Exhibit j.
CUSTODIAN AGREEMENT
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This Agreement between PIMCO MUNICIPAL INCOME FUND II, 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 "Custodian"),
WITNESSETH: that in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
SECTION 1. EMPLOYMENT OF CUSTODIAN AND PROPERTY TO BE HELD BY IT
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The Fund hereby employs the Custodian as the custodian of its assets consisting
of securities that the Fund desires to be held in places within the United
States ("domestic securities"). The Fund agrees to deliver to the Custodian 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. The Custodian 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 (as such term is defined in Section 5
hereof) 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 3
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
the Custodian pursuant to Special Instructions (as such term is defined in
Section 3 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
the Custodian's name on behalf of the Fund will be deemed custody for purposes
hereof.
Upon receipt of Proper Instructions, the Custodian shall on behalf of the Fund
from time to time employ 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") and provided that the Custodian shall have no more or
less responsibility or liability to any Fund on account of any actions or
omissions of any sub-custodian so employed than any such sub-custodian has to
the Custodian.
SECTION 2. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD BY
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THE CUSTODIAN
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SECTION 2.1 HOLDING SECURITIES. The Custodian 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 the Custodian is provided with Proper
Instructions (the "Underlying Transfer Agent").
SECTION 2.2 DELIVERY OF SECURITIES. The Custodian shall release and deliver
domestic securities owned by the Fund held by the Custodian or in a U.S.
Securities System account of the Custodian 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 the Custodian;
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 the Custodian 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 the Custodian;
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, the 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 Custodian'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
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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 the Custodian;
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
the Custodian;
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
Custodian's account in the book-entry system authorized by the U.S.
Department of the Treasury, the Custodian 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 the Custodian
of collateral therefor) agreed upon from time to time by the
Custodian 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, the Custodian 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, the Custodian, 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 the
Custodian 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 with Section
2.6(7), as applicable, shall each be referred to herein as a "Free
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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 the
Custodian (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 the
Custodian 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 the Custodian on behalf of the
Fund under the terms of this Agreement shall be in "street name" or other good
delivery form, provided that the Custodian will hold all such assets in an
account of Custodian as custodian containing only assets of the Fund or only
assets held by the Custodian as fiduciary or custodian for its customers;
provided, further that Custodian'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 the Custodian to maintain securities in
"street name", the Custodian 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. The Custodian 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 the Custodian acting pursuant to the terms of this
Agreement, and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of the 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 the Custodian for the Fund
may be deposited by it to its credit as Custodian in the banking department of
the Custodian or in such other banks or trust companies as it may in its
discretion deem necessary or desirable; provided, however, that every
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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 shall be approved by vote of a majority of
the Board. Such monies shall be deposited by the Custodian in its capacity as
Custodian and shall be withdrawable by the Custodian 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 Section 2.3, the Custodian
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 the Custodian or its agent thereof and shall credit such
income, as collected, to the Fund's custodian account. Without limiting the
generality of the foregoing, the Custodian 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. The Custodian 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 the Custodian 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, the
Custodian 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
the Custodian (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 the
Custodian as its agent for this purpose) registered in the name of
the Fund or in the name of a nominee of the Custodian 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 the Custodian, 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 the Custodian'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 the Custodian along with written evidence of the
agreement by the Custodian 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
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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 4 hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account
of the Fund: 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 the Custodian in advance of receipt of the securities purchased
in the absence of specific Proper Instructions from the Fund to so pay in
advance, the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received by the
Custodian.
SECTION 2.7 APPOINTMENT OF AGENTS. The Custodian 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 the Custodian
may from time to time direct; provided, however, that the appointment of any
agent shall not relieve the Custodian of its responsibilities or liabilities
hereunder. The Underlying Transfer Agent shall not be deemed an agent or
subcustodian of the Custodian for purposes of this Section 2.7 or any other
provision of this Agreement.
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SECTION 2.8 DEPOSIT OF FUND ASSETS IN U.S. SECURITIES SYSTEMS. The
Custodian may deposit and/or maintain securities owned by the Fund in a U.S.
