MUTUAL FUND CUSTODY AND SUB-CUSTODY AGREEMENT
THIS AGREEMENT is made as of the 18th day of October, 1996 by
and among NationsBank of Texas, N.A., a national banking association
("Custodian"), The Bank of New York, a New York corporation authorized to do a
banking business ("Sub-Custodian"), and Nations Institutional Reserves, a
Massachusetts business trust (the "Trust").
W I T N E S S E T H
WHEREAS, the Trust is a registered open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Trust desires to retain Custodian to serve as
custodian for the Trust, on behalf of its portfolios listed on Schedule I
(individually a "Fund" and collectively the "Funds") and to provide the services
described herein, and Custodian is willing to serve and to provide such
services; and
WHEREAS, Custodian and Trust each desires to retain
Sub-Custodian to serve as the Trust's sub-custodian and provide the services
described herein, and Sub-Custodian is willing to so serve and to provide such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the Trust, Custodian and Sub-Custodian hereby agree
as follows:
1. Appointment. The Trust hereby appoints the Custodian to act as
custodian of its portfolio securities, cash and other property on the terms set
forth in this Agreement. The Custodian accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Paragraph 23 hereof. The Custodian agrees to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder.
Custodian and Trust each hereby appoints Sub-Custodian to act as a
sub-custodian of the portfolio securities, cash and other property of the Trust
on the terms set forth in this Agreement. Sub-Custodian accepts such appointment
and agrees to furnish the services herein set forth in return for the
compensation as provided in Paragraph 23 hereof, Sub-Custodian agrees to comply
with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder applicable to Sub-Custodian's performance of its services
hereunder.
The Trust may from time to time issue separate series or classes, and
classify and reclassify shares of any such series or class. Custodian or the
Trust shall promptly specify to Sub-Custodian in writing such series or classes,
or any reclassification, and thereafter Sub-Custodian shall identify to each
such series or class Property, as hereinafter defined, belonging to such series
or class, and such reports, confirmations and notices to the Trust called for
under this Agreement shall identify the series or class to which such report,
confirmation or notice pertains.
2. Delivery of Documents. The Trust has furnished to the Custodian and
Sub-Custodian copies properly certified or authenticated of each of the
following:
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(a) Resolutions of the Trust's Board of Trustees authorizing
the appointment of Custodian and Sub-Custodian as a custodian and sub-custodian
of portfolio securities, cash and other property of the Trust, respectively, and
approving and consenting to this Agreement;
(b) Schedule A identifying and containing the signatures of
the Trust's officers and/or other persons authorized to issue Oral Instructions
and to sign Written Instructions, as hereinafter defined, on behalf of the
Trust;
(c) Schedule B setting forth the names and signatures of the
present officers of the Trust;
(d) The Trust's current Registration Statement on Form N-1A
under the 1940 Act and the Securities Act of 1933, as amended (the "1933 Act"),
as filed with the Securities and Exchange Commission (the "SEC"), relating to
shares of beneficial interest of the Trust, without par value (the "Shares");
(e) The current prospectuses and statements of additional
information of each of the Funds, including all amendments and supplements
thereto (the "Prospectuses"); and
(f) A copy of the opinion of counsel for the Trust, with
respect to the validity of the Shares and the status of such Shares under the
1933 Act filed with the SEC, and any other applicable federal law or regulation.
The Trust shall furnish to Custodian and Sub-Custodian from
time to time copies, properly certified or authenticated, of all amendments of
or supplements to any of the foregoing.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any of the Trust's officers, and any other person,
whether or not any such person is an officer or employee of the Trust, duly
authorized by the Board of Trustees of the Trust to give Oral and Written
Instructions to Custodian and Sub-Custodian on behalf of the Trust and listed on
Schedule A, which may be amended from time to time. Authorized Persons duly
authorized by the Board of Trustees of the Trust to buy and sell foreign
currency on a spot and forward basis and options to buy and sell foreign
currency are denoted by an asterisk thereon.
(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees and any book-entry system maintained by a clearing agency
registered with the SEC under Section 17A of the Securities Exchange Act of 1934
(the "1934 Act").
(c) "Composite Currency Unit". Shall mean the European
Currency Unit or any other composite unit consisting of the aggregate of
specified amounts of specified Currencies as such unit may be constituted from
time to time.
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(d) "Currency". Shall mean money denominated in a lawful
currency of any country or the European Currency Unit.
(e) "FX Transaction". Shall mean any transaction for the
purchase by one party of an agreed amount in one Currency against the sale by it
to the other party of an agreed amount in another Currency.
(f) "Instructions". Shall mean instruction communications
transmitted by electronic or telecommunications media including S.W.I.F.T.,
computer-to-computer interface, dedicated transmission line, facsimile
transmission (which may be signed or unsigned) and tested telex.
(g) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by Custodian or
Sub-Custodian from an Authorized Person or from a person reasonably believed by
Custodian or Sub-Custodian to be an Authorized Person.
(h) "Officer's Certificate". The term "Officer's Certificate"
as used in this Agreement means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending device, and actually received by
Custodian or Sub-Custodian signed or reasonably believed by Custodian or
Sub-Custodian to be signed by two officers of the Trust listed on Schedule B.
(i) "Property". The term "Property", as used in this
Agreement, means:
(i) any and all securities and other property of the
Trust which the Trust or Custodian may from time to time deliver to Custodian or
Sub-Custodian, as applicable, or which Custodian or Sub-Custodian may from time
to time hold for the Trust;
(ii) all income in respect of any securities or other
property described in immediately preceding clause (i);
(iii) all proceeds of sales of any of such securities
or other property described in preceding clause (i) actually received by
Custodian or Sub-Custodian; and
(iv) proceeds of the sale of Shares received by
Custodian or Sub-Custodian from time to time from or on behalf of the Trust.
(j) "Securities Depository". As used in this Agreement, the
term "Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Trust's Board of Trustees approving deposits by the Custodian
or Sub-Custodian therein.
(k) "Written Instructions". As used in this Agreement,
"Written Instructions" means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending
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device, and actually received by the Custodian or Sub-Custodian, signed or
reasonably believed by the Custodian or Sub-Custodian to be signed by two
Authorized Persons, and the term Written Instructions shall also include
Instructions.
4A. Services of Custodian. The Custodian shall be responsible for
oversight and monitoring of the performance by the Sub-Custodian of the duties
assumed by it hereunder. Such oversight and monitoring shall include, but not be
limited to, coordinating communication between the Funds' investment adviser(s)
and the Sub-Custodian with respect to Fund trading activity, assisting with
failed trade resolution, reviewing Fund cash management activity with the
Sub-Custodian, reviewing posting of income to Fund accounts, monitoring
Sub-Custodian's reporting of corporate actions to the Funds' investment
adviser(s) and communications related thereto, facilitating the establishment of
Fund accounts on the Sub-Custodian's custody system, and assisting in the
resolution of any issues between the Sub-Custodian and the Funds.
In no case, however, shall the Custodian have physical custody of any
of the Funds' securities, cash or other monies.
4B. Delivery and Registration of the Property. Custodian or the Trust
shall deliver or cause to be delivered to Sub-Custodian all securities and all
monies owned by the Funds, including cash received for the issuance of Shares,
at any time during the period of this Agreement, except for securities and
monies to be delivered to any other sub-custodian appointed, with approval of
Trust, by Custodian or Sub-Custodian pursuant to Paragraphs 7, 27, or 28(g)
hereof. Sub-Custodian will not be responsible for such securities and such
monies until actually received by it. All securities delivered to Sub-Custodian
(other than in bearer form) shall be registered in the name of the Fund or in
the name of a nominee of a Fund or in the name of Sub-Custodian or any nominee
of Sub-Custodian (with or without indication of fiduciary status) or in the name
of any sub-custodian or any nominee of such sub-custodian appointed, with
approval of Trust, pursuant to Paragraphs 7, 27, or 28(g) hereof or shall be
properly endorsed and in form for transfer satisfactory to Sub-Custodian.
5. Voting Rights. With respect to all securities, however registered,
it is understood that the voting and other rights and powers shall be exercised
by the Trust. Sub-Custodian's only duty shall be to mail to the Trust within two
(2) business days following receipt by the Sub-Custodian any documents received
by Sub-Custodian as sub-custodian, including proxy statements and offering
circulars, with any proxies for securities registered in a nominee name executed
by such nominee. Where warrants, options, tenders or other securities have fixed
expiration dates, the Trust understands that in order for Sub-Custodian to act,
Sub-Custodian must receive the Trust's instructions at its offices in New York,
addressed as Sub-Custodian may from time to time request, by no later than noon
(New York City time) at least one (1) business day prior to the last scheduled
date to act with respect thereto (or such earlier date or time as Sub-Custodian
may reasonably notify the Trust and Custodian). Absent Sub-Custodian's timely
receipt of such instructions, such instructions will expire without liability to
Sub-Custodian. Corporate reports need not be forwarded to the Trust.
6. Receipt and Disbursement of Money.
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(a) Sub-Custodian shall open and maintain a custody account
for each Fund of the Trust, subject only to draft or order by Sub-Custodian
acting pursuant to the terms of this Agreement, and, subject to Paragraphs 7,
27, or 28(g) hereof, shall hold in such account, subject to the provisions
hereof, all cash received by it from or for the Funds. Sub-Custodian shall make
payments of cash to, or for the account of, each Fund from such cash only (i)
for the purchase of securities for the Funds as provided in Paragraph 14 hereof;
(ii) upon receipt of an Officer's Certificate for the payment of dividends or
other distributions on or with respect to Shares, or for the payment of
interest, taxes, administration, distribution or advisory fees or expenses which
are to be borne by the Funds under the terms of this Agreement and, with respect
to each Fund, and under the terms of any investment advisory agreements,
administration agreement or distribution agreement; (iii) upon receipt of
Written Instructions for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Funds and held by or to be
delivered to Sub-Custodian; (iv) to a sub-custodian or co-custodian pursuant to
Paragraphs 7, 27, or 28(g) hereof; or (v) for the redemption of Shares; or (vi)
upon receipt of an Officer's Certificate for other corporate purposes.
(b) Sub-Custodian is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of money received as
custodian for the Funds.
