until terminated as
hereinafter provided, may be amended at any time by mutual agreement of the
parties hereto and may be terminated by either party by an instrument in writing
delivered or mailed, postage prepaid to the other party, such termination to
take effect not sooner than thirty (30) days after the date of such delivery or
mailing; provided, however, that neither party shall amend or terminate this
Agreement in contravention of any applicable federal or state regulations, or
any provision of the Fund's Declaration of Trust and further provided, that the
Fund may at any time by action of its Board (i) substitute another bank or trust
company for State Street by giving notice as described above to State Street, or
(ii) immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for State Street by the Comptroller of the Currency 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:
1) the Fund shall (a) pay to State Street such compensation as may be
due as of the date of such termination and shall likewise reimburse
State Street for its costs, expenses and disbursements, (b)
designate a successor recordkeeper (which may be Fund) by Proper
Instruction; and (c) designate a successor custodian by Proper
Instruction.
2) upon payment of all sums due to it from Fund, State Street shall (a)
deliver all accounts and records to the successor recordkeeper (or,
if none, to Fund) at the office of State Street, and (b) deliver to
the successor custodian (or, if none, to the Fund) at the office of
State Street, duly endorsed and in the form for transfer, all
securities of the Fund then held by it hereunder and shall transfer
to an account of the successor custodian all of the securities of
the Fund held in a Securities System or at the Underlying Transfer
Agent.
In the event that no Proper Instructions designating a successor custodian or
alternative arrangements shall have been delivered to State Street on or before
the date when such termination shall become effective, then State Street shall
have the right to deliver to a bank or trust company, which is a "bank" as
defined in the 1940 Act, doing business in Boston, Massachusetts, or New York,
New York, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$25,000,000, all securities, funds and other properties held by State Street
hereunder and all instruments held by State Street relative thereto and all
other property held by it under this Agreement on behalf of the Fund, and to
transfer to an account of such successor custodian all of the Fund's securities
held in any Securities System or at the Underlying
22
Transfer Agent. Thereafter, such bank or trust company shall be the successor of
State Street under this Agreement.
In the event that securities, funds and other properties remain in the
possession of State Street after the date of termination hereof owing to failure
of the Fund to provide Proper Instructions as aforesaid, State Street shall be
entitled to fair compensation for its services during such period as State
Street retains possession of such securities, funds and other properties and the
provisions of this Agreement relating to the duties and obligations of State
Street shall remain in full force and effect.
Section 16 General.
Section 16.1 Interpretive and Additional Provisions. In connection with the
operation of this Agreement, State Street 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 Fund's Declaration of
Trust. No interpretive or additional provisions made as provided in the
preceding sentence shall be deemed to be an amendment of this Agreement.
Section 16.2 Massachusetts Law to Apply. This Agreement shall be construed
and the provisions thereof interpreted under and in accordance with laws of The
Commonwealth of Massachusetts.
Section 16.3 Prior Agreements. This Agreement supersedes and terminates, as
of the date hereof, all prior Agreements between the Fund and State Street
relating to the custody or recordkeeping of the Fund's assets.
Section 16.4 Notices. Any notice, instruction or other instrument required
to be given hereunder may be delivered in person to the offices of the parties
as set forth herein during normal business hours or delivered prepaid registered
mail or by telex, cable or telecopy to the parties at the following addresses or
such other addresses as may be notified by any party from time to time.
To the Fund: To State Street:
Pimco Floating Rate Income Fund State Street Bank and Trust Company
c/o PIMCO Advisors Fund Management, LLC 801 Pennsylvania
0000 Xxxxxxxx Xxxxxx Xxxxxx Xxxx, XX 00000
Xxxxxxxx, XX 00000 Attention: Vice President, Custody
Attention: Xxxxxx Xxxxxx Telephone: 000-000-0000
Telephone: 000-000-0000 Telecopy: 000-000-0000
Telecopy: 000-000-0000
Such notice, instruction or other instrument shall be deemed to have been served
in the case of a registered letter at the expiration of five business days after
posting, in the case of cable twenty-four hours after dispatch and, in the case
of telex, immediately on dispatch and if delivered outside normal business hours
it shall be deemed to have been received at the next time after delivery when
23
normal business hours commence and in the case of cable, telex or telecopy on
the business day after the receipt thereof. Evidence that the notice was
properly addressed, stamped and put into the post shall be conclusive evidence
of posting.
Section 16.5 Reproduction of Documents. This Agreement and all schedules,
addenda, exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties hereto all/each agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
Section 16.6 Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, and all such
counterparts taken together shall constitute one and the same Agreement.
Section 16.7 Severability. If any provision or provisions of this Agreement
shall be held to be invalid, unlawful or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired.
Section 16.8 Remote Access Services Addendum. State Street and the Fund
agree to be bound by the terms of the Remote Access Services Addendum attached
hereto.
Section 16.9 Shareholder Communications Election. SEC Rule 14b-2 requires
banks which hold securities for the account of customers to respond to requests
by issuers of securities for the names, addresses and holdings of beneficial
owners of securities of that issuer held by the bank unless the beneficial owner
has expressly objected to disclosure of this information. In order to comply
with the rule, State Street needs the Fund to indicate whether it authorizes
State Street to provide the Fund's name, address, and share position to
requesting companies whose securities the Fund owns. If the Fund tells Xxxxx
Xxxxxx "xx", Xxxxx Xxxxxx will not provide this information to requesting
companies. If the Fund tells State Street "yes" or does not check either "yes"
or "no" below, State Street is required by the rule to treat the Fund as
consenting to disclosure of this information for all securities owned by the
Fund or any funds or accounts established by the Fund. For the Fund's
protection, the Rule prohibits the requesting company from using the Fund's name
and address for any purpose other than corporate communications. Please indicate
below whether the Fund consents or objects by checking one of the alternatives
below.
