As filed with the Securities and Exchange Commission on April 30, 1999.
File No. 811-07969
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 1 /X/
FLOATING RATE PORTFOLIO
(Exact Name of Registrant as Specified in Charter)
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (713) 626-1919
Samuel D. Sirko, Esq.
A I M Advisors, Inc.
11 Greenway Plaza,
Suite 100
Houston, Texas 77046
(Name and Address of Agent for Service)
<PAGE>
EXPLANATORY NOTE
This Amendment to the Registration Statement of Floating Rate Portfolio
has been filed by the Registrant pursuant to Section 8(b) of the Investment
Company Act of 1940, as amended (the "1940 Act"). However, interests in the
Registrant have not been registered under the Securities Act of 1933, as amended
(the "1933 Act"), since such interests will be issued solely in private
placement transactions that do not involve any "public offering" within the
meaning of Section 4(2) of the 1933 Act. Investments in the Registrant may be
made only by U.S. and foreign investment companies, common or commingled trust
funds, organizations or trusts described in Sections 401(a) or 501(a) of the
Internal Revenue Code of 1986, as amended, or similar organizations or entities
that are "accredited investors" within the meaning of Regulation D under the
1933 Act. This Amendment to the Registration Statement of Floating Rate
Portfolio does not constitute an offer to sell, or the solicitation of an offer
to buy, any interest in the Registrant.
<PAGE>
FLOATING RATE PORTFOLIO
CONTENTS OF REGISTRATION STATEMENT
This registration statement of Floating Rate Portfolio contains the following
documents:
Facing Sheet
Contents of Registration Statement
Part A
Part B
Part C
Signature Page
Exhibits
<PAGE>
PART A
Responses to Items 1, 2, 3.2, 4, 5, 6 and 7 of Part A have been omitted
pursuant to Paragraph 3 of Instruction G of the General Instructions to Form
N-2.
Responses to certain Items required to be included in Part A of this
Registration Statement are incorporated herein by reference from Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-2 of GT Global Floating
Rate Fund, Inc. (d/b/a AIM Floating Rate Fund) (the "Fund") (1933 Act File No.
333-72419 and 1940 Act File No. 811-08485), as filed with the Securities and
Exchange Commission (the "SEC") on April 14, 1999.
ITEM 3. FEE TABLE AND SYNOPSIS.
Not Applicable.
ITEM 8. GENERAL DESCRIPTION OF THE REGISTRANT.
Floating Rate Portfolio (the "Portfolio") is a closed-end,
non-diversified management investment company that was organized as a business
trust under the laws of the State of Delaware on January 9, 1997. Interests in
the Portfolio are issued solely in private placement transactions that do not
involve any "public offering" within the meaning of Section 4(2) of the
Securities Act of 1933, as amended (the "1933 Act"). Investments in the
Portfolio may be made only by U.S. and foreign investment companies, common or
commingled trust funds, organizations or trusts described in Sections 401(a) or
501(a) of the Internal Revenue Code of 1986, as amended (the "Code"), or similar
organizations or entities that are "accredited investors" within the meaning of
Regulation D under the 1933 Act. This Registration Statement, as amended, does
not constitute an offer to sell, or the solicitation of an offer to buy, any
"security" within the meaning of the 1933 Act.
Information on the Portfolio's investment objective, the kinds of
securities in which the Portfolio principally invests, other investment
practices of the Portfolio and the risk factors associated with investments in
the Portfolio are incorporated herein by reference from the sections entitled
"Investment Objective and Policies" and "Special Considerations and Risk
Factors" in the prospectus of the Fund included in the Fund's Registration
Statement on Form N-2.
ITEM 9. MANAGEMENT.
A description of how the business of the Portfolio is managed is
incorporated herein by reference from the section entitled "Management" in the
Fund's prospectus included in the Fund's Registration Statement on Form N-2. The
following list identifies the specific sections of the Fund's prospectus under
which the information required by Item 9 of Form N-2 may be found; each listed
section is incorporated herein by reference.
A-1
<PAGE>
================================================================================
Item 9.1(a) Management
- --------------------------------------------------------------------------------
Item 9.1(b) Management - Investment Management
- --------------------------------------------------------------------------------
Item 9.1(c) Management - Investment Management
- --------------------------------------------------------------------------------
Item 9.1(d) Management - Investment Management
- --------------------------------------------------------------------------------
Item 9.1(e) Other Information - Custodian, Transfer and Dividend
Disbursing Agent and Registrar
- --------------------------------------------------------------------------------
Item 9.1(f) Management
- --------------------------------------------------------------------------------
Item 9.1(g) Management; Portfolio Transactions
- --------------------------------------------------------------------------------
Item 9.2(a) Not Applicable
- --------------------------------------------------------------------------------
Item 9.2(b) Not Applicable
- --------------------------------------------------------------------------------
Item 9.2(c) Not Applicable
- --------------------------------------------------------------------------------
Item 9.2(d) Not Applicable
- --------------------------------------------------------------------------------
The Portfolio is managed by A I M Advisors, Inc. ("AIM") and is
sub-advised by INVESCO Senior Secured Management, Inc. (the "Sub-advisor"). The
Sub-advisor has appointed INVESCO (NY), Inc. ("INVESCO (NY)") as the
sub-sub-advisor with respect to certain assets of the Portfolio. AIM, the
Sub-advisor and INVESCO (NY) are all indirect wholly owned subsidiaries of
AMVESCAP PLC ("AMVESCAP"). On May 29, 1998, AMVESCAP acquired the Asset
Management Division of Liechtenstein Global Trust AG, which included the
Sub-advisor and certain other affiliates. AMVESCAP and its subsidiaries are an
independent investment management group that has a significant presence in the
institutional and retail segment of the investment management industry in North
America and Europe, and a growing presence in Asia.
ITEM 10. CAPITAL STOCK, LONG-TERM DEBT, AND OTHER SECURITIES.
ITEM 10.1. CAPITAL STOCK.
The Portfolio is organized as a trust under the laws of the State of
Delaware and intends to be classified as a partnership for income tax purposes.
Under the Trust Instrument, the Portfolio shall consist of one or more separate
and distinct series. Additional series shall be established by, and shall be
effective upon, the adoption of a resolution by the trustees. The trustees may
designate the relative rights and preferences of the interests of each series.
The Portfolio shall maintain separate and distinct records for each series. A
series may issue any number of interests. Each holder of an interest in a series
shall be entitled to receive its pro rata share of all distributions made with
respect to that series. On redemption of an interest in a series, an interest
holder shall be paid solely out of the assets belonging to that series.
The beneficial interest in the Portfolio shall be divided into
interests in one or more series. The number of interests in the Portfolio and
each series shall be unlimited. All interests issued by the Portfolio shall be
fully paid and nonassessable. Interest holders shall have no preemptive or other
rights to subscribe to any additional interests or other securities issued by
the Portfolio. The trustees shall have full power and authority, in their sole
A-2
<PAGE>
discretion and without obtaining interest holder approval, (a) to issue original
or additional interests at such times and on such terms and conditions as they
deem appropriate, (b) to establish and to change in any manner interests in any
series with such preference, terms of conversion, voting powers, rights, and
privileges as the trustees may determine (but the trustees may not change
interests in a manner materially adverse to the interest holders), (c) to divide
or combine the interests in any series into a greater or lesser number, (d) to
classify or reclassify any unissued interests of any series into one or more
series, (e) to abolish any one or more series, (f) to issue interests to acquire
other assets (including assets subject to, and in connection with, the
assumption of liabilities) and businesses and (g) to take such other action with
respect to the interests as the trustees may deem desirable.
The trustees shall accept investments in any series from such persons
and on such terms as they may from time to time authorize. At the trustees' sole
discretion, such investments, subject to applicable law, may be in the form of
cash or securities in which that series is authorized to invest. The trustees
shall have the right to refuse to accept investments in any series at any time
without any cause or reason therefor whatsoever. Notwithstanding anything in the
Portfolio's Trust Instrument to the contrary, (a) interests shall be only be
issued in a transaction or transactions not requiring registration under the
1933 Act and (b) no series shall at any time have more than 100 interest
holders. In determining the number of interest holders of any series, a person
owning an interest through a partnership, grantor trust or S corporation (a
"flow-through entity") shall be counted as a interest holder if substantially
all the value of that person's interest in the flow-through entity is
attributable to that series and a principal purpose for using a tiered structure
was to satisfy the 100-interest holder condition. The trustees shall impose such
other limitations on investments in the series as are necessary to avoid having
any series treated as a "publicly traded partnership" within the meaning of
Section 7704 of the Code.
The Portfolio or any series may be terminated by a majority vote of
interest holders of the Portfolio or the affected series, respectively, or the
trustees by written notice to the interest holders. Any series shall be
terminated 120 days after an interest holder in that series either (i) makes an
assignment for the benefit of creditors, (ii) files a voluntary petition in
bankruptcy, (iii) is adjudicated a bankrupt or insolvent, (iv) files any
pleading admitting or failing to contest the material allegations of a petition
filed against it in any bankruptcy or insolvency proceeding or (v) seeks,
consents to, or acquiesces in the appointment of a trustee, receiver, or
liquidator of the interest holder or of all or any substantial part of its
assets, unless, within such 120 days, interest holders (excluding the interest
holder with respect to whom such event occurs) owning a majority of the
interests in that series vote to continue that series.
The trustees may, without interest holder approval, cause the Portfolio
or any series to merge or consolidate with or into any other entity or entities.
Any agreement of merger or consolidation or certificate of merger may be signed
by a majority of trustees, and facsimile signatures conveyed by electronic or
telecommunication means shall be valid.
The trustees may, without the prior consent or vote of the interest
holders, (i) cause to be organized or assist in organizing a corporation or
corporations under the laws of any jurisdiction or any other trust, partnership,
association, or other organization (each, a "successor entity") to take over all
of the trust property or the assets belonging to any series or to carry on any
business in which the trust or any series shall directly or indirectly have any
A-3
<PAGE>
interest, (ii) sell, convey, and transfer the Portfolio property or the assets
belonging to any series to any such successor entity in exchange for the equity
interests thereof or otherwise and (iii) lend money to, subscribe for the equity
interests in, and enter into any contracts with, any such successor entity.
ITEM 10.2. LONG-TERM DEBT.
Not applicable.
ITEM 10.3. GENERAL.
Not applicable.
ITEM 10.4. TAXES.
Information on the taxation of the Portfolio is incorporated by
reference from the section entitled "Taxes - Taxation of the Portfolio" in the
Fund's prospectus included in the Fund's Registration Statement on Form N-2.
ITEM 10.5. OUTSTANDING SECURITIES.
See Item 28 of Part C of this Registration Statement.
ITEM 10.6. SECURITIES RATINGS.
Not applicable.
ITEM 11. DEFAULTS AND ARREARS ON SENIOR SECURITIES.
Not applicable.
ITEM 12. LEGAL PROCEEDINGS.
Not applicable.
ITEM 13. TABLE OF CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION.
Not applicable.
A-4
<PAGE>
PART B
Part B of this Registration Statement should be read in conjunction
with Part A. Capitalized terms used in this Part B and not otherwise defined
have the meanings given them in Part A of this Registration Statement.
Responses to certain Items required to be included in Part B of this
Registration Statement are incorporated herein by reference from Pre-Effective
Amendment No. 1 to the Registration Statement on Form N-2 of the Fund (1933 Act
File No. 333-72419 and 1940 Act File No. 811-08485), as filed with the SEC on
April 14, 1999.
ITEM 14. COVER PAGE.
Not applicable.
ITEM 15. TABLE OF CONTENTS.
Not applicable.
ITEM 16. GENERAL INFORMATION AND HISTORY.
Not applicable.
ITEM 17. INVESTMENT OBJECTIVE AND POLICIES.
Part A contains basic information about the investment objective,
policies and limitations of the Portfolio. This Part B supplements the
discussion in Part A of the investment objective, policies and limitations of
the Portfolio.
Information on the fundamental investment limitations and the
non-fundamental investment policies and limitations of the Portfolio, the types
of securities bought and investment techniques used by the Portfolio and certain
risks attendant thereto, as well as other information on the Portfolio's
investment programs, is incorporated by reference from the sections entitled
"Investment Objective and Policies," "Investment Restrictions," "Special
Considerations and Risk Factors" and "Portfolio Transactions" in the Fund's
prospectus included in the Fund's Registration Statement on Form N-2.
ITEM 18. MANAGEMENT.
Information about the trustees and officers of the Portfolio, and their
roles in the management of the Portfolio and other AIM Funds, is incorporated by
reference from the section entitled "Directors and Executive Officers" in the
Fund's prospectus included in the Fund's Registration Statement on Form N-2.
B-1
<PAGE>
The Board of Trustees of the Portfolio has an Audit Committee, comprised
of Miss Quigley and Messrs. Anderson, Bayley and Patterson, which is responsible
for reviewing and evaluating the audit function, including recommending firms to
serve as independent auditors of the Portfolio. Each trustee and officer of the
Portfolio is also a director and/or trustee and officer, respectively, of the
other investment companies registered under the 1940 Act that are managed by AIM
and that may be sub-advised and/or sub-administered by the Sub-Advisor, INVESCO
(NY), INVESCO Asset Management Limited, INVESCO Asset Management (Japan) Limited
or INVESCO Asia Limited. For the fiscal year ended December 31, 1998, the
Portfolio paid Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley
Trustees' fees and expense reimbursements of $6,650, $5,450, $6,050 and $6,650,
respectively. Mr. Anderson, Mr. Bayley, Mr. Patterson and Miss Quigley, who are
not directors, officers or employees of AIM or any affiliated company, each
received total compensation of $106,850, $90,650, $98,600 and $99,500,
respectively, from the investment companies that are managed or administered by
AIM for which he or she serves as a Director or Trustee. Fees and expense
disbursed to the Trustees contained no accrued or payable pension, or retirement
benefits. Other trustees and officers receive no compensation or expense
reimbursement from the Portfolio. As of April 1, 1999, the officers and Trustees
and their families as a group owned in the aggregate beneficially or of record
less than 1% of the outstanding interests of the Portfolio. The Portfolio
requires no employees since the Sub-advisor and other third-party service
providers perform substantially all of the services necessary for the
Portfolio's operations.
ITEM 19. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.
The Fund invests substantially all of its assets in the Portfolio.
Because the Fund controls the Portfolio, the Fund may take actions affecting the
Portfolio without the approval of any other investor.
The Fund has informed the Portfolio that whenever it is requested to
vote on any proposal of the Portfolio, it will hold a meeting of shareholders
and will cast its vote as instructed by its shareholders. It is anticipated that
any other investors in the Portfolio would follow the same or a similar
practice.
The address of the Fund is 11 Greenway Plaza, Suite 100, Houston, Texas
77046.
ITEM 20. INVESTMENT ADVISORY AND OTHER SERVICES.
Information on the investment management and other services provided
for or on behalf of the Portfolio is incorporated herein by reference from the
sections entitled "Management," "Directors and Executive Officers" and "Other
Information" in the Fund's prospectus included in the Fund's Registration
Statement on Form N-2. The following list identifies the specific sections in
the Fund's prospectus under which the information required by Item 20 of Form
N-2 may be found; each section is incorporated herein by reference.
================================================================================
Item 20.1(a) Management
- --------------------------------------------------------------------------------
Item 20.1(b) Management - Investment Management
- --------------------------------------------------------------------------------
Item 20.1(c) Management - Investment Management
- --------------------------------------------------------------------------------
Item 20.2 Management - Investment Management
- --------------------------------------------------------------------------------
Item 20.3 Not Applicable
- --------------------------------------------------------------------------------
Item 20.4 Management - Investment Management
- --------------------------------------------------------------------------------
B-2
<PAGE>
================================================================================
Item 20.5 Not Applicable
- --------------------------------------------------------------------------------
Item 20.6 Other Information - Custodian, Transfer and
Dividend Disbursing Agent and Registrar
- --------------------------------------------------------------------------------
Item 20.7 Other Information - Independent Accountants
- --------------------------------------------------------------------------------
Item 20.8 Not Applicable
================================================================================
ITEM 21. BROKERAGE ALLOCATION AND OTHER PRACTICES.
A description of the Portfolio's brokerage allocation and other
practices is incorporated herein by reference from the section entitled
"Portfolio Transactions" in the Fund's prospectus included in the Fund's
Registration Statement on Form N-2.
ITEM 22. TAX STATUS.
Information on the taxation of the Portfolio is incorporated by
reference from the section entitled "Taxes - Taxation of the Portfolio" in the
Fund's prospectus included in the Fund's Registration Statement on Form N-2.
ITEM 23. FINANCIAL STATEMENTS.
The audited financial statements of the Portfolio for the fiscal year
ended December 31, 1998 are attached hereto in reliance on the report of
PricewaterhouseCoopers LLP, independent auditors, given on the authority of said
firm as experts in auditing and accounting.