7. Receipt of Securities.
(a) Except as provided by Paragraphs 7(c), 8, 27, or 28(g)
hereof, and except as otherwise directed by Oral or Written Instructions
described in Paragraph 11 hereof, Sub-Custodian shall hold and physically
segregate in a separate account with respect to each Fund, identifiable from
those of any other person, all securities and non-cash property received by it
for the Funds. All such securities and non-cash property are to be held or
disposed of by Sub-Custodian for each Fund pursuant to the terms of this
Agreement. In the absence of Written Instructions accompanied by a certified
resolution authorizing the specific transaction by the Trust's Board of
Trustees, and subject to Paragraph 25 hereof, Sub-Custodian shall have no power
or authority to withdraw, deliver, assign, hypothecate, pledge or otherwise
dispose of any such securities and investments, except in accordance with the
express terms provided for in this Agreement. In no case may any director,
officer, employee or agent of the Trust or of Custodian withdraw any securities.
In connection with its duties under this Paragraph 7(a), Sub-Custodian may, with
the prior written approval of Trust and Custodian, enter into sub-custodian
agreements with other banks or trust companies for the receipt of certain
securities and cash to be held by Sub-Custodian for the account of a Fund
pursuant to this Agreement; provided that each such bank or trust company has an
aggregate capital, surplus and undivided profits, as shown by its last published
report, of not less than one million dollars ($1,000,000) for a Sub-Custodian
subsidiary or affiliate, or of not less than twenty million dollars
($20,000,000) for a sub-custodian that is not a subsidiary or affiliate of
Sub-Custodian and that in either case such bank or trust company agrees with
Sub-Custodian to comply with the provisions of the 1940 Act and applicable rules
and regulations thereunder applicable to its performance of its services.
Sub-Custodian will provide the Trust and Custodian with a copy of each
sub-custodian agreement it executes pursuant to this Paragraph 7(a).
Sub-Custodian shall be liable for acts or omissions of any such sub-custodian
selected by it pursuant to this Paragraph 7(a), under the standards of care
provided for herein, except for any such sub-custodian engaged at the specific
direction of the Funds.
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Notwithstanding anything herein to the contrary, this Paragraph 7(a) shall not
apply to Sub-Custodian's engagement of foreign sub-custodians, which shall
instead be governed by Paragraph 27 hereof.
(b) Promptly after the close of business on each day,
Sub-Custodian shall furnish the Trust and/or Custodian with confirmations and a
summary of all transfers to or from the account of each Fund during said day.
Where securities are transferred to the account of any Fund established at a
Securities Depository or the Book Entry System pursuant to Paragraph 8 hereof,
Sub-Custodian shall also, by book-entry or otherwise, identify as belonging to
such Fund the quantity of securities in a fungible bulk of securities registered
in the name of Sub-Custodian (or its nominee) or shown in Sub-Custodian's
account on the books of a Securities Depository or the Book-Entry System. At
least monthly and from time to time, Sub-Custodian shall furnish the Trust
and/or Custodian with a detailed statement of the Property held for each Fund
under this Agreement.
(c) Notwithstanding any provision elsewhere contained herein,
Sub-Custodian shall not be required to obtain possession of any instrument or
certificate representing any futures contract, any option, or any futures
contract option until after it shall have determined, or shall have received an
Officer's Certificate from the Trust stating that any such instruments or
certificates are available. The Trust shall deliver to Sub-Custodian such an
Officer's Certificate no later than the business day preceding the availability
of any such instrument or certificate. Prior to such availability, Sub-Custodian
shall comply with the 1940 Act in connection with the purchase, sale,
settlement, closing out or writing of futures contracts, options, or futures
contract options by making payments or deliveries specified in such Officer's
Certificates or Written Instructions received by Sub-Custodian in connection
with any such purchase, sale, writing, settlement or closing out upon its
receipt from a broker, dealer, or futures commission merchant of a statement or
confirmation reasonably believed by Sub-Custodian to be in the form customarily
used by brokers, dealers, or future commission merchants with respect to such
futures contracts, options, or futures contract options, as the case may be,
confirming that the same is held by such broker, dealer or futures commission
merchant, in book-entry form or otherwise, in the name of Sub-Custodian (or any
nominee of Sub-Custodian) as Sub-Custodian for the Fund, provided, however, that
notwithstanding the foregoing, and subject to Paragraph 13(b) hereof, payments
to or deliveries from any margin account, and payments with respect to future
contracts, options, or future contract options to which a margin account
relates, shall be made in accordance with the terms and conditions of the
Trust's relevant margin account agreement. Whenever any such instruments or
certificates are available, Sub-Custodian shall, notwithstanding any provision
in this Agreement to the contrary, make payment for any futures contract,
option, or futures contract option for which such instruments or such
certificates are available against the delivery to Sub-Custodian of such
instrument or such certificate, and deliver any futures contract, option or
futures contract option for which such instruments or such certificates are
available only against receipt by Sub-Custodian of payment therefor. Any such
instrument or certificate delivered to Sub-Custodian shall be held by
Sub-Custodian hereunder in accordance with, and subject to, the provisions of
this Agreement.
8. Use of Securities Depository or the Book-Entry System. Custodian or
the Trust shall deliver to Sub-Custodian a certified resolution of the Board of
Trustees of the Trust
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approving, authorizing and instructing Sub-Custodian on a continuous and ongoing
basis until instructed to the contrary by Written Instructions (i) to deposit in
a Securities Depository or the Book-Entry System all securities of the Funds
held hereunder eligible for deposit therein and (ii) to utilize a Securities
Depository or the Book-Entry System to the extent possible in connection with
the performance of its duties hereunder, including without limitation
settlements of purchases and sales of securities by the Funds, and deliveries
and returns of securities loaned, subject to repurchase agreements or used as
collateral in connection with borrowings. Without limiting the generality of
such use, the following provisions shall apply thereto:
(a) Securities and any cash of the Funds deposited by
Sub-Custodian in a Securities Depository or the Book-Entry System will at all
times be segregated from any assets and cash controlled by Sub-Custodian in
other than a fiduciary or custodian capacity. Subject to Paragraph 28(m) hereof,
Sub-Custodian and its sub-custodians, if any, will pay out money only upon
receipt of securities and will deliver securities only upon receipt of money,
absent Written Instructions to the contrary.
(b) All books and records maintained by Sub-Custodian that
relate to the Funds' participation in a Securities Depository or the Book-Entry
System will at all times during Sub-Custodian's regular business hours be open
to inspection by the Trust's and/or Custodian's duly authorized employees or
agents and the Trust's independent auditors in accordance with applicable
regulations, it being understood, however, that such records may be kept in an
off site Sub-Custodian storage location and the Trust and Custodian will be
furnished with all information in respect of the services rendered to it as it
may require.
(c) Sub-Custodian will provide the Trust with copies of any
report obtained by Sub-Custodian on the system of internal accounting control of
the Securities Depository or Book-Entry System promptly after receipt of such a
report by Sub-Custodian. Sub-Custodian will also provide the Trust and/or
Custodian with such reports on its own system of internal control as the Trust
and/or Custodian may reasonably request from time to time.
9. Instructions Consistent With the Charter, Etc. Unless otherwise
provided in this Agreement, Custodian and Sub-Custodian shall act only upon
Officer's Certificates, Oral Instructions and/or Written Instructions. Custodian
and Sub-Custodian may assume that any Officer's Certificate, Oral Instructions
or Written Instructions received hereunder are not in any way inconsistent with
any provision of the Charter or Code of Regulations or any vote or resolution of
the Trust's Board of Trustees, or any committee thereof. Custodian and
Sub-Custodian shall be entitled to rely upon any Oral Instructions or Written
Instructions actually received by Custodian and Sub-Custodian pursuant to this
Agreement, and upon any certificate, oral instructions, or written instructions
reasonably believed by Custodian and Sub-Custodian to be, respectively, an
Officer's Certificate, Oral Instructions or Written Instructions. The Trust and
Custodian agree to forward to Custodian and Sub-Custodian, as the case may be,
Written Instructions confirming Oral Instructions in such manner that the
Written Instructions are received by Custodian and Sub-Custodian at the close of
business of the same day that such Oral Instructions are given to Custodian and
Sub-Custodian. The Trust and Custodian agree that the fact that such confirming
Written Instructions are not received by Sub-Custodian shall in no way affect
the validity of any of the transactions authorized by the Trust by giving Oral
Instructions,
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and that Sub-Custodian's records with respect to the content of Oral
Instructions shall be controlling.
10. Transactions-Not Requiring Instructions. Sub-Custodian is
authorized to take the following action without Oral Instructions, Written
Instructions, or an Officer's Certificate:
(a) Collection of Income and Other Payments. Sub-Custodian
shall subject to Paragraph 28(f) hereof:
(i) collect and receive for the account of any Fund,
all income and other payments and distributions, including (without limitation)
stock dividends, rights, warrants and similar items, included or to be included
in the Property of any Fund, and promptly advise the Trust and Custodian of such
receipt and shall credit such income, as collected, to such Fund of the Trust.
From time to time, Sub-Custodian may elect, but shall not be so obligated, to
credit the account with interest, dividends or principal payments on payable or
contractual settlement date, in anticipation of receiving same from a payor,
central depository, Securities Depository, broker or other agent employed by the
Trust or Sub-Custodian. Any such crediting and posting shall be at the Trust's
sole risk, and Sub-Custodian shall be authorized to reverse (A) any such advance
posting in the event it does not receive good funds from any such payor, central
depository, Securities Depository, broker or agent, and (B) any other payment or
crediting, including, without limitation, payments made by check or draft, in
the event it does not receive good funds or final payment.
(ii) with respect to securities of foreign issue, and
subject to Paragraph 27 hereof, effect collection of dividends, interest and
other income, and to promptly transmit to the Trust and Custodian all reports,
written information or notices actually received by Sub-Custodian as
sub-custodian, including notices of any call for redemption, offer of exchange,
right of subscription, reorganization, or other proceedings affecting such
securities, or any default in payments due thereon. It is understood, however,
that Sub-Custodian shall be under no responsibility for any failure or delay in
effecting such collections or giving such notice with respect to securities of
foreign issue, regardless of whether or not the relevant information is
published in any financial service available to it unless such failure or delay
is due to Sub-Custodian's own negligence. Collections of income in foreign
currency are, to the extent possible, to be converted into United States dollars
unless otherwise instructed in writing, and in effecting such conversion
Sub-Custodian may use such methods or agencies as it may see fit, including the
facilities of its own foreign division at customary rates. All risk and expenses
incident to such collection and conversion are for the account of the Funds and
Sub-Custodian shall have no responsibility for fluctuations in exchange rates
affecting any such conversions.