YES [_] State Street is authorized to release the Fund's name, address, and
share positions.
NO [X] State Street is not authorized to release the Fund's name, address, and
share positions.
24
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of *, 2003.
Pimco Floating Rate Income Fund Fund Signature Attested to By:
By: _________________________ By: ____________________
Name: _________________________ Name: ____________________
Title: _________________________ Title: ____________________
State Street Bank and Trust Company Signature Attested to By:
By: ________________________ By: ________________________
Name: ________________________ Name: ________________________
Title: Senior Vice President Title: ________________________
25
Remote Access Services Addendum to
Custodian and Investment Accounting Agreement
Addendum to that certain Custodian and Investment Accounting Agreement
dated as of *, 2003 (the "Custodian Agreement") between PIMCO Floating Rate
Income Fund (the "Customer") and State Street Bank and Trust Company, including
its subsidiaries and affiliates ("State Street").
State Street has developed proprietary accounting and other systems, and
has acquired licenses for other such systems, which it utilizes in conjunction
with the services we provide to you (the "Systems"). In this regard, we maintain
certain information in databases under our control and ownership that we make
available on a remote basis to our customers (the "Remote Access Services").
The Services. This addendum shall govern use of all Systems that State
Street may from time to time agree to provide you, the Customer, and your
designated investment advisors, consultants or other third parties authorized by
State Street who agree to abide by the terms of this Addendum ("Authorized
Designees") in order to provide Remote Access Services for the purpose of
obtaining and analyzing reports and information.
Security Procedures. The Customer agrees to comply, and to cause its
Authorized Designees to comply, with remote access operating standards and
procedures and with user identification or other password control requirements
and other security procedures as may be issued from time to time by State Street
for use of the System and access to the Remote Access Services. The Customer
agrees to advise State Street immediately in the event that it learns or has
reason to believe that any person to whom it has given access to the System or
the Remote Access Services has violated or intends to violate the terms of this
Addendum and the Customer will cooperate with State Street in seeking injunctive
or other equitable relief. The Customer agrees to discontinue use of the System
and Remote Access Services, if requested, for any security reasons cited by
State Street.
Fees. Fees and charges for the use of the System and the Remote Access
Services and related payment terms shall be as set forth in the custody fee
schedule in effect from time to time between the parties (the "Fee Schedule").
The Customer shall be responsible for any tariffs, duties or taxes imposed or
levied by any government or governmental agency by reason of the transactions
contemplated by this Addendum, including, without limitation, federal, state and
local taxes, use, value added and personal property taxes (other than income,
franchise or similar taxes which may be imposed or assessed against State
Street). Any claimed exemption from such tariffs, duties or taxes shall be
supported by proper documentary evidence delivered to State Street.
Proprietary Information/Injunctive Relief. The System and Remote Access
Services described herein and the databases, computer programs, screen formats,
report formats, interactive design techniques, formulae, processes, systems,
software, know- how, algorithms, programs, training aids, printed materials,
methods, books, records, files, documentation and other information made
available to the Customer by State Street as part of the Remote Access Services
and through the use of the System and all copyrights, patents, trade secrets and
other proprietary rights of State Street related thereto are the exclusive,
valuable and confidential property of State Street and its relevant licensors
(the "Proprietary Information"). The Customer agrees on behalf of itself and its
26
Authorized Designees to keep the Proprietary Information confidential and to
limit access to its employees and Authorized Designees (under a similar duty of
confidentiality) who require access to the System for the purposes intended. The
foregoing shall not apply to Proprietary Information in the public domain or
required by law to be made public.
The Customer agrees to use the Remote Access Services only in connection with
the proper purposes of this Addendum. The Customer will not, and will cause its
employees and Authorized Designees not to, (i) permit any third party to use the
System or the Remote Access Services, (ii) sell, rent, license or otherwise use
the System or the Remote Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, or (iv)
allow or cause any information transmitted from State Street's databases,
including data from third party sources, available through use of the System or
the Remote Access Services, to be published, redistributed or retransmitted for
other than use for or on behalf of the Customer, as State Street's customer.
The Customer agrees that neither it nor its Authorized Designees will modify the
System in any way; enhance or otherwise create derivative works based upon the
System; or reverse engineer, decompile or otherwise attempt to secure the source
code for all or any part of the System.
The Customer acknowledges that the disclosure of any Proprietary Information, or
of any information which at law or equity ought to remain confidential, will
immediately give rise to continuing irreparable injury to State Street
inadequately compensable in damages at law and that State Street shall be
entitled to obtain immediate injunctive relief against the breach or threatened
breach of any of the foregoing undertakings, in addition to any other legal
remedies which may be available.
Limited Warranties. State Street represents and warrants that it is the
owner of and has the right to grant access to the System and to provide the
Remote Access Services contemplated herein. Because of the nature of computer
information technology and the necessity of relying upon third party sources,
and data and pricing information obtained from third parties, the System and
Remote Access Services are provided "AS IS", and the Customer and its Authorized
Designees shall be solely responsible for the investment decisions, results
obtained, regulatory reports and statements produced using the Remote Access
Services. State Street and its relevant licensors will not be liable to the
Customer or its Authorized Designees for any direct or indirect, special,
incidental, punitive or consequential damages arising out of or in any way
connected with the System or the Remote Access Services, nor shall either party
be responsible for delays or nonperformance under this Addendum arising out of
any cause or event beyond such party's control.
State Street will take reasonable steps to ensure that its products (and those
of its third-party suppliers) reflect the available state of the art technology
to offer products that are Year 2000 compliant, including, but not limited to,
century recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that reflect
the date issues arising between now and December 31, 2099, and if any changes
are required, State Street will make the changes to its products at no cost to
you and in a commercially reasonable time frame and will require third-party
suppliers to do likewise. The Customer will do likewise for its systems.