B-3
<PAGE>
To the Shareholders and Board of Trustees of AIM Floating Rate Portfolio
(formerly GT Global Floating Rate Portfolio, Inc.):
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets, cash flows and the supplementary data present fairly, in
all material respects, the financial position of the AIM Floating Rate Portfolio
at December 31, 1998, and the results of its operations, the changes in its net
assets, cash flows and the supplementary data for the periods indicated, in
conformity with generally accepted accounting principles. These financial
statements and supplementary data (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of investments owned at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
BOSTON, MASSACHUSETTS
FEBRUARY 19, 1999
B-4
<PAGE>
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- --------------------------------------------------------- ----------- ----------- ------------ ----------
<S> <C> <C> <C> <C>
Leisure & Tourism (13.1%)
Patriot American Hospitality, Inc.: ..................... NR 2.8
Term loan B due 3/31/03 ................................. 5,620,313 $ 5,402,526
Term loan due 3/31/00 ................................... 1,488,971 1,455,469
Term loan due 3/31/99 ................................... 1,323,529 1,293,750
Starwood Hotels & Resorts Worldwide, Inc.: .............. NR 1.7
Term loan due 2/23/03 ................................... 5,000,000 4,937,500
Extended Stay America, Inc.: ............................ NR 1.7
Term loan B due 12/31/03 ................................ 5,000,000 4,900,000
Interval International Corp.: ........................... NR 1.5
Term loan B due 12/16/05 ................................ 2,103,750 2,097,176
Term loan C due 12/15/06 ................................ 2,103,750 2,097,176
The Resort at Summerlin, Inc.: .......................... NR 1.4
Term loan A due 3/31/04 ................................. 4,000,000 3,970,000
KSL Recreation Group, Inc.: ............................. B2 1.4
Revolving Credit due 4/30/03 ............................ 4,011,429 2,516,362
Term loan A due 4/30/05 ................................. 707,143 699,336
Term loan B due 4/30/06 ................................. 707,143 699,336
ASC-West, Inc.: ......................................... B1 1.2
Term loan due 5/31/06 ................................... 3,571,429 3,571,429
Aladdin Gaming, LLC.: ................................... B2 0.9
Term loan C due 2/26/08 ................................. 2,222,223 2,194,444
Term loan B due 8/26/06 ................................. 277,778 274,305
ASC East, Inc.: ......................................... B1 0.5
Term loan due 5/31/06 ................................... 1,428,570 1,428,570
------------
37,537,379
------------
Broadcasting & Publishing (8.0%)
Capstar Broadcasting Corp.: ............................. B3 3.4
Term loan B due 5/31/05 ................................. 9,950,000 9,894,031
White Knight Broadcasting, Inc.: ........................ NR 1.9
Term loan B due 9/30/05 ................................. 5,329,268 5,315,945
21st Century Newspapers, Inc.: .......................... Ba3 1.7
Term loan due 9/15/05 ................................... 4,962,500 4,894,266
Comcorp Broadcasting, Inc.: ............................. NR 1.0
Term loan B due 9/30/05 ................................. 2,926,829 2,897,561
------------
23,001,803
------------
Chemicals (7.7%)
Lyondell Petrochemical Co.: ............................. Ba2 3.6
Term loan B due 6/30/05 ................................. 10,479,000 10,217,025
Huntsman Specialty Chemicals Corp.: ..................... Ba2 1.6
Term loan due 3/15/07 ................................... 2,727,273 2,707,636
Term loan C due 3/15/05 ................................. 2,152,144 2,136,003
Sterling Pulp Chemicals (SASK) Ltd.: .................... NR 1.3
Term loan B due 6/30/05 ................................. 3,640,598 3,604,192
Huntsman Corp.: ......................................... Ba2 1.2
Term loan B due 6/30/04 ................................. 3,442,437 3,412,316
------------
22,077,172
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-5
<PAGE>
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- --------------------------------------------------------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C>
Household Products (5.5%)
20th Century Plastics, Inc.: ............................ NR 2.6
Term loan B due 9/30/05 ................................. 3,988,889 $ 3,958,972
Term loan C due 9/30/06 ................................. 3,491,250 3,465,066
Century Maintenance Supply, Inc.: ....................... NR 1.7
Term loan B due 7/8/05 .................................. 4,975,000 4,912,813
Paint Sundry Brands Corp.: .............................. NR 1.2
Term loan B due 8/11/05 ................................. 1,795,500 1,764,079
Term loan C due 8/11/06 ................................. 1,661,667 1,632,588
------------
15,733,518
------------
Business & Public Services (5.2%)
Bridge Information Systems, Inc.: ....................... B1 1.7
Term loan due 5/29/05 ................................... 5,000,000 4,940,000
Genicom Corp.: .......................................... NR 1.6
Term loan B due 9/5/04 .................................. 4,843,750 4,698,438
Safety-Kleen Services Inc.: ............................. Ba3 1.0
Term loan B due 4/3/04 .................................. 1,356,818 1,356,818
Term loan C due 4/3/05 .................................. 1,356,818 1,356,818
Decision One Corp.: ..................................... B1 0.9
Term loan B due 8/6/05 .................................. 2,962,500 2,562,562
------------
14,914,636
------------
Health Care Services (4.7%)
Mariner Post-Acute Network, Inc.: ....................... Ba3 1.7
Term loan B due 3/31/05 ................................. 2,495,000 2,457,575
Term loan C due 3/31/06 ................................. 2,495,000 2,457,575
MedPartners, Inc.: ...................................... B1 1.6
Term loan B due 6/9/01 .................................. 4,636,661 4,485,969
Genesis Health Ventures, Inc.: .......................... Ba3 0.8
Term loan B due 9/30/04 ................................. 1,203,598 1,182,535
Term loan C due 6/30/05 ................................. 1,200,806 1,179,791
The Multicare Companies, Inc.: .......................... B1 0.6
Term loan B due 9/30/04 ................................. 1,234,375 1,208,145
Term loan C due 6/1/05 .................................. 410,417 401,695
------------
13,373,285
------------
Auto Parts (4.3%)
American Axle & Manufacturing of Michigan, Inc.: ........ Ba3 1.7
Term loan due 4/30/06 ................................... 5,000,000 4,962,500
Federal-Mogul Corp.: .................................... Ba2 1.6
Term loan B due 12/31/05 ................................ 4,500,000 4,454,999
Joan Fabrics Corp.: ..................................... B1 1.0
Term loan B due 6/30/05 ................................. 1,907,401 1,893,096
Term loan C due 6/30/06 ................................. 990,514 983,085
------------
12,293,680
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-6
<PAGE>
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- --------------------------------------------------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Consumer Services (3.9%)
Coinmach Laundry Corp.: ................................. Ba2 2.4
Term loan B due 6/30/05 ................................. 6,932,538 $ 6,897,875
Rent-A-Center, Inc.: .................................... Ba3 1.5
Term loan C due 2/5/07 .................................. 2,408,924 2,366,767
Term loan B due 2/5/06 .................................. 1,970,938 1,936,446
------------
11,201,088
------------
Cable Television (3.4%)
Charter Communications Entertainment, L.P.: ............. Ba3 1.7
Term loan due 9/30/07 ................................... 5,000,000 4,987,500
Charter Communications Southeast, L.P.: ................. Ba3 1.7
Term loan C due 1/1/08 .................................. 5,000,000 4,953,125
------------
9,940,625
------------
Wireless Communications (3.4%)
Western PCS Holding Corp.: .............................. B1 1.7
Term loan B due 6/26/07 ................................. 5,000,000 4,968,750
Commnet Cellular, Inc.: ................................. B1 1.7
Term loan D due 9/30/07 ................................. 3,252,033 3,228,992
Term loan C due 3/31/07 ................................. 1,161,440 1,153,211
Term loan B due 9/30/06 ................................. 586,527 582,251
------------
9,933,204
------------
Appliances & Household (3.4%)
Simmons Co., Inc.: ...................................... Ba3 1.7
Term loan C due 10/29/06 ................................ 3,562,500 3,544,688
Term loan B due 10/29/05 ................................ 1,424,489 1,417,367
The Imperial Home Decor Group: .......................... B1 1.7
Term loan B due 3/13/05 ................................. 3,300,000 3,262,875
Term loan C due 3/13/06 ................................. 1,700,000 1,680,875
------------
9,905,805
------------
Transportation - Shipping (2.7%)
American Commercial Lines: .............................. Ba2 1.7
Term loan C due 6/30/07 ................................. 2,877,301 2,861,122
Term loan B due 6/30/06 ................................. 2,111,273 2,099,401
Atlas Freighter Leasing, Inc.: .......................... Ba3 1.0
Term loan due 5/29/04 ................................... 2,734,865 2,706,380
------------
7,666,903
------------
Plastics & Rubber (2.6%)
Intesys Technologies, Inc.: ............................. NR 2.6
Term loan due 6/30/06 ................................... 7,485,000 7,410,150
------------
Gas Production & Distribution (2.4%)
Ferrellgas, L.P.: ....................................... NR 2.4
Term loan C due 6/17/06 ................................. 7,000,000 7,000,000
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-7
<PAGE>
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- --------------------------------------------------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Machinery & Engineering (2.4%)
Formax, Inc.: ........................................... NR 2.4
Term loan B due 9/30/05 ................................. 6,965,000 $ 6,930,175
------------
Pharmaceuticals (2.4%)
Leiner Health Products Group: ........................... Ba3 1.5
Term loan C due 12/30/05 ................................ 4,451,207 4,417,822
Endo Pharmaceuticals, Inc.: ............................. B1 0.9
Term loan B due 6/30/04 ................................. 2,452,381 2,427,857
------------
6,845,679
------------
Paper/Packaging (2.3%)
Graham Packaging Co.: ................................... B1 1.3
Term loan D due 1/31/07 ................................. 1,446,429 1,439,196
Term loan B due 1/31/06 ................................. 1,353,516 1,343,364
Term loan C due 1/31/07 ................................. 1,121,484 1,115,877
Stone Container Corp.: .................................. Ba3 1.0
Term loan E due 10/1/03 ................................. 2,895,738 2,877,640
------------
6,776,077
------------
Restaurants (1.7%)
AFC Enterprises, Inc.: .................................. Ba3 1.7
Term loan B due 6/30/04 ................................. 4,987,500 4,975,031
------------
Retailers-Food (1.7%)
Star Markets, Inc.: ..................................... Ba3 1.7
Term Loan C due 12/31/02 ................................ 4,954,088 4,941,703
------------
Beverages - Non-alcoholic (1.7%)
Mistic/Snapple Brands, Inc.: ............................ NR 1.7
Term loan B due 6/1/04 .................................. 2,439,492 2,421,196
Term loan C due 6/1/05 .................................. 2,439,492 2,421,196
------------
4,842,392
------------
Office Equipment (1.6%)
Dictaphone Corp.: ....................................... B2 1.6
Term loan C due 12/31/02 ................................ 2,475,000 2,351,250
Term loan B due 6/30/02 ................................. 2,436,828 2,290,618
------------
4,641,868
------------
Coal (1.5%)
P & L Coal Holdings Corp.: .............................. NR 1.0
Term loan B due 6/9/06 .................................. 2,769,231 2,751,924
Centennial Resoures, Inc.:-/- ........................... NR 0.5
Term loan B due 3/31/04 ................................. 1,966,666 983,334
Term loan A due 3/31/02 ................................. 850,000 425,000
Revolving Credit due 6/30/99 ............................ 355,789 176,704
------------
4,336,962
------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
B-8
<PAGE>
<TABLE>
<CAPTION>
MOODY'S
RATING PRINCIPAL VALUE % OF NET
SENIOR SECURED FLOATING RATE INTERESTS{.:}{/\} (UNAUDITED) AMOUNT (NOTE 1) ASSETS
- --------------------------------------------------------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Other Consumer Goods (1.5%)
The Boyds Collection, Ltd.: ............................. Ba3 1.5
Term loan B due 4/21/06 ................................. 4,216,667 $ 4,169,229
------------
Industrial Components (1.4%)
Thermadyne MFG. L.L.C.: ................................. B1 1.4
Term loan B due 5/22/05 ................................. 1,990,000 1,976,319
Term loan C due 5/22/06 ................................. 1,990,000 1,976,319
------------
3,952,638
------------
Building Materials & Components (1.3%)
Atrium Cos., Inc.: ...................................... B1 1.3
Term Loan C due 6/30/06 ................................. 1,963,333 1,951,554
Term Loan B due 6/30/05 ................................. 1,716,481 1,706,182
------------
3,657,736
------------
Medical Technology & Supplies (0.9%)
Sterling Diagnostic Imaging, Inc.: ...................... NR 0.9
Term loan due 6/30/05 ................................... 2,497,596 2,472,620
------------ ------
TOTAL SENIOR SECURED FLOATING RATE INTERESTS (cost
$265,043,827) ........................................... 260,531,358 90.7
------------ ------
<CAPTION>
VALUE % OF NET
REPURCHASE AGREEMENT (NOTE 1) ASSETS
- ------------------------------------------------------------- ------------ -------------
<S> <C> <C>
Dated December 31, 1998, with State Street Bank & Trust
Co., due January 4, 1999, for an effective yield of 4.50%,
collateralized by $325,000 U.S. Treasury Notes, 4.00% due
10/31/00 and $22,395,000 U.S. Treasury Notes, 6.875% due
5/15/06 (market value of collateral is $25,825,681
including accrued interest). (cost $25,314,000) ......... 25,314,000 8.8
------------ ------
TOTAL INVESTMENTS (cost $290,357,827) * ................. 285,845,358 99.5
Other Assets and Liabilities ............................ 1,431,345 0.5
------------ ------
NET ASSETS .............................................. $287,276,703 100.0
------------ ------
------------ ------
</TABLE>
--------------
{.:} Senior secured corporate loans and senior secured debt securities
in the Fund's portfolio generally have variable rates which
adjust to a base, such as the London Inter-Bank Offered Rate
("LIBOR"), on set dates, typically every 30 days but not greater
than one year; and/or have interest rates that float at a margin
above a widely recognized base lending rate such as the Prime
Rate of a designated U.S. bank. Senior secured floating rate
interests are, at present, not readily marketable and may be
subject to restrictions on resale.
{/\} Senior secured floating rate interests often require prepayments
from excess cash flow or permit the borrower to repay at its
election. The degree to which borrowers repay, whether as a
contractual requirement or at their election, cannot be predicted
with accuracy. As a result, the actual remaining maturity may be
substantially less than the stated maturities shown. However, it
is anticipated that the senior secured floating rate interests
will have an expected average life of three to five years.
Unrealized appreciation: $ 4,815
Unrealized depreciation: (4,517,284)
-------------
Net unrealized depreciation: $ (4,512,469)
-------------
-------------
B-9
<PAGE>
Assets:
Investments in securities, at value (cost $290,357,827)......... $285,845,358
U.S. currency................................................... 756
Interest receivable............................................. 2,294,966
Unamortized organizational costs................................ 63,914
Receivable for securities sold.................................. 30,148
Miscellaneous receivable........................................ 3,798
-----------
Total assets.................................................. 288,238,940
-----------
Liabilities:
Payable for loan fees........................................... 582,302
Payable for investment management and administration fees....... 329,666
Payable for securities purchased................................ 8,989
Payable for custodian fees...................................... 1,886
Payable for operating expenses.................................. 39,394
-----------
Total liabilities............................................. 962,237
-----------
Net assets........................................................ $287,276,703
-----------
-----------
Net assets consist of:
Paid in capital................................................. $269,035,116
Accumulated net investment income............................... 22,592,993
Accumulated net realized gain on investments and foreign
currency transactions........................................ 161,063
Net unrealized depreciation of investments...................... (4,512,469)
-----------
Total -- representing net assets applicable to shares
of beneficial interest outstanding.............................. $287,276,703
-----------
-----------
The accompanying notes are an integral part of the financial statements.
B-10
<PAGE>
Investment income:
Interest income................................................. $18,729,751
Other income.................................................... 326,507
-----------
Total investment income....................................... 19,056,258
-----------
Expenses:
Investment management and administration fees................... 2,147,460
Amortization of organization costs.............................. 19,199
Custodian fees.................................................. 3,970
Other expenses.................................................. 35,025
-----------
Total expenses................................................ 2,205,654
-----------
Net investment income............................................. 16,850,604
-----------
Net realized and unrealized gain (loss) on investments and foreign currencies:
Net realized gain during the year............................... 10,508
Net unrealized depreciation during the year..................... (4,634,050)
-----------
Net realized and unrealized loss on investments and foreign
currencies...................................................... (4,623,542)
Net increase in net assets resulting from operations.............. $12,227,062
-----------
-----------
The accompanying notes are an integral part of the financial statements.
B-11
<PAGE>
MAY 1, 1997 (COMMENCEMENT OF OPERATIONS) YEAR ENDED TO
DECEMBER 31, DECEMBER 31,
1998 1997
- ------------- --------------
Increase in net assets
Operations:
Net investment income................. $16,850,604 $ 5,742,389
Net realized gain on investments and
foreign currency transactions........ 10,508 150,555
Net change in unrealized appreciation
(depreciation) of investments........ (4,634,050) 121,581
------------- ------------
Net increase in net assets resulting
from operations.................... 12,227,062 6,014,525
------------- ------------
Beneficial interest transactions:
Contributions......................... 151,573,415 160,309,506
Withdrawals........................... (36,556,868) (6,290,937)
------------- -------------
Net increase from beneficial
interest transactions.............. 115,016,547 154,018,569
- ------------- --------------
Total increase in net assets............ 127,243,609 160,033,094
Net assets:
Beginning of year..................... 160,033,094 0
------------- -------------
End of year........................... $287,276,703 $160,033,094
------------- -------------
------------- -------------
The accompanying notes are an integral part of the financial statements.
B-12
<PAGE>
Cash Provided by Operating Activities:
Net increase in net assets resulting from operations........ $ 12,227,062
Increase in receivables................................... (952,065)
Increase in payables...................................... 346,993
Net realized and unrealized gain on investments........... 4,623,542
Increase in deferred facility fees........................ 393,307
Decrease in unamortized organization costs................ 19,199
--------------
Net cash provided by operating activities............... 16,658,038
--------------
Cash Used for Investing Activities:
Proceeds from principal payments and sales of senior
floating rate interests.................................... 155,074,585
Purchases of senior secured floating rate interests......... (263,037,556)
Purchases of short-term investments......................... (4,074,810,000)
Proceeds from sales and maturities of short-term
investments................................................ 4,051,099,000
--------------
Net cash used in investing activities................... (131,673,971)
--------------
Cash Provided by Financing Activities:
Proceeds from capital shares sold and reinvested............ 151,573,415
Disbursements from capital shares repurchased............... (36,556,868)
Proceeds from bank line of credit........................... 38,416,000
Repayment of proceeds from bank line of credit.............. (38,416,000)
--------------
Net cash provided by financing activities................ 115,016,547
--------------
Net increase in cash........................................ 614
Cash at Beginning of Period................................. 142
--------------
Cash at End of Period....................................... $ 756
--------------
--------------
The accompanying notes are an integral part of the financial statements.
B-13
<PAGE>
Contained below are ratios and supplemental data that have been derived from
information provided in the financial statements.
MAY 1, 1997
(COMMENCEMENT
OF
YEAR ENDED OPERATIONS) TO
DECEMBER 31, DECEMBER 31,
1998 1997
- -------------- --------------
Per Share Operating Performance:
Ratios and supplemental data:
Net assets, end of period (in 000's).... $ 287,277 $ 160,033
Ratio of net investment income to
average net assets..................... 7.44 % 7.88 %(a)
Ratio of expenses to average net
assets:................................ 0.97 % 0.98 %(a)
Ratio of interest expense to average net
assets................................. 0.01 % 0.15 %(a)
Portfolio turnover rate................. 75 % 118 %(a)
- --------------
(a) Annualized
The accompanying notes are an integral part of the financial statements.
B-14
<PAGE>
1. SIGNIFICANT ACCOUNTING POLICIES
Floating Rate Portfolio ("Portfolio") is organized as a Delaware business trust
and is registered under the 1940 Act as a non-diversified, closed-end management
investment company.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of income and expenses during the reporting year. Actual
results could differ from those estimates. The following is a summary of
significant accounting policies in conformity with generally accepted accounting
principles consistently followed by the Fund in the preparation of the financial
statements.
(A) PORTFOLIO VALUATION
The Portfolio invests primarily in senior secured corporate loans ("Corporate
Loans") and senior secured debt securities ("Corporate Debt Securities") that
meet credit standards established by INVESCO Senior Secured Management, Inc.,
(the "Sub-Adviser"), formerly, Chancellor LGT Senior Secured Management, Inc.
When possible, A I M Advisors, Inc. (the "Manager") or the Sub-Adviser will rely
on quotations provided by banks, dealers or pricing services with respect to
Corporate Loans and Corporate Debt Securities. Whenever it is not possible to
obtain such quotes, the Sub-Adviser, subject to guidelines reviewed by the
Portfolio's Board of Trustees, values the Corporate Loans and Corporate Debt
Securities at Fair Value, which approximates market value. In valuing a
Corporate Loan or Corporate Debt Security, the Sub-Adviser considers, among
other factors, (i) the credit worthiness of the U.S. or non-U.S. Company
borrowing or issuing Corporate Debt Securities and any intermediate loan
participants, (ii) the current interest rate, period until next interest rate
reset and maturity of the Corporate Loan or Corporate Debt Security, (iii)
recent prices in the market for instruments of similar quality, rate, and period
until next interest rate reset and maturity.
(B) REPURCHASE AGREEMENTS
With respect to repurchase agreements entered into by the Portfolio, it is the
Portfolio's policy to always receive, as collateral, United States government
securities or other high quality debt securities of which the value, including
accrued interest, is at least equal to the amount to be repaid to the Portfolio
under each agreement at its maturity. Repurchase agreements are valued at cost
plus accrued interest.
(C) INTERMEDIATE PARTICIPANTS
The Portfolio invests primarily in Corporate Loans from U.S. or non-U.S.
companies (the "Borrowers"). The investment of the Portfolio in a Corporate Loan
may take the form of participation interests or assignments. If the Portfolio
purchases a participation interest from a syndicate of lenders ("Lenders") or
one of the participants in the syndicate ("Participant"), one or more of which
administers the loan on behalf of all the Lenders (the "Agent Bank"), the
Portfolio would be required to rely on the Lender that sold the participation
interest not only for the enforcement of the Portfolio's rights against the
Borrower but also for the receipt and processing of payments due to the
Portfolio under the Corporate Loans. As such, the Portfolio is subject to the
credit risk of the Borrower and a Participant. Lenders and Participants
interposed between the Portfolio and a Borrower, together with Agent Banks
are referred to as "Intermediate Participants".
(D) INVESTMENT TRANSACTIONS
Investment transactions are accounted for on the trade date (date the order to
buy or sell is executed). The cost of investments sold is determined on a
first-in, first-out basis, unless otherwise specified. The Portfolio may trade
securities on other than normal settlement terms. This may increase the market
risk if the other party to the transaction fails to deliver and causes the
Portfolio to subsequently invest at less advantageous prices.
(E) TAXES
It is the policy of the Portfolio to meet the requirements for qualification as
a "regulated investment company" under the Internal Revenue Code of 1986, as
amended ("Code"). Therefore, no provision has been made for Federal taxes on
income, capital gains, and unrealized appreciation of securities held, or excise
tax on income and capital gains.
(F) DEFERRED ORGANIZATIONAL EXPENSES
Expenses incurred by the Portfolio in connection with its organization
aggregated $95,995. These expenses are being amortized on a straightline basis
over a five-year period.
B-15
<PAGE>
(G) RESTRICTED SECURITIES
The Portfolio may invest all or substantially all of its assets in Corporate
Loans, Corporate Debt Securities or other securities that are rated below
investment grade by a nationally recognized statistical rating organization, or
in comparable unrated securities. The Portfolio is permitted to invest in
privately placed restricted securities. These securities may be resold in
transactions exempt from registration or to the public if the securities are
registered. Disposal of these securities may involve time-consuming negotiations
and expense, and prompt sale at an acceptable price may be difficult.
(H) SECURITIES PURCHASED ON A WHEN-ISSUED AND DELAYED
DELIVERY BASIS
The Portfolio may purchase and sell interests in Corporate Loans and Corporate
Debt Securities and other portfolio securities on a when-issued and delayed
delivery basis, with payment and delivery scheduled for a future date. No income
accrues to the Portfolio on such interests or securities in connection with such
transactions prior to the date the Portfolio actually takes delivery of such
interests or securities. These transactions are subject to market fluctuations
and are subject to the risk that the value at delivery may be more or less than
the trade date purchase price. Although the Portfolio will generally purchase
these securities with the intention of acquiring such securities, they may sell
such securities before the settlement date. These securities are identified on
the accompanying Portfolio of Investments. The Portfolio has set aside
sufficient cash or liquid high grade debt securities as collateral for these
purchase commitments.
(I) INVESTMENT INCOME
Investment income is recorded on an accrual basis. Where a high level of
uncertainty exists as to collection of income on securities, income is recorded
net of all withholding tax with any rebate recorded when received. Facility fees
received are recognized as income over the expected life of the loan. Market
discounts are accreted over the stated life of each applicable security.
(J) LINE OF CREDIT
The Fund, along with certain other funds advised and/or administered by A I M
Advisors, Inc. ("AIM" or the "Manager"), has a line of credit with BankBoston
and State Street Bank and Trust Company. The arrangements with the banks allow
the Fund and certain other funds to borrow, on a first come, first served basis,
an aggregate maximum amount of $250,000,000. The Fund is limited to borrowing up
to 33 1/3% of the value of the Fund's total assets. On December 31, 1998, the
Fund had no outstanding loan balance.
For the year ended December 31, 1998, the weighted average outstanding daily
balance of bank loans (based on the number of days the loans were outstanding)
was $2,799,958 with a weighted average interest rate of 6.21%. Interest expense
for the year ended was $11,594.
2. RELATED PARTIES
A I M Advisors, Inc. (the "Manager") is the investment manager and administrator
for the Portfolio, INVESCO Senior Secured Management, Inc. (formerly, Chancellor
LGT Senior Secured Management, Inc.) is the Portfolio's investment sub-adviser
("Sub-Adviser"), and INVESCO (NY), Inc. (formerly Chancellor LGT Asset
Management, Inc.) is the Portfolio's sub-sub-adviser.
The Portfolio pays investment management and administration fees to the Manager
at the annualized rate of 0.95% of the Portfolio's average daily net assets.
Through December 31, 1998, all of the beneficial interest in the Portfolio was
owned either by AIM Floating Rate Fund or INVESCO (NY), Inc., the Portfolio's
investment sub-sub-advisor which has a nominal ($100) investment in the
Portfolio.
3. PURCHASES AND SALES OF SECURITIES
For the year ended December 31, 1998, purchases and sales of investment
securities by the Portfolio, other than U.S. government obligations and
short-term investments, aggregated $263,046,545 and $154,949,346, respectively.
There were no purchases or sales of U.S. government obligations by the Portfolio
for the year ended December 31, 1998.
B-16
<PAGE>
<TABLE>
<CAPTION>
BOARD OF TRUSTEES OFFICERS OFFICE OF THE FUND
<S> <C> <C> <C> <C> <C> <C>
C. Derek Anderson Robert H. Graham 11 Greenway Plaza
President, Plantagenet Capital Chairman and President Suite 100
Management, LLC (an investment Houston, TX 77046
partnership); Chief Executive Dana R. Sutton
Officer, Vice President & Assistant INVESTMENT MANAGER
Plantagenet Holdings, Ltd. Treasurer
(an investment banking firm) A I M Advisor, Inc.
11 Greenway Plaza
Samuel D. Sirko Suite 100
Frank S. Bayley Vice President & Secretary Houston, TX 77046
Partner, law firm of
Baker & McKenzie Kenneth W. Chancey SUB-ADVISOR
Vice President &
Robert H. Graham Principal Accounting Officer INVESCO Senior Secured
President and Chief Executive Management, Inc.
Officer, 1166 Avenue of the Americas
A I M Management Group Inc. John J. Arthur New York, NY 10036
Vice President
Arthur C. Patterson SUB-SUB-ADVISOR
Managing Partner, Accel Partners Melville B. Cox
(a venture capital firm) Vice President INVESCO (NY), Inc.
1166 Avenue of the Americas
Ruth H. Quigley Gary T. Crum New York, NY 10036
Private Investor Vice President
TRANSFER AGENT
Carol F. Relihan
Vice President A I M Fund Services, Inc.
P.O. Box 4739
Nancy L. Martin Houston, TX 77210-4739
Assistant Secretary
CUSTODIAN
Ofelia M. Mayo
Assistant Secretary State Street Bank and Trust
Company
Kathleen J. Pflueger 225 Franklin Street
Assistant Secretary Boston, MA 02110
Pamela Ruddock COUNSEL TO THE FUND
Assistant Treasurer
Kirkpatrick & Lockhart LLP
Paul Wozniak 1800 Massachusetts Avenue, N.W.
Assistant Treasurer Washington, D.C. 20036-1800
COUNSEL TO THE TRUSTEES
Paul, Hastings, Janofsky &
Walker LLP
Twenty Third Floor
555 South Flower Street
Los Angeles, CA 90071
DISTRIBUTOR
A I M Distributors, Inc.