(iii) endorse and deposit for collection in the name
of the Trust and each of its Funds, checks, drafts, or other orders for the
payment of money on the same day as received;
(iv) receive and hold for the account of each of the
Fund's securities received by the Funds as a result of a stock dividend, share
split-up or reorganization,
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recapitalization, readjustment or other rearrangement or distribution of rights
or similar securities issued with respect to any portfolio securities of the
Funds held by Sub-Custodian hereunder;
(v) present for payment and collect the amount
payable upon all securities which may mature or be called, redeemed or retired,
or otherwise become payable on the date such securities become payable, but,
with respect to calls, early redemptions, or early retirements, only if
Sub-Custodian either (i) receives a written notice of the same or (ii) notice of
the same appears in one or more of the publications then listed in Appendix A
hereto, which Appendix may be amended to add other publications at any time by
Sub-Custodian without prior notice to or consent from the Trust or Custodian and
which may be amended to delete a publication with the prior notice and consent
from the Trust and Custodian;
(vi) subject to Paragraphs 28(e) and (f) hereof, take
any action which may be necessary and proper in connection with the collection
and receipt of such income and other payments and the endorsement for collection
of checks, drafts and other negotiable instructions;
(vii) with respect to domestic securities, to
exchange securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is changed, and to
surrender securities at maturity or when advised by the Trust or the investment
adviser to the Trust of earlier call for redemption, against payment therefor in
accordance with accepted industry practice. When fractional shares of stock of a
declaring corporation are received as a stock distribution, Sub-Custodian is
authorized to sell the fraction received and credit the Trust's account. Unless
specifically instructed to the contrary in writing, Sub-Custodian is authorized
to exchange securities in bearer form for securities in registered form. If any
Property registered in the name of a nominee of Sub-Custodian is called for
partial redemption by the issuer of such Property, Sub-Custodian is authorized
to allot the called portion to the respective beneficial holders of the Property
in such manner deemed to be fair and equitable by Sub-Custodian in its
reasonable discretion.
(b) Miscellaneous Transactions. Sub-Custodian is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor in the following cases:
(i) for examination by a broker selling for the
account of the Trust in accordance with street delivery custom;
(ii) for the exchange for interim receipts or
temporary securities for definitive securities;
(iii) for transfer of securities into the name of the
Funds or Sub-Custodian or a nominee of either, or for exchange or securities for
a different number of bonds, certificates, or other evidence, representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to Sub-Custodian.
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11. Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions, and not otherwise, Sub-Custodian, directly or through the
use of a Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies, consents, authorizations, and any
other instruments whereby the authority of the Funds as owners of any securities
may be exercised;
(b) Deliver any securities held for any Fund against receipt
of other securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) Deliver any securities held for any Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, against receipt of such certificates or deposit,
interim receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of any Fund
and take such other steps as shall be stated in said instructions to be for the
purposes of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Funds;
(e) Subject to Paragraph 25(b) hereof, release securities
belonging to any Fund to any bank or trust company for the purpose of pledge or
hypothecation to secure any loan incurred by such Fund; provided, however, that
securities shall be released only upon payment to Sub-Custodian of the monies
borrowed, except that in cases where additional collateral is required to secure
a borrowing already made, subject to proper prior authorization, further
securities may be released for that purpose; and pay such loan upon redelivery
to it of the securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(f) Deliver any securities held for any Fund upon the exercise
of a covered call option written by such Fund on such securities;
(g) Release and deliver securities owned by a Fund in
connection with any repurchase agreement entered into on behalf of such Fund,
but subject to Paragraph 28(m) hereof, only on receipt of payment therefor; and
pay out monies of such Fund in connection with such repurchase agreements, but
only upon the delivery of the securities;
(h) otherwise transfer, exchange or deliver securities in
accordance with Oral or Written Instructions specifying the purpose of such
transfer, including without limitation, loans of securities, short sales, or
reverse repurchase agreements, and subject to Paragraph 7(a) hereof.
12. Segregated Accounts. Sub-Custodian shall upon receipt of Written or
Oral Instructions establish and maintain a segregated account or accounts on its
records for and on behalf of any Fund, into which account or accounts shall be
credited, but only pursuant to an
10
Officer's Certificate or Written Instructions
specifying the particular securities and/or amount of cash, cash and/or
securities, including securities in the Book-Entry System (i) for the purposes
of compliance by the Funds and the Trust with the procedures required by a
securities or option exchange, (ii) for the purpose of compliance by the Funds
and the Trust with the 1940 Act and Release No. 10666 or any subsequent release
or releases of the SEC relating to the maintenance of segregated accounts by
registered investment companies, and (iii) for other proper corporate purposes.
13. Dividends and Distributions.
(a) The Trust and/or Custodian shall furnish Sub-Custodian
with appropriate evidence of action by the Trust's Board of Trustees declaring
and authorizing the payment of any dividends and distributions. Upon receipt by
Sub-Custodian of an Officer's Certificate with respect to dividends and
distributions declared by the Trust's Board of Trustees and payable to
shareholders of any Fund who are entitled to receive cash for fractional shares
and those who have elected in the proper manner to receive their distributions
on dividends in cash, and in conformance with procedures mutually agreed upon by
Custodian and Sub-Custodian, the Trust, and the Trust's administrator or
transfer agent, Sub-Custodian shall pay to the Fund's transfer agent, as agent
for the shareholders, an amount equal to the amount indicated in said Officer's
Certificate as payable by the Fund to such shareholders for distribution in cash
by the transfer agent to such shareholders.
(b) Sub-Custodian may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that the Trust or Custodian
uses (each an "FCM Agreement"), pursuant to which the Funds' margin deposits in
any transactions involving futures contracts and options on futures contracts
will be held by Sub-Custodian in accounts (each an "FCM Account") subject to the
disposition by the FCM involved in such contracts in accordance with the
customer contract between FCM and the Trust ("FCM Contract"), SEC rules
governing such segregated accounts, Commodities and Futures Trading Commission
("CFTC") rules and the rules of the applicable commodities exchange. Such FCM
Agreements shall only be entered into by Sub-Custodian upon receipt by
Sub-Custodian of Written Instructions from the Trust which state that (i) an FCM
Contract has been entered into; (ii) the Trust is in compliance with all the
rules and regulations of the CFTC; and (iii) the FCM Agreement is acceptable to
the Trust. Transfers of initial margin shall be made into an FCM Account only
upon Written Instructions; transfers of premium and variation margin may be made
into an FCM Account pursuant to Oral Instructions. Transfers of funds from an
FCM Account to the FCM for which Custodian holds such an account may only occur
in accordance with the terms of the FCM Agreement.
14. Purchase of Securities. Promptly after each purchase of securities
by the Trust on behalf of any Fund, the Trust or Custodian shall deliver to
Sub-Custodian Oral or Written Instructions specifying with respect to each such
purchase: (a) the name of the issuer and the title of the securities, (b) the
number of shares of the principal amount purchased and accrued interest, if any,
(c) the dates of purchase and settlement, (d) the purchase price per unit, (e)
the total amount payable upon such purchase, (f) the name of the person from
whom or the broker through whom the purchase was made and (g) the Fund for which
the purchase was made. Sub-Custodian shall upon receipt of securities purchased
by or for the Trust pay out of the monies held for the
11
account of the Trust the total amount payable to the person from whom or the
broker through whom the purchase was made, provided that the same conforms to
the total amount payable as set forth in such Oral or Written Instructions.
15. Sales of Securities. Promptly after each sale of securities by the
Funds, the Trust or Custodian shall deliver to Sub-Custodian Oral or Written
Instructions, specifying with respect to each such sale: (a) the name of the
issuer and the title of the security, (b) the number of shares or principal
amount sold, and accrued interest, if any, (c) the dates of sale, (d) the sale
price per unit, (e) the total amount payable to the Trust upon such sale, (f)
the name of the broker through whom or the person to whom the sale was made and
(g) the Fund for which the sale was made. Sub-Custodian shall, subject to
Paragraph 28(m) hereof, deliver the securities against payment of the total
amount payable to the Trust upon such sale, provided that the same conforms to
the total amount payable as set forth in such Oral and Written Instructions.
16. Records. The books and records pertaining to the Funds and the
Trust which are in the possession of Sub-Custodian shall be the property of the
Trust. Such books and records shall be prepared and maintained as required by
the 1940 Act and other applicable securities laws and rules and regulations. The
SEC, the Trust, or the Trust's authorized representatives, shall have access to
such books and records at all times during Sub-Custodian's normal business
hours. Upon the reasonable request of the Trust or Custodian, copies of any such
books and records shall be provided by Sub-Custodian to the Custodian, the Trust
or the Trust's authorized representative, and the Trust shall reimburse
Sub-Custodian reasonable expenses for providing such copies. Upon reasonable
request of the Trust or the Custodian, Sub-Custodian shall provide in hard copy,
tape or on micro-film, or such other medium as agreed to among Trust, Custodian
and Sub-Custodian, and any books and records maintained by Sub-Custodian.
17. Reports.
(a) Sub-Custodian shall furnish the Trust and Custodian the
following reports:
(i) such periodic and special reports as the Trust
and Custodian may reasonably request from time to time;
(ii) a monthly statement summarizing all transactions
and entries for the account of each Fund;
(iii) a monthly report of portfolio securities
belonging to each Fund showing the adjusted average cost of each issue and
market value at the end of such month;
(iv) a monthly report of the cash account of each
Fund showing disbursements;
(v) the reports to be furnished to the Trust pursuant
to Rule 17f-4 under the 1940 Act; and
(vi) such other information as may be agreed upon
from time to time between the Trust and/or Custodian and Sub-Custodian.
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(b) Subject to Paragraphs 5 and 27(g) hereof, Sub-Custodian
shall transmit promptly to the Trust any proxy statement, proxy materials,
notice of a call or conversion or similar communications actually received by
Sub-Custodian as custodian of the Property.