27
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR ITSELF AND ITS
RELEVANT LICENSORS, EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE
SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
Infringement. State Street will defend or, at our option, settle any claim
or action brought against the Customer to the extent that it is based upon an
assertion that access to the System or use of the Remote Access Services by the
Customer under this Addendum constitutes direct infringement of any United
States patent or copyright or misappropriation of a trade secret, provided that
the Customer notifies State Street promptly in writing of any such claim or
proceeding and cooperates with State Street in the defense of such claim or
proceeding. Should the System or the Remote Access Services or any part thereof
become, or in State Street's opinion be likely to become, the subject of a claim
of infringement or the like under the patent or copyright or trade secret laws
of the United States, State Street shall have the right, at State Street's sole
option, to (i) procure for the Customer the right to continue using the System
or the Remote Access Services, (ii) replace or modify the System or the Remote
Access Services so that the System or the Remote Access Services becomes
noninfringing, or (iii) terminate this Addendum without further obligation.
Termination. Either party to the Custodian Agreement may terminate this
Addendum (i) for any reason by giving the other party at least one-hundred and
eighty (180) days' prior written notice in the case of notice of termination by
State Street to the Customer or thirty (30) days' notice in the case of notice
from the Customer to State Street of termination, or (ii) immediately for
failure of the other party to comply with any material term and condition of the
Addendum by giving the other party written notice of termination. This Addendum
shall in any event terminate within ninety (90) days after the termination of
the Custodian Agreement. In the event of termination, the Customer will return
to State Street all copies of documentation and other confidential information
in its possession or in the possession of its Authorized Designees. The
foregoing provisions with respect to confidentiality and infringement will
survive termination for a period of three (3) years.
Miscellaneous. This Addendum and the exhibit hereto constitute the entire
understanding of the parties to the Custodian Agreement with respect to access
to the System and the Remote Access Services. This Addendum cannot be modified
or altered except in a writing duly executed by each of State Street and the
Customer and shall be governed by and construed in accordance with the laws of
The Commonwealth of Massachusetts.
By its execution of the Custodian Agreement, the Customer accepts responsibility
for its and its Authorized Designees' compliance with the terms of this
Addendum.
28
SCHEDULE A: GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Argentina Citibank, N.A.
Australia Westpac Banking Corporation
Austria Erste Bank der Osterreichischen Sparkassen AG
Bahrain HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Bangladesh Standard Chartered Bank
Belgium Fortis Bank nv-sa
Benin via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Bermuda The Bank of Bermuda Limited
Bolivia Citibank, N. A.
Botswana Barclays Bank of Botswana Limited
Brazil Citibank, N.A.
Bulgaria ING Bank N.V.
Burkina Faso via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Canada State Street Trust Company Canada
Cayman Islands Bank of Nova Scotia Trust Company (Cayman) Ltd.
Chile BankBoston, N.A.
People's Republic Hongkong and Shanghai Banking Corporation Limited,
of China Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria
Costa Rica Banco BCT S.A.
Croatia Privredna Banka Zagreb d.d
Cyprus Cyprus Popular Bank Ltd.
Czech Republic Ceskoslovenska Obchodni Banka, A.S.
Denmark Danske Bank A/S
Ecuador Citibank, N.A.
Egypt HSBC Bank Egypt S.A.E.
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
29
SCHEDULE A: GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Estonia Hansabank
Finland Nordea Bank Finland Plc.
France BNP Paribas Securities Services, S.A.
Germany Dresdner Bank AG
Ghana Barclays Bank of Ghana Limited
Greece National Bank of Greece S.A.
Guinea-Bissau via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Hong Kong Standard Chartered Bank
Hungary HVB Bank Hungary Rt.
Iceland Icebank Ltd.
India Deutsche Bank AG
Hongkong and Shanghai Banking Corporation Limited
Indonesia Standard Chartered Bank
Ireland Bank of Ireland
Israel Bank Hapoalim B.M.
Italy BNP Paribas Securities Services, S.A.
Ivory Coast Societe Generale de Banques en Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and Merchant Bank Ltd.
Japan Mizuho Corporate Bank Ltd.
Sumitomo Mitsui Banking Corporation
Jordan HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Kazakhstan HSBC Bank Kazakhstan
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Kenya Barclays Bank of Kenya Limited
Republic of Korea Hongkong and Shanghai Banking Corporation Limited
Latvia A/s Hansabanka
Lebanon HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
30
SCHEDULE A: GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Lithuania Vilniaus Bankas AB
Malaysia Standard Chartered Bank Malaysia Berhad
Mali via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Mauritius Hongkong and Shanghai Banking Corporation Limited
Mexico Banco Nacional de Mexico S.A
Morocco Banque Commerciale du Maroc
Namibia Standard Bank Namibia Limited
Netherlands KAS BANK N.V.
New Zealand Westpac Banking Corporation
Niger via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Nigeria Stanbic Bank Nigeria Limited
Norway Nordea Bank Norge ASA
Oman HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Pakistan Deutsche Bank AG
Palestine HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Panama BankBoston, N.A.
Peru Citibank, N.A.
Philippines Standard Chartered Bank
Poland Bank Handlowy w Warszawie S.A.
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
Romania ING Bank N.V.
Russia ING Bank (Eurasia) ZAO, Moscow
Senegal via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Singapore The Development Bank of Singapore Limited
31
SCHEDULE A: GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Country Subcustodian Non-Mandatory Depositories
Slovak Republic Ceskoslovenska Obchodni Banka, A.S., pobocka zahranicnej banky v SR
Slovenia Bank Austria Creditanstalt d.d. - Ljubljana
South Africa Nedcor Bank Limited
Standard Bank of South Africa Limited
Spain Banco Santander Central Hispano S.A.