11 Greenway Plaza
Suite 100
Houston, TX 77046
AUDITORS
PricewaterhouseCoopers LLP
One Post Office Square
Boston, MA 02109
</TABLE>
B-17
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.
(1) Financial Statements:
The financial statements of the Portfolio for the fiscal year ended
December 31, 1998 and report by PricewaterhouseCoopers LLP, independent
auditors, are included in Part B.
(2) Exhibits:
(a) Trust Instrument of Registrant, dated January 9,
1997, was filed as an Exhibit to the Registration
Statement on Form N-2, on March 21, 1997, and is
hereby incorporated by reference.
(b) (1) By-Laws of Registrant, dated January 9, 1997,
were filed as an Exhibit to the Registration
Statement on Form N-2, on March 21, 1997, and are
hereby incorporated by reference.
(2) Amended and Restated By-Laws of Registrant are filed
herewith electronically.
(c) Not applicable.
(d) Instruments defining the rights of holders of
Registrant's securities were filed as an Exhibit to
the Registration Statement on Form N-2, on March 21,
1997, and are hereby incorporated by reference.
(e) Not applicable.
(f) Not applicable.
(g) (1) Investment Management and Administration Contract,
dated May 29, 1998, between Registrant and A I M
Advisors, Inc. is filed herewith electronically.
(g) (2) Sub-Advisory and Sub-Administration Contract, dated
May 29, 1998, between A I M Advisors, Inc. and
INVESCO Senior Secured Management, Inc. is filed
herewith electronically.
C-1
<PAGE>
(g) (3) Sub-Sub-Advisory and Sub-Sub-Administration Contract,
dated May 29, 1998, between INVESCO Senior Secured
Management, Inc. and INVESCO (NY), Inc. is filed
herewith electronically.
(h) Not applicable.
(i) Not applicable.
(j) (1) Custodian Contract, dated April 30, 1997, between
Registrant and State Street Bank and Trust Company,
was filed as an Exhibit to the Registration Statement
on Form N-2, on March 21, 1997, and is hereby
incorporated by reference.
(j) (2) Amendment to Custodian Contract, dated January 26,
1999, is filed herewith electronically.
(k) (1) Transfer Agency Contract, dated April 30, 1997,
between Registrant and GT Global Investor Services,
Inc., is filed herewith electronically.
(k) (2) Fund Accounting and Pricing Agent Agreement, dated
April 30, 1997, between Registrant, GT Global
Floating Rate Fund, Inc. (d/b/a AIM Floating Rate
Fund) and Chancellor LGT Asset Management, Inc. is
filed herewith electronically.
(l) Not applicable.
(m) Not applicable.
(n) Consent of PricewaterhouseCoopers LLP, independent
auditors, is filed herewith electronically.
(o) Not applicable.
(p) Not applicable.
(q) Not applicable.
(r) None.
ITEM 25. MARKETING ARRANGEMENTS.
Not applicable.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Not applicable.
C-2
<PAGE>
ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL.
Not applicable.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES.
Number of Record Holders
Title of Class as of April 1, 1999
- -------------------------------------- ----------------------------------
Interests One
ITEM 29. INDEMNIFICATION.
Reference is hereby made to Article X of the Registrant's Trust
Instrument, which was filed as Exhibit 2(a) to the Registration Statement on
Form N-2, on March 21, 1997.
The Registrant's trustees and officers are insured under an errors and
omissions liability insurance policy. The Registrant is insured under the
fidelity bond required by Rule 17g-1 under the Investment Company Act of 1940,
as amended.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF THE INVESTMENT ADVISOR.
Information as to any other business, profession, vocation or
employment of a substantial nature in which each director or officer of A I M
Advisors, Inc., INVESCO Senior Secured Management, Inc. or INVESCO (NY), Inc.
is, or at any time during the past two years has been, engaged for his or her
own account or in the capacity of director, officer, employee, partner or
trustee is incorporated herein by reference from the sections entitled
"Management" and "Directors and Executive Officers" in the Fund's Part A.
See the material in the prospectus, under the captions "Directors and
Executive Officers" and "Management," included in the Fund's Registration
Statement on Form N-2. Information about the Directors and Officers of A I M
Advisors, Inc. and INVESCO (NY), Inc. is included in Schedule A and Schedule D
of Part I of each entity's Form ADV (File No. 801-12313 and File No. 801-10254,
respectively), filed with the Securities and Exchange Commission, which is
incorporated herein by reference.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS.
Accounts, books and other records required by Rules 31a-1 and 31a-2
under the Investment Company Act of 1940, as amended, are maintained and held in
the offices of the Registrant and its advisor A I M Advisors, Inc., 11 Greenway
Plaza, Suite 100, Houston, Texas 77046, and its custodian, State Street Bank and
Trust Company, 225 Franklin Street, Boston, Massachusetts 02110.
ITEM 32. MANAGEMENT SERVICES.
Other than as set forth in Parts A and B of this Registration
Statement, the Registrant is not a party to any management-related service
contract.
C-3
<PAGE>
ITEM 33. UNDERTAKINGS.
Not applicable.
C-4
<PAGE>
SIGNATURES
Floating Rate Portfolio has duly caused this Amendment to be signed on
its behalf by the undersigned, thereunto duly authorized, in the city of
Houston, Texas on the 30th day of April, 1999.
FLOATING RATE PORTFOLIO
By: *
-------------------------------
Robert H. Graham, President
This Amendment has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURES TITLE DATE
---------- ----- ----
* Chairman, Trustee & President
-------------------------- (Principal Executive Officer)
(Robert H. Graham)
* Trustee
--------------------------
(C. Derek Anderson)
* Trustee
--------------------------
(Frank S. Bayley)
* Trustee
--------------------------
(Arthur C. Patterson)
* Trustee
--------------------------
(Ruth H. Quigley)
Vice President &
* Treasurer
-------------------------- (Chief Accounting Officer)
(Dana R. Sutton)
* By: /s/ Carol F. Relihan
----------------------
Carol F. Relihan
Attorney-In-Fact
<PAGE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit
(b) (2) Amended and Restated By-Laws of Registrant.
(g) (1) Investment Management and Administration Contract.
(g) (2) Sub-Advisory and Sub-Administration Contract.
(g) (3) Sub-Sub-Advisory and Sub-Sub-Administration Contract.
(j) (2) Amendment to Custodian Contract.
(k) (1) Transfer Agency Contract.
(k) (2) Fund Accounting and Pricing Agent Agreement.
(n) Consent of PricewaterhouseCoopers LLP.
FLOATING RATE PORTFOLIO
AMENDED AND RESTATED BY-LAWS
Adopted effective January 9, 1997
Amended effective December 10, 1998
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
PRINCIPAL OFFICE AND SEAL.....................................................1
Section 1. Principal Office..........................................1
Section 2. Seal......................................................1
ARTICLE II
MEETINGS OF TRUSTEES..........................................................1
Section 1. Action by Trustees........................................1
Section 2. Compensation of Trustees..................................1
ARTICLE III
COMMITTEES....................................................................1
Section 1. Establishment.............................................1
Section 2. Proceedings; Quorum; Action...............................2
Section 3. Compensation of Committee Members.........................2
ARTICLE IV
OFFICERS......................................................................2
Section 1. General...................................................2
Section 2. Election, Tenure and Qualifications of Officers...........2
Section 3. Vacancies and Newly Created Offices.......................2
Section 4. Removal and Resignation...................................2
Section 5. President.................................................3
Section 6. Vice President(s).........................................3
Section 7. Treasurer and Assistant Treasurer(s)......................3
Section 8. Secretary and Assistant Secretaries.......................3
Section 9. Compensation of Officers..................................3
Section 10. Surety Bond...............................................4
ARTICLE V
MEETINGS OF HOLDERS...........................................................4
Section 1. No Annual Meetings........................................4
Section 2. Special Meetings..........................................4
Section 3. Notice of Meetings; Waiver................................4
Section 4. Adjourned Meetings........................................4
Section 5. Validity of Proxies.......................................5
Section 6. Record Date...............................................5
Section 7. Action Without a Meeting..................................5
i
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ARTICLE VI
BENEFICIAL INTERESTS..........................................................6
Section 1. No Certificates...........................................6
Section 2. Transfer of Interests.....................................6
ARTICLE VII
CUSTODY OF SECURITIES.........................................................6
Section 1. Employment of a Custodian.................................6
Section 2. Termination of Custodian Agreement........................6
Section 3. Other Arrangements........................................6
ARTICLE VIII
FISCAL YEAR AND ACCOUNTANT....................................................6
Section 1. Fiscal Year...............................................6
Section 2. Accountant................................................6
ARTICLE IX
AMENDMENTS....................................................................7
Section 1. General...................................................7
Section 2. By Holders Only...........................................7
ARTICLE X
NET ASSET VALUE...............................................................7
ARTICLE XI
MISCELLANEOUS.................................................................7
Section 1. Inspection of Books.......................................7
Section 2. Severability..............................................7
Section 3. Headings..................................................8
ii
<PAGE>
AMENDED AND RESTATED BY-LAWS
OF
FLOATING RATE PORTFOLIO
These Amended and Restated By-Laws of Floating Rate Portfolio (the
"Trust"), a Delaware business trust, are subject to the Trust Instrument of the
Trust dated as of January 9, 1997, as from time to time amended, supplemented or
restated (the "Trust Instrument"). Capitalized terms used herein have the same
meanings as in the Trust Instrument.
ARTICLE I
PRINCIPAL OFFICE AND SEAL
Section 1. Principal Office.
----------------
The principal office of the Trust shall be located in Wilmington,
Delaware or such other location as the Trustees determine. The Trust may
establish and maintain other offices and places of business as the Trustees
determine.
Section 2. Seal.
----
The Trustees may adopt a seal for the Trust in such form and with such
inscription as the Trustees determine. Any Trustee or officer of the Trust shall
have authority to affix the seal to any document.
ARTICLE II
MEETINGS OF TRUSTEES
Section 1. Action by Trustees.
------------------
Trustees may take actions at meetings held at such places and times as
the Trustees may determine, or without meetings, all as provided in Article II,
Section 7, of the Trust Instrument.
Section 2. Compensation of Trustees.
------------------------
Each Trustee who is neither an employee of an investment adviser of the
Trust or any Series nor an employee of an entity affiliated with the investment
adviser may receive such compensation from the Trust for services and
reimbursement for expenses as the Trustees may determine.
ARTICLE III
COMMITTEES
Section 1. Establishment.
-------------
The Trustees may designate one or more committees of the Trustees,
which may include an Executive Committee, a Nominating Committee, and an Audit
Committee. The Trustees shall determine the number of members of each committee
and its powers and shall appoint its members and its chair. Each committee
member shall serve at the pleasure of the Trustees. The Trustees may abolish any
committee at any time. Each committee shall maintain records of its meetings and
report its actions to the Trustees. The Trustees may rescind any action of any
2
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committee, but such rescission shall not have retroactive effect. The Trustees
may delegate to any committee any of its powers, subject to the limitations of
applicable law.
Section 2. Proceedings; Quorum; Action.
---------------------------
Each committee may adopt such rules governing its proceedings, quorum
and manner of acting as it shall deem proper and desirable. In the absence of
such rules, a majority of any committee shall constitute a quorum, and a
committee shall act by the vote of a majority of a quorum.
Section 3. Compensation of Committee Members.
---------------------------------
Each committee member who is not an "interested person" of the Trust,
as defined in the 1940 Act ("Disinterested Trustees") may receive such
compensation from the Trust for services and reimbursement for expenses as the
Trustees may determine.
ARTICLE IV
OFFICERS
Section 1. General.
-------
The officers of the Trust shall include a President, one or more Vice
Presidents, a Treasurer, and a Secretary, and may include one or more Assistant
Treasurers or Assistant Secretaries and such other officers ("Other Officers")
as the Trustees may determine.
Section 2. Election, Tenure and Qualifications of Officers.
-----------------------------------------------
The Trustees shall elect the officers of the Trust. Each officer
elected by the Trustees shall hold office until his or her successor shall have
been elected and qualified or until his or her earlier death, inability to
serve, or resignation. Any person may hold one or more offices, except that the
Chairman and the Secretary may not be the same individual. A person who holds
more than one office in the Trust may not act in more than one capacity to
execute, acknowledge, or verify an instrument required by law to be executed,
acknowledged, or verified by more than one officer. No officer of the Trust need
be a Trustee or Holder.
Section 3. Vacancies and Newly Created Offices.
-----------------------------------
Whenever a vacancy shall occur in any office or if any new office is
created, the Trustees may fill such vacancy or new office.
Section 4. Removal and Resignation.
-----------------------
Officers serve at the pleasure of the Trustees and may be removed at
any time with or without cause. The Trustees may delegate this power to the
President with respect to any Other Officer. Such removal shall be without
prejudice to the contract rights, if any, of the person so removed. Any officer
may resign from office at any time by delivering a written resignation to the
Trustees or the President. Unless otherwise specified therein, such resignation
shall take effect upon delivery.
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Section 5. President.
---------
The President shall be the chief executive officer of the Trust.
Subject to the direction of the Trustees, the President shall have general
charge, supervision and control over the Trust's business affairs and shall be
responsible for the management thereof and the execution of policies established
by the Trustees. The President shall preside at any Holders' meetings and at all
meetings of the Trustees. Except as the Trustees may otherwise order, the
President shall have the power to grant, issue, execute or sign such powers of
attorney, proxies, agreements or other documents. The President also shall have
the power to employ attorneys, accountants and other advisers and agents for the
Trust. The President shall exercise such other powers and perform such other
duties as the Trustees may assign to the President.
Section 6. Vice President(s).
-----------------
The Vice President(s) shall have such powers and perform such duties as
the Trustees or the President may determine. At the request or in the absence or
disability of the President, the Vice President(s) shall perform all the duties
of the President and, when so acting, shall have all the powers of the
President.
Section 7. Treasurer and Assistant Treasurer(s).
------------------------------------
The Treasurer shall be the principal financial and accounting officer
of the Trust. The Treasurer shall have general charge of the finances and books
of the Trust, and shall report to the Trustees annually regarding the financial
condition of each Series as soon as possible after the close of such Series'
fiscal year. The Treasurer shall be responsible for the delivery of all funds
and securities of the Trust to such company as the Trustees shall retain as
Custodian. The Treasurer shall furnish such reports concerning the financial
condition of the Trust as the Trustees may request. The Treasurer shall perform
all acts incidental to the office of Treasurer, subject to the Trustees'
supervision, and shall perform such additional duties as the Trustees may
designate.
Any Assistant Treasurer may perform such duties of the Treasurer as the
Trustees or the Treasurer may assign, and, in the absence of the Treasurer, may
perform all the duties of the Treasurer.
Section 8. Secretary and Assistant Secretaries.
-----------------------------------
The Secretary shall record all votes and proceedings of the meetings of
Trustees and Holders in books to be kept for that purpose. The Secretary shall
be responsible for giving and serving notices of the Trust. The Secretary shall
have custody of any seal of the Trust and shall be responsible for the records
of the Trust, including the register of Interests and such other books and
documents as may be required by the Trustees or by law. The Secretary shall
perform all acts incidental to the office of Secretary, subject to the
supervision of the Trustees, and shall perform such additional duties as the
Trustees may designate.
Any Assistant Secretary may perform such duties of the Secretary as the
Trustees or the Secretary may assign, and, in the absence of the Secretary, may
perform all the duties of the Secretary.
Section 9. Compensation of Officers.
------------------------
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Each officer may receive such compensation from the Trust for services
and reimbursement for expenses as the Trustees may determine.
Section 10. Surety Bond.
-----------
The Trustees may require any officer or agent of the Trust to execute a
bond (including, without limitation, any bond required by the Investment Company
Act of 1940, as amended ("1940 Act") and the rules and regulations of the
Securities and Exchange Commission ("Commission") to the Trust in such sum and
with such surety or sureties as the Trustees may determine, conditioned upon the
faithful performance of his or her duties to the Trust, including responsibility
for negligence and for the accounting of any of the Trust's property, funds or
securities that may come into his or her hands.
ARTICLE V
MEETINGS OF HOLDERS
Section 1. No Annual Meetings.
------------------
There shall be no annual meeting of Holders, unless required by law.
Section 2. Special Meetings.
----------------
The Secretary shall call a special meeting of Holders of any Series or
Class whenever ordered by the Trustees.
The Secretary also shall call a special meeting of Holders of any
Series or Class upon the written request of Holders owning at least ten percent
of the Outstanding Interests of such Series or Class entitled to vote at such
meeting; provided, that (1) such request shall state the purposes of such
meeting and the matters proposed to be acted on, and (2) the Holders requesting
such meeting shall have paid to the Trust the reasonably estimated cost of
preparing and mailing the notice thereof, which the Secretary shall determine
and specify to such Holders. If the Secretary fails for more than thirty days to
call a special meeting when required to do so, the Trustees or the Holders
requesting such a meeting may, in the name of the Secretary, call the meeting by
giving the required notice. The Secretary shall not call a special meeting upon
the request of Holders of any Series or Class to consider any matter that is
substantially the same as a matter voted upon at any special meeting of Holders
of such Series or Class held during the preceding twelve months, unless
requested by the holders of a majority of the Outstanding Interests of such
Series or Class entitled to be voted at such meeting.
A special meeting of Holders of any Series or Class shall be held at
such time and place as is determined by the Trustees and stated in the notice of
that meeting.
Section 3. Notice of Meetings; Waiver.
--------------------------
The Secretary shall call a special meeting of Holders by giving written
notice of the place, date, time, and purposes of that meeting at least fifteen
days before the date of such meeting. The Secretary may deliver or mail, postage
prepaid, the written notice of any meeting to each Holder entitled to vote at
such meeting. If mailed, notice shall be deemed to be given when deposited in
the United States mail directed to the Holder at his or her address as it
appears on the records of the Trust.
Section 4. Adjourned Meetings.
------------------
A meeting of Holders may be adjourned one or more times for any reason,
4
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including the failure of the presence of a quorum to attending the meeting. No
notice of adjournment of a meeting to another time or place need be given to
Holders if such time and place are announced at the meeting at which the
adjournment is taken or reasonable notice is given to persons present at the
meeting, and if the adjourned meeting is held within a reasonable time after the
date set for the original meeting. Any business that might have been transacted
at the original meeting may be transacted at any adjourned meeting. If after the
adjournment a new record date is fixed for the adjourned meeting, the Secretary
shall give notice of the adjourned meeting to Holders of record entitled to vote
at such meeting. Any irregularities in the notice of any meeting or the
nonreceipt of any such notice by any of the Holders shall not invalidate any
action otherwise properly taken at any such meeting.
Section 5. Validity of Proxies.
-------------------
At all meetings of Holders, every Holder of record entitled to vote
thereat shall be entitled to vote either in person or by proxy, which term shall
include proxies provided through written, electronic, telephonic, computerized,
facsimile, telecommunications, telex or oral communication or by any other form
of communication, each pursuant to such voting procedures and through such
systems as are authorized by the Trustees or one or more executive officers of
the Trust. Unless the proxy provides otherwise, it shall not be valid for more
than eleven months prior to the date of the meeting. All proxies shall be
delivered to the Secretary or other person responsible for recording the
proceedings before being voted. A proxy with respect to Interests held in the
name of two or more persons shall be valid if executed by one of them unless at
or prior to exercise of such proxy the Trust receives a specific written notice
to the contrary from any one of them. Unless otherwise specifically limited by
their terms, proxies shall entitle the Holder to vote at any adjournment of a
meeting of Holders. A proxy purporting to be executed by or on behalf of a
Holder shall be deemed valid unless challenged at or prior to its exercise, and
the burden of proving invalidity shall rest on the challenger. At every meeting
of Holders, unless the voting is conducted by inspectors, the chairman of the
meeting shall decide all questions concerning the qualifications of voters, the
validity of proxies, and the acceptance or rejection of votes. Subject to the
provisions of the Delaware Business Trust Act, the Trust Instrument, or these
Amended and Restated By-Laws, the General Corporation Law of the State of
Delaware relating to proxies, and judicial interpretations thereunder shall
govern all matters concerning the giving, voting or validity of proxies, as if
the Trust were a Delaware corporation and the Holders were shareholders of a
Delaware corporation.
Section 6. Record Date.
-----------
The Trustees may fix in advance a date up to ninety days prior to the
date of any meeting of Holders as a record date for the determination of the
Holders entitled to notice of, and to vote at, any such meeting. The Holders of
record entitled to vote at a meeting of Holders shall be deemed the Holders of
record at any meeting reconvened after one or more adjournments, unless the
Trustees have fixed a new record date. If the meeting of Holders is adjourned
for more than sixty days after the original date, the Trustees shall establish a
new record date.
Section 7. Action Without a Meeting.
------------------------
Holders may take any action without a meeting if a majority (or such
greater amount as may be required by law) of the Outstanding Interests entitled
to vote on the matter consent to the action in writing and such written consents
are filed with the records of Holders' meetings. Such written consent shall be
treated for all purposes as a vote at a meeting of the Holders.
5
<PAGE>
ARTICLE VI
BENEFICIAL INTERESTS
Section 1. No Certificates.
---------------
Neither the Trust nor any Series or Class shall issue certificates
certifying the ownership of Interests, unless the Trustees may otherwise
specifically authorize such certificates.
Section 2. Transfer of Interests.
---------------------
Interests shall be transferable only by a transfer recorded on the
books of the Trust by the Holder of record in person or by his or her duly
authorized attorney or legal representative. Interests may be freely transferred
and the Trustees may, from time to time, adopt rules and regulations regarding
the method of transfer of such Interests.
ARTICLE VII
CUSTODY OF SECURITIES
Section 1. Employment of a Custodian.
-------------------------
The Trust shall at all times place and maintain all cash, securities
and other assets of the Trust and of each Series in the custody of a custodian
meeting the requirements set forth in Article VII, Section 4 of the Trust
Instrument ("Custodian"). The Custodian shall be appointed from time to time by
the Board of Trustees, who shall determine its remuneration.
Section 2. Termination of Custodian Agreement.
----------------------------------
Upon termination of any Custodian Agreement or the inability of the
Custodian to continue to serve as custodian, in either case with respect to the
Trust or any Series, the Board of Trustees shall (a) use its best efforts to
obtain a successor Custodian; and (b) require that the cash, securities and
other assets owned by the Trust or any Series be delivered directly to the
successor Custodian.
Section 3. Other Arrangements.
------------------
The Trust may make such other arrangements for the custody of its
assets (including deposit arrangements) as may be required by any applicable
law, rule or regulation.
ARTICLE VIII
FISCAL YEAR AND ACCOUNTANT
Section 1. Fiscal Year.
-----------
The fiscal year of the Trust shall end on December 31st.
Section 2. Accountant.
----------
The Trust shall employ independent certified public accountants as its
Accountant to examine the accounts of the Trust and to sign and certify
financial statements filed by the Trust. The Accountant's certificates and
reports shall be addressed both to the Trustees and to the Holders. A majority
of the Disinterested Trustees shall select the Accountant at any meeting held
within ninety days before or after the beginning of the fiscal year of the
6
<PAGE>
Trust, acting upon the recommendation of the Audit Committee. The employment of
the Accountant shall be conditioned upon the right of the Trust to terminate
such employment without any penalty by vote of a Majority Holder Vote at any
meeting of Holders called for that purpose.