(c) Sub-Custodian shall report as the market value at the end
of each month the last closing bid, offer or sale price to the extent, and as
the same, is furnished to Sub-Custodian by a pricing or similar service utilized
or subscribed to by Sub-Custodian. Sub-Custodian shall not be responsible for,
have any liability with respect to, or be under any duty to inquire into, nor
deemed to make any assurances with respect to, the accuracy or completeness of
such information, even if The Bank of New York in performing services for
others, including services similar to those performed hereunder, receives
different valuations of the same or different securities of the same issuer.
18. Cooperation with Accountants. Each of the Custodian and
Sub-Custodian shall cooperate with the Trust's independent certified public
accountants and shall take all reasonable action in the performance of its
obligations under this Agreement, and obligations under Rule 17f-2 under the
1940 Act to the extent such rule is applicable, to assure that the necessary
information is made available to such accountants.
19. Confidentiality. Each of Custodian and Sub-Custodian agrees on
behalf of itself and its employees to treat all record and other information
relative to the Trust, its prior, present or potential shareholders, its
managers and its prior, present or potential customers, as confidential
information, and to protect and safeguard the same to the extent required by
applicable law, provided, however, that Custodian and Sub-Custodian may make
such disclosure as required by applicable law, regulation, court order, decrees
or legal process and upon receipt of any of the foregoing requiring such
disclosure, Custodian and Sub-Custodian's only obligation shall be to notify the
Trust thereof. Each of Custodian and Sub-Custodian further agrees not to
otherwise use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Trust.
20. Equipment Failures. In the event of equipment failures beyond
Sub-Custodian's control, Sub-Custodian shall take reasonable steps to minimize
service interruptions but neither it nor Custodian shall have any further
liability with respect thereto. Notwithstanding the foregoing, Sub-Custodian
shall maintain sufficient back up electronic data processing equipment to enable
Sub-Custodian to fulfill its obligations under this Agreement consistent with
standard industry practices.
21. Right to Receive Advice.
(a) Advice of Fund. If Custodian or Sub-Custodian shall be in
doubt as to any action to be taken or omitted by it, either may request, and
shall receive, from the Trust clarification or advice, including Oral or Written
Instructions.
(b) Advice of Counsel. If Custodian or Sub-Custodian shall be
in doubt as to any question of law involved in any action to be taken or omitted
by Custodian or Sub-Custodian,
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either may request at its option advice from its own counsel, at its own
expense, or advice from the Trust's counsel.
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions received by Custodian or
Sub-Custodian pursuant to subparagraph (a) of this paragraph and advice received
by Custodian or Sub-Custodian pursuant to subparagraph (b) of this paragraph,
Custodian and Sub-Custodian shall be entitled to rely on and follow the advice
received pursuant to subparagraph (b) alone.
(d) Protection of Sub-Custodian. Each of Custodian and
Sub-Custodian shall be protected in any action or inaction which it takes or
omits to take in reliance on any directions, advice or Oral or Written
Instructions received pursuant to subparagraphs (a) or (b) of this section which
it, after receipt of any such directions, advice or Oral or Written
Instructions, in good faith reasonably believes to be consistent with such
directions, advice or Oral or Written Instructions, as the case may be. Nothing
in this Paragraph 21 shall be construed as imposing upon Custodian or
Sub-Custodian any obligation (i) to seek such directions, advice or Oral or
Written Instructions, or (ii) to act in accordance with such directions, advice
or Oral or Written Instructions when received, unless, under the terms or
another provision of this Agreement, the same is a condition to Custodian or
Sub-Custodian's properly taking or omitting to take such action. Nothing in this
Paragraph 21(d) shall excuse Custodian or Sub-Custodian when an action or
omission on the part of Custodian or Sub-Custodian constitutes willful
misfeasance or bad faith, or negligence or reckless disregard by Custodian or
Sub-Custodian of its duties under this Agreement.
22. Compliance with Governmental Rules and Regulations. Each of
Custodian and Sub-Custodian undertakes to comply with the laws, rules and
regulations of governmental authorities having jurisdiction over Custodian and
Sub-Custodian and its express duties hereunder.
23. Compensation. As compensation for the services rendered by
Custodian and Sub-Custodian during the term of this Agreement, the Trust shall
pay to Custodian and Sub-Custodian, in addition to reimbursement of its
out-of-pocket expenses, such compensation as may be agreed upon from time to
time in writing by the Trust and Custodian and/or Sub-Custodian, as applicable
as set forth in Appendix E with respect to Custodian and Appendix F with respect
to Sub-Custodian.
24. Indemnification. The Trust agrees to indemnify each of Custodian
and Sub-Custodian against, and hold harmless from all taxes, charges, expenses
(including reasonable fees and expenses of counsel), assessments, claims,
losses, demands and liabilities whatsoever (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act and the 1940 Act, and any
state and foreign securities laws, all as currently in effect or as may be
amended from time to time) and expenses, including without limitation,
reasonable attorney's fees and disbursements, howsoever arising or incurred
because of or in connection with this Agreement, except for such liability,
claim, loss, demand, charge, expense, tax or assessment arising out of either
Custodian's or Sub-Custodian's, or their nominees', willful misconduct or
negligence or reckless disregard of their duties under this Agreement. For the
purposes of this Agreement,
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including, without limitation, for purposes of Paragraphs 24 and 28, neither
Sub-Custodian's acceptance of Instructions in accordance with Paragraph 26A nor
Sub-Custodian's use of Foreign Sub-Custodians pursuant to agreements that do not
permit actual examination by independent public accountants, nor the denial of
examination by any Foreign Sub-Custodian, shall, in and of itself, constitute,
or be deemed to constitute, a breach by Sub-Custodian of this Agreement or
negligence, willful misconduct, or reckless disregard of its duties by
Sub-Custodian, provided the relevant agreement between Sub-Custodian and a
Foreign Sub-Custodian satisfies the requirements of Rule 17f-5, exclusive of any
requirements of such Rule imposed by Rule 17f-2.
25. Overdrafts or Indebtedness.
(a) Sub-Custodian shall advance funds under this Agreement
with respect to any Fund which results in an overdraft because the moneys held
by Sub-Custodian in the separate account for such Fund shall be insufficient to
pay the total amount payable upon a purchase of securities by such Fund, as set
forth in an Officer's Certificate or Oral or Written Instructions, or which
results in an overdraft in the separate account of such Fund for some other
reason, or if the Trust is for any other reason indebted to Sub-Custodian,
including any indebtedness to The Bank of New York under the Trust's Cash
Management and Related Services Agreement, (except a borrowing for investment or
for temporary or emergency purposes using securities as collateral pursuant to a
separate agreement and subject to the provisions of Paragraph 25(b) hereof),
such overdraft or indebtedness shall be deemed to be a loan made by
Sub-Custodian to the Trust for such Fund payable on demand and shall bear
interest from the date incurred at a rate per annum (based on a 360-day year for
the actual number of days involved) equal to the overdraft rate specified in
Appendix F to this Agreement. In addition, the Trust hereby agrees that
Sub-Custodian shall have a continuing lien and security interest in and to any
property at any time held by it for the benefit of such Fund or in which the
Fund may have an interest which is then in Sub-Custodian's possession or control
or in possession or control of any third party acting on Sub-Custodian's behalf.
The Trust authorizes Sub-Custodian, in its sole discretion, at any time to
charge any such overdraft or indebtedness together with interest due thereon
against any balance of account standing to such Fund's credit on Sub-Custodian's
books. In addition, the Trust hereby covenants that on each Business Day on
which either it intends to enter a Reverse Repurchase Agreement and/or otherwise
borrow from a third party, or which next succeeds a Business Day on which at the
close of business the Trust had outstanding a Reverse Repurchase Agreement or
such a borrowing, it shall prior to 1:00 p.m., New York City time, advise
Sub-Custodian, in writing, of each such borrowing, shall specify the Fund to
which the same relates, and shall not incur any indebtedness not so specified
other than from Sub-Custodian.
(b) The Trust will cause to be delivered to Sub-Custodian by
any bank (including, if the borrowing is pursuant to a separate agreement,
Sub-Custodian) from which it borrows money for investment or for temporary or
emergency purposes using securities held by Sub-Custodian hereunder as
collateral for such borrowings, a notice or undertaking in the form currently
employed by such bank setting forth the amount which such bank will loan to the
Trust against delivery of a stated amount of collateral. The Trust shall
promptly deliver to Sub-Custodian Written Instruction specifying with respect to
each such borrowing: (a) the Fund to which such borrowing relates; (b) the name
of the bank, (c) the amount and terms of the borrowing, which may be set forth
by incorporating by reference an attached promissory note, duly
15
endorsed by the Fund, or other loan agreement, (d) the time and date, if known,
on which the loan is to be entered into, (e) the date on which the loan becomes
due and payable, (f) the total amount payable to the Fund on the borrowing date,
(g) the market value of securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular securities, and (h) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the 1940 Act and the Fund's
prospectus. Sub-Custodian shall deliver on the borrowing date specified in
Written Instructions the specified collateral and the executed promissory note,
if any, against delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount payable as set
forth in such Written Instructions. Sub-Custodian may, at the option of the
lending bank, keep such collateral in its possession, but such collateral shall
be subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. Sub-Custodian shall deliver such securities
as additional collateral as may be specified in Written Instructions to
collateralize further any transaction described in this Paragraph 25(b). The
Trust shall cause all securities released from collateral status to be returned
directly to Sub-Custodian, and Sub-Custodian shall receive from time to time
such return of collateral as may be tendered to it. In the event that the Trust
fails to specify in Written Instructions the Fund, the name of the issuer, the
title and number of shares or the principal amount of any particular securities
to be delivered as collateral by Sub-Custodian, Sub-Custodian shall not be under
any obligation to deliver any securities.
26A. Instructions
(a) With respect to any software provided by the Sub-Custodian
to a Fund in order for the Fund to transmit Instructions to the Sub-Custodian
(the "Software"), the Sub-Custodian grants to the Trust a personal,
nontransferable and nonexclusive license to use the Software solely for the
purpose of transmitting Instructions to, and receiving communications from, the
Sub-Custodian in connection with its account(s). The Trust agrees not to sell,
reproduce, lease or otherwise provide, directly or indirectly, the Software or
any portion thereof to any third party without the prior written consent of the
Sub-Custodian. At no time shall Trust be obligated to use the Software to
transmit Instructions to the Sub-Custodian.