Sri Lanka Hongkong and Shanghai Banking Corporation Limited
Swaziland Standard Bank Swaziland Limited
Sweden Skandinaviska Enskilda Banken
Switzerland UBS AG
Taiwan - R.O.C. Central Trust of China
Thailand Standard Chartered Bank
Togo via Societe Generale de Banques en Cote d'Ivoire, Abidjan, Ivory Coast
Trinidad & Tobago Republic Bank Limited
Tunisia Banque Internationale Arabe de Tunisie
Turkey Citibank, N.A.
Uganda Barclays Bank of Uganda Limited
Ukraine ING Bank Ukraine
United Arab Emirates HSBC Bank Middle East
(as delegate of the Hongkong and Shanghai Banking Corporation Limited)
United Kingdom State Street Bank and Trust Company, London Branch
Uruguay BankBoston, N.A.
Venezuela Citibank, N.A.
Vietnam The Hongkong and Shanghai Banking Corporation Limited
Zambia Barclays Bank of Zambia Limited
Zimbabwe Barclays Bank of Zimbabwe Limited
32
SCHEDULE B: GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
Country Mandatory Depositories
Argentina Caja de Valores S.A.
Australia Austraclear Limited
Austria Oesterreichische Kontrollbank AG (Wertpapiersammelbank Division)
Bahrain Exchange Clearing, Settlement, and Depository System of the Bahrain Stock
Belgium Caisse Interprofessionnelle de Depots et de Virements de Titres, S.A.
Banque Nationale de Belgique
Benin Depositaire Central - Banque de Reglement
Bermuda Bermuda Securities Depository
Brazil Central de Custodia e de Liquidacao Financeira de Titulos Privados (CETIP)
Companhia Brasileira de Liquidacao e Custodia
Sistema Especial de Liquidacao e de Custodia (SELIC)
Bulgaria Bulgarian National Bank
Central Depository AD
Burkina Faso Depositaire Central - Banque de Reglement
Canada Canadian Depository for Securities Limited
Chile Deposito Central de Valores S.A.
People's Republic China Securities Depository and Clearing Corporation Limited, Shanghai Branch
of China China Securities Depository and Clearing Corporation Limited, Shenzhen Branch
Colombia Deposito Central de Valores
Deposito Centralizado de Valores de Colombia SA. (DECEVAL)
Costa Rica Central de Valores S.A.
Croatia Ministry of Finance
National Bank of Croatia
Sredisnja Depozitarna Agencija d.d.
Cyprus Central Depository and Central Registry
Czech Republic Czech National Bank
Stredisko cennych papiru - Ceska republika
Denmark Vaerdipapircentralen (Danish Securities Center)
Egypt Misr for Clearing, Settlement, and Depository S.A.E.
Estonia Eesti Vaartpaberikeskus
Finland Suomen Arvopaperikeskus (Finnish Central Securities Depository)
33
SCHEDULE B: GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
Country Mandatory Depositories
France Euroclear France
Germany Clearstream Banking AG, Frankfurt
Greece Apothetirion Titlon AE - Central Securities Depository
Bank of Greece, System for Monitoring Transactions in Securities in Book-Entry Form
Guinea-Bissau Depositaire Central - Banque de Reglement
Hong Xxxx Xxxxxxx Xxxxxxxxxxxx Xxxx
Xxxx Xxxx Securities Clearing Company Limited
Hungary Kozponti Elszamolohaz es Ertektar (Budapest) Rt. (KELER)
Iceland Iceland Securities Depository Limited
India Central Depository Services India Limited
National Securities Depository Limited
Reserve Bank of India
Indonesia Bank Indonesia
PT Kustodian Sentral Efek Indonesia
Israel Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearinghouse)
Italy Monte Titoli S.p.A.
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica Jamaica Central Securities Depository
Japan Bank of Japan - Net System
Japan Securities Depository Center (JASDEC) Incorporated
Kazakhstan Central Depository of Securities
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository
Latvia Latvian Central Depository
Lebanon Custodian and Clearing Center of Financial Instruments for
Lebanon and the Middle East (Midclear) X.X.X.
Banque du Liban
Lithuania Central Securities Depository of Lithuania
Malaysia Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia
Mali Depositaire Central - Banque de Reglement
Mauritius Central Depository and Settlement Co. Ltd.
34
SCHEDULE B: GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
Country Mandatory Depositories
Bank of Mauritius
Mexico S.D. Indeval, S.A. de C.V.
Morocco Maroclear
Netherlands NECIGEF) Nederlands Centraal Instituut voor Giraal Effectenverkeer B.V.
New Zealand New Zealand Central Securities Depository Limited
Niger Depositaire Central - Banque de Reglement
Nigeria Central Securities Clearing System Limited
Norway Verdipapirsentralen (Norwegian Central Securities Depository)
Oman Muscat Depository & Securities Registration Company, SAOC
Pakistan Central Depository Company of Pakistan Limited
State Bank of Pakistan
Palestine Clearing Depository and Settlement, a department of the Palestine Stock Exchange
Panama Central Latinoamericana de Valores, S.A. (LatinClear)
Peru Caja de Valores y Liquidaciones, Institucion de
Compensacion y Liquidacion de Valores S.A
Philippines Philippine Central Depository, Inc.
Registry of Scripless Securities (XXXX) of the Bureau of Treasury
Poland Krajowy Depozyt Papierow Wartos<180>ciowych S.A. (National Depository of Securities)
Central Treasury Bills Registrar
Portugal INTERBOLSA - Sociedade Gestora de Sistemas de Liquidacao e de Sistemas Centralizados de Valores
Mobiliarios, S.A.
Qatar Central Clearing and Registration (CCR), a department of the Doha Securities Market
Romania Bucharest Stock Exchange Registry Division
National Bank of Romania
National Securities Clearing, Settlement and Depository Company
Russia Vneshtorgbank, Bank for Foreign Trade of the Russian Federation
Senegal Depositaire Central - Banque de Reglement
Singapore Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic National Bank of Slovakia
Stredisko cennych papierov SR, a.s.