Securities System in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and subject to
the following provisions:
1) The Custodian may keep securities of the Fund in a U.S. Securities
System provided that such securities are represented in an account of
the Custodian in the U.S. Securities System (the "U.S. Securities
System Account") which account shall not include any assets of the
Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
2) The records of the Custodian with respect to securities of the Fund
which are maintained in a U.S. Securities System shall identify by
book-entry those securities belonging to the Fund;
3) The Custodian 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 the
Custodian to reflect such payment and transfer for the account of the
Fund. The Custodian shall transfer securities sold for the account of
the Fund 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 the Custodian 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 the Custodian and be
provided to the Fund at its request. Upon request, the Custodian 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;
4) The Custodian shall provide the Fund with any report obtained by the
Custodian 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, the
Custodian 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 the Custodian or any of its
agents or of any of its or their employees or from failure of the
Custodian 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 the
Custodian with respect to any claim against the U.S. Securities System
or any other person which the Custodian may have as a consequence of
any such loss or damage if and to the extent that the Fund has not
been made whole for any such loss or damage.
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SECTION 2.9 SEGREGATED ACCOUNT. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for and on
behalf of the Fund, into which account or accounts may be transferred cash
and/or securities, including securities maintained in an account by the
Custodian pursuant to Section 2.8 hereof, (i) in accordance with the provisions
of any agreement among the Fund, the Custodian 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.
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 the Custodian to
deposit and/or maintain such securities with the Underlying Transfer Agent,
subject to the following provisions:
1) The Custodian 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 the Custodian as custodian for the Fund.
2) The records of the Custodian 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;
3) The Custodian 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 the Custodian, 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 the Custodian to reflect
such payment and transfer for the account of the Fund. The Custodian
shall receive confirmation from the Underlying Transfer Agent of the
purchase of such securities and the transfer of such securities to the
Custodian's account with the Underlying Transfer Agent only after such
payment is made. The Custodian shall transfer
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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 the Custodian and (ii) the making of an entry
on the records of the Custodian to reflect such transfer and payment
for the account of the Fund. The Custodian 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 the Custodian,
and be provided to the Fund's investment adviser at its request; and
4) The Custodian 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 the Custodian or any
of its agents or of any of its or their employees.
SECTION 2.11 OWNERSHIP CERTIFICATES FOR TAX PURPOSES. The Custodian 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),
the Custodian shall, with respect 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 Section
2.3, the Custodian 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 the
Custodian from issuers of the securities being held for the Fund. With respect
to tender or exchange offers, the Custodian shall transmit promptly to the Fund
all written information received by the Custodian 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 the Custodian at least three business days prior to the date on which the
Custodian is to take such action.
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SECTION 3. SPECIAL SUB-CUSTODIANS
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Upon receipt of Special Instructions (as such term is defined in Section 5
hereof), the Custodian 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 the Custodian. In connection with the
appointment of any Special Sub-Custodian, and in accordance with Special
Instructions, the Custodian 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. PAYMENTS FOR SALES OR REPURCHASES OR REDEMPTIONS OF SHARES
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The Custodian 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. The Custodian 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, the Custodian 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, the Custodian 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 5. PROPER INSTRUCTIONS
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"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 the Custodian reasonably believes them to have been given by a
person authorized to give such instructions with respect to the transaction
involved. The Fund shall cause all oral instructions to be confirmed in writing.
Proper Instructions may include communications effected directly between
electro-mechanical or electronic devices provided that the Fund and the
Custodian agree to security procedures, including but not limited to, the
security procedures selected by the Fund in the form of Funds Transfer Addendum
attached hereto. For purposes of this Section, Proper Instructions shall include
instructions received by the Custodian pursuant to any three-party agreement
which requires a segregated asset account in accordance with Section 2.9.
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"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 the Custodian
agree in writing.
Concurrently with the execution of this Agreement, and from time to time
thereafter, as appropriate, the Fund shall deliver to the Custodian, 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 the Custodian as conclusive
evidence of the facts set forth therein and shall be considered to be in full
force and effect until receipt by the Custodian of a similar certificate to the
contrary.
SECTION 6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
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The Custodian may in its discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Agreement, provided that all such payments shall be
accounted for 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 7. EVIDENCE OF AUTHORITY
---------------------
The Custodian 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. The Custodian 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 the
11
Custodian of written notice to the contrary.