(b) The Trust shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and transmit Instructions to
the Sub-Custodian. The Sub-Custodian shall not be responsible for the
reliability, compatibility with the Software or availability of any such
equipment or services.
(c) The Trust acknowledges that the Software, all data bases
made available to the Trust by utilizing the Software (other than data bases
relating solely to the assets of the Funds and transactions with respect
thereto), and any proprietary data, processes, information and documentation
(other than those which are or become part of the public domain or are legally
required to be made available to the public) (collectively, the "Information"),
are the exclusive and confidential property of the Sub-Custodian. The Trust
shall keep the Information confidential by using the same care and discretion
that the Trust uses with respect to its own confidential property and trade
secrets and shall neither make nor permit any disclosure without the prior
16
written consent of the Sub-Custodian. Upon termination of this Agreement or the
Software license granted hereunder for any reason, the Trust shall return to the
Sub-Custodian all copies of the Information which are in its possession or under
its control or which the Trust distributed to third parties.
(d) The Sub-Custodian reserves the right to modify the
Software from time to time upon reasonable prior notice and the Trust shall, if
it desires in its sole discretion to continue to use the software, install new
releases of the Software as the Sub-Custodian may direct. The Trust agrees not
to modify or attempt to modify the Software without the Sub-Custodian's prior
written consent. The Trust acknowledges that any modifications to the Software,
whether by the Trust or the Sub-Custodian and whether with or without the
Sub-Custodian's consent, shall become the property of the Sub-Custodian.
(e) The Sub-Custodian makes no warranties or representations
of any kind with regard to the Software or the method(s) by which the Trust may
transmit Instructions to the Sub-Custodian, express or implied, including but
not limited to any implied warranties or merchantability or fitness for a
particular purpose.
(f) Where the method for transmitting Instructions by the
Trust involves an automatic systems acknowledgment by the Sub-Custodian of its
receipt of such Instructions, then in the absence of such acknowledgment, the
Sub-Custodian shall not be liable for any failure to act pursuant to such
Instructions and the Trust may not claim that such Instructions were received by
the Sub-Custodian, and the Trust shall deliver a Certificate by some other
means.
(g) (i) The Trust agrees that where it delivers to the
Sub-Custodian Instructions hereunder, it shall be the Trust's sole
responsibility to ensure that only persons duly authorized by the Trust and the
correct number of such persons transmit such Instructions to the Sub-Custodian.
The Trust will cause all persons transmitting Instructions to the Sub-Custodian
to treat applicable use and authorization codes, passwords and authentication
keys with extreme care, and authorizes the Sub-Custodian to act in accordance
with and rely upon Instructions received by it pursuant hereto.
(ii) The Trust hereby represents, acknowledges and
agrees that it is fully informed of the protections and risks associated with
the various methods of transmitting Instructions to the Sub-Custodian and that
there may be more secure methods of transmitting instructions to the
Sub-Custodian than the method(s) selected by the Trust. The Trust hereby agrees
that the security procedures (if any) to be followed in connection with the
Trust's transmission of Instructions provide to it a commercially reasonable
degree of protection in light of its particular needs and circumstances.
(h) The Trust shall notify the Sub-Custodian of any errors,
omissions or interruptions in, or delay or unavailability of, its ability to
send Instructions as promptly as practicable, and in any event within 24 hours
after the earliest of (i) discovery thereof, (ii) the business day on which
discovery should have occurred through the exercise of reasonable care and (iii)
in the case of any error, the date of actual receipt of the earliest notice
which reflects such error, it being agreed that discovery and receipt of notice
may only occur on a business day. The
17
Sub-Custodian shall, as promptly as practicable, and in any event within 24
hours after the earliest of (i) discovery thereof, (ii) the business day on
which discovery should have occurred through the exercise of reasonable care and
(iii) in the case of any error, the date of actual receipt of the earliest
notice which reflects such error, it being agreed that discovery and receipt of
notice may only occur on a business day, advise the Trust whenever the
Sub-Custodian learns of any errors, omissions or interruption in, or delay or
unavailability of, the Trust's ability to send Instructions.
26B. FX Transactions
(a) Whenever a Fund shall enter into an FX Transaction, the
Fund shall promptly deliver to the Sub-Custodian a Certificate or Oral
Instructions specifying with respect to such FX Transaction: (a) the Series to
which such FX Transaction is specifically allocated; (b) the type and amount of
Currency to be purchased by the Fund; (c) the type and amount of Currency to be
sold by the Fund; (d) the date on which the Currency to be purchased is to be
delivered; (e) the date on which the Currency to be sold is to be delivered; and
(f) the name of the person from whom or through whom such currencies are to be
purchased and sold. Unless otherwise instructed by a Certificate or Oral
Instructions, the Custodian shall deliver, or shall instruct a Foreign
Sub-Custodian to deliver, the Currency to be sold on the date on which such
delivery is to be made, as set forth in the Certificate, and shall receive, or
instruct a Foreign Sub-Custodian to receive, the Currency to be purchased on the
date as set forth in the Certificate.
(b) Where the Currency to be sold is to be delivered on the
same day as the Currency to be purchased, as specified in the Certificate or
Oral Instructions, the Sub-Custodian or a Foreign Sub-Custodian may arrange for
such deliveries and receipts to be made in accordance with the customs
prevailing from time to time among brokers or dealers in Currencies, and such
receipt and delivery may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall continue
until the Currency to be received by the Fund has been received in full.
(c) Any foreign exchange transaction effected by the
Sub-Custodian in connection with this Agreement may be entered with the
Sub-Custodian, any office, branch or subsidiary of The Bank of New York Company,
Inc., or any Foreign Sub-Custodian acting as principal or otherwise through
customary banking channels. The Fund may issue a standing Certificate with
respect to foreign exchange transactions but the Sub-Custodian may establish
rules or limitations concerning any foreign exchange facility made available to
the Fund. The Fund shall bear all risks of investing in Securities or holding
Currency. Without limiting the foregoing, the Fund shall bear the risks that
rules or procedures imposed by a Foreign Sub-Custodian or foreign depositories,
exchange controls, asset freezes or other laws, rules, regulations or orders
shall prohibit or impose burdens or costs on the transfer to, by or for the
account of the Fund of Securities or any cash held outside the Fund's
jurisdiction or denominated in Currency other than its home jurisdiction or the
conversion of cash from one Currency into another currency. The Sub-Custodian
shall not be obligated to substitute another Currency for a Currency (including
a Currency that is a component of a Composite Currency Unit) whose
transferability, convertibility or availability has been affected by such law,
regulation, rule or
18
procedure. Neither the Sub-Custodian nor any Foreign Sub-Custodian shall be
liable to the Fund for any loss resulting from any of the foregoing events.
27. Duties of Sub-Custodian with respect to Property of any Fund held
outside of the United States.
(a) Sub-Custodian is authorized and instructed to employ, as
sub-custodian for each Fund's Foreign Securities (as such term is defined in
paragraph (c)(1) of Rule 17f-5 under the 0000 Xxx) and other assets, the foreign
banking institutions and foreign securities depositories and clearing agencies
designated on Appendix C hereto ("Foreign Sub-Custodians") to carry out their
respective responsibilities in accordance with the terms of the sub-custodian
agreement between each such Foreign Sub-Custodian and Sub-Custodian (each such
agreement, a "Foreign Sub-Custodian Agreement"). Upon receipt of an Officer's
Certificate, together with a certified resolution substantially in the form
attached as Appendix D of the Trust's Board of Trustees, the Trust may designate
any additional foreign sub-custodian with which Sub-Custodian has an agreement
for such entity to act as Sub-Custodian's agent, as its sub-custodian and any
such additional foreign sub-custodian shall be deemed added to Appendix C
hereto. Upon receipt of an Officer's Certificate, Sub-Custodian shall cease the
employment of any one or more Foreign Sub-Custodians for maintaining custody of
the Trust's assets and such Foreign Sub-Custodian shall be deemed deleted from
Appendix C hereto.
(b) Each Foreign Sub-Custodian Agreement shall be
substantially in the form delivered to the Trust herewith and will not be
amended in a way that materially adversely affects the Trust without the Trust's
prior written consent.
(c) Sub-Custodian shall identify on its books as belonging to
each Fund the Foreign Securities of such Fund held by each Foreign
Sub-Custodian. At the election of the Trust, it shall be entitled to be
subrogated to the rights of Sub-Custodian with respect to any claims by the
Trust or any Fund against a Foreign Sub-Custodian as a consequence of any loss,
damage, cost, expense, liability or claim sustained or incurred by the Trust or
any Fund if and to the extent that the Trust or such Fund has not been made
whole for any such loss, damage, cost, expense, liability or claim.
(d) Upon request of the Trust, Sub-Custodian will, consistent
with the terms of the applicable Foreign Sub-Custodian Agreement, use reasonable
efforts to arrange for the independent accountants of the Trust to be afforded
access to the books and records of any Foreign Sub-Custodian insofar as such
books and records relate to the performance of such Foreign Sub-Custodian under
its agreement with Sub-Custodian on behalf of the Trust.
(e) Sub-Custodian will supply to the Trust and to the
Custodian from time to time, as mutually agreed upon, statements in respect of
the securities and other assets of each Fund held by Foreign Sub-Custodians,
including but not limited to, an identification of entities having possession of
each Fund's Foreign Securities and other assets, and advices or notifications of
any transfers of Foreign Securities to or from each custodial account maintained
by a Foreign Sub-Custodian for Sub-Custodian on behalf of the Fund.
19
(f) Sub-Custodian shall furnish annually to the Trust and to
the Custodian, as mutually agreed upon, information concerning the Foreign
Sub-Custodians employed by Sub-Custodian. Such information shall be similar in
kind and scope to that furnished to the Trust in connection with the Trust's
initial approval of such Foreign Sub-Custodians and, in any event, shall include
information pertaining to (i) the Foreign Sub-Custodian's financial strength,
general reputation and standing in the countries in which they are located and
their ability to provide the custodial services required, and (ii) whether the
Foreign Sub-Custodians would provide a level of safeguards for safekeeping and
custody of securities not materially different from those prevailing in the
United States. Sub-Custodian shall monitor the general operating performance of
each Foreign Sub-Custodian. Sub-Custodian agrees that it will use reasonable
care in monitoring compliance by each Foreign Sub-Custodian with the terms of
the relevant Foreign Sub-Custodian Agreement and that if it learns of any breach
of such Foreign Sub-Custodian Agreement believed by Sub-Custodian to have a
material adverse effect on the Trust or any Fund it will promptly notify the
Trust and Custodian in writing of such breach. Sub-Custodian also agrees to use
reasonable and diligent efforts to enforce its rights under the relevant Foreign
Sub-Custodian Agreement.