35
SCHEDULE B: GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
Country Mandatory Depositories
Slovenia KDD - Centralna klirinsko depotna xxxxxx x.x.
South Africa Central Depository Limited
Share Transactions Totally Electronic (STRATE) Ltd.
Spain Banco de Espana
Servicio de Compensacion y Liquidacion de Valores, S.A.
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen VPC AB
(Swedish Central Securities Depository)
Switzerland SegaIntersettle AG (SIS)
Taiwan - R.O.C. Taiwan Securities Central Depository Company Limited
Thailand Bank of Thailand
Thailand Securities Depository Company Limited
Togo Depositaire Central - Banque de Reglement
Trinidad and Tobago Trinidad and Tobago Central Bank
Tunisia Societe Tunisienne Interprofessionelle pour la
Compensation et de Depots des Valeurs Mobilieres (STICODEVAM)
Turkey Central Bank of Turkey
Takas ve Saklama Bankasi A.S. (TAKASBANK)
Uganda Bank of Uganda
Ukraine Mizhregionalny Fondovy Souz
National Bank of Ukraine
United Arab Emirates Clearing and Depository System, a department of theDubai Financial Market
Venezuela Banco Central de Venezuela
Vietnam Securities Registration, Clearing and Settlement,
Depository Department of the Securities Trading Center
Zambia Bank of Zambia
XxXX Central Shares Depository Limited
TRANSNATIONAL
Euroclear
Clearstream Banking AG
36
SCHEDULE C
MARKET INFORMATION
Publication/Type of Information Brief Description
(scheduled frequency)
The Guide to Custody in World Markets An overview of settlement and
(hardcopy annually and regular safekeeping procedures, custody
website updates) practices and foreign investor
considerations for the markets in which
State Street offers custodial services.
Global Custody Network Review Information relating to Foreign Sub-
(annually) Custodians in State Street's Global
Custody Network. The Review stands as an
integral part of the materials that
State Street provides to its U.S. mutual
fund clients to assist them in complying
with SEC Rule 17f-5. The Review also
gives insight into State Street's market
expansion and Foreign Sub-Custodian
selection processes, as well as the
procedures and controls used to monitor
the financial condition and performance
of our Foreign Sub-Custodian banks.
Securities Depository Review Custody risk analyses of the Foreign
(annually) Securities Depositories presently
operating in Network markets. This
publication is an integral part of the
materials that State Street provides to
its U.S. mutual fund clients to meet
informational obligations created by SEC
Rule 17f-7.
Global Legal Survey With respect to each market in which
(annually) State Street offers custodial services,
opinions relating to whether local law
restricts (i) access of a fund's
independent public accountants to books
and records of a Foreign Sub-Custodian
or Foreign Securities System, (ii) a
fund's ability to recover in the event
of bankruptcy or insolvency of a Foreign
Sub-Custodian or Foreign Securities
System, (iii) a fund's ability to
recover in the event of a loss by a
Foreign Sub-Custodian or Foreign
Securities System, and (iv) the ability
of a foreign investor to convert cash
and cash equivalents to U.S. dollars.
Subcustodian Agreements Copies of the contracts that State
(annually) Street has entered into with each
Foreign Sub-Custodian that maintains
U.S. mutual fund assets in the markets
in which State Street offers custodial
services.
Global Market Bulletin Information on changing settlement and
(daily or as necessary) custody conditions in markets where
State Street offers custodial services.
Includes changes in market and tax
regulations, depository developments,
dematerialization information, as well
as other market changes that may impact
State Street's clients.
Foreign Custody Advisories For those markets where State Street
(as necessary) offers custodial services that exhibit
special risks or infrastructures
impacting custody, State Street issues
market advisories to highlight those
unique market factors which might impact
our ability to offer recognized custody
service levels.
Material Change Notices Informational letters and accompanying
(presently on a quarterly materials confirming State Street's
basis or as otherwise necessary) foreign custody arrangements, including
a summary of material changes with
Foreign Sub-Custodians that have
occurred during the previous quarter.
The notices also identify any material
changes in the custodial risks
associated with maintaining ssets with
Foreign Securities Depositorie
37
Funds Transfer Operating Guidelines
1. OBLIGATION OF THE SENDER: State Street Bank and Trust Company and affiliates
("SSB") is authorized to promptly debit Client's account(s) upon the receipt of
a payment order in compliance with any of the Security Procedures chosen by the
Client, from those offered on the attached selection form (and any updated
selection forms hereafter executed by the Client), for funds transfers and in
the amount of money that SSB has been instructed to transfer. SSB is hereby
instructed to accept funds transfer instructions only via the delivery methods
and Security Procedures indicated on the attached selection form (and any
updated selection forms hereafter executed by the Client). The Client agrees
that the Security Procedures are reasonable and adequate for its wire transfer
transactions and agrees to be bound by any payment orders, amendments and
cancellations, whether or not authorized, issued in its name and accepted by SSB
after being confirmed by any of the selected Security Procedures. The Client
also agrees to be bound by any other valid and authorized payment order accepted
by SSB. SSB shall execute payment orders in compliance with the selected
Security Procedures and with the Client's/Investment Manager's instructions on
the execution date provided that such payment order is received by the customary
deadline for processing such a request, unless the payment order specifies a
later time. SSB will use reasonable efforts to execute on the execution date
payment orders received after the customary deadline, but if it is unable to
execute any such payment order on the execution date, such payment order will be
deemed to have been received on the next business day.
2. SECURITY PROCEDURES: The Client acknowledges that the selected Security
Procedures were selected by the Client from Security Procedures offered by SSB.
The Client shall restrict access to confidential information relating to the
Security Procedures to authorized persons as communicated in writing to SSB. The
Client must notify SSB immediately if it has reason to believe unauthorized
persons may have obtained access to such information or of any change in the
Client's authorized personnel. SSB shall verify the authenticity of all
instructions according to the selected Security Procedures.