ARTICLE IX
AMENDMENTS
Section 1. General.
-------
Except as provided in Section 2 of this Article, these Amended and
Restated By-Laws may be amended by the Trustees, or by the affirmative vote of a
majority of the Outstanding Interests entitled to vote at any meeting.
Section 2. By Holders Only.
---------------
After the issue of any Interests, this Article may only be amended by
the affirmative vote of the holders of the lesser of (a) at least two-thirds of
the Outstanding Interests present and entitled to vote at any meeting, or (b) at
least fifty percent of the Outstanding Interests.
ARTICLE X
NET ASSET VALUE
The term "Net Asset Value" of any Series shall mean that amount by
which the assets belonging to that Series exceed its liabilities, all as
determined by or under the direction of the Trustees. Net Asset Value per
Interest shall be determined separately for each Series and each Class and shall
be determined on such days and at such times as the Trustees may determine. The
Trustees shall make such determination with respect to securities for which
market quotations are readily available, at the market value of such securities,
and with respect to other securities and assets, at the fair value as determined
in good faith by the Trustees; provided, however, that the Trustees, without
Holder approval, may alter the method of appraising portfolio securities insofar
as permitted under the 1940 Act and the rules, regulations and interpretations
thereof promulgated or issued by the Commission or insofar as permitted by any
order of the Commission applicable to the Series or to the Class. The Trustees
may delegate any of their powers and duties under this Article X with respect to
appraisal of assets and liabilities. At any time the Trustees may cause the Net
Asset Value per Interest last determined to be determined again in a similar
manner and may fix the time when such redetermined values shall become
effective.
ARTICLE XI
MISCELLANEOUS
Section 1. Inspection of Books.
-------------------
The Board of Trustees shall from time to time determine whether and to
what extent, and at what times and places, and under what conditions the
accounts and books of the Trust or any Series or Class shall be open to the
inspection of Holders. No Holder shall have any right to inspect any account or
book or document of the Trust except as conferred by law or otherwise by the
Board of Trustees or by resolution of Holders.
Section 2. Severability.
------------
The provisions of these Amended and Restated By-Laws are severable. If
the Board of Trustees determine, with the advice of counsel, that any provision
hereof conflicts with the 1940 Act, the regulated investment company provisions
7
<PAGE>
of the Internal Revenue Code or with other applicable laws and regulations, the
conflicting provision shall be deemed never to have constituted a part of these
Amended and Restated By-Laws; provided, however, that such determination shall
not affect any of the remaining provisions of these Amended and Restated By-Laws
or render invalid or improper any action taken or omitted prior to such
determination. If any provision hereof shall be held invalid or unenforceable in
any jurisdiction, such invalidity or unenforceability shall attach only to such
provision only in such jurisdiction and shall not affect any other provision of
these Amended and Restated By-Laws.
Section 3. Headings.
--------
Headings are placed in these Amended and Restated By-Laws for
convenience of reference only and in case of any conflict, the text of these
Amended and Restated By-Laws rather than the headings shall control.
8
FLOATING RATE PORTFOLIO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
BETWEEN
FLOATING RATE PORTFOLIO
AND
A I M ADVISORS, INC.
Contract made as of May 29, 1998, between Floating Rate Portfolio
("Portfolio"), a Delaware business trust, and A I M Advisors, Inc. (the
"Adviser"), a Delaware corporation.
WHEREAS the Portfolio is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as a closed-end management investment company;
and
WHEREAS the Portfolio desires to retain Adviser as investment manager
and administrator to furnish certain administrative, investment advisory and
portfolio management services to the Portfolio, and Adviser is willing to
furnish such services;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Portfolio hereby appoints Adviser as investment manager
and administrator for the period and on the term set forth in this Contract.
Adviser accepts such appointment and agrees to render the services herein set
forth, for the compensation herein provided.
2. DUTIES AS INVESTMENT MANAGER.
(a) Subject to the supervision of the Portfolio's Board of Trustees
("Board"), Adviser will provide a continuous investment program for the
Portfolio, including investment research and management with respect to all
securities and investments and cash equivalents of the Portfolio. Adviser will
determine from time to time what securities and other investments will be
purchased, retained or sold by the Portfolio, and the brokers and dealers
through whom trades will be executed.
(b) Adviser agrees that in placing orders with brokers and dealers it will
attempt to obtain the best net results in terms of price and execution.
Consistent with this obligation Adviser may, in its discretion, purchase and
sell portfolio securities to and from brokers and dealers who sell shares of the
Portfolio or provide the Portfolio's or Adviser's other clients with research,
analysis, advice and similar services. Adviser may pay to brokers and dealers,
in return for research and analysis, a higher commission or spread than may be
charged by other brokers and dealers, subject to Adviser's determining in good
faith that such commission or spread is reasonable in terms either of the
particular transaction or of the overall responsibility of Adviser to the
Portfolio and its other clients and that the total commissions or spreads paid
by the Portfolio will be reasonable in relation to the benefits to the Portfolio
<PAGE>
over the long term. In no instance will portfolio securities be purchased from
or sold to Adviser or any affiliated person thereof except in accordance with
the federal securities laws and the rules and regulations thereunder and any
exemptive orders currently in effect. Whenever Adviser simultaneously places
orders to purchase or sell the same security on behalf of the Portfolio and one
or more other accounts advised by Adviser, such orders will be allocated as to
price and amount among all such accounts in a manner believed to be equitable to
each account. The Portfolio recognizes that in some-cases. this procedure may
adversely affect the results obtained for the Portfolio.
(c) Adviser will oversee the maintenance of all books and records with
respect to the securities transactions of the Portfolio, and will furnish the
Board with such periodic and special reports as the Board reasonably may
request. In compliance with the requirements of Rule 31a-3 under the 1940 Act,
Adviser hereby agrees that all records which it maintains for the Portfolio are
the property of the Portfolio, agrees to preserve for the periods prescribed by
Rule 31a-2 under the 1940 Act any records which it maintains for the Portfolio
and which are required to be maintained by Rule 31a-1 under the 1940 Act, and
further agrees to surrender promptly to the Portfolio any records which it
maintains for the Portfolio upon request by the Portfolio.
3. DUTIES AS ADMINISTRATOR. Adviser will administer the affairs of the
Portfolio subject to the supervision of the Board and the following
understandings:
(a) Adviser will supervise all aspects of the operations of the Portfolio,
including the oversight of transfer agency and custodial services, except as
hereinafter set forth; provided, however, that nothing herein contained shall be
deemed to relieve or deprive the Board of its responsibility for control of the
conduct of the affairs of the Portfolio.
(b) At Adviser's expense, Adviser will provide the Portfolio with such
corporate, administrative and clerical personnel (including officers of the
Portfolio) and services as are reasonably deemed necessary or advisable by the
Board.
(c) Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of the Portfolio's proxy
material, tax returns and required reports with or to the Portfolio's
shareholders, the Securities and Exchange Commission and other appropriate
federal or state regulatory authorities.
(d) Adviser will provide the Portfolio with, or obtain for it, adequate
office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
4. FURTHER DUTIES. In all matters relating to the performance of this Contract,
Adviser will act in conformity with the Agreement and Declaration of Trust,
By-Laws and Registration Statement of the Portfolio and with the instructions
and directions of the Board and will comply with the requirements of the 1940
Act, the rules thereunder, and all other applicable federal and state laws and
regulations.
5. DELEGATION OF ADVISER'S DUTIES AS INVESTMENT MANAGER AND ADMINISTRATOR. With
respect to the Portfolio, Adviser may enter into one or more contracts
("Sub-Advisory or Sub-Administration Contract") with a Sub-Adviser or
<PAGE>
Sub-Administrator in which Adviser delegates to such sub-adviser or
sub-administrator the performance of any or-all of the services specified in
Paragraphs 2 and 3 of this Contract, provided that: (i) each Sub-Advisory and
Sub-Administration Contract imposes on the sub-adviser or sub-administrator
bound thereby all the duties and conditions to which Adviser is subject with
respect to the services under Paragraphs 2, 3 and 4 of this Contract; (ii) each
Sub-Advisory and Sub-Administration Contract meets all requirements of the 1940
Act and rules thereunder; and (iii) Adviser shall not enter into a Sub-Advisory
or Sub-Administration Contract unless it is approved by the Board prior to
implementation.
6. SERVICES-NOT EXCLUSIVE. The services furnished by Adviser hereunder are
not to be deemed exclusive and Adviser shall be free to furnish similar services
to others so long as its services under this Contract are not impaired thereby.
Nothing in this Contract shall limit or restrict the right of any director,
officer or employee of Adviser, who may also be a Trustee, officer or employee
of the Portfolio, to engage in any other business or to devote his or her time
and attention in part to the management or other aspects of any other business,
whether of a similar nature or a dissimilar nature.
7. EXPENSES.
(a) During the term of this Contract, the Portfolio will bear all
expenses, not specifically assumed by Adviser.
(b) Expenses borne by the Portfolio will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Portfolio and any losses incurred in
connection therein; (ii) fees payable to and expenses incurred on behalf of the
Portfolio by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Portfolio; (v) costs incurred in
connection with the issuance, sale or repurchase of the Portfolio's shares of
beneficial interest; (vi) filing fees and expenses relating to the registration
and qualification for the Portfolio's shares and the Portfolio under federal
and/or state securities laws and maintaining such registrations and
qualifications; (vii) expenses of preparing and filing reports and other
documents with governmental and regulatory agencies; (viii) fees and salaries
payable to the Portfolio's Trustees who are not parties to this Contract or
interested persons of any such party ("Independent Trustees"); (ix) all expenses
incurred in connection with the Independent Trustees' services, including travel
expenses; (x) taxes (including any income or franchise taxes) and governmental
fees; (xi) costs of any liability, uncollectible items of deposit and other
insurance and fidelity bonds; (xii) any costs, expenses or losses arising out of
a liability of or claim for damages or other relief asserted against the
Portfolio for violation of any law; (xiii) interest charges; (xiv) legal,
accounting and auditing expenses, including legal fees of special counsel for
the Independent Trustees; (xv) charges of custodians, transfer agents, pricing
agents and other agents; (xvi) costs of preparing share certificates; (xvii)
expenses of setting in type, printing and mailing prospectuses and supplements
thereto, reports, notices and proxy materials for existing shareholders; (xviii)
expenses of obtaining and maintaining securities exchange listing of the
<PAGE>
Portfolio's shares of beneficial interest; (xix) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Portfolio is a party and the expenses the Portfolio may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Portfolio; (xx) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xxi) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xxii) the cost of investment company literature and other publications
provided by the portfolio to its Trustees and officers; and (xxiii) costs of
mailing, stationery and communications, equipment.
(c) Adviser will assume the cost of any compensation for services provided
to the Portfolio received by the officers of the Portfolio and by the Trustees
of the Portfolio who are not Independent Trustees.
(d) The payment or assumption by Adviser of any expense of the Portfolio
that Adviser is not required by this Contract to pay or assume shall not
obligate Adviser to pay or assume the same or any similar expense of the
Portfolio on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided to the Portfolio under this Contract, the
Portfolio shall pay the Adviser an annual fee, payable monthly, based upon the
average daily net assets of the Portfolio as forth in Appendix A attached
hereto. Such compensation shall be paid solely from the assets of the Portfolio.
(b) The fee shall be computed weekly and paid monthly to Adviser on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
9. LIMITATION OF LIABILITY OF ADVISER AND INDEMNIFICATION. Adviser shall not
be liable and the Portfolio shall indemnify Adviser and its directors, officers
and employees, for any Costs or liabilities arising from any error of judgment
or mistake of law or any loss suffered by the Portfolio in connection with the
matters to which this Contract relates except a loss resulting from willful
misfeasance, bad faith or gross negligence on the part of Adviser in the
performance by Adviser of its duties or from reckless disregard by Adviser of
its obligations and duties under this Contract. Any person, even though also an
officer, partner, employee, or agent of Adviser, who may be or become an
officer, Trustee, employee or agent of the Portfolio shall be deemed, when
rendering services to the Portfolio or acting with respect to any business of
the Portfolio, to be rendering such service to or acting solely for the
Portfolio and not as an officer, partner, employee, or agent or one under the
control or direction of Adviser even though paid by it.
<PAGE>
10. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date here above written,
provided that this Contract shall not take effect with respect to the Portfolio
unless it has first been approved (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Portfolio's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, with respect to the Portfolio this Contract shall continue
automatically for successive periods not to exceed twelve months each, provided
that such continuance is specifically approved at least annually (i) by a vote
of a majority of the Independent Trustees, cast in person at a meeting called
for the purpose of voting on such approval, and (ii) by the Board or by vote of
a majority of the outstanding voting securities of the Portfolio.
(c) Notwithstanding the foregoing, with respect to the Portfolio this
Contract may be terminated at any time, without the payment of any penalty, by
vote of the Board or by a vote of a majority of the outstanding voting
securities of the Portfolio on sixty days' written notice, to Adviser or by
Adviser at any time, without the payment of any penalty, on sixty days' written
notice to the Portfolio. This Contract will automatically terminate in the event
of its assignment.
11. AMENDMENT OF THIS CONTRACT. No provision of this Contract may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Portfolio's outstanding voting
securities, when required by the 1940 Act.
12. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the, State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. LICENSE AGREEMENT. The Portfolio shall have the non-exclusive right to-use
the name "AIM" to designate the Portfolio or any current or future series of
shares only so long as A I M Advisors, Inc. serves as investment manager or
adviser to the Portfolio with respect to such series of shares.
14. LIMITATION OF SHAREHOLDER LIABILITY. It is expressly agreed that the
obligations of the Portfolio hereunder shall not be binding upon any of the
Trustees, shareholders, nominees, officers, agents or employees of the Portfolio
personally, but shall only bind the assets and property of the Portfolio, as
provided in the Portfolio's Agreement and Declaration of Trust. The execution
and delivery of this Contract have been authorized by the Trustees of the
Portfolio and shareholders of the Portfolio, and this Contract has been executed
and delivered by an authorized ofecer of the Portfolio acting as such; neither
such authorization by such Trustees and shareholders nor such execution and
<PAGE>
delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, but shall
bind only the assets and property of the Portfolio, as provided in the
Portfolio's Agreement and Declaration of Trust.
15. MISCELLANEOUS. The captions in this Contract are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. If any provision of this Contract
shall be held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Contract shall not be affected thereby. This Contract
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors. As used in this Contract, the terms "majority of
the outstanding voting securities," "interested person," assignment," "broker,"
"dealer," "investment adviser," "national securities exchange," "net assets,"
"prospectus," "sale," "sell" and "security" shall have the same meaning as such
terms have in the 1940 Act, subject to such exemption as may be granted by the
Securities and Exchange Commission by any rule, regulation or order. Where the
effect of a requirement of the 1940 Act reflected in any provision of this
Contract is made less restrictive by a rule, regulation or order of the
Securities and Exchange Commission, whether of special or general application,
such provision shall be deemed to incorporate the effect of such rule,
regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
Attest: FLOATING RATE PORTFOLIO
By: /s/ Michael A. Silver By: /s/ Helge K. Lee
--------------------- -----------------
Name: Michael A. Silver Name: Helge K. Lee
Title: Assistant Secretary Title: Vice President and Secretary
Attest: A I M ADVISORS, INC.
By: /s/ Kathleen J. Pflueger By: /s/ Carol F. Relihan
------------------------ --------------------
Name: Kathleen J. Pflueger Name: Carol F. Relihan
Title: Assistant Secretary Title: Senior Vice President
<PAGE>
APPENDIX A
TO
INVESTMENT MANAGEMENT AND ADMINISTRATION CONTRACT
OF
FLOATING RATE PORTFOLIO
The Portfolio shall pay the Adviser, out of the assets of the Portfolio,
as full compensation for all services rendered and all facilities furnished
hereunder, a management fee of 0.95% of the Portfolio's average daily net assets
for the calendar year, computed in the manner used for the determination of the
Portfolio's net asset value.
FLOATING RATE PORTFOLIO
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
BETWEEN
A I M ADVISORS, INC.
AND
INVESCO SENIOR SECURED MANAGEMENT, INC.
Contract made as of May 29, 1998, between A I M Advisors, Inc., a
Delaware corporation ("Adviser"), and Invesco Senior Secured Management, Inc., a
New York corporation ("Sub-Adviser").
WHEREAS Adviser has entered into an Investment Management and
Administration, Contract with Floating Rate Portfolio ("Portfolio"), a
closed-end management investment company registered under the Investment Company
Act of 1940, as amended ("1940 Act"); and
WHEREAS Adviser desires to retain Sub-Adviser as sub-adviser and
sub-administrator to furnish certain advisory and administrative services to the
Portfolio, and Sub-Adviser is willing to furnish such services;
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Adviser hereby appoints Sub-Adviser as sub-adviser and
sub-administrator of the Portfolio for the period and on the terms set forth in
this Contract. Sub-Adviser accepts such appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision of the Portfolio's Board of Trustees
("Board") and Adviser, the Sub-Adviser will provide a continuous investment
program for the Portfolio, including investment research and management, with
respect to all securities and investments and cash equivalents of the Portfolio.
The Sub-Adviser will determine from time to time what securities and investments
will be purchased, retained or sold by the Portfolio, and the brokers and
dealers through whom trades will be executed.
(b) The Sub-Adviser agrees that, in placing orders with brokers and
dealers, it will attempt to obtain the best net results in terms of price and
execution. Consistent with this obligation, the Sub-Adviser may, in its
discretion, purchase and sell portfolio securities from and to brokers and
dealers who provide the Portfolio's, Adviser's, or Sub-Adviser's other clients
with research, analysis, advice and similar services. The Sub-Adviser may pay,
in return for such services research and analysis, a higher commission or spread
<PAGE>
than may be charged by other brokers and dealers, subject to the Sub-Adviser's
determining in good faith that such commission or spread is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Sub-Adviser to the Portfolio and its other clients and that the total
commissions or spreads paid by the Portfolio will be reasonable in relation to
the benefits to the Portfolio over the long term. In no instance will Portfolio
securities be purchased from or sold to the Sub-Adviser, or any affiliated
person thereof, except in accordance with the federal securities laws and the
rules and regulations thereunder and any exemptive orders currently in effect.
Whenever the Sub-Adviser simultaneously places orders to purchase or sell the
same security on behalf of the Portfolio and one or more other accounts advised
by the Sub-Adviser, such orders will be allocated as to price and amount among
all such accounts in a manner believed to be equitable to each account. The
Portfolio recognizes that in some cases this procedure may adversely affect the
results obtained for the Portfolio.
(c) The Sub-Adviser will maintain all books and records with respect to
the securities transactions of the Portfolio, and will furnish the Board and
Adviser with such periodic and special reports as the Board or Adviser
reasonably may request. In compliance with the requirements of Rule 31a-3 under
the 1940 Act, the Sub-Adviser hereby agrees that all records which it maintains
for the Portfolio are the property of the Portfolio, agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act any records which it
maintains for the Portfolio and which are required to be maintained by Rule
31a-1 under the 1940 Act, and further agrees to surrender promptly to the
Portfolio any records which it maintains for the Portfolio upon request by the
Portfolio.
3. DUTIES AS SUB-ADMINISTRATOR. Sub-Adviser will administer the affairs of
the Portfolio subject to the supervision of the Portfolio's Board of Trustees
("Board"), the Adviser, and the following understandings:
(a) Sub-Adviser will supervise all aspects of the operations of the
Portfolio, including the oversight of transfer agency and custodial services
except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for control of the conduct of the affairs of the Portfolio.
(b) At Sub-Adviser's expense, Sub-Adviser will provide the Portfolio with
such corporate, administrative and clerical personnel (including officers of the
Portfolio) and services as are reasonably deemed necessary or advisable by the
Board.
(c) Sub-Adviser will arrange, but not pay, for the periodic preparation,
updating, filing and dissemination (as applicable) of the Portfolio's
prospectus, proxy material, tax returns and required reports with or to the
Portfolio's shareholders, the Securities and Exchange Commission and other
appropriate federal or state regulatory authorities.
(d) Sub-Adviser will provide the Portfolio with, or obtain for it,
adequate office space and all necessary office equipment and services, including
telephone service, heat, utilities, stationery supplies and similar items.
<PAGE>
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Sub-Adviser will act in conformity with the Agreement and Declaration
of Trust, By-Laws and Registration Statement of the Portfolio and with the
instructions and directions of the Board and will comply with the requirements
of the 1940 Act, the rules thereunder, and all other applicable federal and
state laws and regulations.
5. DELEGATION OF SUB-ADVISER'S DUTIES AS SUB-ADVISER AND
SUB-ADMINISTRATOR. With respect to the Portfolio, Sub-Adviser may enter into one
or more contracts ("Sub-Sub-Advisory or Sub-Sub-Administration Contracts") with
a sub-sub-adviser or sub-sub-administrator in which Sub-Adviser delegates to
such sub-sub-adviser or sub-sub-administrator the performance of any or all of
the services specified in Paragraphs 2 and 3 of this Contract, provided that:
(i) each Sub-Sub-Advisory and Sub-Sub-Administration Contract imposes on the
sub-sub-adviser or sub-sub-administrator bound thereby all the duties and
conditions to which Sub-Adviser is subject with respect to the services under
Paragraphs 2, 3 and 4 of this Contract; (ii) each Sub-Sub-Advisory and
Sub-Sub-Administration Contract meets all requirements of the 1940 Act and rules
thereunder, and (iii) Adviser shall not enter into a Sub-Sub-Advisory or
Sub-Sub-Administration Contract unless it is approved by the Board prior to
implementation.
6. SERVICES NOT EXCLUSIVE. The services furnished by Sub-Adviser hereunder
are not to be deemed exclusive and Sub-Adviser shall be free to furnish similar
services to others so long as its services under this Contract are not impaired
thereby. Nothing in this Contract shall limit or restrict the right of any
director, officer or employee of Sub-Adviser, who may also be a Trustee, officer
or employee of the Portfolio, to engage in any other business or to devote his
or her time and attention in part to the management or other aspects of any
other business, whether of a similar nature or a dissimilar nature.
7. EXPENSES.
(a) During the term of this Contract, the Portfolio will bear all expenses
not specifically assumed by Sub-Adviser.