(g) Sub-Custodian shall transmit promptly to the Trust all
notices, reports or other written information received pertaining to the Trust's
Foreign Securities, including without limitation, notices of corporate action,
proxies and proxy solicitation materials.
(h) Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for securities received for the account of the
Trust or any Fund and delivery of securities maintained for the account of the
Trust or any Fund may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivery of securities 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 securities from such
purchaser or dealer.
(i) With respect to any losses or damages arising out of or
relating to any actions or omissions of any Foreign Sub-Custodian, the sole
responsibility and liability of Sub-Custodian shall be to take all appropriate
and reasonable action at the Trust's expense to recover such loss or damage from
the Foreign Sub-Custodian. It is expressly understood and agreed that
Sub-Custodian's sole responsibility and liability shall be limited to amounts so
recovered from the Foreign Sub-Custodian. Custodians' liability to the Trust
under this paragraph (i) shall under no circumstances exceed the liability of
Sub-Custodian assumed hereunder.
28. Concerning Custodians.
(a) (i) The Custodian shall exercise care and diligence and
act in good faith and use all commercially reasonable efforts in the performance
of its duties i. The Sub-Custodian shall exercise care and diligence and act in
good faith and use all commercially reasonable efforts in the performance of its
duties hereunder. The Custodian shall be responsible to the Trust for its own
failure, or the failure of Sub-Custodian, or the failure of any sub-custodian
that either shall appoint (other than a foreign sub-custodian referred to in
Paragraph 27) or that of
20
their respective employees or agents, to perform their duties, obligations or
responsibilities in accordance with this Agreement, but only to the extent that
such failure results from acts or omissions that constitute willful misfeasance,
bad faith or negligence on the part of the Custodian or Sub-Custodian, or on the
part of their respective employees or agents, or reckless disregard of such
duties, obligations and responsibilities. The Sub-Custodian shall be responsible
to the Trust and to the Custodian for its own failure, or the failure of any
sub-custodian that it shall appoint (other than a foreign sub-custodian referred
to in Paragraph 27 or a sub-custodian appointed by the Sub-Custodian at the
specific direction of the Custodian or the Trust), or that of their respective
employees or agents, to perform their duties, obligations or responsibilities in
accordance with this Agreement, but only to the extent that such failure results
from acts or omissions that constitute willful misfeasance, bad faith or
negligence on the part of the Sub-Custodian or such sub-custodian, or on the
part of their respective employees or agents, or reckless disregard of such
duties, obligations and responsibilities.
(ii) Without limiting the generality of the foregoing
or any other provision of this Agreement, in no event shall Custodian or
Sub-Custodian be liable to the Fund or any third party nor, except as otherwise
provided in this subparagraph (a), shall Sub-Custodian be liable to Custodian,
for special, indirect or consequential damages or lost profits or loss of
business, arising under or in connection with this Agreement, even if previously
informed of the possibility of such damages and regardless of the form of
action. Custodian and/or Sub-Custodian may, with respect to questions of law
arising under any FCM Agreement, apply for and obtain the advice and opinion of
counsel to the Trust at the expense of the Trust, or of its own counsel at its
own expense, and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with such advice or opinion.
Sub-Custodian shall be liable to the Trust for any loss or damage resulting from
the use of the Book-Entry System or any Securities Depository arising by reason
of any negligence or willful misconduct on the part of Sub-Custodian or any of
its employees or agents.
(iii) Sub-Custodian's liability pursuant to the last
sentence of subparagraph (a)(i) shall include, but not be limited to,
reimbursing Custodian for court-ordered damage awards, fines, penalties, and
judicially-approved settlements (and attorney's fees and disbursements relating
thereto) arising out of or in connection with the conduct giving rise to such
liability.
(iv) If Custodian receives notice of the commencement of any
action, suit, or proceeding (an "Action"), or notice that any Action may be
commenced, for which Sub-Custodian may be liable to Custodian pursuant to this
Paragraph 28, Custodian shall give notice to Sub-Custodian of the commencement
of the Action or of the possibility that an Action will be commenced. Any
omission to notify Sub-Custodian will not relieve Sub-Custodian from any
liability which it may have under this Paragraph, except to the extent the
failure to notify Sub-Custodian prejudices the rights of Sub-Custodian.
Sub-Custodian will be entitled at its sole expense and liability, to exercise
full control of the defense, compromise or settlement of any such Action,
provided that Sub-Custodian (1) notifies Custodian in writing of Sub-Custodian's
intention to assume such defense; and (2) retains legal counsel reasonably
satisfactory to Custodian to conduct the defense of such Action. If
Sub-Custodian advises Custodian that it does not wish to exercise full control
of any defense, compromise or settlement of any Action, Sub-
21
Custodian shall be responsible for the fees and expenses of counsel selected by
Custodian, in addition to any other amounts for which Sub-Custodian may be
liable pursuant to this Paragraph 28. The other person will cooperate with the
person assuming the defense, compromise or settlement of any Action in
accordance with this Paragraph in any manner that such person reasonably may
request. If Sub-Custodian so assumes the defense of any such Action, Custodian
will have the right to employ a separate counsel and to participate in (but not
control) the defense, compromise or settlement of the Action, but the fees and
expenses of such counsel will be at the expense of Custodian unless (a)
Sub-Custodian has agreed to pay such fees and expenses, (b) any relief other
than the payment of money damages is sought against Custodian, or (c) Custodian
has been advised by its counsel that there may be one or more defenses available
to it which are different from or additional to those available to Sub-Custodian
and that a conflict of interest therefore exists, and in any such case that
portion of the fees and expenses of such separate counsel that are reasonably
related to matters for which Sub-Custodian is liable pursuant to this Paragraph
will be paid by Sub-Custodian. Custodian will not settle or compromise any such
Action for which Sub-Custodian is liable pursuant to this Paragraph without the
prior written consent of Sub-Custodian, unless Sub-Custodian has failed, after
reasonable notice, to undertake control of such Action in the manner provided in
this Paragraph. Sub-Custodian will not settle or compromise any such Action in
which any relief other than the payment of money damages is sought against
Custodian without the consent of Custodian, such consent not to be unreasonably
withheld. In the event that Sub-Custodian intends to settle or compromise any
Action in which solely money damages are sought, Sub-Custodian shall give
Custodian fifteen (15) business days prior written notice.
(b) Without limiting the generality of the foregoing, neither
Custodian nor Sub-Custodian shall be under any obligation to inquire into, and
neither party shall be liable for:
(i) The validity of the issue of any securities
purchased, sold, or written by or for the Trust or any Fund, the legality of the
purchase, sale or writing thereof, or the propriety of the amount paid or
received therefor;
(ii) The legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid therefor;
(iii) The legality of the declaration or payment of
any dividend by the Trust;
(iv) The legality of any borrowing by the Trust using
securities as collateral;
(v) The legality of any loan of portfolio securities,
nor shall Custodian or Sub-Custodian be under any duty or obligation to see to
it that any cash collateral delivered to it by a broker, dealer, or financial
institution or held by it at any time as a result of such loan of portfolio
securities is adequate collateral for or against any loss Custodian,
Sub-Custodian, the Trust or any Fund might sustain as a result of such loan. The
Custodian and Sub-Custodian
22
specifically, but not by way of limitation, shall not be under any duty or
obligation periodically to check or notify the Trust or any Fund that the amount
of such cash collateral held by Sub-Custodian for the Trust is sufficient
collateral for the Trust, but such duty or obligation shall be the sole
responsibility of the Trust. In addition, Custodian and Sub-Custodian shall be
under no duty or obligation to see that any broker, dealer or financial
institution to which portfolio securities are lent makes payment to it of any
dividends or interest which are payable to or for the account of the Trust
during the period of such loan or at the termination of such loan, provided,
however, that Sub-Custodian shall promptly notify the Trust in the event that
such dividends or interest are not paid and received when due; or
(vi) The sufficiency or value of any amounts of money
and/or securities held in any segregated account described in Paragraph 12(a)
hereof in connection with transactions by the Funds, or whether such segregated
account provides the compliance intended to be achieved. In addition, neither
Custodian nor Sub-Custodian shall be under any duty or obligation to see that
any broker, dealer, FCM or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, FCM or Clearing Member, to see that any
payment received by Sub-Custodian from any broker, dealer, FCM or Clearing
Member is the amount the Trust is entitled to receive, or to notify the Trust or
a Fund of Sub-Custodian's receipt or non-receipt of any such payment.
(c) Neither Custodian nor Sub-Custodian shall be liable for,
or considered to be sub-custodian or custodian of, any money, whether or not
represented by any check, draft, or other instrument for the payment of money,
received by Sub-Custodian on behalf of the Trust until Sub-Custodian actually
receives and collects such money directly or by the final crediting of the
account representing the Fund's interest at the Book-Entry System or a
Securities Depository.
(d) Neither Custodian nor Sub-Custodian shall have any
responsibility or be liable for ascertaining or acting upon any calls,
conversions, exchange offers, tenders, interest rate changes or similar matters
relating to securities held in a Securities Depository, unless Custodian or
Sub-Custodian shall have actually received timely notice from such Securities
Depository. In no event shall Custodian or Sub-Custodian have any responsibility
or liability for the failure of any Securities Depository to collect, or for the
late collection or late crediting by a Securities Depository of any amount
payable upon securities deposited in a Securities Depository which may mature or
be redeemed, retired, called or otherwise become payable. Upon receipt of
Written Instructions from the Trust of an overdue amount on securities held in a
Securities Depository Sub-Custodian shall make a claim against a Securities
Depository on behalf of the Trust, except that neither Custodian nor
Sub-Custodian shall be under any obligation to appear in, prosecute or defend
any action suit or proceeding in respect to any securities held by a Securities
Depository which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense and liability be furnished as
often as may be required.