3. ACCOUNT NUMBERS: SSB shall process all payment orders on the basis of the
account number contained in the payment order. In the event of a discrepancy
between any name indicated on the payment order and the account number, the
account number shall take precedence and govern. Financial institutions that
receive payment orders initiated by SSB at the instruction of the Client may
also process payment orders on the basis of account numbers, regardless of any
name included in the payment order. SSB will also rely on any financial
institution identification numbers included in any payment order, regardless of
any financial institution name included in the payment order.
4. REJECTION: SSB reserves the right to decline to process or delay the
processing of a payment order which (a) is in excess of the collected balance in
the account to be charged at the time of SSB's receipt of such payment order;
(b) if initiating such payment order would cause SSB, in SSB's sole judgment, to
exceed any applicable volume, aggregate dollar, network, time, credit or similar
limits upon wire transfers; or (c) if SSB, in good faith, is unable to satisfy
itself that the transaction has been properly authorized.
5. CANCELLATION OR AMENDMENT: SSB shall use reasonable efforts to act on all
authorized requests to cancel or amend payment orders received in compliance
with the selected Security Procedures provided that such requests are received
in sufficient time to afford SSB a reasonable opportunity to act prior to
executing the payment order. However, SSB assumes no liability if the request
for amendment or cancellation cannot be satisfied by SSB's reasonable efforts.
6. ERRORS: SSB shall assume no responsibility for failure to detect any
erroneous payment order provided that SSB complies with the payment order
instructions as received and SSB complies with the selected Security Procedures.
The Security Procedures are established for the purpose of
38
authenticating payment orders only and not for the detection of errors in
payment orders.
7. INTEREST AND LIABILITY LIMITS: SSB shall assume no responsibility for lost
interest with respect to the refundable amount of any unauthorized payment
order, unless SSB is notified of the unauthorized payment order within thirty
(30) days of notification by SSB of the acceptance of such payment order. In no
event (including but not limited to failure to execute a payment order) shall
SSB be liable for special, indirect or consequential damages, even if advised of
the possibility of such damages.
8. AUTOMATED CLEARING HOUSE ("ACH") CREDIT ENTRIES/PROVISIONAL PAYMENTS: When
the Client initiates or receives ACH credit and debit entries pursuant to these
Guidelines and the rules of the National Automated Clearing House Association
and the Mid-America Payment Exchange or other similar body, SSB or its agent
will act as an Originating Depository Financial Institution and/or Receiving
Depository Financial Institution, as the case may be, with respect to such
entries. Credits given with respect to an ACH credit entry are provisional until
final settlement for such entry is received from the Federal Reserve Bank. If
such final settlement is not received, the Client agrees to promptly refund the
amount credited to the Client in connection with such entry, and the party
making payment to the Client via such entry shall not be deemed to have paid the
amount of the entry.
9. CONFIRMATIONS: Confirmation of SSB's execution of payment orders shall
ordinarily be provided within 24 hours. Notice may be delivered through SSB's
account statements, advices, information systems, or by facsimile or callback.
The Client must report any objections to the execution of a payment order within
30 days.
10. MISCELLANEOUS: SSB may use the Federal Reserve System Fedwire to execute
payment orders, and any payment order carried in whole or in part through
Fedwire will be subject to applicable Federal Reserve Board rules and
regulations. SSB and the Client agree to cooperate to attempt to recover any
funds erroneously paid to wrong parties, regardless of any fault of SSB or the
Client, but the party responsible for the erroneous payment shall bear all costs
and expenses incurred in trying to effect such recovery. These Guidelines may
not be amended except by a written agreement signed by the parties.
11. LIABILITY ON FOREIGN ACCOUNTS: State Street shall not be required to repay
any deposit made at a non-U.S. branch of State Street, or any deposit made with
State Street and denominated in a non-U.S. dollar currency, if repayment of such
deposit or the use of assets denominated in the non-U.S. dollar currency is
prevented, prohibited or otherwise blocked due to: (a) an act of war,
insurrection or civil strife; (b) any action by a non-U.S. government or
instrumentality or authority asserting governmental, military or police power of
any kind, whether such authority be recognized as a defacto or a dejure
government, or by any entity, political or revolutionary movement or otherwise
that usurps, supervenes or otherwise materially impairs the normal operation of
civil authority; or (c) the closure of a non-U.S. branch of State Street in
order to prevent, in the reasonable judgment of State Street, harm to the
employees or property of State Street. The obligation to repay any such deposit
shall not be transferred to and may not be enforced against any other branch of
State Street.
The foregoing provisions constitute the disclosure required by Massachusetts
General Laws, Chapter 167D, Section 36.
While State Street is not obligated to repay any deposit made at a non-U.S.
branch or any deposit denominated in a non-U.S. currency during the period in
which its repayment has been prevented, prohibited or otherwise blocked, State
Street will repay such deposit when and if all circumstances preventing,
prohibiting or otherwise blocking repayment cease to exist
39
Security Procedures Selection Form: Please select at least two of the funds
transfer security procedures indicated below.
[_] SWIFT
SWIFT (Society for Worldwide Interbank Financial Telecommunication) is a
cooperative society owned and operated by member financial institutions
that provides telecommunication services for its membership. Participation
is limited to securities brokers and dealers, clearing and depository
institutions, recognized exchanges for securities, and investment
management institutions. SWIFT provides a number of security features
through encryption and authentication to protect against unauthorized
access, loss or wrong delivery of messages, transmission errors, loss of
confidentiality and fraudulent changes to messages. Selection of this
security procedure would be most appropriate for existing SWIFT members.