(b) Expenses borne by the Portfolio will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Portfolio and any losses incurred in
connection therein; (ii) fees payable to and expenses incurred on behalf of the
Portfolio by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Portfolio; (v) costs incurred in
connection with the issuance, sale or repurchase of the Portfolio's shares of
beneficial interest; (vi) filing fees and expenses relating to the registration
and qualification for the Portfolio's shares and the Portfolio under federal
and/or state securities laws and maintaining such registrations and
qualifications; (vii) expenses of preparing and filing reports and other
documents with government and regulatory agencies; (viii) fees and salaries
payable to the Portfolio's Trustees who are not parties to this Contract or
interested persons of any such party ("Independent Trustees"); (ix) all expenses
incurred in connection with the Independent Trustees' services, including travel
expenses; (x) taxes (including any income or franchise taxes) and government
fees; (xi) costs of any liability, uncollectible items of deposit and other
<PAGE>
insurance and fidelity bonds; (xii) any costs, expenses or losses arising out of
a liability of or claim for damages or other relief asserted against the
Portfolio for violation of any law; (xiii) interest charges; (xiv) legal,
accounting and auditing expenses, including legal fees of special counsel for
the Independent Trustees; (xv) charges of custodians, transfer agents, pricing
agents and other agents; (xvi) costs of preparing share certificates; (xvii)
expenses of setting in type, printing and mailing prospectuses and supplements
thereto, reports, notices and proxy materials for existing shareholders; (xviii)
expenses of obtaining and maintaining securities exchange listing of the
Portfolio's shares of beneficial interest; (xix) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Portfolio is a party and the expenses the Portfolio may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Portfolio; (xx) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xxi) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof, (xxii) the cost of investment company literature and other publications
provided by the Portfolio to its Trustees and officers; and (xxiii) costs of
mailing, stationery and communications equipment.
(c) Sub-Adviser will assume the cost of any compensation for services
provided to the Portfolio received by the officers of the Portfolio and by the
Trustees of the Portfolio who are not Independent Trustees.
(d) The payment or assumption by Sub-Adviser of any expense of the
Portfolio that Sub-Adviser is not required by this Contract to pay or assume
shall not obligate Sub-Adviser to pay or assume the same or any similar expense
of the Portfolio on any subsequent occasion.
8. COMPENSATION.
(a) For the services provided to the Portfolio under this Contract,
Adviser will pay Sub-Adviser a fee, computed daily and paid monthly, as set
forth in Appendix A hereto.
(b) The fee shall be computed weekly and paid monthly to Sub-Adviser on or
before the last business day of the next succeeding calendar month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
9. LIMITATION OF LIABILITY OF SUB-ADVISER AND INDEMNIFICATION. Sub-Adviser
shall not be liable for any costs or liabilities arising from any error of
judgment or mistake of law or any loss suffered by the Portfolio in connection
with the matters to which this Contract relates except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of Sub-Adviser in
the performance by Sub-Adviser of its duties or from reckless disregard by
<PAGE>
Sub-Adviser of its obligations and duties under this Contract. Any person, even
though also an officer, partner, employee, or agent of Sub-Adviser, who may be
or become a Trustee, officer, employee or agent of the Portfolio, shall be
deemed, when rendering services to the Portfolio or acting with respect to any
business of the Portfolio to be rendering such service to or acting solely for
the Portfolio and not as an officer, partner, employee, or agent or one under
the control or direction of Sub-Adviser even though paid by it.
10. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect unless it has first been
approved (i) by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and (ii) by vote
of a majority of the Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods
not to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on sixty days'
written notice to Sub-Adviser or by Sub-Adviser at any time, without the payment
of any penalty, on sixty days' written notice to the Portfolio. This Contract
will automatically terminate in the event of its assignment.
11. AMENDMENT. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Portfolio's outstanding voting
securities, when required by the 1940 Act.
12. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
13. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall be held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors. As used in this Contract,
<PAGE>
the terms "majority of the outstanding voting securities," "Interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
A I M ADVISORS, INC.
Attest:/s/ Kathleen J. Pflueger By: /s/ Carol F. Relihan
------------------------ --------------------
Name: Kathleen J. Pflueger Name: Carol F. Relihan
Title: Assistant Secretary Title: Senior Vice President
& Secretary
INVESCO SENIOR SECURED
MANAGEMENT, INC.
Attest: /s/ Michael A. Silver By: /s/Anthony Clemente
--------------------- -------------------
Michael A. Silver Name: Anthony Clemente
Title: Managing Director
<PAGE>
APPENDIX A
TO
SUB-ADVISORY AND SUB-ADMINISTRATION CONTRACT
The Adviser shall pay the Sub-Adviser, as full compensation for all
services rendered and all facilities furnished hereunder, a sub-advisory fee of
0.48% of the Portfolio's average daily net assets for the calendar year,
computed in the manner used for the determination of the Portfolio's net asset
value.
FLOATING RATE PORTFOLIO
SUB-SUB-ADVISORY AND SUB-SUB-ADMINISTRATION CONTRACT
BETWEEN
INVESCO SENIOR SECURED MANAGEMENT, INC.
AND
INVESCO (NY), INC.
Contract made as of May 29, 1998, between INVESCO Senior Secured
Management, Inc., a New York corporation ("Sub-Adviser"), and INVESCO (NY),
INC., a California corporation ("Secondary Sub-Adviser").
WHEREAS Sub-Adviser has entered into a Sub-Advisory and Sub-Administration
Contract with A I M Advisors, Inc. ("Adviser") with respect to Floating Rate
Portfolio (`Portfolio"), a closed-end management investment company registered
under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS Sub-Adviser desires to retain Secondary Sub-Adviser as
sub-sub-adviser and sub-sub-administrator to furnish certain advisory and
administrative services to the Portfolio, and Secondary Sub-Adviser is willing
to furnish such services;
NOW THEREFORE, in consideration of the promises and the mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. Sub-Adviser hereby appoints Secondary Sub-Adviser as
sub-sub-adviser and sub-sub-administrator of the Portfolio for the period and on
the terms set forth in this Contract. Secondary Sub-Adviser accepts such
appointment and agrees to render the services herein set forth, for the
compensation herein provided.
2. DUTIES AS SUB-SUB-ADVISER.
(a) Subject to the supervision of the Portfolio's Board of Trustees
("Board"), Adviser, and the Sub-Adviser, the Secondary Sub-Adviser will provide
a continuous investment program for the Portfolio, including investment research
and management, for a portion of the investments of the Portfolio to be
determined by the Sub-Adviser (the "Sub-Sub-Advised Assets"). The Secondary
Sub-Adviser will determine from time to time what securities and other
investments will be purchased, retained or sold with respect to the
Sub-Sub-Advised Assets of the Portfolio. The Secondary Sub-Adviser will be
responsible for placing purchase and sell orders for such investments and for
other related transactions. The Secondary Sub-Adviser will provide services
under this Agreement in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's registration statement.
(b) The Secondary Sub-Adviser agrees that in placing orders with brokers
and dealers, it will attempt to obtain the best net result, in terms of price
and execution. Consistent with this obligation, the Secondary Sub-Adviser may,
<PAGE>
in its discretion, purchase and sell portfolio securities from and to brokers
and dealers who provide the Portfolio's, Adviser's, Sub-Adviser's or Secondary
Sub-Adviser's other clients with research, analysis, advice and similar
services. The Secondary Sub-Adviser may pay to brokers and dealers, in return
for such research and analysis services, a higher commission or spread than may
be charged by other brokers and dealers, subject to the Secondary Sub-Adviser
determining in good faith that such commission or spread is reasonable in terms
either of the particular transaction or of the overall responsibility of the
Secondary Sub-Adviser to the Portfolio and its other clients and that the total
commissions or spreads paid by the Portfolio will be reasonable in relation to
the benefits to the Portfolio over the long term. In no instance will Portfolio
securities be purchased from or sold to the Secondary Sub-Adviser, or any
affiliated person thereof, except in accordance with the federal securities laws
and the rules and regulations thereunder and any exemptive orders currently in
effect. Whenever the Secondary Sub-Adviser simultaneously places orders to
purchase or sell the same security on behalf of the Portfolio and one or more
other accounts advised by the Secondary Sub-Adviser, such orders will be
allocated as to price and amount among all such accounts in a manner believed to
be equitable to each account. The Portfolio recognizes that in some cases this
procedure may adversely affect the results obtained for the Portfolio.
(c) The Secondary Sub-Adviser will maintain all books and records with
respect to the securities transactions of the Portfolio, and will furnish the
Board, Adviser, and Sub-Adviser with such periodic and special reports as the
Board, Adviser, or Sub-Adviser reasonably may request. In compliance with the
requirements of Rule 31a-3 under the 1940 Act, the Secondary Sub-Adviser hereby
agrees that all records which it maintains for the Portfolio are the property of
the Portfolio, agrees to preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any records which it maintains for the Portfolio and which are
required to be maintained by Rule 31a-1 under the 1940 Act, and further agrees
to surrender promptly to the Portfolio any records which it maintains for the
Portfolio upon request by the Portfolio.
(d) The Secondary Sub-Adviser will provide the Board, the Adviser, and the
Sub-Adviser on a regular basis with economic and investment analyses and reports
and make available to the Board, the Adviser, and the Sub-Adviser upon request
any economic, statistical and investment services normally available to
institutional or other customers of the Secondary Sub-Adviser.
3. DUTIES AS SUB-SUB-ADMINISTRATOR. Secondary Sub-Adviser will administer
the affairs of the Portfolio subject to the supervision of the Portfolio's Board
of Trustees ("Board"), the Adviser, the Sub-Adviser, and the following
understandings:
(a) Secondary Sub-Adviser will supervise all aspects of the operations of
the Portfolio, including the oversight of transfer agency and custodial services
except as hereinafter set forth; provided, however, that nothing herein
contained shall be deemed to relieve or deprive the Board of its responsibility
for control of the conduct of the affairs of the Portfolio.
(b) At Secondary Sub-Adviser's expense, Secondary Sub-Adviser will provide
the Portfolio with such corporate, administrative and clerical personnel
(including officers of the Portfolio) and services as are reasonably deemed
necessary or advisable by the Board.
<PAGE>
(c) Secondary Sub-Adviser will arrange, but not pay, for the periodic
preparation, updating, filing and dissemination (as applicable) of the
Portfolio's prospectus, proxy material, tax returns and required reports with or
to the Portfolio's shareholders, the Securities and Exchange Commission and
other appropriate federal or state regulatory authorities.
(d) Secondary Sub-Adviser will provide the Portfolio with, or obtain for
it, adequate office space and all necessary office equipment and services,
including telephone service, heat, utilities, stationery supplies and similar
items.
4. FURTHER DUTIES. In all matters relating to the performance of this
Contract, Secondary Sub-Adviser will act in conformity with the Agreement and
Declaration of Trust, By-Laws and Registration Statement of the Portfolio and
with the instructions and directions of the Board and will comply with the
requirements of the 1940 Act, the rules thereunder, and all other applicable
federal and state laws and regulations.
5. SERVICES NOT EXCLUSIVE. The services furnished by Secondary
Sub-Adviser hereunder are not to be deemed exclusive and Secondary Sub-Adviser
shall be free to furnish similar services to others so long as its services
under this Contract are not impaired thereby. Nothing in this Contract shall
limit or restrict the right of any director, officer or employee of Secondary
Sub-Adviser, who may also be a Trustee, officer or employee of the Portfolio, to
engage in any other business or to devote his or her time and attention in part
to the management or other aspects of any other business, whether of a similar
nature or a dissimilar nature.
6. EXPENSES.
(a) During the term of this Contract, the Portfolio will bear all expenses
not specifically assumed by Secondary Sub-Adviser.
(b) Expenses borne by the Portfolio will include but not be limited to the
following: (i) all direct charges relating to the purchase and sale of portfolio
securities, including the cost (including brokerage commissions, if any) of
securities purchased or sold by the Portfolio and any losses incurred in
connection therein; (ii) fees payable to and expenses incurred on behalf of the
Portfolio by Adviser under this Contract; (iii) investment consulting fees and
related costs; (iv) expenses of organizing the Portfolio; (v) costs incurred in
connection with the issuance, sale or repurchase of the Portfolio's shares of
beneficial interest; (vi) filing fees and expenses relating to the registration
and qualification for the Portfolio's shares and the Portfolio under federal
and/or state securities laws and maintaining such registrations and
qualifications; (vii) expenses of preparing and filing reports and other
documents with governmental and regulatory agencies; (viii) fees and salaries
payable to the Portfolio's Trustees who are not parties to this Contract or
interested persons of any such party ("Independent Trustees"); (ix) all expenses
incurred in connection with the Independent Trustees' services, including travel
expenses; (x) taxes (including any income or franchise taxes) and governmental
fees; (xi) costs of any liability, uncollectible items of deposit and other
insurance and fidelity bonds; (xii) any costs, expenses or losses arising out of
a liability of or claim for damages or other relief asserted against the
Portfolio for violation of any law; (xiii) interest charges; (xiv) legal,
<PAGE>
accounting and auditing expenses, including legal fees of special counsel for
the Independent Trustees; (xv) charges of custodians, transfer agents, pricing
agents and other agents; (xvi) costs of preparing share certificates; (xvii)
expenses of setting in type, printing and mailing prospectuses and supplements
thereto, reports, notices and proxy materials for existing shareholders; (xviii)
expenses of obtaining and maintaining securities exchange listing of the
Portfolio's shares of beneficial interest; (xix) any extraordinary expenses
(including fees and disbursements of counsel, costs of actions, suits or
proceedings to which the Portfolio is a party and the expenses the Portfolio may
incur as a result of its legal obligation to provide indemnification to its
officers, Trustees, employees and agents) incurred by the Portfolio; (xx) fees,
voluntary assessments and other expenses incurred in connection with membership
in investment company organizations; (xxi) costs of mailing and tabulating
proxies and costs of meetings of shareholders, the Board and any committees
thereof; (xxii) the cost of investment company literature and other publications
provided by the Portfolio to its Trustees and officers; and (xxiii) costs of
mailing, stationery and communications equipment.
(c) Secondary Sub-Adviser will assume the cost of any compensation for
services provided to the Portfolio received by the officers of the Portfolio and
by the Trustees of the Portfolio who are not Independent Trustees.
(d) The payment or assumption by Secondary Sub-Adviser of any expense of
the Portfolio that Secondary Sub-Adviser is not required by this Contract to pay
or assume shall not obligate Secondary Sub-Adviser to pay or assume the same or
any similar expense of the Portfolio on any subsequent occasion.
7. COMPENSATION.
(a) For the services provided to the Portfolio under this Contract,
Sub-Adviser will pay Secondary Sub-Adviser a fee, computed weekly and paid
monthly, as set forth in Appendix A hereto.
(b) The fee shall be computed weekly and paid monthly to Secondary
Sub-Adviser on or before the last business day of the next succeeding calendar
month.
(c) If this Contract becomes effective or terminates before the end of any
month, the fee for the period from the effective date to the end of the month or
from the beginning of such month to the date of termination, as the case may be,
shall be prorated according to the proportion which such period bears to the
full month in which such effectiveness or termination occurs.
8. LIMITATION OF LIABILITY OF SECONDARY SUB-ADVISER AND INDEMNIFICATION.
Secondary Sub-Adviser shall not be liable for any costs or liabilities arising
from any error of judgment or mistake of law or any loss suffered by the
Portfolio in connection with the matters to which this Contract relates except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of Secondary Sub-Adviser in the performance by Secondary Sub-Adviser of its
duties or from reckless disregard by Secondary Sub-Adviser of its obligations
and duties under this Contract. Any person, even though also an officer,
<PAGE>
partner, employee, or agent of Secondary Sub-Adviser, who may be or become a
Trustee, officer, employee or agent of the Portfolio, shall be deemed, when
rendering services to the Portfolio or acting with respect to any business of
the Portfolio to be rendering such service to or acting solely for the Portfolio
and not as an officer, partner, employee, or agent or one under the control or
direction of Secondary Sub-Adviser even though paid by it.
9. DURATION AND TERMINATION.
(a) This Contract shall become effective upon the date hereabove written,
provided that this Contract shall not take effect unless it has first been
approved (i) by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and (ii) by vote
of a majority of the Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Contract shall
continue in effect for two years from the above written date. Thereafter, if not
terminated, this Contract shall continue automatically for successive periods
not to exceed twelve months each, provided that such continuance is specifically
approved at least annually (i) by a vote of a majority of the Independent
Trustees, cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the outstanding
voting securities of the Portfolio.
(c) Notwithstanding the foregoing, this Contract may be terminated at any
time, without the payment of any penalty, by vote of the Board or by a vote of a
majority of the outstanding voting securities of the Portfolio on sixty days'
written notice to Secondary Sub- Adviser or by Secondary Sub-Adviser at any
time, without the payment of any penalty, on sixty days' written notice to the
Portfolio. This Contract will automatically terminate in the event of its
assignment.
10. AMENDMENT. No provision of this Contract may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against which enforcement of the change, waiver, discharge or
termination is sought, and no amendment of this Contract shall be effective
until approved by vote of a majority of the Portfolio's outstanding voting
securities, when required by the 1940 Act.
11. GOVERNING LAW. This Contract shall be construed in accordance with the
laws of the State of Delaware (without regard to Delaware conflict or choice of
law provisions) and the 1940 Act. To the extent that the applicable laws of the
State of Delaware conflict with the applicable provisions of the 1940 Act, the
latter shall control.
12. MISCELLANEOUS. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. If any
provision of this Contract shall he held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Contract shall not be affected
thereby. This Contract shall be binding upon and shall inure to the benefit of
<PAGE>
the parties hereto and their respective successors. As used in this Contract,
the terms "majority of the outstanding voting securities," "interested person,"
"assignment," "broker," "dealer," "investment adviser," "national securities
exchange," "net assets," "prospectus," "sale," "sell" and "security" shall have
the same meaning. as such terms have in the 1940 Act, subject to such exemption
as may be granted by the Securities and Exchange Commission by any rule,
regulation or order. Where the effect of a requirement of the 1940 Act reflected
in any provision of this Contract is made less restrictive by a rule, regulation
or order of the Securities and Exchange Commission, whether of special or
general application, such provision shall be deemed to incorporate the effect of
such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated as of the day and year first above
written.
INVESCO SENIOR SECURED MANAGEMENT,
INC.
Attest: /s/ Michael A. Silver By: /s/ Anthony Clemente
--------------------- --------------------
Michael A. Silver Name: Anthony Clemente
Title: Managing Director
INVESCO (NY), INC.
Attest: /s/ Michael A. Silver By: /s/ Helge K. Lee
--------------------- --------------------
Michael A. Silver Name: Helge K. Lee
Title: Chief Legal and Compliance
Officer and Secretary
<PAGE>
APPENDIX A
TO
SUB-SUB-ADVISORY AND SUB-SUB-ADMINISTRATION CONTRACT
The Sub-Adviser shall pay the Secondary Sub-Adviser, as full compensation
for all services rendered and all facilities furnished hereunder, a
sub-sub-advisory fee of 0.48% of the portion of the Portfolio's average daily
net assets for the calendar year that is delegated to the Secondary Sub-Adviser.
The Portfolio's average daily net assets shall be computed in the manner used
for the determination of the Portfolio's net asset value.
AMENDMENT TO CUSTODIAN CONTRACT
This Amendment to the Custodian Contract is made as of January 26, 1999 by
and between Floating Rate Portfolio (the "Fund") and State Street Bank and Trust
Company (the "Custodian"). Capitalized terms used in this Amendment without
definition shall have the respective meanings ascribed to such terms in the
Custodian Contract referred to below.
WHEREAS, the Fund and the Custodian entered into a Custodian Contract
dated as of April 30, 1997 (as amended and in effect from time to time, the
"Contract"); and
WHEREAS, the Fund and the Custodian desire to amend certain provisions of
the Contract to reflect revisions to Rule 17f-5 ("Rule 17f-5") promulgated under
Section 17(f) of the Investment Company Act of 1940, as amended (the "1940
Act"); and
WHEREAS, the Fund and the Custodian desire to amend and restate certain
other provisions of the Contract relating to the terms and conditions of the
custody of assets of the Fund held outside of the United States.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements hereinafter contained, the parties hereby agree to amend the
Contract; pursuant to the terms thereof, as follows:
I. Article 3 of the Contract is hereby deleted, and Articles 4 through 17 of
the Contract are hereby amended, as of the effective date of this
Amendment, by renumbering same as Articles 5 through 18, respectively.
II. New Articles 3 and 4 of the Contract are hereby added, as of the effective
date of this Amendment, as set forth below.
3. THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
3.1. DEFINITIONS.
Capitalized terms in this Article 3 of the Contract 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 Mandatory Securities Depositories operating in the country);
prevailing or developing custody and settlement practices; laws and regulations
applicable to the safekeeping and recovery of Foreign Assets held in custody in
that country; and factors comprising the "prevailing country risk", including
the effects of foreign law on the safekeeping of Fund assets, the likelihood of
expropriation, nationalization, freezing, or confiscation of the Fund's assets
and any reasonably foreseeable difficulties in repatriating the Fund's assets.
"Eligible Foreign Custodian" has the meaning set forth in section (a)(1) of Rule
17f-5, including a majority-owned or indirect subsidiary of a U.S. Bank (as
defined in Rule 17f-5), a bank holding company meeting the requirements of an
<PAGE>
Eligible Foreign Custodian (as set forth in Rule 17f-5 or by other appropriate
action of the SEC), or a foreign branch of a Bank (as defined in Section 2(a)(5)
of the 1940 Act) meeting the requirements of a custodian under Section 17(f) of
the 1940 Act, except that the term does not include Mandatory Securities
Depositories.
"Foreign Assets" means any of the Fund's investments (including foreign
currencies) for which the primary market is outside the United States, currency
contracts that are settled outside the United States and such cash and cash
equivalents as are reasonably necessary to effect the Fund's transactions in
such investments.
"Foreign Custody Manager" has the meaning set forth in section (a)(2) of Rule
17f-5.
"Mandatory Securities Depository" means a foreign securities depository or
clearing agency that, either as a legal or practical matter, must be used if the
Fund determines to place Foreign Assets in a country outside the United States
(i) because required by law or regulation; (ii) because securities cannot be
withdrawn from such foreign securities depository or clearing agency; or (iii)
because maintaining or effecting trades in securities outside the foreign
securities depository or clearing agency is not consistent with prevailing or
developing custodial or market practices.
3.2. DELEGATION TO THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Fund, by resolution adopted by its Board of Trustees (the "Board"), hereby
delegates to the Custodian, subject to Section (b) of Rule 17f-5, the
responsibilities set forth in this Article 3 with respect to Foreign Assets held
outside the United States, and the Custodian hereby accepts such delegation as
Foreign Custody Manager of the Fund.
3.3. COUNTRIES COVERED.
The Foreign Custody Manager shall be responsible for performing the delegated
responsibilities defined below only with respect to (a) the countries listed on
Schedule A hereto as approved by the Board, which list of Board-approved
countries may be amended from time to time by the Fund with the agreement of the
Foreign Custody Manager, and (b) the custody arrangements set forth on such
Schedule A. The Foreign Custody Manager shall list on Schedule A the Eligible
Foreign Custodians selected by the Foreign Custody Manager to maintain the
Fund's assets, which list of Eligible Foreign Custodians may be amended from
time to time in the sole discretion of the Foreign Custody Manager. Mandatory
Securities Depositories are listed on Schedule B to this Contract, which
Schedule B may be amended from time to time by the Foreign Custody Manager. The
Foreign Custody Manager will provide amended versions of Schedules A and B in
accordance with Section 3.7 of this Article 3.