(e) Neither Custodian nor Sub-Custodian shall be under any
duty or obligation to take action to effect collection of any amount due to the
Trust from a transfer agent of the Trust nor to take any action to effect
payment or distribution by the transfer agent of the Trust of
23
any amount paid by Sub-Custodian to the transfer agent of the Trust in
accordance with this Agreement.
(f) Neither Custodian nor Sub-Custodian shall be under any
duty or obligation to take action to effect collection of any amount, if the
securities upon which such amount is payable are in default, or if payment is
refused after due demand or presentation, unless and until (i) it shall be
directed to take such action by Written Instructions and (ii) it shall be
assured to its reasonable satisfaction of reimbursement of its costs and
expenses in connection with any such action.
(g) Custodian and Sub-Custodian may in addition to the
employment of Foreign Sub-Custodians pursuant to Paragraphs 7 and 27, hereof
appoint one or more banking institutions as Depository or Depositories, as a
sub-custodian or as sub-custodians, or as a co-custodian or as co-custodians,
including, but not limited to, banking institutions located in foreign
countries, of securities and moneys at any time owned by the Fund, upon such
terms and conditions as may be approved in an Officer's Certificate or contained
in an agreement executed by Sub-Custodian, Custodian and the Trust and the
appointed institution.
(h) Neither Custodian nor Sub-Custodian shall be under any
duty or obligation (i) to ascertain whether any securities at any time delivered
to, or held by it or by any Foreign Sub-Custodian, for the account of the Trust
and specifically allocated to a Fund are such as properly may be held by the
Trust or such Fund under the provisions of its Prospectus, or (ii) to ascertain
whether any transactions by the Fund, whether or not involving Sub-Custodian,
are such transactions as may properly be engaged in by the Fund.
(i) Sub-Custodian shall charge its compensation and any
expenses with respect to the Funds of the Trust incurred by Sub-Custodian in the
performance of its duties under this Agreement only against the money of the
Fund or Funds of the Trust from which such compensation or expenses is actually
due and payable, and under no circumstances shall any compensation or expenses
due to the Sub-Custodian be considered to be a joint, or joint and several,
obligation of the Funds of the Trust. To the extent that Sub-Custodian is
entitled to recover from the Trust any loss, damage, liability or expense
(including counsel fees) under this Agreement, Sub-Custodian shall charge the
amount due in respect of such loss, damage, liability or expense (including
counsel fees) only against the money held by it for the Fund or Funds of the
Trust that is/are identified by the Trust in an Officer's Certificate, unless
and until the Trust instructs Sub-Custodian by an Officer's Certificate to
charge against money held by it for the account of a Fund such Fund's pro rata
share (based on such Fund's net asset value at the time of the charge in
proportion to the aggregate net asset value of all Funds at that time) of the
amount of such loss, damage, liability or expense (including counsel fees).
(j) Custodian and Sub-Custodian shall be entitled to rely upon
any Officer's Certificate, Written Instructions, notice or other instrument in
writing received by Custodian or Sub-Custodian and reasonably believed by
Custodian or Sub-Custodian, as the case may be, to be an Officer's Certificate
or Written Instructions. Custodian and Sub-Custodian shall be entitled to rely
upon any Oral Instructions actually received by Custodian or Sub-Custodian. The
Trust agrees to forward to Custodian or Sub-Custodian Written Instructions
confirming such Oral
24
Instructions in such manner so that such Written Instructions are received by
Sub-Custodian, whether by hand delivery, telecopier or other similar device, or
otherwise, by the close of business of the same day that such Oral Instructions
are received by Sub-Custodian. The Trust agrees that the fact that such
confirming instructions are not received, or that contrary instructions are
received, by Custodian or Sub-Custodian shall in no way affect the validity of
the transactions or enforceability of the transactions hereby authorized by the
Trust. The Trust agrees that neither Custodian nor Sub-Custodian shall incur any
liability to the Trust in acting upon Oral Instructions given to Custodian or
Sub-Custodian hereunder concerning such transactions provided such instructions
reasonably appear to have been received from an Authorized Person.
(k) Each of Custodian and Sub-Custodian shall be entitled to
rely upon any instrument, instruction or notice received by it and reasonably
believed by it to be given in accordance with the terms and conditions of any
FCM Agreement. Without limiting the generality of the foregoing, neither
Custodian nor Sub-Custodian shall be under any duty to inquire into, and neither
Custodian nor Sub-Custodian shall be liable for, the accuracy of any statements
or representations contained in any such instrument or other notice including,
without limitation, any specification of any amount to be paid to a broker,
dealer, futures commission merchant or clearing member.
(l) Sub-Custodian shall provide the Trust with any report
obtained by Sub-Custodian on the system of internal accounting control of the
Book-Entry System, any Securities Depository utilized hereunder the Depository
or the Options Clearing Corporation, and with such reports on its own systems of
internal accounting control as the Trust may reasonably request from time to
time.
(m) Subject to the foregoing provisions of this Agreement,
including, without limitation, those contained in Paragraph 27 hereof,
Sub-Custodian may deliver and receive securities, and receipts with respect to
such securities, and arrange for payments to be made and received by
Sub-Custodian in accordance with the customs prevailing from time to time among
brokers or dealers in such securities. When Sub-Custodian is instructed to
deliver securities against payment, delivery of such securities and receipt of
payment therefor may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
Sub-Custodian's delivery of securities pursuant to proper instructions of the
Fund, which responsibility and liability shall continue until final payment in
full has been received by Sub-Custodian.
(n) Neither Custodian nor Sub-Custodian shall have any duties
or responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against Custodian or Sub-Custodian.
(o) To the extent Custodian shall have discharged its
obligations to the Trust under subparagraph (a)(i) of this paragraph 28 on
account of conduct of Sub-Custodian, its agents or employees, Custodian shall be
subrogated to all rights of the Trust with respect to such conduct.
25
29. Termination. Any of the parties hereto may terminate this Agreement
by giving to the other parties a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. Upon the date set forth in such notice this Agreement
shall terminate, and Sub-Custodian shall on that date deliver directly to the
Custodian or a successor sub-custodian designated by the Trust or Custodian all
securities and moneys then owned by the Trust and held by Sub-Custodian, after
deducting all fees, expenses and other amounts for the payment or reimbursement
of which it shall then be entitled; provided, however, that transaction fees and
expenses payable by the Trust in connection with a deconversion to a successor
sub-custodian shall be limited to Sub-Custodian's actual direct cost.
30. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
Notices shall be addressed (a) if to Sub-Custodian, at Sub-Custodian's address,
00 Xxxxxxxxxx Xxxxxx, (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Ajosa; (b) if to Custodian, at Custodian's address, NationsBank, 000 Xxxxx Xxxxx
Xxxxxx, XX0-000-00-00, Xxxxxxxxx, XX 00000, Attention: Xxxxx Xxxxx; (c) if to
the Trust, at the address of the Trust, 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxxx
00000, Attention: Xxxxxxx X. Xxxxx, Xx., Secretary; or (d) if to none of the
foregoing, at such other address as shall have been notified to the sender of
any such Notice or other communication. Notice shall be deemed to have been
given when actually received by the other party. All postage, cable, telegram,
telex and facsimile sending device charges arising from the sending of a Notice
hereunder shall be paid by the sender.
31. Further Actions. Each party agrees to perform such further acts and
execute such further documents as it deems necessary to effectuate the purposes
hereof.
32. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
33. Miscellaneous.
(a) The Trust agrees that Sub-Custodian may be a counterparty
in any purchase or sale of foreign currency by or for the Trust on a spot or
forward basis, and on any option to buy or sell foreign currency.
(b) This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. 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 deemed to be a contract made in New York and
governed by New York 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 parties hereto and their respective
successors.
26
34. The names "Nations Fund" and "Trustees of Nations Fund" refer
respectively to the Trust created and the Trustees, as Trustees but not
individually or personally, acting from time to time under a Declaration of
Trust dated January 22, 1990, which is hereby referred to and a copy of which is
on file at the office of the State Secretary of The Commonwealth of
Massachusetts and at the principal office of the Trust. The obligations of
"Nations Fund" entered into in the name or on behalf thereof by any of the
Trustees, representatives or agents are made
27
not individually, but in such capacities, and are not binding upon any of the
Trustees, Shareholders, or representatives of the Trust personally, but bind
only the Trust Property, and all persons dealing with any class of Shares of the
Trust Property, and all persons dealing with any class of Shares of the Trust
must look solely to the Trust Property belonging to such class for the
enforcement of any claims against the Trust.
35. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
28
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as of the day and
year first above written.
THE BANK OF NEW YORK NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxxxxx X. Grunston By: /s/ Xxxx X. Xxxxxx
Xxxxxxx X. Grunston Xxxx X. Xxxxxx
Vice-President Senior Vice-President
NATIONS INSTITUTIONAL RESERVES
By: /s/ Xxxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxx, Xx.
Secretary
29
SCHEDULE A
AUTHORIZED PERSONS FOR
ORAL AND WRITTEN INSTRUCTIONS
In addition to the Trust's Officers, any one of the following persons
is authorized as an "Authorized Person" to give "Oral Instructions" on behalf of
the Trust to the Custodian or Sub-Custodian pursuant to the Mutual Fund Custody
and Sub-Custody Agreement among the Trust, NationsBank of Texas, N.A. and The
Bank of New York, provided that no person shall be authorized or permitted to
withdraw Trust investments or assets upon his/her mere receipt (unless otherwise
authorized with respect to a specific Fund or Funds pursuant to a separate vote
approved by the Board of Trustees):
NATIONS CASH RESERVES, NATIONS TREASURY RESERVES
AND NATIONS GOVERNMENT RESERVES
Xxxxxxx Xxxxxx
Xxxxxx Duck
Xxxxxxxx X. Xxxxxx
Xxxxxx Xxxxxxx
Xxxx Xxxxxx; and
NATIONS MUNICIPAL RESERVES
Xxxxxxx Xxxxxx
Xxxxxx Duck
Xxxx Xxxx
Xxxxxxxx X. Xxxxxx
Xxxxxx Xxxxxxx
In addition to the Trust's Officers, any two of the individuals named
above be is authorized as an "Authorized Person" to give "Written Instructions"
on behalf of the Trust to the Custodian, provided, however, that "Written
Instructions" given in connection with the issuance of checks and other drafts
in payment of the Trust's operating expenses as provided therein must not be
given except upon prior written authorization of the Trust's President,
Treasurer or Assistant Treasurer; and provided further that no one or more
persons shall be authorized or permitted to withdraw Trust investments or assets
upon his/her or their mere receipt (unless otherwise authorized with respect to
a specific Fund or Funds pursuant to a separate vote approved by the Board of
Trustees).
