EXHIBIT 99.h(iii)
August 1, 2002
Ms. Xxxxxxx Xxxxxx
Xxxx Xxxxx Institutional
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxxxxxx:
Western Asset Funds, Inc. (the "Fund") and State Street Bank & Trust Company
(the "Transfer Agent") are parties to an agreement dated as of December 10, 1990
(the "Agreement") under which the Transfer Agent performs certain transfer
agency and/or recordkeeping services for the Fund. In connection with the
enactment of the USA Patriot Act of 2001 and the regulations promulgated
thereunder, (collectively, the "Patriot Act"), the Fund has requested and the
Transfer Agent has agreed to amend the Agreement as of the date hereof in the
manner set forth below:
WHEREAS, the Patriot Act imposes new anti-money laundering requirements on
financial institutions, including mutual funds;
WHEREAS, the Fund recognizes the importance of complying with the Patriot Act
and the Fund has developed and implemented a written anti-money laundering
program, which is designed to satisfy the requirements of the Patriot Act, (the
"Fund's Program");
WHEREAS, the Patriot Act authorizes a mutual fund to delegate to a service
provider, including its transfer agent, the implementation and operation of
aspects of the fund's anti-money laundering program; and
WHEREAS, the Fund desires to delegate to the Transfer Agent the implementation
and operation of certain aspects of the Fund's Program and the Transfer Agent
desires to accept such delegation.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants and
agreements hereinafter contained, the parties hereby agree to amend the
Agreement, pursuant to the terms thereof, as follows
1. DELEGATION; DUTIES
1.1 Subject to the terms and conditions set forth in the Agreement,
the Fund hereby delegates to the Transfer Agent those aspects of
the Fund's Program that are set forth on Exhibit A, attached
hereto. The duties set forth on Exhibit A may be amended, from
time to time, by mutual
agreement of the parties upon the execution by both parties of a
revised Exhibit A bearing a later date than the date hereof.
1.2 The Transfer Agent agrees to perform such delegated duties, with
respect to the ownership of shares in the Fund for which the
Transfer Agent maintains the applicable shareholder information,
subject to and in accordance with the terms and conditions of
the Agreement.
2. CONSENT TO EXAMINATION
2.1 In connection with the performance by the Transfer Agent of the
above-delegated duties, the Transfer Agent understands and
acknowledges that the Fund remains responsible for assuring
compliance with the Patriot Act and that the records the
Transfer Agent maintains for the Fund relating to the Fund's
Program may be subject, from time to time, to examination and/or
inspection by federal regulators in order that the regulators
may evaluate such compliance. The Transfer Agent hereby consents
to such examination and/or inspection and agrees to cooperate
with such federal examiners in connection with their review. For
purposes of such examination and/or inspection, the Transfer
Agent will use its best efforts to make available, during normal
business hours, all required records and information for review
by such examiners.
3. LIMITATION ON DELEGATION.
3.1 The Fund acknowledges and agrees that in accepting the
delegation hereunder, the Transfer Agent is agreeing to perform
only those aspects of the Fund's Program that have been
expressly delegated hereby and is not undertaking and shall not
be responsible for any other aspect of the Fund's Program or for
the overall compliance by the Fund with the Patriot Act.
Additionally, the parties acknowledge and agree that the
Transfer Agent shall only be responsible for performing the
delegated duties with respect to the ownership of shares in the
Fund for which the Transfer Agent maintains the applicable
shareholder information.
4. EXPENSES.
4.1 In consideration of the performance of the foregoing duties, the
Fund agrees to pay the Transfer Agent for the reasonable
administrative expense that may be associated with such
additional duties. The terms of the Agreement shall apply with
respect to the payment of such expense in the same manner and to
the same extent as any other expenses incurred under the
Agreement.
5. MISCELLANEOUS.
5.1 In all other regards, the terms and provisions of the Agreement shall
continue to apply with full force and effect.
5.2 Each party represents to the other that the execution and delivery of
this Amendment has been duly authorized.
IN WITNESS WHEREOF, each of the parties has caused this Amendment to
be executed in its name and behalf by its duly authorized representative as of
the date first above written.
WITNESSED BY: State Street Bank and Trust Company
/s/ Xxxx Xxxxxxxx-Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
------------------------- -------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Executive Vice President
----------------------------
WITNESSED BY: Western Asset Funds, Inc.
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------- -------------------------------
Name: Xxxxxxx X. Xxxxx Name: Xxxxxxx X. Xxxxxx
------------------- -----------------------------
Title: Account Specialist Title: Vice President
------------------ ----------------------------
Exhibit A
DELEGATED DUTIES
With respect to the ownership of shares in the Fund for which the Transfer Agent
maintains the applicable shareholder information, the Transfer Agent shall:
- Follow the Fund's third party check policies (which may change from time to
time).
- Submit all financial and non-financial transactions through the Office of
Foreign Assets Control ("OFAC") database and the Securities and Exchange
Commission ("SEC") Control Lists.
- Review all maintenance transactions to shareholder registrations that occur
within thirty (30) days of an account being established.
- Review redemption transactions that occur within thirty (30) days of account
establishment or maintenance.
- Review wires sent to banking instructions other than those on file.
- Review a shareholder's account for unusual activity when purchases and
redemptions by the shareholder (based on social security number within the
Funds) hit the $100,000 threshold that has been set on the "Unusual Activity
Warning System."
- Review accounts to identify those established by known offenders attempting
fraud and once identified, freeze such accounts.
- Monitor and track cash equivalents under $10,000 for a rolling twelve-month
period and file Form 8300 as necessary.
- File suspicious activity reports as necessary.
In the event that the Transfer Agent detects suspicious activity as a result of
the foregoing procedures, which necessitates the filing by the Transfer Agent of
a suspicious activity report, a Form 8300 or other similar report or notice to
OFAC or other regulatory agency, then the Transfer Agent shall also immediately
notify the Fund, unless prohibited by applicable law.
STATE STREET BANK AND TRUST COMPANY WESTERN ASSET FUNDS, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------ --------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President Title: Vice President
Date:
-------------------------