Upon the receipt by the Foreign Custody Manager of Proper 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 account opening requirements
for such country (if any), the Foreign Custody Manager shall be deemed to have
been appointed by the Board as Foreign Custody Manager with respect to that
country and to have accepted the delegation. Execution of this Amendment by the
Fund shall be deemed to be a Proper Instruction to open an account, or to place
or maintain Foreign Assets, in each Board-approved country listed on Schedule A
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<PAGE>
in which the Custodian has previously placed or currently maintains Foreign
Assets pursuant to the terms of the Contract. Following the receipt of Proper
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 the Custodian as Foreign
Custody Manager for that country shall be deemed to have been withdrawn and the
Custodian 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. Thirty days (or such longer period as to which the parties agree in
writing) after receipt of any such notice by the Fund, the Custodian shall have
no further responsibility as Foreign Custody Manager to the Fund with respect to
the country as to which the Custodian's acceptance of delegation is withdrawn.
3.4. SCOPE OF DELEGATED RESPONSIBILITIES.
3.4.1. SELECTION OF ELIGIBLE FOREIGN CUSTODIANS.
Subject to the provisions of this Article 3, the Foreign Custody Manager of the
Fund may place and maintain the Foreign Assets in the care of the Eligible
Foreign Custodians selected by the Foreign Custody Manager in each country
listed as "approved" on Schedule A, as such Schedule is amended from time to
time.
In performing its delegated responsibilities as Foreign Custody Manager to place
or maintain the 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 country
in which the Foreign Assets will be held by that Eligible Foreign Custodian,
after considering all factors relevant to the safekeeping of such assets,
including, without limitation, the factors specified in Rule 17f-5(c)(1).
3.4.2. CONTRACTS WITH ELIGIBLE FOREIGN CUSTODIANS.
The Foreign Custody Manager shall determine that the contract (or the rules or
established practices or procedures in the case of an Eligible Foreign Custodian
that is a foreign securities depository or clearing agency) governing the
foreign custody arrangements with each Eligible Foreign Custodian selected by
the Foreign Custody Manager will satisfy the requirements of Rule l7f-5(c)(2).
3.4.3. 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 maintain a system to monitor (i) the
appropriateness of maintaining the Foreign Assets with such Eligible Foreign
Custodian, and (ii) the contract governing the custody arrangements established
by the Foreign Custody Manager with the Eligible Foreign Custodian (or the rules
or established practices and procedures in the case of an Eligible Foreign
3
<PAGE>
Custodian selected by the Foreign Custody Manager which is a foreign securities
depository or clearing agency that is not a Mandatory Securities Depository).
The Foreign Custody Manager shall provide the Board with information at least
annually as to the factors used in such monitoring system. In the event the
Foreign Custody Manager determines that the custody arrangements with an
Eligible Foreign Custodian that it has selected are no longer appropriate, the
Foreign Custody Manager shall promptly transfer the Fund's Foreign Assets to
another Eligible Foreign Custodian in the market and shall notify the Board in
accordance with Section 3.7 hereunder.
3.5. GUIDELINES FOR THE EXERCISE OF DELEGATED AUTHORITY.
For purposes of this Article 3, the Board 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 the Custodian is serving as Foreign
Custody Manager of the Fund, and the Board shall be deemed to be monitoring on a
continuing basis such Country Risk to the extent that the Board considers
necessary or appropriate.
Notwithstanding any provision of this Contract to the contrary, the Fund and the
Custodian expressly acknowledge and agree that the Foreign Custody Manager,
shall not be delegated any responsibilities under this Article 3 with respect to
Mandatory Securities Depositories, and that the determination by or on behalf of
the Board to place the Foreign Assets in a particular country shall be deemed to
include the determination to place such Foreign Assets eligible for any
Mandatory Securities Depository with such Mandatory Securities Depository,
whether the Mandatory Securities Depository exists at the time the Foreign
Assets are acquired, or after the acquisition thereof.
3.6. STANDARD OF CARE AS FOREIGN CUSTODY MANAGER OF THE FUND.
In performing the responsibilities delegated to it, the Foreign Custody Manager
shall exercise reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of assets of management investment companies
registered under the 1940 Act would exercise.
3.7. REPORTING REQUIREMENTS.
The Foreign Custody Manager shall report at least quarterly on the Foreign
Assets held with each Eligible Foreign Custodian and, in connection therewith if
applicable, provide to the Board amended Schedules A or B at the end of the
calendar quarter in which an amendment to either Schedule has occurred. The
Foreign Custody Manager will make written reports notifying the Board of any
other material change in the foreign custody arrangements of the Fund defined in
this Article 3 promptly after the occurrence of the material change.
3.8. 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.
4
<PAGE>
The Fund represents to the Custodian that the Board has determined that it is
reasonable for the Board to rely on the Custodian to perform the
responsibilities delegated pursuant to this Contract to the Custodian as the
Foreign Custody Manager of the Fund.
3.9. EFFECTIVE DATE AND TERMINATION OF THE CUSTODIAN AS FOREIGN CUSTODY MANAGER.
The Board's delegation to the Custodian 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 will become effective thirty
days after receipt by the non-terminating party of such notice. The provisions
of Section 3.3 hereof shall govern the delegation to and termination of the
Custodian as Foreign Custody Manager of the Fund with respect to designated
countries.
3.10. FUTURE NEGOTIATIONS.
If at any time prior to termination of this Amendment the Custodian as a matter
of standard business practice, accepts delegation as Foreign Custody Manager for
its U.S. mutual fund clients on terms materially different than set forth in
this Amendment, the Custodian hereby agrees to negotiate with the fund in good
faith with respect thereto.
4. DUTIES OF THE CUSTODIAN WITH RESPECT TO PROPERTY OF THE FUND HELD OUTSIDE
THE UNITED STATES.
4.1. DEFINITIONS.
Terms used in this Article 4 and not defined below shall have the meanings
ascribed them in the Contract or in this Amendment:
"Foreign Securities System" means either a clearing agency or a securities
depository which is listed on Schedule A hereto or a Mandatory Securities
Depository.
"Foreign Sub-Custodian" means a foreign banking institution serving as an
Eligible Foreign Custodian.
4.2. HOLDING SECURITIES.
The Custodian shall identify on its books as belonging to the Fund the foreign
securities held by each Foreign Sub-Custodian or Foreign Securities System. The
Custodian 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 the Custodian for the benefit of its customers, PROVIDED HOWEVER,
that (i) the records of the Custodian with respect to foreign securities of the
Fund which are maintained in such account shall identify those securities as
belonging to the Fund and (ii), to the extent permitted and customary in the
market in which the account is maintained, the Custodian 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.
5
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4.3. FOREIGN SECURITIES SYSTEMS.
Foreign securities shall be maintained in a Foreign Securities System in a
designated country only through arrangements implemented by the Foreign
Sub-Custodian in such country pursuant to the terms of this Contract.
4.4. TRANSACTIONS IN FOREIGN CUSTODY ACCOUNT.
4.4.1. DELIVERY OF FOREIGN SECURITIES.
The Custodian or a Foreign Sub-Custodian shall release and deliver foreign
securities of the Fund held by such Foreign Sub-Custodian, or in a Foreign
Securities System account, only upon receipt of Proper Instructions, which may
be continuing instructions when deemed appropriate by the parties, and only in
the following cases:
(i) upon sale of such foreign securities for the Fund in accordance
with reasonable market practice in the country where such Foreign
Assets 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;
(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
the Custodian (or the name of the respective Foreign Sub-Custodian
or of any nominee of the Custodian (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 reasonable market practices
in the country where such securities are held or traded; PROVIDED
that in any such case the 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 Sub-Custodian's own negligence 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
6
<PAGE>
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 proper corporate purpose, BUT ONLY upon receipt of,
in addition to Proper Instructions, a copy of a resolution of the
Board or of an Executive Committee of the Board so authorized by
the Board, signed by an officer of the Fund and certified by its
Secretary or an Assistant Secretary that the resolution was duly
adopted and is in full force and effect (a "Certified Resolution"),
specifying the Foreign Assets to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person or
persons to whom delivery of such Foreign Assets shall be made.
4.4.2. 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, or direct the
respective Foreign Sub-Custodian or the respective Foreign Securities System to
pay out, moneys of the Fund in the following cases only:
(i) upon the purchase of foreign securities for the Fund, unless
otherwise directed by Proper Instructions, in accordance with
reasonable market settlement practice in the country where such
foreign securities are held or traded, including, without
limitation: (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;
(ii) in connection with the conversion, exchange or surrender of foreign
securities of the Fund;
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<PAGE>
(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 under this
Contract, 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 the Custodian or its Foreign Sub-Custodians;
(v) in connection with trading in options and futures contracts,
including delivery as original margin and variation margin;
(vii) in connection with the borrowing or lending of foreign securities;
and
(viii) for any other proper purpose, BUT ONLY upon receipt of, in addition
to Proper Instructions, a Certified Resolution specifying the
amount of such payment, setting forth the purpose for which such
payment is to be made, declaring such purpose to be a proper
purpose, and naming the person or persons to whom such payment is
to be made.
4.4.3. MARKET CONDITIONS; MARKET INFORMATION.
Notwithstanding any provision of this Contract 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 generally accepted by Institutional Clients, including, without
limitation, delivering Foreign Assets to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Foreign Assets from such
purchaser or dealer. For purposes of this Contract, "Institutional Clients"
means U.S. registered investment companies or major U.S. based commercial banks,
insurance companies, pension funds or substantially similar institutions which,
as a part of their ordinary business operations, purchase or sell securities and
make use of global custody services.
The Custodian shall provide to the Board the information with respect to custody
and settlement practices in countries in which the Custodian employs a Foreign
Sub-Custodian, including without limitation information relating to Foreign
Securities Systems, described on Schedule C hereto at the time or times set
forth on such Schedule. The Custodian 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 and,
provided further, that the Custodian shall in any event provide to the Board and
to A I M Advisors, Inc. annually the following information and opinions with
respect to the Board-approved countries listed on Schedule A:
(i) legal opinions relating to whether local law restricts with respect
to U.S. registered mutual funds (a) access of a fund's independent
8
<PAGE>
public accountants to books and records of a Foreign Sub-Custodian
or Foreign Securities System, (b) a fund's ability to recover in
the event of bankruptcy or insolvency of a Foreign Sub-Custodian or
Foreign Securities System, (c) a fund's ability to recover in the
event of a loss by a Foreign Sub-Custodian or Foreign Securities
System, and (d) the ability of a foreign investor to convert cash
and cash equivalents to U.S. dollars;
(ii) summary of information regarding Foreign Securities Systems; and
(iii) country profile information containing market practice for (a)
delivery versus payment, (b) settlement method, (c) currency
restrictions, (d) buy- in practices, (e) foreign ownership limits,
and (f) unique market arrangements.
4.5. REGISTRATION OF FOREIGN SECURITIES.
The foreign securities maintained in the custody of a Foreign Custodian (other
than bearer securities) shall be registered in the name of the Fund or in the
name of the Custodian or in the name of any Foreign Sub-Custodian or in the name
of any nominee of the foregoing, and the Fund agrees to hold any such nominee
harmless from any liability as a holder of record of such foreign securities,
except to the extent that the Fund incurs loss or damage due to failure of such
nominee to meet its standard of care as set forth in the Contract. The Custodian
or a Foreign Sub-Custodian shall not be obligated to accept securities on behalf
of the Fund under the terms of this Contract unless the form of such securities
and the manner in which they are delivered are in accordance with reasonable
market practice.
4.6. BANK ACCOUNTS.
The Custodian shall identify on its books as belonging to the Fund cash
(including cash denominated in foreign currencies) deposited with the Custodian.
Where the Custodian is unable to maintain, or market practice does not
facilitate the maintenance of, cash on the books of the Custodian, a bank
account or bank accounts opened and maintained outside the United States on
behalf of the Fund in a Foreign Sub-Custodian shall be subject only to draft or
order by the Custodian or such Foreign Sub-Custodian, acting pursuant to the
terms of this Contract to hold cash received by or from or for the account of
the Fund.
4.7. COLLECTION OF INCOME.
The Custodian shall use reasonable commercial efforts to collect all dividends,
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 the Custodian or a Foreign Sub-Custodian must use
measures beyond those which are customary in a particular country to collect
such payments, the Fund and the Custodian shall consult as to such measures and
as to the compensation and expenses of the Custodian attendant thereto.
9
<PAGE>
4.8. SHAREHOLDER RIGHTS.
With respect to the foreign securities held under this Article 4, the Custodian
will use commercially reasonable efforts to facilitate the exercise by the Fund
of voting and other shareholder rights, subject always to the laws, regulations
and practical constraints that may obtain 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.
4.9. COMMUNICATIONS RELATING TO FOREIGN SECURITIES.
The Custodian shall transmit promptly to the Fund written information
(including, without limitation, pendency of calls and maturities of foreign
securities and expirations of rights in connection therewith) received by the
Custodian via the Foreign Sub-Custodians from issuers of the foreign securities
being held for the account of the Fund. With respect to tender or exchange
offers, the Custodian shall transmit promptly to the Fund written information so
received by the Custodian 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. Subject to the standard of care to which the Custodian is held
under this Contract, the Custodian 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) the
Custodian or the respective Foreign Sub-Custodian is in actual possession of
such foreign securities or property and (ii) the Custodian receives Proper
Instructions with regard to the exercise of any such right or power, and both
(i) and (ii) occur at least two New York business days prior to the date on
which the Custodian is to take action to exercise such right or power.
4.10. LIABILITY OF FOREIGN SUB-CUSTODIANS AND FOREIGN SECURITIES SYSTEMS.
Each agreement pursuant to which the Custodian employs a Foreign Sub-Custodian
shall, to the extent possible consistent with prevailing market practice,
require the Foreign Sub-Custodian to exercise reasonable care in the performance
of its duties and to indemnify, and hold harmless, the Custodian from and
against any loss, damage, cost, expense, liability or claim arising out of or in
connection with such Foreign Sub-Custodian's performance of such obligations. At
the election of the Fund, the Fund shall be entitled to be subrogated to the
rights of the Custodian 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.
4.11. TAX LAW.
The Custodian shall have no responsibility or liability for any obligations now
or hereafter imposed on the Fund or the Custodian as custodian of the Fund by
the tax law of the United States or of any state or political subdivision
thereof. With respect to jurisdictions other than the United States, the sole
responsibility of the Custodian with regard to the tax law of any such
jurisdiction shall be to use reasonable efforts to (a) notify the Fund of the
obligations imposed on the Fund or the Custodian as custodian of the Fund by the
10
<PAGE>
tax law of such jurisdictions, including responsibility for withholding and
other taxes, assessment or other governmental charges, certifications and
government reporting and (b) perform such ministerial steps as are required to
collect any tax refund, to ascertain the appropriate rate of tax withholding and
to provide such documents as may be required to enable each Fund to receive
appropriate tax treatment under applicable tax laws and any applicable treaty
provisions. The Custodian, in performance of its duties under this Section,
shall be entitled to treat each Fund as a Delaware business trust which is
"registered investment company" under the laws of the United States, and it
shall be the duty of each Fund to inform the Custodian of any change in the
organization, domicile or, to the extent within the knowledge of the Fund, other
relevant facts concerning tax treatment of the Fund and further to inform the
Custodian if the Fund is or becomes the beneficiary of any special ruling or
treatment not applicable to the general nationality and category of entity of
which the Fund is a part under general laws and treaty provisions. The Custodian
shall be entitled to rely on any information supplied by the Fund. The Custodian
may engage reasonable professional advisors disclosed to the Fund by the
Custodian, which may include attorneys, accountants or financial institutions in
the regular business of investment administration and may rely upon advice
received therefrom.
4.12. LIABILITY OF CUSTODIAN.
Except as may arise from the Custodian's own negligence or willful misconduct or
the negligence or willful misconduct of a Sub-Custodian, the Custodian shall be
without liability to the Fund for any loss, liability, claim or expense
resulting from or caused by Country Risk (as such term is defined in Article 3
hereof), regardless of whether assets are maintained in the custody of a Foreign
Sub-Custodian or a Foreign Securities Depository, the Custodian shall be without
liability for any loss, damage, cost, expense, liability or claim resulting from
nationalization, expropriation, currency restrictions, or acts of war or
terrorism, or any other similar loss beyond the reasonable control of the
Custodian or the Sub-Custodian.
The Custodian shall be liable to the Fund on account of any actions or omissions
of any Foreign Sub-Custodian to the same extent as such Foreign Sub-Custodian
shall be liable to the Custodian.
4.13. USE OF TERM "FUND"; ASSETS AND LIABILITIES
All references in this Article 4 or in Article 3 of this Agreement to "Fund"
shall mean the Fund, or a Portfolio of the Fund, as the context requires or as
applicable.
The Custodian shall maintain separate and distinct records for each Portfolio
and the assets allocated solely with such Portfolio shall be held and accounted
for separately from the assets of the Fund associated solely with any other
Portfolio. The debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to a particular Portfolio shall be
enforceable against the assets of such Portfolio only, and not against the
assets of the Fund generally or the assets of any other Portfolio.
III. Except as specifically superseded or modified herein, the terms and
provisions of the Contract shall continue to apply with full force and
effect. In the event of any conflict between the terms of the Contract
11
<PAGE>
prior to this Amendment and this Amendment, the terms of this Amendment
shall prevail. If the Custodian is delegated the responsibilities of
Foreign Custody Manager pursuant to the terms of Article 3 hereof, in the
event of any conflict between the provisions of Articles 3 and 4 hereof,
the provisions of Article 3 shall prevail.
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/ Marc L. Parsons
- ------------------------
Marc L. Parsons By:/s/ Ronald E. Logue
Associate Counsel ----------------------------
Name: Ronald E. Logue
Title: Executive Vice President
WITNESSED BY: FLOATING RATE PORTFOLIO
/s/ Samuel D. Sirko
- -------------------------
Name: Samuel D. Sirko By:/s/ Carol F. Relihan
Title: Assistant Secretary --------------------------
Name: Carol F. Relihan
Title: Vice President
12
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
COUNTRY SUBCUSTODIAN NON-MANDATORY DEPOSITORIES
<S> <C> <C>
Argentina Citibank, N.A. --
Australia Westpac Banking Corporation --
Austria Erste Bank der --
Oesterreichischen Sparkassen AG
Bahrain British Bank of the Middle East --
(as delegate of The Hongkong
and Shanghai Banking
Corporation Limited)
Bangladesh Standard Chartered Bank --
Belgium Generale de Banque --
Bermuda The Bank of Bermuda Limited --
Bolivia Banco Boliviano Americano S.A. --
Botswana Barclays Bank of Botswana --
Limited
Brazil Citibank, N.A. --
Bulgaria ING Bank N.V. --
Canada Canada Trustco Mortgage Company --
Chile Citibank, N.A. Deposito Central de Valores S.A.
People's Republic of The Hongkong and Shanghai --
China Banking Corporation Limited,
Shanghai and Shenzhen branches
Colombia Cititrust Colombia S.A. --
Sociedad Fiduciaria
Costa Rica Banco BCT S.A. --
Croatia Privredna Banka Zagreb d.d --
11/20/98
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Cyprus Barclays Bank Plc. Cyprus --
Offshore Banking Unit
Czech Republic Ceskoslovenska Obchodni --
Banka, A.S.
Denmark Den Danske Bank --
Ecuador Citibank, N.A. --
Egypt National Bank of Egypt --
Estonia Hansabank --
Finland Merita Bank Limited --
France Banque Paribas --
Germany Dresdner Bank AG --
Ghana Barclays Bank of Ghana Limited --
Greece National Bank of Greece S.A. The Bank of Greece, System for
Monitoring Transactions in
Securities in Book-Entry Form
Hongkong Standard Chartered Bank --
Hungary Citibank Budapest Rt. --
Iceland Icebank Ltd. --
India Deutsche Bank AG --
The Hongkong and Shanghai --
Banking Corporation Limited
Indonesia Standard Chartered Bank --
Ireland Bank of Ireland --
Israel Bank Hapoalim B.M. --
12/31/98
2
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Italy Banque Paribas --
Ivory Coast Societe Generale de Banques en --
Cote d'Ivoire
Jamaica Scotiabank Jamaica Trust and --
Merchant Bank Ltd.
Japan The Daiwa Bank, Limited Japan Securities Depository Center
The Fuji Bank, Limited --
Jordan British Bank of the Middle East --
(as delegate of The Hongkong
and Shanghai Banking
Corporation Limited)
Kenya Barclays Bank of Kenya Limited --
Republic of Korea The Hongkong and Shanghai --
Banking Corporation Limited
Latvia JSC Hansabank-Latvija --
Lebanon British Bank of the Middle East --
(as delegate of The Hongkong
and Shanghai Banking
Corporation Limited)
Lithuania Vilniaus Bankas AB --
Malaysia Standard Chartered Bank --
Malaysia Berhad
Mauritius The Hongkong and Shanghai --
Banking Corporation Limited
Mexico Citibank Mexico, S.A. --
Morocco Banque Commerciale du Maroc --
Namibia (via) Standard Bank of South --
Africa
12/31/98
3
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
The Netherlands MeesPierson N.V. --
New Zealand ANZ Banking Group --
(New Zealand) Limited
Norway Christiania Bank og --
Kreditkasse
Oman British Bank of the Middle East --
(as delegate of The Hongkong
and Shanghai Banking
Corporation Limited)
Pakistan Deutsche Bank AG --
Peru Citibank, N.A. --
Philippines Standard Chartered Bank --
Poland Citiband (Poland) S.A. --
Bank Polska Kasa Opieki S.A.
Portugal Banco comercial Portugues --
Romania ING Bank N.V. --
Russia Credit Suisse First Boston AO, --
Moscow (as delegate of Credit
Suisse First Boston, Zurich)
Singapore The Development Bank of --
Singapore Limited
Slovak Republic Ceskoslovenska Obchodna --
Banka, A.S.
Slovenia Bank Austria d.d. Ljubljana --
South Africa Standard Bank of Sourth Africa --
Limited
12/31/98
4
<PAGE>
SCHEDULE A
STATE STREET
GLOBAL CUSTODY NETWORK
SUBCUSTODIANS AND NON-MANDATORY DEPOSITORIES
Spain Banco Santander, S.A. --
Sri Lanka The 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 --
Trinidad & Tobago Republic Bank Limited --
Tunisia Bank Internationale Arabe de --
Tunisie
Turkey Citibank, N.A. --
Ottoman Bank
Ukraine ING Bank, Ukraine --
United Kingdom State Street Bank and Trust --
Company, London Branch
Uruguay Citibank, N.A. --
Venezuela Citibank, N.A. --
Zambia Barclays Bank of Zambia Limited --
Zimbabwe Barclays Bank of Zimbabwe --
Limited
12/31/98
</TABLE>
<PAGE>
Euroclear (The Euroclear System)/State Street
London Limited
Cedel, S.A. (Cedel Bank, societe anonyme)/State Street
London Limited
INTERSETTLE (for EASDAQ Securities)
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
<S> <C>
Argentina Caja De Valores S.A
Australia Austraclear Limited
Reserve Bank Information and Transfer System
Austria Oesterreichische Kontrollbank AG
(Wertpapiersammelbank Division)
Belgium Caisse Interprofessionnelle de Depot et
de Virement de Titres S.A.