SECTION 8. DUTIES OF CUSTODIAN WITH RESPECT TO THE BOOKS OF ACCOUNT AND
------------------------------------------------------------
CALCULATION OF NET ASSET VALUE AND NET INCOME
---------------------------------------------
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Board to keep the books of account of the
Fund and/or compute the net asset value per Share of the outstanding Shares or,
if directed in writing to do so by the Fund, shall itself keep such books of
account and/or compute such net asset value per Share. If so directed, the
Custodian shall also calculate daily the net income of the Fund as described in
the Prospectus and shall advise the Fund and the Transfer Agent daily of the
total amounts of such net income and, if instructed in writing by an officer of
the Fund to do so, shall advise the Transfer Agent periodically of the division
of such net income among its various components. The calculations of the net
asset value per Share and the daily income of the Fund shall be made at the time
or times described from time to time in the Prospectus.
SECTION 9. RECORDS
-------
The Custodian shall create and maintain all records relating to its activities
and obligations under this Agreement in such manner as will meet the obligations
of the Fund under the 1940 Act, with particular attention to Section 31 thereof
and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of
the Fund and shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers, employees or
agents of the Fund and employees and agents of the SEC. The Custodian shall, at
the Fund's request, supply the Fund with a tabulation of securities owned by the
Fund and held by the Custodian and shall, when requested to do so by the Fund
and for such compensation as shall be agreed upon between the Fund and the
Custodian, include certificate numbers in such tabulations. The Fund
acknowledges that, in creating and maintaining the records as set forth herein
with respect to Fund property released and delivered pursuant to Section
2.2(14), or purchased pursuant to Section 2.6(7) hereof, the Custodian is
authorized and instructed to rely upon information provided to it by the Fund,
the Fund's counterparty(ies), or the agents of either of them.
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 the Custodian has the right to rely on holdings information
furnished by the Underlying Transfer Agent to the Custodian in performing its
duties under this Agreement, including without limitation, the duties set forth
in this Section 9; provided, however, that the Custodian shall be obligated to
reconcile information as to purchases and sales of Underlying Shares contained
in trade instructions and confirmations received by the Custodian and to report
promptly any discrepancies to the Underlying Transfer Agent and the Fund.
12
SECTION 10. OPINION OF FUND'S INDEPENDENT ACCOUNTANT
----------------------------------------
The Custodian 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 11. REPORTS TO FUND BY INDEPENDENT PUBLIC ACCOUNTANTS
-------------------------------------------------
The Custodian 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 U.S. Securities System, relating to the
services provided by the Custodian 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 12. COMPENSATION OF CUSTODIAN
-------------------------
The Custodian shall be entitled to reasonable compensation for its services and
expenses as Custodian, as agreed upon from time to time between the Fund and the
Custodian.
SECTION 13. RESPONSIBILITY OF CUSTODIAN
---------------------------
So long as and to the extent that it is in the exercise of reasonable care and
good faith, the Custodian 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. The Custodian 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) 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 the Custodian's own negligence, willful misconduct or
bad faith or the negligence or willful misconduct of a sub-custodian or agent,
the Custodian shall be without liability to the Fund for any loss, liability,
claim or expense resulting from or caused by; (i) events or
13
circumstances beyond the reasonable control of the Custodian 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 the Custodian provided
such instructions, and Custodian'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 the Custodian'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
Custodian) in charge of registering or transferring securities in the name of
the Custodian, the Fund, the Custodian'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 the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the opinion of the Custodian, result in the Custodian or its nominee assigned to
the Fund being liable for the payment of money or incurring liability of some
other form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, 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 the Custodian 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 the Custodian promptly, the Custodian
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 the Custodian's own negligence, willful misconduct or
bad faith, the Fund shall indemnify and hold the Custodian harmless from and
against any and all costs, expenses, losses, damages, charges, counsel fees,
payments and liabilities which may be asserted against the Custodian (a) acting
in accordance with any Proper Instruction or Special Instruction including,
without 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
14
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 the Custodian to respond to or be aware of
notices or other corporate communications with respect to purchased investments,
or (iv) the Custodian'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 14. EFFECTIVE PERIOD, TERMINATION AND AMENDMENT
-------------------------------------------
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 the Custodian by giving notice
as described above to the Custodian, or (ii) immediately terminate this
Agreement in the event of the appointment of a conservator or receiver for the
Custodian 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, the Fund shall pay to the Custodian such
compensation as may be due as of the date of such termination and shall likewise
reimburse the Custodian for its costs, expenses and disbursements.
SECTION 15. SUCCESSOR CUSTODIAN
-------------------
If a successor custodian for the Fund shall be appointed by the Board, the
Custodian shall, upon termination and receipt of Proper Instructions, deliver to
such successor custodian at the office of the Custodian, 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.