[_] REMOTE BATCH TRANSMISSION
Wire transfer instructions are delivered via Computer-to-Computer
(CPU-CPU) data communications between the Client and/or its agent and SSB
and/or its agent. Security procedures include encryption and/or the use of
a test key by those individuals authorized as Automated Batch Verifiers or
a callback procedure to those individuals. Clients selecting this option
should have an existing facility for completing CPU-CPU transmissions.
This delivery mechanism is typically used for high-volume business such as
shareholder redemptions and dividend payments.
[_] AUTOMATED CLEARING HOUSE (ACH)
SSB or its agent receives an automated transmission from a Client for the
initiation of payment (credit) or collection (debit) transactions through
the ACH network. The transactions contained on each transmission or tape
must be authenticated by the Client. The transmission is sent from the
Client's or its agent's system to SSB's or its agent's system with
encryption.
[_] REPETITIVE WIRES
For situations where funds are transferred periodically from an existing
authorized account to the same payee (destination bank and account number)
and only the date and currency amount are variable, a repetitive wire may
be implemented. Repetitive wires will be subject to a $10 million limit.
If the payment order exceeds the $10 million limit, the instruction will
be confirmed by Telephone Confirmation (Call Back) or Test Key prior to
execution. Repetitive wire instructions must be reconfirmed annually.
Clients may establish Repetitive Wires by following the agreed upon
security procedures as described by Telephone Confirmation (Call Back) or
Test Key. This alternative is recommended whenever funds are frequently
transferred between the same two accounts. If this option is selected,
choose either Telephone Confirmation or Test Key to be used as a secondary
procedure when over $10 million.
[_] STANDING INSTRUCTIONS
Funds are transferred by SSB to a counter party on the Client's
established list of authorized counter parties. Only the date and the
dollar amount are variable. Clients may establish Standby Instructions by
following the agreed upon security procedures as described by Telephone
Confirmation (Call Back) or Test Key. Additional paperwork will be
required from insurance Clients using 1031 drawdowns. This option is used
for transactions that include but are not limited to Foreign Exchange
Contracts, Time Deposits and Tri-Party Repurchase Agreements. If this
option is selected, choose either Telephone Confirmation or Test Key to be
used as a secondary procedure when over $10 million.
[_] TELEPHONE CONFIRMATION (CALL BACK)
This procedure requires Clients to designate individuals as authorized
initiators and authorized verifiers. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of
the payment order, will contact someone other than the originator at the
Client's location to authenticate the instruction. Selection of this
alternative is appropriate for Clients who do not have the capability to
use other security procedures. Please complete the Telephone Confirmation
Instructions attached as a Schedule hereto.
[_] TEST KEY
Test Key confirmation will be used to verify all non-repetitive funds
transfer instructions received via facsimile or phone. SSB will provide
test keys if this option is chosen. SSB will verify that the instruction
contains the signature of an authorized person and prior to execution of
the payment order, will authenticate the test key provided with the
corresponding test key at SSB. Selection of this alternative is
appropriate for Clients who do not have the capability to use other
security procedures.
The individual signing below must be authorized to sign contract on behalf of
the client. The execution of payment orders under the selected Security
Procedures is governed by the Funds Transfer Operating Guidelines, which are
incorporated by reference.
Pimco Floating Rate Income Fund
By: ________________________________
Authorized Signature
____________________________________
Type or Print Name and Title
Date:
------------------
40
Schedule to Funds Transfer Operating Guidelines
and Security Procedures Selection Form
CLIENT/INVESTMENT MANAGER: _____________________________________________________
Company Name
KEY CONTACT INFORMATION
Whom shall we contact to implement your selection(s)?
CLIENT OPERATIONS CONTACT ALTERNATE CONTACT
Name Name
Address Address
City/State/Zip Code City/State/Zip Code
Telephone Number Telephone Number
Facsimile Number Facsimile Number
SWIFT Number
TELEPHONE CONFIRMATION INSTRUCTIONS
Authorized Initiators (Please Type or Print) - Please provide a listing of your
staff members who are currently authorized to INITIATE wire transfer
instructions:
NAME TITLE SPECIMEN SIGNATURE
______________________ ______________________ ______________________
______________________ ______________________ ______________________
______________________ ______________________ ______________________
______________________ ______________________ ______________________
______________________ ______________________ ______________________
Authorized Verifiers (Please Type or Print) - Please provide a listing of your
staff members who will be CALLED BACK to verify the initiation of repetitive
wires of $10 million or more and all non-repetitive wire instructions:
NAME CALLBACK PHONE NUMBER DOLLAR LIMITATION (IF ANY)
______________________ ______________________ ____________________________
______________________ ______________________ ____________________________
______________________ ______________________ ____________________________
______________________ ______________________ ____________________________
______________________ ______________________ ____________________________
00
XXXXX XXXXXX BANK & TRUST COMPANY
FEE SCHEDULE
FOR
PIMCO FLOATING RATE INCOME FUND
I. INVESTMENT ACCOUNTING
A. Minimum Monthly Fee
There is a monthly minimum fee of $3,000 per fund/portfolio. The
monthly minimum fee per portfolio does not apply to any portfolio if
the asset-based fee discussed in I.B. below produces greater revenue
than the aggregate minimum.
B. Asset Based Fee
1/100 of 1% (1.00 basis points) on the first $2 billion in assets.
.9/100 of 1% (.90 basis points) on the next $3 billion in assets.
.75/100 of 1% (.75 basis points) on all assets in excess of $5
billion in assets.
C. AMP Testing
There will be a monthly charge of $2,500.00 for the Auction Market
Preferred Stock Test. This is based on the complexity of the
existing PIMCO Closed-End Fund By-laws and the requirement to use
two rating agencies. State Street reserves the right to adjust the
AMP test fees after reviewing the Floating Rate Income Fund By-Laws
and or any future changes to the By-laws occur. In addition, should
the existing AMP Testing program require modifications, State Street
will prepare an estimate for PIMCO Advisors review and approval. The
modification will commence after both parties have agreed to the
time and costs in writing. The basic hourly rate will be charged at
$100.00 per hour. State Street will cap the project costs at
$5,000.00.