Banque nationale de Belgique
Brazil Companhia Brasileira de Liquidacao e
Custodia (CBLC)
Bolsa de Valores de Rio de Janeiro
All SSB CLIENTS PRESENTLY USE CBLC
Central de Custodia e de Liquidacao
Financeira de Titulos
Bulgaria Central Depository AD
Bulgarian National Bank
Canada The Canadian Depository
for Securities Limited
People's Republic of China Shanghai Securities Central Clearing and
Registration Corporation
Shezhen Securities
Central Clearing Co., Ltd
Costa Rica Central de Valores S.A. (CEVAL)
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Croatia Ministry of Finance
National Bank of Croatia
Czech Republic Stredisko cennych papiru
Czech National Bank
Denmark Vaerdipapircentralen (the Danish Securities Center)
Egypt Misr Company for Clearing, Settlement, and
Central Depository
Estonia Eeisti Vaartpaberite Keskdepositoorium
Finland The Finnish Central Securities Depository
France Societe Interprofessionnelle pour la Compensation
des Valeurs Mobilieres (SICOVAN)
Germany Deutsche Borse Clearing AG
Greece The Central Securities Depository
(Apothetirion Titlon AE)
Hongkong The Central Clearing and Settlement System
Central Money Market Unit
Hungary The Central Depository and Clearing House
(Budapest) Ltd. (KELER) [MANDATORY FOR GOV'T BONDS
ONLY; SSB DOES NOT USE FOR OTHER SECURITIES]
India The National Securities Depository Limited
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98
2
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Indonesia Bank Indonesia
Ireland Central Bank of Ireland
Securities Settlement office
Israel The Tel Aviv Stock Exchange Clearing House Ltd.
Bank of Israel
Italy Monte Titoli S.p.A.
Banca d'Italia
Ivory Coast Depositaire Central - Banque de Reglement
Jamaica The Jamaican Central Securities Depository
Japan Bank of Japan Net System
Kenya Central Bank of Kenya
Republic of Korea Korea Securities Depository Corporation
Latvia The Latvian Central Depository
Lebanon The Custodian and Clearing Center of Financial
Instruments for Lebanon and the Middle East
(MIDCLEAR) S.A.L.
The Central Bank of Lebanon
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98
3
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Lithuania The Central Securities Depository of Lithuania
Malaysia The Malaysian Central Depository Sdn. Bhd.
Bank Negara Malaysia, Scripless Securities Trading
and Safekeeping System
Mauritius The Central Depository & Settlement Co. Ltd.
Mexico S.D. INDEVAL, S.A. de C.V. (Instituto para el
Deposito de Valores)
Morocco Maroclear
The Netherlands Nederlands Centraal Instituut voor Giraal
Effectenverkeer B.V. (NECIGEF)
De Nederlandsche Bank N.V.
New Zealand New Zealand Central Securities Depository Limited
Norway Verdipapirsentralen (the Norwegian Registry of
Securities)
Oman Muscat Securities Market
Pakistan Central Depository Company of Pakistan Limited
Peru Caja de Valores y Liquidaciones S.A. (CAVALI)
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98
4
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Philippines The Philippines Central Depository, Inc.
The Registry of Scripless Securities (ROSS) of the
Bureau of the Treasury
Poland The National Depository of Securities (Krajowy
Depozyt Papierow Wartosciowych)
Central Treasury Bills Registrar
Portugal Central de Valores Mobiliarios (Central)
Romania National Securities Clearing Settlement and
Depository Co.
Bucharest Stock Exchange Registry Division
Singapore The Central Depository (Pte) Limited
Monetary Authority of Singapore
Slovak Republic Stredisko Cennych Papierov
National Bank of Slovakia
Slovenia Klirinsko Depotna Druzba d.d.
South Africa The Central Depository Limited
Spain Servicio de Compensacion y Liquidacion de Valores,
S.A.
Banco de Espana, Central de Anotaciones en Cuenta
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98
5
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Sri Lanka Central Depository System (Pvt) Limited
Sweden Vardepapperscentralen AB (the Swedish Central
Securities Depository)
Switzerland Schweizerische Effekten -Giro AG
Taiwan - R.O.C. The Taiwan Securities Central Depository Co., Ltd.
Thailand Thailand Securities Depository Company Limited
Tunisia Societe Tunisienne Interprofessionelle de
Compensation et de Depot de Valeurs Mobilieres
Central Bank of Tunisia
Tunisian Treasury
Turkey Takas ve Saklama Bankasi A.S. (TAKASBANK)
Central Bank of Turkey
Ukraine The National Bank of Ukraine
United Kingdom The Bank of England, The Central Gilts Office and
The Central Moneymarkets Office
Uruguay Central Bank of Uruguay
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98
6
<PAGE>
SCHEDULE B
STATE STREET
GLOBAL CUSTODY NETWORK
MANDATORY* DEPOSITORIES
COUNTRY MANDATORY DEPOSITORIES
Venezuela Central Bank of Venezuela
Zambia Lusaka Central Depository Limited Bank of Zambia
</TABLE>
* Mandatory depositories include entities for which use is mandatory as a matter
of law or effectively mandatory as a matter of market practice.
11/20/98
7
<PAGE>
SCHEDULE C
MARKET INFORMATION
PUBLIC /TYPE OF INFORMATION BRIEF DESCRIPTION
(FREQUENCY)
THE GUIDE TO CUSTODY IN WORLD An overview of safekeeping and settlement
MARKETS practices and procedures in each market in
(annually) which State Street Bank and Trust Company
offers custodial services.
GLOBAL CUSTODY NETWORK REVIEW Information relating to the operating
(annually) history and structure of depositories and
subcustodians located in the markets in
which State Street Bank and Trust Company
offers custodial services, including
transnational depositories.
GLOBAL LEGAL SURVEY With respect to each market in which State
(annual) Street Bank and Trust Company 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) the Fund's ability to recover in the
event of bankruptcy or insolvency of 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 AGREEMENT Copies of the subcustodian contracts State
(annually) Street Bank and Trust company has entered
into with each subcustodian in the markets
in which State Street Bank and Trust
Company offers subcustody services to its
US mutual fund clients.
Network Bulletins (weekly): Developments of interest to investors in
the markets in which State Street Bank and
Trust Company offers custodial services.
Foreign Custody Advisories (as With respect to markets in which State
necessary): Street Bank and Trust Company offers
custodial services which exhibit special
custody risks, developments which may
impact State Street's ability to deliver
expected levels of service.
TRANSFER AGENCY CONTRACT BETWEEN
FLOATING RATE PORTFOLIO
AND
GT GLOBAL INVESTOR SERVICES, INC.
This Transfer Agency Contract ("Contract") is made as of April 30, 1997
between Floating Rate Portfolio (the "Portfolio"), a Delaware business trust,
and GT Global Investor Services, Inc. ("GT"), a California corporation.
WHEREAS, the Portfolio is registered under the Investment Company Act of
1940, as amended ("1940 Act"), as a closed-end management investment company;
and
WHEREAS, the Portfolio may from time-to-time in the future establish one
or more additional separate and distinct series of shares of beneficial interest
of the Portfolio; and
WHEREAS, the Portfolio desires to retain GT to act as transfer agent and
dividend disbursing agent to the Portfolio, and GT is willing to act in such
capacities;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
I. APPOINTMENT
The Portfolio hereby appoints GT to act as transfer agent and dividend
disbursing agent of the Portfolio for the period and on the terms set forth in
this Contract. GT accepts such appointment and agrees to render the services
herein set forth for the compensation herein provided.
II. DEFINITIONS
As used in this Contract, the following terms shall have the definition
ascribed to them in this Paragraph.
(A) "Agent" means a broker, dealer or other agent authorized to act on
behalf of a Shareholder in transactions involving Shares.
(B) "Agent Firm" means an investment, stock brokerage or other business
firm employing an Agent.
(C) "Authorized Person" means any officer of the Portfolio and any other
person, whether or not any such person is an officer or employee of the
Portfolio, duly authorized by the Board of Trustees, the President or any Vice
President of the Portfolio to give Oral and Written Instructions on behalf of
the Portfolio. The Portfolio will provide to GT and keep current a written list
of all Authorized Persons.
(D) "Custodian" means the custodian or custodians employed by the
Portfolio to maintain custody of the Portfolio's assets.
<PAGE>
(E) "Distributor" means the principal underwriter of the Shares of the
Portfolio.
(F) "Governing Trust Documents" means the Instrument of Trust, Certificate
of Trust and other applicable Governing Trust documents of the Portfolio all as
may be amended from time to-time.
(G) "Oral Instructions" means oral instructions actually received by GT
from an Authorized Person or from a person reasonably believed by GT to be an
Authorized Person.
(H) "Registration Statement" means the current N-2 of the Portfolio.
(I) "Shares" means shares of beneficial interest of the Portfolio.
(J) "Shareholder" means the owner of Shares.
(K) "Written Instructions" means written instructions delivered by hand,
mail, tested telegram or telex, cable, or facsimile sending device, received by
GT and signed by an Authorized Person.
III. AUTHORIZED AND REGISTERED SHARES
(A) As of the date if this Contract, the Portfolio represents that there
is no limitation on the number of Shares that are authorized for issuance under
the Portfolio's Instrument of Trust. The Portfolio agrees to keep GT apprised,
to the extent necessary for GT to adequately perform its duties hereunder, of
the number of shares of the Portfolio authorized for issuance.
IV. COMPLIANCE BY GT WITH GOVERNING TRUST DOCUMENTS, REGISTRATION
STATEMENT AND APPLICABLE LAW AND REGULATION
All of GT's actions in fulfilling its responsibilities under this Contract
shall be made in accordance with the Registration Statement, the Governing Trust
Documents, the rules and regulations of the Securities and Exchange Commission
and the laws and regulations of the State of Delaware relating to the issuance
and transfer of securities such as the Shares.
V. RECORDS
(A) GT shall maintain records of the accounts for each Shareholder which
include the following information with respect to the Portfolio:
(1) name, address and United States Taxpayer Identification
Number;
(2) number of Shares held and number of Shares for which
certificates, if any, have been issued, including certificate numbers and
denominations;
(3) historical information regarding the account of each
Shareholder, including dividends and distributions paid and the date and price
of all transactions in a Shareholder's account;
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(4) any stop or restraining order placed against a Shareholder's
account;
(5) any correspondence relating to the current maintenance of
shareholder's account;
(6) information with respect to all tax withholdings;
(7) any information required to enable GT to perform any
calculations contemplated or required by this Agreement or that may reasonably
be requested by the Portfolio.
(B) The books and records pertaining to the Portfolio which are in the
possession of GT shall be the property of the Portfolio. Such books and records
shall be prepared and maintained as required by the 1940 Act and other
applicable laws, rules and regulations. The Portfolio or its authorized
representatives shall have access to such books and records at all times during
GT's normal business hours. Upon the reasonable request of the Portfolio, copies
of any such books and records shall be provided by GT to the Portfolio or its
authorized representatives, at the Portfolio's expense.
VI. TRANSACTIONS NOT REQUIRING INSTRUCTIONS
In the absence of contrary Written Instructions, GT is authorized to take
the following actions in providing services under this Contract, all in
accordance with the provisions of the Registration Statement:
(A) SHARE TRANSACTIONS -- UNCERTIFICATED SHARES
(1) ISSUANCE OF SHARES. Upon receipt by GT of a purchase order for
Shares from the Distributor or directly from an investor or an investor's Agent,
upon the further receipt by GT of sufficient information necessary to enable GT
to establish an account, and after confirmation of receipt of payment for such
Shares, GT shall create an account and issue and credit Shares to such account.
(2) TRANSFERS OF SHARES. When the Distributor, a Shareholder or a
Shareholder's Agent provides GT with instructions to transfer Shares on the
books of the Portfolio, and GT further receives such documentation as is
necessary to process the transfer, GT shall transfer the registration of such
Shares and if necessary deliver them pursuant to such instructions.
(3) TENDER OFFERS. Upon receipt of acceptance of a tender offer from
the Distributor, a Shareholder or a Shareholder's Agent, GT shall repurchase the
number of Shares indicated thereon from the tendering Shareholder's account and
disburse to the tendering Shareholder or the Shareholder's Agent, if so
instructed, the proceeds of the repurchase.
(B) SHARE TRANSACTIONS - CERTIFICATED SHARES
(1) The Portfolio shall supply GT with a sufficient supply of
certificates representing Shares, in the form approved from time to time by the
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Board of Trustees or officers of the Portfolio, and, from time-to-time, shall
replenish such supply upon the request of GT Certificates shall be property
executed, manually or by facsimile signature, by the duly authorized officers of
the Portfolio. Notwithstanding the death, resignation or removal of any officer
of the Portfolio, such executed certificates bearing the manual or facsimile
signature of such officer shall remain valid and may be issued to Shareholders
until GT is otherwise directed.
(2) In the case of the loss or destruction of any certificate
representing Shares, no new certificate shall be issued in lieu thereof, unless
there shall first have been furnished an appropriate bond of indemnity issued by
a surety company approved by GT.
(3) Upon receipt of written instructions from a Shareholder or a
Shareholder's Agent of uncertificated Shares for a certificate in the number of
shares in the Shareholder's account, GT shall issue the requested certificate
and deliver it to the Shareholder in accordance with the Shareholder's
instructions.
(4) GT shall process all orders for the purchase, transfer,
redemption and exchange of certificated Shares in the same fashion as it
processes such orders for uncertificated Shares, as specified in subparagraph
VI(A) of this Contract, provided that, as specified in the Registration
Statement, GT receives properly executed and completed certificates and stock
power transfers or similar documents necessary to effectuate the contemplated
transaction.
(5) Upon receipt of certificates, which shall be in proper form for
transfer, together with Shareholder's instructions to hold such certificates for
safekeeping, GT shall reduce such Shares to uncertificated status, while
retaining the appropriate registration in the name of the Shareholder upon the
transfer books.
(C) SPECIAL INVESTMENT AND WITHDRAWAL PLANS. GT shall process transactions
of Shareholders participating in any special investment and/or withdrawal plans
or programs established by the Portfolio or the Distributor with respect to
Shares, such as automatic investment plans, systematic withdrawal plans and
dollar cost averaging investing programs, in accordance with the terms of such
plans or programs as provided to GT the Portfolio or the Distributor.
VII. RELIANCE BY GT ON INSTRUCTIONS
Unless otherwise provided in this Contract, GT shall act only upon Oral or
Written Instructions (collectively, "Instructions"). GT shall be entitled to
rely upon any Instructions actually received by it under this Contract. The
Portfolio agrees that GT shall incur no liability to the Portfolio in acting
upon Instructions given to GT hereunder, provided that such Instructions
reasonably appear to have been received from an Authorized Person.
VIII. DIVIDENDS AND DISTRIBUTION
(A) The Portfolio shall furnish GT with appropriate evidence of action by
the Portfolio's board of trustees declaring dividends and distributions and
authorizing their payment as described in the Registration Statement. After
deducting any amount required to be withheld by any applicable tax laws, rules
and regulations or other applicable laws, rules and regulations, in accordance
with the instructions in proper form from a Shareholder and the provisions of
the Governing Trust Documents and Registration Statement, GT shall issue and
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credit the account of the Shareholder with Shares or pay such dividends for
distributions to the Shareholder in cash, upon the election of the Shareholder
as provided for in the Registration Statement. In lieu of receiving from the
Custodian and paying to Shareholders cash dividends or distributions, GT may
arrange for the direct payment of cash dividends and distributions to
Shareholders by the Custodian, in accordance with such procedures and controls
as are mutually agreed upon from time to time by and among the Portfolio, GT and
the Custodian.
(B) GT shall prepare and file with the Internal Revenue Service and other
appropriate taxing authorities, and address and mail to Shareholders, such
returns and information relating to dividends and distributions paid by the
Portfolio as are required to be so prepared, filed and mailed by applicable
laws, rules and regulations, or such substitute form of notice as may from time
to time be permitted or required by the Internal Revenue Service. On behalf of
the Portfolio, GT shall mail certain requests for Shareholders' certifications
under penalties of perjury of taxpayer identification numbers and/or other
information and pay on a timely basis to the appropriate Federal authorities any
taxes withheld on dividends and distributions paid by the Portfolio, all as
required by applicable Federal tax laws and regulations.
IX. COMMUNICATIONS WITH SHAREHOLDERS
(A) COMMUNICATIONS TO SHAREHOLDERS. GT will address and mail all
communications by the Portfolio to the shareholders of the Portfolio, including
reports to Shareholders, confirmations of purchases and sales of Shares,
periodic account statements, dividend and distribution notices and proxy
materials for meetings of shareholders. GT will receive and tabulate the proxy
cards for meetings of Shareholders, and if requested by the Portfolio, attend
meetings of Shareholders for purposes of reporting on and certifying such
tabulations.
(B) CORRESPONDENCE. GT will answer such correspondence from Shareholders,
Agents and others relating to its duties hereunder and such other correspondence
as may from time to time be mutually agreed upon by GT and the Portfolio.
X. OTHER ONGOING SERVICES
As requested by the Portfolio, GT shall also provide the following
services on an ongoing basis:
(A) Furnish to the Portfolio or its designated agent such state-by-state
registration reports reasonably necessary to enable the Portfolio to keep
current the registration of its shares with state securities authorities.
(B) Provide toll free phone lines for direct Shareholder use, plus
customer liaison staff with on-line inquiry capacity.
(C) File with the Internal Revenue Service such information on behalf of
each Shareholder as is required by law.
(D) Provide the Portfolio with Shareholder lists and such statistical
information as the Portfolio reasonably may request.
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(E) Provide the Custodian with such information as the Portfolio or the
Custodian reasonably may request.
(F) Mail duplicate confirmations and/or statements to Agents with respect
to their clients' accounts and transactions in Shares, whether such transactions
were executed through such Agents or directly through GT.
(G) Provide detail for confirmations and/or statements to be provided to
Shareholders by Agent Firms, and provide such other Shareholder accounting
information to Agent Firms as may be agreed upon between the Portfolio and GT.
(H) Provide to the custodian timely notification of Share transactions and
such other information as may be agreed upon from time to time by the Portfolio,
GT and the Custodian.
XI. COOPERATION WITH ACCOUNTANTS
GT shall cooperate with the Portfolio's independent public accountants and
shall take all reasonable action in the performance of its obligations under
this Contract to assure that all necessary information is made available to such
accountants for the timely expression of their opinion with respect to the
financial statements of the Portfolio.
XII. CONFIDENTIALITY
GT agrees on behalf of itself and its employees to treat confidentially
all records and other information relative to the Portfolio and their prior,
present or potential Shareholders, except, after prior notification to and
approval in writing by the Portfolio, which approval shall not be unreasonably
withheld and may not be withheld when GT may be exposed to civil or criminal
contempt proceedings for failure to comply, when requested do divulge such
information by duly constituted authorities, or when so requested by the
Portfolio.
XIII. COMPENSATION
As compensation for the services rendered by GT during the term of this
Contract, the Portfolio will pay to GT monthly fees that shall be agreed to from
time to time by the Portfolio and GT. In addition, as may be agreed to from time
to time by the Portfolio and GT, the Portfolio shall reimburse GT for certain
expenses incurred by GT in rendering services with respect to that Fund under
this Contract.
XIV. STANDARD OF CARE
(A) In the performance of its duties hereunder, GT shall be obligated to
exercise care and diligence and to act in good faith and to use its best efforts
within reasonable limits to ensure the accuracy and completeness of all services
provided under this Contract.
(B) GT shall be under no duty to take any action on behalf of the
Portfolio except as specifically set forth herein or as may be specifically
agreed to by GT in writing.
(C) GT shall be responsible and liable for all losses, damages and costs
(including reasonable attorneys fees) incurred by the Portfolio which is due to
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or caused by GT's negligence in the performance of its duties under this
contract or for GT's negligent failure to perform such duties as are
specifically ascribed to GT in this Contract; provided that, to the extent that
duties, obligations and responsibilities are not expressly set forth in this
Contract, GT shall not be liable for any act or omission which does not
constitute willful misfeasance, bad faith or gross negligence on the part of GT,
or reckless disregard by GT of such duties, obligations and responsibilities.
(D) Without limiting the generality of the foregoing subparagraphs of this
Paragraph XIV or of any other provision of this Contract, in connection with
GT's duties under this Contract, GT shall not be under any duty or obligation to
inquire into and shall not be liable for or in respect of:
(1) the validity or invalidity or authority or lack thereof of any
Oral or Written Instruction, notice or other instrument which conforms to the
applicable requirements of this Contract, if any, and which GT reasonably
believes to be genuine; or
(2) delays or errors or loss of data occurring by reason of
circumstances beyond GT's control, including acts of civil or military
authority, national emergencies, labor difficulties, fire, mechanical breakdown,
earthquake, flood or catastrophe, acts of God, insurrection, war, riots or
failure of the mails, transportation, communication or power supply.
XV. RECEIPT OF ADVICE
(A) ADVICE OF INVESTMENT FUNDS. If GT is in doubt as to any action to be
taken or omitted by it, GT may request and shall receive from the Portfolio
directions or advice including Oral or Written Instructions where appropriate.
(B) ADVICE OF COUNSEL. If GT is in doubt as to any question of law
involved in any action to be taken or omitted by it, GT may request advice from
counsel of its own choosing (who may also be counsel for the Portfolio, the
Distributor and/or the investment adviser of the Portfolio).
(C) CONFLICTING ADVICE. In case of conflict between directions, advice or
Oral or Written Instructions received by GT pursuant to subparagraph (A) of this
Paragraph and advice received by GT pursuant to subparagraph (b) of this
Paragraph, GT shall be entitled to rely on and follow the advice received
Pursuant to subparagraph (8) alone.
(D) PROTECTION OF GT.
(1) GT shall be protected in any action or inaction which it takes
in reliance on any directions, advice or Oral or Written Instructions received
pursuant to subparagraphs (A) or (B) of this Paragraph which GT, after receipt
of any such directions, advice or Oral or Written Instructions, in good faith
believes to be consistent with such directions, advice or Oral or Written
Instructions, as the case may be.
(2) Notwithstanding the foregoing, nothing in this Paragraph shall
be construed as imposing upon GT any obligation (a) to seek such directions,
advice or Oral or Written Instructions, or (b) to act in accordance with such
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directions advice or Oral or Written Instructions when received, unless, under
the terms of another provision of this Contract, the same is a condition to GT's
properly taking or omitting to take such actions.
XVI. INDEMNIFICATION OF GT
The Portfolio agrees to indemnify and hold harmless GT and its nominees
and sub contractors, if any, from all taxes, charges, expenses, assessments,
claims and liabilities (including, without limitation, liabilities arising under
the 1933 Act, the 1940 Act, the Securities Exchange Act of 1934, the Commodities
Exchange Act, and any state and foreign securities and blue sky laws, all as or
to be amended from time to time) and expenses, including (without limitation)
reasonable attorneys' fees and disbursements, arising directly or indirectly
from any action or thing which GT takes or does or omits to take or do:
(A) at the request or on the direction of or in reliance upon the
advice of the Portfolio;
(B) upon Oral or Written Instructions; or
(C) in the performance by GT of its responsibilities under this Contract;
PROVIDED that GT shall not be indemnified against any liability to the Portfolio
or the Shareholders (or any expenses incident to such liability) arising out of
GT's own willful misfeasance, bad faith or negligence or reckless disregard of
its duties in connection with the performance of its duties and obligations
specifically described in this Contract.