If no such successor custodian shall be appointed, the Custodian shall, in like
manner, upon receipt of Proper Instructions, deliver at the office of the
Custodian and transfer such securities, funds and other properties in accordance
with such Proper Instructions. In the event that no Proper Instructions
designating a successor custodian or alternative arrangements shall have been
delivered to the Custodian on or before the date when such termination shall
become effective, then the Custodian
15
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 the Custodian
hereunder and all instruments held by the Custodian 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 Transfer Agent. Thereafter,
such bank or trust company shall be the successor of the Custodian under this
Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Fund to provide Proper Instructions as aforesaid, the Custodian
shall be entitled to fair compensation for its services during such period as
the Custodian retains possession of such securities, funds and other properties
and the provisions of this Agreement relating to the duties and obligations of
the Custodian shall remain in full force and effect.
SECTION 16. INTERPRETIVE AND ADDITIONAL PROVISIONS
--------------------------------------
In connection with the operation of this Agreement, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition to
the provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
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 17. 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 18. PRIOR AGREEMENTS
----------------
This Agreement supersedes and terminates, as of the date hereof, all prior
Agreements between the Fund and the Custodian relating to the custody of the
Fund's assets.
SECTION 19. NOTICES.
-------
Any notice, instruction or other instrument required to be given hereunder may
be delivered in
16
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: PIMCO MUNICIPAL INCOME FUND II
[*address]
Attention: [*contact name]
Telephone:
Telecopy:
To the Custodian: STATE STREET BANK AND TRUST COMPANY
Xxxxxx Xxxxxx Building, 2 South
0 Xxxxxxxx Xxxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxx Xxxxxx
Telephone: 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
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 20. 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.
17
SECTION 21. 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 22. 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 23. REMOTE ACCESS SERVICES ADDENDUM
-------------------------------
The Custodian and the Fund agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.
SECTION 24. 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, the Custodian needs the Fund to
indicate whether it authorizes the Custodian to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells the Custodian "no", the Custodian will not provide this
information to requesting companies. If the Fund tells the Custodian "yes" or
does not check either "yes" or "no" below, the Custodian 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 [ ] The Custodian is authorized to release the Fund's name, address, and
share positions.
NO [X] The Custodian is not authorized to release the Fund's name, address, and
share positions.
[Remainder of page intentionally left blank]
18
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 June 28, 2002.
PIMCO MUNICIPAL INCOME FUND II FUND SIGNATURE ATTESTED TO BY:
By: _________________________ By: ____________________
Name: _________________________ Name: ____________________
Title: _________________________ Title: ____________________
STATE STREET BANK AND TRUST COMPANY SIGNATURE ATTESTED TO BY:
By: _________________________ By: _____________________
Name: Xxxxxx X. Xxxxxx Name: Xxxxxxx X. XxXxxxxx
------------------------- ---------------------
Title: Executive Vice President Title: V.P. and Counsel
------------------------- ---------------------
19
[LOGO OF STATE STREET]
FUNDS TRANSFER ADDENDUM
OPERATING GUIDELINES
--------------------
1. Obligation of the Sender: State Street is authorized to promptly debit
Client's account(s) upon the receipt of a payment order in compliance with the
selected Security Procedure chosen for funds transfer and in the amount of money
that State Street has been instructed to transfer. State Street shall execute
payment orders in compliance with the Security Procedure and with the Client'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. All payment orders and communications received
after this time will be deemed to have been received on the next business day.
2. Security Procedure: The Client acknowledges that the Security Procedure it
has designated on the Selection Form was selected by the Client from Security
Procedures offered by State Street. 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 State Street 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 State
Street. The Client shall restrict access to confidential information relating to
the Security Procedure to authorized persons as communicated in writing to State
Street. The Client must notify State Street 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. State Street shall verify the
authenticity of all instructions according to the Security Procedure.
3. Account Numbers: State Street 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 State Street 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. State
Street 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: State Street 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 State Street's receipt of such payment
order; (b) if initiating such payment order would cause State Street, in State
Street's sole judgment, to exceed any volume, aggregate dollar, network, time,
credit or similar limits upon wire transfers which are applicable to State
Street; or (c) if State Street, in good faith, is unable to satisfy itself that
the transaction has been properly authorized.
5. Cancellation or Amendment: State Street shall use reasonable efforts to act
on all authorized requests to cancel or amend payment orders received in
compliance with the Security Procedure provided that such requests are received
in a timely manner affording State Street reasonable opportunity to act.