II. SECURITY CUSTODY
A. Domestic Custody
Asset-Based Fee:
.50/100 of 1% (.50 basis points) on all assets.
August 5, 2003 Page 1 of 3
PIMCO FLOATING RATE INCOME FUND
Fee Schedule (cont.)
Transaction Fee, per transaction:
DTC or FED book entry - $8.00
Domestic Physical and Cedel Settlements - $18.00 *
Mortgage Backed Securities Principal & Income Paydown - $10.00
Repo - $50.00 per Fund, Per Month
Federal Funds Wire Received or Delivered - $7.00 per wire
*Includes futures, options and Eurodollar CD settlements.
B. Foreign Securities
See Appendix I for Global Fee Agreement.
C. Balance Credits
State Street will offset fees with balance credits calculated at 75%
of the bank credit rate (see below) applied to average custody
collected cash balances for the month. Balance credits can be used
to offset fees. Any credits in excess of fees will be carried
forward from month to month through the end of the calendar year.
For calculation purposes, State Street uses an actual/actual basis.
Note: The bank credit rate is the equivalent to the lesser of:
. The average 91-day Treasury Xxxx discount rate for the month
or
. The average Federal Funds rate for the month less 50 basis
points.
D. Multi Class Fees
$500 (not included in minimum monthly fee discussed in I.A.).
E. Monthly SEC Calculation Fee Per Portfolio
$500 (not included in minimum monthly fee discussed in I.A.).
III. AUTOMATED PRICING
This service provides securities pricing daily.
Monthly Quote charge: Based on the number of positions priced during the
month.
. Municipal Bonds $ 16.00
. Municipal bonds $ 16.00
. Government, Corporate and Convertible Bonds $ 6.00
. Corporate and Government Bonds $ 6.00
. Options, Futures and Private Placement $ 6.00
. Foreign Equities and Bonds $ 8.00
August 5, 2003 Page 2 of 3
PIMCO FLOATING RATE INCOME FUND
Fee Schedule (cont.)
. Listed Equities, OTC Equities $ 6.00
. Corporate, Municipal, Convertible and Government Bonds,
Adjustable Rate Preferred Stocks $ 6.00
IV. NOTES TO THE ABOVE FEE SCHEDULE
A. Asset based fees will be billed monthly at 1/12th of the annual
stated rate based on monthly average net assets. Annual
maintenance fees are payable monthly at 1/12th of the annual
stated rate.
B. The above schedule does not include out-of-pocket expenses that
would be incurred by State Street on the client's behalf. Examples
of out-of-pocket expenses include but are not limited to record
retention, microfiche, disaster recovery, pricing and research
services, overnight mailing services, foreign registration and
script fees, etc. State Street bills out-of-pocket expenses
separately from service fees.
C. The fees stated above are exclusive of terminal equipment required
in the client's location(s) and communication line costs.
D. Any fees or out-of-pocket expenses not paid within 30 days of the
date of the original invoice will be charged a late payment fee of
1% per month until payment of the fees are received by State
Street.
E. The fees are guaranteed for a two-year period commencing on the
effective date of the service agreement between State Street and
the client. All changes to the fee schedule will be communicated
in writing at least 60 days prior to their effective date.
F. Overdrafts will be calculated at the monthly average Prime rate
(as published in the Wall Street Journal) and charged on the
monthly average overdraft balance.
____________________________________ _______________________________
State Street Bank & Trust Company PIMCO FLOATING RATE INCOME FUND
PIMCO ADVISORS FUND MANAGEMENT,
LLC
____________________________________ _______________________________
Date Date
August 5, 2003 Page 3 of 3
APPENDIX I
PIMCO FLOATING RATE INCOME FUND
GLOBAL CUSTODY FEES
I. Country Based Charges:
----------------------------------------------------------------------------------------------
MARKET/ ASSET TRANSACTION MARKET/ ASSET TRANSACTION
COUNTRY CHARGE CHARGE COUNTRY CHARGE CHARGE
Argentina 16.5 $65 Malaysia 9 $65
Australia 5 $65 Mexico 16.5 $65
Austria 5 $65 Morocco 16.5 $65
Bangladesh 16.5 $65 Netherlands 5 $65
Belgium 5 $65 New Zealand 5 $65
Botswana 16.5 $65 Norway 5 $65
Brazil 16.5 $65 Pakistan 16.5 $65
Canada 5 $65 Peru 16.5 $65
Cedel/Euroclear 2 $18 Phillippines 16.5 $65
Chile 16.5 $65 Poland 16.5 $65
Colombia 16.5 $65 Portugal 16.5 $65
Czech Republic 16.5 $65 Shanghai(China) 16.5 $65
Denmark 5 $65 Shenzhen(China) 16.5 $65
Finland 9 $65 Singapore 9 $65
France 5 $65 South Africa 5 $65
Germany 5 $65 South Korea 16.5 $65
Greece 16.5 $65 Spain 5 $65
Hong Kong 5 $65 Sri Lanka 16.5 $65
Hungary 16.5 $65 Sweden 7 $65
India 16.5 $65 Switzerland 5 $65
Indonesia 9 $65 Taiwan 16.5 $65
Ireland 16.5 $65 Thailand 16.5 $65
Israel 16.5 $65 Turkey 16.5 $65
Italy 5 $65 United Kingdom 5 $65
Japan 5 $65 Uruguay 16.5 $65
Jordan 16.5 $65 Venezuela 16.5 $65
----------------------------------------------------------------------------------------------
NOTE: Any country not listed above will be negotiated at time of investment.
Out of Pocket Expenses will be billed as incurred (e.g. stamp taxes,
registration costs, script fees, special transportation costs, etc.).