XVII. INDEMNIFICATION OF THE PORTFOLIO
GT agrees to indemnify and hold harmless the Portfolio from all taxes,
charges, expenses, assessments, claims and liabilities (including, without
limitation, liabilities arising under the 1933 Act, the 1940 Act, the Securities
Exchange Act of 1934, the Commodities Exchange Act, and any state and foreign
securities and blue sky laws, all as or to be amended from time to time) and
expenses, including (without limitation) reasonable attorneys' fees and
disbursements, arising directly or indirectly from any action or omission of GT
that does not meet the standard of care to which GT is subject under Paragraph
XIV of this Contract.
XVIII.DURATION AND TERMINATION
This Contract shall continue with respect to the Portfolio until
termination with respect to that Fund by the Portfolio or GT on sixty (60) days'
prior written notice.
XIX. REGISTRATION AS A TRANSFER AGENT
GT represents that it is currently registered as a transfer agent with the
Securities and Exchange Commission, and that it will remain so registered for
the duration of this Contract. GT agrees that it will promptly notify the
Portfolio in the event of any material change in its status as a registered
transfer agent. Should GT fail to be registered with the Securities and Exchange
Commission as a transfer agent at any time during the term of this Contract, the
Portfolio may immediately terminate this Contract, upon written notice to GT.
XX. NOTICES
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All notices and other communications hereunder, including Written
Instructions, shall be in writing or by confirming telegram, cable, telex or
facsimile sending device. Notices with respect to a party shall be directed to
such address as may from time to time be designated by that party to the other.
XXI. FURTHER ACTIONS
Each party agrees to perform such further acts and execute such further
documents as are necessary to effect the purposes of this Contract.
XXII. AMENDMENTS
This Contract or any part hereof may be amended only by an instrument in
writing signed by both parties hereto.
XXIII.COUNTERPARTS
This Contract may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
XXIV. MISCELLANEOUS
This Contract embodies the entire agreement and understanding between the
parties hereto, and supersedes all prior agreements and understandings relating
to the subject matter hereof, provided that the parties may embody in one or
more separate documents their agreement or agreements with respect to such
matters that this Contract provides may be later agreed to by and between the
parties from time to time. The captions in this Contract are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Contract shall be governed by and construed in accordance with California law.
If any provision of this Contract shall be held or made invalid by a court
decision, statute, rule or otherwise, the remainder of this Contract shall not
be affected thereby. This Contract shall be binding and shall inure to the
benefit of the parties hereto and their respective successors.
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IN WITNESS WHEREOF, the parties hereto have caused this Contract to be
executed by their officers designated below on the day and year first written
above.
FLOATING RATE PORTFOLIO
/S/ JOHANNE CASTRO /S/ DAVID J. THELANDER
Attest: Johanne Castro By: David J. Thelander
GT GLOBAL INVESTOR SERVICES, INC.
/S/ JOHANNE CASTRO /S/ JAMES R. TUFTS
Attest: Johanne Castro By: James R. Tufts
FUND ACCOUNTING AND PRICING AGENT AGREEMENT
This Fund Accounting and Pricing Agent Agreement (the "Agreement") is
made as of April 30, 1997, by and among GT Global Floating Rate Fund, Inc.
(the "Fund"), Floating Rate Portfolio (the "Portfolio"), and Chancellor LGT
Asset Management, Inc. ("Chancellor LGT").
WHEREAS, each of the Fund and the Portfolio is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a closed-end
management investment company;
WHEREAS, the Fund and the Portfolio are part of a complex of investment
companies that are managed and/or administered by Chancellor LGT (the "GT Global
Group of Funds");
WHEREAS, the Fund and the Portfolio desire to retain Chancellor LGT to act
as their accounting and pricing agent, and Chancellor LGT is willing to act in
such capacities.
NOW, THEREFORE, in consideration of the foregoing and the terms and
conditions hereinafter set forth, the Fund, the Portfolio and Chancellor LGT
hereby agree as follows:
SECTION 1. APPOINTMENT. The Fund and the Portfolio hereby appoint
Chancellor LGT to act as the accounting and pricing agent for the period and on
the terms and conditions set forth in this Agreement. Chancellor LGT hereby
accepts such appointment and agrees to render the services set forth for the
compensation herein provided.
SECTION 2. DEFINITIONS. As used in this Agreement and in
addition to the terms defined elsewhere herein, the following terms shall
have the meanings assigned to them in this Section:
(a) "Authorized Person" means any officer of the Fund or the
Portfolio and any other person, whether or not any such person is an
officer or employee of the Fund or the Portfolio, duly authorized by the
Board of Directors or Trustees, the President or any Vice President of the
Fund or the Portfolio to give Oral and/or Written Instructions on behalf
of the Fund or the Portfolio.
(b) "Commission" means the Securities and Exchange Commission.
(c) "Custodian" means the custodian or custodians employed by
the Fund and the Portfolio to maintain custody of the Fund's and the
Portfolio's assets.
(d) "Governing Documents" means the Articles of Incorporation,
Declaration of Trust, By-Laws and other applicable charter documents of
the Fund and the Portfolio, all as they may be amended from time to time.
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(e) "Oral Instruction" means oral instructions actually
received by Chancellor LGT from an Authorized Person or from a person
reasonably believed by Chancellor LGT to be an Authorized Person, provided
that, any Oral Instruction shall be promptly confirmed by Written
Instructions.
(f) "Prospectus" means the current prospectus of the Fund.
(g) "Shares" means shares of beneficial interest of the Fund
and of the Portfolio.
(h) "Shareholder" means any owner of Shares.
(i) "Written Instructions" means written instructions
delivered by hand, mail, tested telegram or telex, cable or facsimile
sending device received by Chancellor LGT and signed by an Authorized
Person.
SECTION 3. COMPLIANCE WITH LAWS, ETC. In performing its
responsibilities hereunder, Chancellor LGT shall comply with all terms and
provisions of the Governing Documents, the Prospectus and all applicable state
and federal laws including, without limitation, the 1940 Act and the rules and
regulations promulgated by the Commission thereunder.
SECTION 4. SERVICES. In consideration of the compensation payable
hereunder and subject to the supervision and control of the Fund's and the
Portfolio's Boards, Chancellor LGT shall provide the following services to the
Fund and the Portfolio:
(a) PRICING AGENT. As pricing agent, Chancellor LGT shall:
(1) Obtain security market quotes from services approved by
the investment manager of the Portfolio or, if such quotes are
unavailable, then obtain such prices from the investment manager of
the Portfolio or from such sources as the investment manager may
direct, and, in either case, calculate the market value of the
Portfolio's investments; and
(2) Value the assets of the Portfolio and compute the net
asset value per Share of the Portfolio at such dates and times and
in the manner specified in the then currently effective Prospectus
and transmit to the Portfolio's investment manager.
(b) ACCOUNTING AGENT. As fund accounting agent, Chancellor LGT
shall:
(1) Calculate the net income of the Fund;
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(2) Calculate capital gains or losses for the Fund from the
sale or disposition of assets, if any;
(3) Maintain the general ledger and other accounts, books and
financial records of the Fund and the Portfolio, as required under
Section 31(a) of the 1940 Act and the rules promulgated by the
Commission thereunder in connection with the services provided by
Chancellor LGT;
(4) Perform the following functions on a daily basis:
(A) journalize the Fund's and the Portfolio's
investment, capital share and income and expense activities;
(B) reconcile cash and investment balances of the Fund
and the Portfolio with the Custodian and provide the
Portfolio's investment manager with the beginning cash balance
available for investment purposes and update the cash
availability throughout the day as required by the investment
manager;
(C) verify investment buy/sell trade tickets received
from the Fund's investment manager and transmit trades to the
Fund's Custodian for proper settlement;
(D) maintain individual ledgers for investment
securities;
(E) maintain historical tax lots for investment
securities;
(F) calculate various contractual expenses (e.g.,
advisory and custody fees);
(G) post to and prepare the Fund's and the Portfolio's
statement of assets and liabilities and statement of
operations; and
(H) monitor expense accruals and notify an Authorized
Person of any proposed adjustments;
(5) Receive and act upon notices, Oral and Written
Instructions, certificates, instruments or other communications from
the Fund's and the Portfolio's shareholder servicing and transfer
agent;
(6) Assist in the preparation of financial statements
semiannually which will include the following items:
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(A) schedule of investments;
(B) statement of assets and liabilities;
(C) statement of operations;
(D) changes in net assets;
(E) cash statement; and
(F) schedule of capital gains and losses;
(7) Prepare monthly security transaction listings;
(8) Prepare quarterly broker security transactions summaries;
and
(9) At the reasonable request of the Fund or the Portfolio,
assist in the preparation of various reports or other financial
documents required by federal, state and other appropriate laws and
regulations.
SECTION 5. COMPENSATION. As compensation for the services rendered
by Chancellor LGT hereunder during the term of the Agreement, the Fund and the
Portfolio shall pay to Chancellor LGT monthly such fees as shall be agreed to
from time to time by the Fund, the Portfolio and Chancellor LGT, in writing and
attached hereto as Schedule A. In addition, as may be agreed to from time to
time in writing by the Fund, the Portfolio and Chancellor LGT, the Fund and the
Portfolio shall reimburse Chancellor LGT for certain expenses that it incurs in
rendering services under this Agreement.
SECTION 6. RELIANCE BY CHANCELLOR LGT ON INSTRUCTIONS. Unless
otherwise provided in this Agreement, Chancellor LGT shall act only upon Oral or
Written Instructions. Chancellor LGT shall be entitled to rely upon any such
Instructions actually received by it under this Agreement. The Fund and the
Portfolio agree that Chancellor LGT shall incur no liability to the Fund or the
Portfolio in acting upon Oral or Written Instructions given to Chancellor LGT
hereunder, provided that, such Instructions reasonably appear to have been
received from an Authorized Person.
SECTION 7. COOPERATION WITH AGENTS OF THE FUND AND THE PORTFOLIO.
Chancellor LGT shall cooperate with the Fund's and the Portfolio's agents and
employees, including, without limitation, their independent accountants, and
shall take all reasonable action in the performance of its obligations under
this Agreement to assure that all necessary information is made available to
such agents to the extent necessary in the performance of their duties to the
Fund and the Portfolio.
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SECTION 8. CONFIDENTIALITY. Chancellor LGT, on behalf of itself and
its employees, agrees to treat confidentially all records and other information
relating to the Fund and the Portfolio except when requested to divulge such
information by duly constituted authorities provided that notification and prior
approval is obtained from the Fund or the Portfolio, which approval shall not be
unreasonably withheld and may not be withheld if Chancellor LGT, in its
judgment, may be subject to civil or criminal contempt proceedings for failure
to comply.
SECTION 9. STANDARD OF CARE. In the performance of its
responsibilities hereunder, Chancellor LGT shall exercise care and diligence in
the performance of its duties and act in good faith and use its best efforts to
ensure the accuracy and completeness of all services under this Agreement. In
performing services hereunder, Chancellor LGT:
(a) shall be under no duty to take any action on behalf of the
Fund or the Portfolio except as specifically set forth herein or as may be
specifically agreed to by Chancellor LGT in writing, and in computing the
net asset value per Share of the Fund or the Portfolio, Chancellor LGT may
rely upon any information furnished to it including, without limitation,
information (1) as to the accrual of liabilities of the Fund or the
Portfolio and as to liabilities of the Fund or the Portfolio not appearing
on the books of account kept by Chancellor LGT, (2) as to the existence,
status and proper treatment of reserves, if any, authorized by the Fund or
the Portfolio, (3) as to the sources of quotations to be used in computing
net asset value, (4) as to the fair value to be assigned to any securities
or other property for which price quotations are not readily available and
(5) as to the sources of information with respect to "corporate actions"
affecting portfolio securities of the Portfolio (information as to
"corporate actions" shall include information as to dividends,
distributions, interest payments, prepayments, stock splits, stock
dividends, rights offerings, conversions, exchanges, recapitalizations,
mergers, redemptions, calls, maturity dates and similar actions, including
ex-dividend and record dates and the amounts and terms thereof);
(b) shall be responsible and liable for all losses, damages
and costs (including reasonable attorneys' fees) incurred by the Fund or
the Portfolio which is due to or caused by Chancellor LGT's negligence in
the performance of its duties under this Agreement or for Chancellor LGT's
negligent failure to perform such duties as are specifically assumed by
Chancellor LGT in this Agreement, provided that, to the extend that
duties, obligations and responsibilities are not expressly set forth in
this Agreement, Chancellor LGT shall not be liable for any act or omission
that does not constitute willful misfeasance, bad faith or negligence on
the part of Chancellor LGT or reckless disregard by Chancellor LGT of such
duties, obligations and responsibilities; and
(c) without limiting the generality of the foregoing,
Chancellor LGT shall not, in connection with Chancellor LGT's duties
under this Agreement, be under any duty or obligation to inquire
into and shall not be liable for or in respect of:
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(1) the validity or invalidity or authority or lack of
authority of any Oral or Written Instruction, notice or other
instrument which conforms to the applicable requirements of
this Agreement, if any and that Chancellor LGT reasonably
believes to be genuine; and
(2) delays or errors or loss of data occurring by reason
of circumstances beyond Chancellor LGT's control including,
without limitation, acts of civil or military authorities,
national emergencies, labor difficulties, fire, mechanical
breakdown, denial of access, earthquake, flood or catastrophe,
acts of God, insurrection, war, riots, or failure of the
mails, transportation, communication or power supply.
Notwithstanding any other provisions of this Agreement, the following provisions
shall apply with respect to Chancellor LGT's computation of the Fund's and the
Portfolio's net asset value: Chancellor LGT shall be held to the exercise of
reasonable care in computing and determining net asset value as provided in
Section 4(a), above, but shall not be held accountable or liable for any losses,
damages or expenses of the Fund, the Portfolio or any Shareholder or former
Shareholder may incur arising from or based upon errors or delays in the
determination of such net asset value unless such error or delay was due to
Chancellor LGT's negligence or willful misfeasance in the computation and
determination of such net asset value. The parties hereto acknowledge, however,
that Chancellor LGT causing an error or delay in the determination of net asset
value may, but does not in an of itself, constitute negligence or willful
misfeasance. In no event shall Chancellor LGT be liable or responsible to the
Fund or the Portfolio or any other party for any error or delay which continued
or was undetected after the date of an audit of the Fund or the Portfolio
performed by the certified public accountants employed by the Fund or the
Portfolio if, in the exercise of reasonable care in accordance with generally
accepted accounting principles, such accountants should have become aware of
such error or delay in the course of performing such audit. Chancellor LGT's
liability for any such negligence or willful misfeasance which results in an
error in determination of such net asset value be limited to the direct
out-of-pocket loss the Fund, the Portfolio and/or any Shareholder or former
Shareholder shall actually incur.
Without limiting the generality of the foregoing, Chancellor LGT
shall not be held accountable or liable to the Fund, the Portfolio, a
Shareholder or former Shareholder or any other person for any delays or losses,
damages or expenses any of them may suffer or incur resulting from (1)
Chancellor LGT's failure to receive timely and suitable notification concerning
quotations, corporate actions or similar matters relating to or affecting
portfolio securities of the Fund or the Portfolio or (2) any errors in the
computation of a net asset value based upon or arising out of quotations or
information as to corporate actions if received by Chancellor LGT from a source
that Chancellor LGT was authorized to rely upon. Nevertheless, Chancellor LGT
will use its best judgment in determining whether to verify through other
sources any information that it has received as to quotations or corporate
actions if Chancellor LGT has reason to believe that any such information is
incorrect.
6
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SECTION 10. RECEIPT OF ADVICE. If Chancellor LGT is in doubt as to
any action to be taken or omitted by it, Chancellor LGT may request, and shall
be entitled to rely upon, directions and advice from the Fund or the Portfolio,
including Oral or Written Instructions where appropriate, or from counsel of its
own choosing (who may also be counsel for the Fund or the Portfolio), with
respect to any question of law. In case of conflict between directions, advice
or Oral and Written Instructions received by Chancellor LGT pursuant to this
Section, Chancellor LGT shall be entitled to rely on and follow the advice
received from counsel as described above. Chancellor LGT shall be protected in
any action or in action that it takes in reliance on any directions, advice or
Oral or Written Instructions received pursuant to this Section that Chancellor
LGT, after the receipt of the same, in good faith believes to be consistent with
such directions, advice or Oral or Written Instructions, as the case may be.
Notwithstanding the foregoing, nothing in this Section shall be construed as
imposing on Chancellor LGT any obligation to seek such directions, advice or
Oral or Written Instruction, or to act in accordance with them when received,
unless the same is a condition to Chancellor LGT's properly taking or omitting
to take such action under the terms of this Agreement.
SECTION 11. INDEMNIFICATION OF CHANCELLOR LGT. The Fund and the
Portfolio agree, separately and not jointly, to indemnify and hold harmless
Chancellor LGT and its officers, directors, employees, nominees and
subcontractors, if any, from all taxes, charges, expenses, assessments, claims
and liabilities, including, without limitation, liabilities arising under the
1940 Act, the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended, the Commodities Exchange Act and any state or foreign
securities or blue sky laws, and expenses, including, without limitation,
reasonable attorneys' fees and disbursements, arising directly or indirectly
from any action or thing that Chancellor LGT takes or omits to take or do:
(a) at the request or on the direction of or in reliance
upon the advice of the Fund or the Portfolio;
(b) upon Oral or Written Instructions; or
(c) in the performance by Chancellor LGT of its
responsibilities under this Agreement;
provided that, Chancellor LGT shall not be indemnified against any liability to
the Fund or the Portfolio, or any expenses incident thereto, arising out of
Chancellor LGT's own willful misfeasance, bad faith or negligence or reckless
disregard of its duties in connection with the performance of its duties and
obligations specifically described in this Agreement.
SECTION 12. INDEMNIFICATION OF THE FUND AND THE PORTFOLIO.
Chancellor LGT agrees to indemnify and hold harmless each of the Fund and the
Portfolio and their officers, trustees, directors and employees, from all taxes,
charges, expenses, assessments, claims and liabilities, including, without
limitation, liabilities arising under the 1940 Act, the Securities Act of 1933,
7
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as amended, the Securities Exchange Act of 1934, as amended, the Commodities
Exchange Act and any state or foreign securities or blue sky laws, and expenses,
including, without limitation, reasonable attorneys' fees and disbursements,
arising directly or indirectly from any action or omission of Chancellor LGT
that does not meet the standard of care to which Chancellor LGT is subject under
Section 9, above.
SECTION 13. LIMITATION OF LIABILITY OF SHAREHOLDERS AND TRUSTEES OF
THE FUND AND THE PORTFOLIO. It is expressly agreed that the obligations of the
Fund and the Portfolio hereunder shall not be binding upon any of the
shareholders, trustees, directors, officers, nominees, agents or employees of
the Fund or the Portfolio personally, but shall only bind the assets and
property of the Fund or the Portfolio, respectively, as provided in the
Governing Documents. The execution and delivery of this Agreement has been
authorized by the Boards of the Fund and the Portfolio, and this Agreement has
been executed and delivered by an authorized officer of each of the Fund and the
Portfolio acting as such, and neither such authorization by the Boards nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, but
shall bind only the assets and property of the Fund or the Portfolio as provided
in the Governing Documents.
SECTION 14. DURATION AND TERMINATION. This Agreement shall continue
with respect to the Fund and the Portfolio until termination with respect to the
Fund or the Portfolio is effected by the Fund, the Portfolio, or Chancellor LGT
upon sixty days' prior written notice to the other. In the event of the
"assignment" of this Agreement within the meaning of the 1940 Act, this
Agreement shall terminate automatically.
SECTION 15. NOTICES. All notices and other communications hereunder,
including Written Instructions, shall be in writing or by confirming telegram,
cable, telex or facsimile sending device. Notices with respect to a party shall
be directed to such address as may from time to time be designated by that party
to the other.
SECTION 16. FURTHER ACTIONS. The Fund, the Portfolio and Chancellor
LGT agree to perform such further acts and to execute such further documents as
may be necessary or appropriate to effect the purposes of this Agreement.
SECTION 17. AMENDMENTS. This Agreement, or any part thereof,
may be amended only by an instrument in writing signed by the Fund, the
Portfolio and Chancellor LGT.
SECTION 18. COUNTERPARTS. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original, but all of
which together constitute one and the same instrument.
SECTION 19. MISCELLANEOUS. This Agreement embodies the entire
agreement and understanding between the Fund, the Portfolio and Chancellor LGT
8
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and supersedes all prior agreements and understandings relating to the subject
matter hereof, provided that the Fund, the Portfolio and Chancellor LGT may
embody in one or more separate documents their agreement or agreements with
respect to such matters that this Agreement provides may be later agreed to by
and among the Fund, the Portfolio and Chancellor LGT from time to time. The
captions in this Agreement are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be governed by and construed in
accordance with California law. If any provision of this Agreement shall be held
or made invalid by a court decision, statute, rule or otherwise, the remainder
of this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the Fund, the Portfolio and Chancellor
LGT and their respective successors.
IN WITNESS WHEREOF, the Fund, the Portfolio and Chancellor LGT have
caused this Agreement to be executed by their officers designated below as of
this day, month and year first above written.
GT GLOBAL FLOATING RATE FUND, INC.
By: /S/ DAVID J. THELANDER
David J. Thelander
Attest: /S/ JOHANNE CASTRO
Johanne Castro
FLOATING RATE PORTFOLIO
By: /S/ DAVID J. THELANDER
David J. Thelander
Attest: /S/ JOHANNE CASTRO
Johanne Castro
CHANCELLOR LGT ASSET MANAGEMENT, INC.
By: /S/ JAMES R. TUFTS
James R. Tufts
Attest: /S/ JOHANNE CASTRO
Johanne Castro
9
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SCHEDULE A
FUND ACCOUNTING AND PRICING AGENT FEES
Annual Fee payable based on aggregate net assets of the GT Global Group of
Funds:
First $5 billion in net assets of the .02% (2 basis points) of the Fund's
GT Global Group of Funds: average daily net assets
.01% (1 basis point) of the
Portfolio's average daily net assets
In excess of $5 billion in net assets .01% (1 basis point) of the Fund's
of the GT Global Group of Funds: average daily net assets
.01% (1 basis point) of the
Portfolio's average daily net assets
[Letterhead of PricewaterhouseCoopers LLP]
CONSENT OF INDEPENDENT ACCOUNTANTS
To the Trustees of AIM Floating Rate Portfolio
We consent to the inclusion in Amendment No. 1 to the Registration Statement on
Form N-2, under the Securities Act of 1940, of AIM Floating Rate Portfolio: (the
"Portfolio"), of our report dated February 19, 1999, on our audits of the
financial statements and supplementary data of the Portfolio, which are
incorporated by reference into this Registration Statement. We also consent to
the reference to our Firm as "Experts" under the caption "Financial Statements."
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 29, 1999