However, State Street assumes no liability if the request for amendment or
cancellation cannot be satisfied.
6. Errors: State Street shall assume no responsibility for failure to detect any
erroneous payment order provided that State Street complies with the payment
order instructions as received and State Street complies with the Security
Procedure. The Security Procedure is established for the purpose of
authenticating payment orders only and not for the detection of errors in
payment orders.
7. Interest and Liability Limits: State Street shall assume no responsibility
for lost interest with respect to the refundable amount of any unauthorized
payment order, unless State Street is notified of the unauthorized payment order
within thirty (30) days of notification by State Street of the acceptance of
such payment order. In no event shall State Street be liable for special,
indirect or consequential damages, even if advised of the possibility of such
damages and even for failure to execute a payment order.
8. Automated Clearing House ("ACH") Credit Entries/Provisional Payments: When a
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 New England Clearing House Association, State Street will act as an
Originating Depository Financial Institution and/or Receiving Depository
Institution, as the case may be, with respect to such entries. Credits given by
State Street with respect to an ACH credit entry are provisional until State
Street receives final settlement for such entry from the Federal Reserve Bank.
If State Street does not receive such final settlement, the Client agrees that
State Street shall receive a refund of 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. Confirmation Statements: Confirmation of State Street's execution of payment
orders shall ordinarily be provided within 24 hours. Notice may be delivered
through State Street's proprietary information systems, such as, but not limited
to Horizon and GlobalQuest(R), account statements, advices, or by facsimile or
callback. The Client must report any objections to the execution of a payment
order within 30 days.
[LOGO OF STATE STREET]
FUNDS TRANSFER ADDENDUM
10. 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.
11. MISCELLANEOUS: State Street and the Client agree to cooperate to attempt to
recover any funds erroneously paid to the wrong party or parties, regardless of
any fault of State Street 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.
[LOGO OF STATE STREET]
FUNDS TRANSFER ADDENDUM
Security Procedure(s) Selection Form
------------------------------------
Please select one or more 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. SWIFT is considered to be one of the most secure and efficient
networks for the delivery of funds transfer instructions.
Selection of this security procedure would be most appropriate for existing
SWIFT members.
[ ] Standing Instructions
Standing Instructions may be used where funds are transferred to a broker on the
Client's established list of brokers with which it engages in foreign exchange
transactions. Only the date, the currency and the currency amount are variable.
In order to establish this procedure, State Street will send to the Client a
list of the brokers that State Street has determined are used by the Client. The
Client will confirm the list in writing, and State Street will verify the
written confirmation by telephone. Standing Instructions will be subject to a
mutually agreed upon limit. If the payment order exceeds the established limit,
the Standing Instruction will be confirmed by telephone prior to execution.
[ ] Remote Batch Transmission
Wire transfer instructions are delivered via Computer-to-Computer (CPU-CPU) data
communications between the Client and State Street. Security procedures include
encryption and or the use of a test key by those individuals authorized as
Automated Batch Verifiers.
Clients selecting this option should have an existing facility for completing
CPU-CPU transmissions. This delivery mechanism is typically used for high-volume
business.
[ ] Global Horizon Interchangesm Funds Transfer Service
Global Horizon Interchange Funds Transfer Service (FTS) is a State Street
proprietary microcomputer-based wire initiation system. FTS enables Clients to
electronically transmit authenticated Fedwire, CHIPS or internal book transfer
instructions to State Street.
This delivery mechanism is most appropriate for Clients with a low-to-medium
number of transactions (5-75 per day), allowing Clients to enter, batch, and
review wire transfer instructions on their PC prior to release to State Street.
[ ] Telephone Confirmation (Callback)
Telephone confirmation will be used to verify all non-repetitive funds transfer
instructions received via untested facsimile or phone. This procedure requires
Clients to designate individuals as authorized initiators and authorized
verifiers. State Street will verify that the instruction contains the signature
of an authorized person and prior to execution, 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.
[ ] Repetitive Wires
For situations where funds are transferred periodically (minimum of one
instruction per calendar quarter) 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 mutually agreed upon limit. If the payment order exceeds the
established limit, the instruction will be confirmed by telephone prior to
execution. Telephone confirmation is used to establish this process. Repetitive
wire instructions must be reconfirmed annually.
This alternative is recommended whenever funds are frequently transferred
between the same two accounts.
[ ] Transfers Initiated by Facsimile
The Client faxes wire transfer instructions directly to State Street Mutual Fund
Services. Standard security procedure requires the use of a random number test
key for all transfers. Every six months the Client receives test key logs from
State Street. The test key contains alpha-numeric characters, which the Client
puts on each document faxed to State Street. This procedure ensures all wire
instructions received via fax are authorized by the Client.
We provide this option for Clients who wish to batch wire instructions and
transmit these as a group to State Street Mutual Fund Services once or several
times a day.
[LOGO OF STATE STREET]
FUNDS TRANSFER ADDENDUM
[ ] Automated Clearing House (ACH)
State Street receives an automated transmission or a magnetic tape 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. Clients using ACH must select one or more
of the following delivery options:
[ ] Global Horizon Interchange Automated Clearing House Service
Transactions are created on a microcomputer, assembled into batches and
delivered to State Street via fully authenticated electronic transmissions in
standard NACHA formats.
[ ] Transmission from Client PC to State Street Mainframe with Telephone
Callback
[ ] Transmission from Client Mainframe to State Street Mainframe with Telephone
Callback
[ ] Transmission from DST Systems to State Street Mainframe with Encryption
[ ] Magnetic Tape Delivered to State Street with Telephone Callback
State Street is hereby instructed to accept funds transfer instructions only via
the delivery methods and security procedures indicated. The selected delivery
methods and security procedure(s) will be effective ________________________ for
payment orders initiated by our organization.
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
________________________________
Telex Number
[LOGO OF STATE STREET]
FUNDS TRANSFER ADDENDUM
INSTRUCTION(S)
--------------
TELEPHONE CONFIRMATION
----------------------
Fund PIMCO Municipal Income Fund II
--------------------------------------------------
Investment Adviser
-------------------------------------
Authorized Initiators
Please Type or Print
Please provide a listing of Fund officers or other individuals who are currently
authorized to initiate wire transfer instructions to State Street:
NAME TITLE (Specify whether SPECIMEN SIGNATURE
position is with Fund or
Investment Adviser)
__________________ ________________________ _________________________
__________________ ________________________ _________________________
__________________ ________________________ _________________________
__________________ ________________________ _________________________
__________________ ________________________ _________________________
Authorized Verifiers
Please Type or Print
Please provide a listing of Fund officers or other individuals 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)
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
__________________ ________________________ __________________________
REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
------------------------------------------------------
ADDENDUM to that certain Custodian Agreement dated as of June 28, 2002 (the
"Custodian Agreement") between PIMCO Municipal Income Fund II (the "Customer")
and State Street Bank and Trust Company, including its subsidiaries and
affiliates ("State Street").
State Street has developed and utilizes proprietary accounting and other
systems in conjunction with the custodian services which State Street provides
to the Customer. In this regard, State Street maintains certain information in
databases under its control and ownership which it makes available to its
customers (the "Remote Access Services").
The Services
------------
State Street agrees to provide the Customer, and its designated investment
advisors, consultants or other third parties authorized by State Street
("Authorized Designees") with access to In~SightSM as described in Exhibit A or
such other systems as may be offered from time to time (the "System") on a
remote basis.
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, knowhow, 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
i
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; nor will the Customer or Customer's Authorized Designees 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,
including but not limited to the use of the Internet, 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 the next one-hundred years, 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.
ii
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 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 any applicable patent or copyright or trade secret laws, 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 exhibits 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.
iii
EXHIBIT A
to
REMOTE ACCESS SERVICES ADDENDUM TO CUSTODIAN AGREEMENT
------------------------------------------------------
IN~SIGHT/SM/
System Product Description
In~Sight/SM/ provides bilateral information delivery, interoperability, and
on-line access to State Street. In~Sight/SM/ allows users a single point of
entry into State Street's diverse systems and applications. Reports and data
from systems such as Investment Policy Monitor/SM/, Multicurrency Horizon/SM/,
Securities Lending, Performance & Analytics, and Electronic Trade Delivery can
be accessed through In~Sight/SM/. This Internet-enabled application is designed
to run from a Web browser and perform across low-speed data lines or corporate
high-speed backbones. In~Sight/SM/ also offers users a flexible toolset,
including an ad-hoc query function, a custom graphics package, a report
designer, and a scheduling capability. Data and reports offered through
In~Sight/SM/ will continue to increase in direct proportion with the customer
roll out, as it is viewed as the information delivery system will grow with
State Street's customers.
iv