30
SCHEDULE B
OFFICERS OF NATIONS INSTITUTIONAL RESERVES
OFFICER POSITION
A. Xxx Xxxxxx President and
Chairman of the Board
Xxxxxxx X. Xxxxx, Xx. Secretary
Xxxxxxx X. Xxxxx Assistant Secretary
Xxxxxx X. Xxxxxxx Assistant Secretary
Xxxxx X. Xxxxx Assistant Secretary
Xxxxxxx X. Xxxx Treasurer
Xxxxxx X. Xxxxxxx Assistant Treasurer
Xxxxx Xxxxxx Assistant Treasurer
31
SCHEDULE I
The Mutual Fund Custody and Sub-Custody Agreement among Nations
Institutional Reserves, Custodian and Sub-Custodian, applies to the following
funds of the Trust:
Nations Cash Reserves Fund
Nations Treasury Reserves Fund
Nations Government Reserves Fund
Nations Municipal Reserves Fund
32
APPENDIX A
I, , a Vice President with THE BANK OF NEW
YORK do hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
00
XXXXXXXX X
The undersigned, Xxxxxxx X. Xxxxx, Xx., hereby certifies that he is the
duly elected and acting Secretary of Nations Institutional Reserves, a
Massachusetts business trust (the "Trust"), further certifies that the following
resolutions were adopted by the Board of Trustees of the Trust at a meeting duly
held on October 11-12, 1996, at which a quorum was at all times present and that
such resolutions have not been modified or rescinded and are in full force and
effect as of the date hereof.
TRUST VOTE
VOTED, that the Mutual Fund Custody and Sub-Custody Agreement
for each Fund as presented to this meeting be, and it hereby is,
approved, and that the appropriate Officers of the Trust be, and each
hereby is, authorized and directed to execute and deliver the Mutual
Fund Custody and Sub-Custody Agreement on behalf of the Trust, in that
form or with such changes as that Officer, with the advice of counsel,
deems necessary or desirable.
IN WITNESS WHEREOF, I have hereunto set my hand as of the 18th day of
October 1996.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxx, Xx.
Secretary
34
APPENDIX C
LIST OF FOREIGN SUB-CUSTODIANS
SCHEDULE OF FOREIGN SUB-CUSTODIANS
--------------------------------- -----------------------------------------------------
COUNTRY ELIGIBLE FOREIGN CUSTODIAN
--------------------------------- -----------------------------------------------------
Argentina The Bank of Boston, Buenos Aires
--------------------------------- -----------------------------------------------------
Australia ANZ, Melbourne
--------------------------------- -----------------------------------------------------
Austria Creditanstalt, Vienna
--------------------------------- -----------------------------------------------------
Bangladesh Standard Chartered Bank, Dhaka
--------------------------------- -----------------------------------------------------
Belgium BBL, Brussels
--------------------------------- -----------------------------------------------------
Botswana Stanbic Bank, Botswana
--------------------------------- -----------------------------------------------------
Brazil The Bank of Boston, Sao Paolo
--------------------------------- -----------------------------------------------------
Canada Royal Bank of Canada
--------------------------------- -----------------------------------------------------
Chile The Bank of Boston, Xxxxxxxx
--------------------------------- -----------------------------------------------------
China (Shanghai) Standard Chartered, Shanghai
--------------------------------- -----------------------------------------------------
China (Shenzhen) Standard Chartered, Shenzhen
--------------------------------- -----------------------------------------------------
Colombia Cititrust, Bogota
--------------------------------- -----------------------------------------------------
Czech Republic CSOB, Prague
--------------------------------- -----------------------------------------------------
Denmark Den Danske Bank, Copenhagen
--------------------------------- -----------------------------------------------------
Ecuador Citibank, Quito
--------------------------------- -----------------------------------------------------
Egypt Citibank, Cairo
--------------------------------- -----------------------------------------------------
Euromarket CEDEL, Luxembourg
--------------------------------- -----------------------------------------------------
Finland Xxxxxx Bank, Helsinki
--------------------------------- -----------------------------------------------------
France Banque Paribas, Paris
--------------------------------- -----------------------------------------------------
Germany Dresdner Bank AG, Frankfurt
--------------------------------- -----------------------------------------------------
Ghana Merchant Bank Ghana, Accra
--------------------------------- -----------------------------------------------------
Greece National Bank of Greece, Athens
--------------------------------- -----------------------------------------------------
Hong Kong HSBC, Hong Kong
--------------------------------- -----------------------------------------------------
Hungary Citibank, Budapest
--------------------------------- -----------------------------------------------------
India HSBC, Bombay
--------------------------------- -----------------------------------------------------
Indonesia HSBC, Jakarta
--------------------------------- -----------------------------------------------------
Ireland Allied Irish Banks, plc.
--------------------------------- -----------------------------------------------------
Israel Bank Leumi, Tel Aviv
--------------------------------- -----------------------------------------------------
Italy Banca Commerciale Italiana, Milan
--------------------------------- -----------------------------------------------------
Japan Fuji Bank, Kabutochu, Tokyo
--------------------------------- -----------------------------------------------------
Xxxxxx British Bank of Middle East, Amman
--------------------------------- -----------------------------------------------------
Kenya Stanbic Bank Kenya
--------------------------------- -----------------------------------------------------
Korea Seoulbank, Seoul
--------------------------------- -----------------------------------------------------
Luxembourg Banque Int'l a Luxembourg
--------------------------------- -----------------------------------------------------
Malaysia Hong Kong Bank Malaysia Berhad, Kuala Lumpur
35
--------------------------------- -----------------------------------------------------
Mexico Banamex, Mexico City
--------------------------------- -----------------------------------------------------
Morocco Banque Commerciale du Maroc, Casablanca
--------------------------------- -----------------------------------------------------
Namibia Stanbic Bank Namibia
--------------------------------- -----------------------------------------------------
Netherlands Mees Pierson, Amsterdam
--------------------------------- -----------------------------------------------------
New Zealand ANZ, Wellington
--------------------------------- -----------------------------------------------------
Nigeria Stanbic Bank Nigeria
--------------------------------- -----------------------------------------------------
Norway Den norske Bank, Oslo
--------------------------------- -----------------------------------------------------
Pakistan Standard Chartered, Karachi
--------------------------------- -----------------------------------------------------
Peru Citibank, Lima
--------------------------------- -----------------------------------------------------
Philippines HSBC, Manila
--------------------------------- -----------------------------------------------------
Poland Bank Handlowy, Warsaw
--------------------------------- -----------------------------------------------------
Portugal Banco Comercial Portugues, Lisbon
--------------------------------- -----------------------------------------------------
Singapore United Overseas Singapore
--------------------------------- -----------------------------------------------------
Slovak Republic CSOB, Bratislava
--------------------------------- -----------------------------------------------------
South Africa Standard Bank of South Africa, Johannesburg
--------------------------------- -----------------------------------------------------
Spain Banco Bilbao Vizcaya, Madrid
--------------------------------- -----------------------------------------------------
Sri Lanka Standard Chartered, Colombo
--------------------------------- -----------------------------------------------------
Swaziland Stanbic Bank Swaziland
--------------------------------- -----------------------------------------------------
Sweden Skandinaviska Enskilda Banken, Stockholm
--------------------------------- -----------------------------------------------------
Switzerland Bank Leu, Zurich
--------------------------------- -----------------------------------------------------
Taiwan HSBC, Taipei
--------------------------------- -----------------------------------------------------
Thailand Bangkok Bank, Bangkok
--------------------------------- -----------------------------------------------------
Turkey CITIBANK, Istanbul
--------------------------------- -----------------------------------------------------
United Kingdom The Bank of New York, London
--------------------------------- -----------------------------------------------------
United States The Bank of New York, New York
--------------------------------- -----------------------------------------------------
Uruguay The Bank of Boston, Montevideo
--------------------------------- -----------------------------------------------------
Venezuela Citibank, Caracas
--------------------------------- -----------------------------------------------------
Zambia Stanbic Bank Zambia
--------------------------------- -----------------------------------------------------
Zimbabwe Stanbic Bank Zimbabwe, Harare
--------------------------------- -----------------------------------------------------
36
APPENDIX D
The undersigned, Xxxxxxx X. Xxxxx, Xx., hereby certifies that he is the
duly elected and acting Secretary of Nations Institutional Reserves, a
Massachusetts business trust (the "Trust"), further certifies that the following
resolutions were adopted by the Board of Trustees of the Trust at a meeting duly
held on October 11-12, 1996, at which a quorum was at all times present and that
such resolutions have not been modified or rescinded and are in full force and
effect as of the date hereof.
TRUST VOTES
VOTED, that the sub-custody and maintenance of securities and
other assets owned by the Funds of the Trust in countries other than
the United States is necessary, appropriate and desirable for the
efficient operation of the Funds; and
FURTHER VOTED, that pursuant to Rule 17f-5 under the 1940 Act,
BONY, as custodian for the Funds of the Trust, be, and it hereby is,
authorized and directed to use the foreign sub-custodians and
depositories in the indicated countries listed on the attached
Schedule, each such foreign sub-custodian and depository being an
eligible foreign custodian under Rule 17f-5 or being authorized to act
in such capacity pursuant to exemptive relief granted by the SEC;
FURTHER VOTED, that the Sub-Custodian Agreements between BONY
and its network banks, providing for, among other things, the manner
in which BONY will maintain the Funds' foreign securities and other
assets with eligible foreign sub-custodians be, and they hereby are,
approved;
FURTHER VOTED, that the appropriate Officers of the Trust be,
and each hereby is, authorized to execute such documents and to take
such actions as may be necessary or appropriate to carry out the
purposes and intent of the preceding resolutions, the execution and
delivery of such documents or taking of such action to be conclusive
evidence of the Board of Trustees' approval;
FURTHER VOTED, that the attached Schedule of approved foreign
custodians may be amended from time to time with the approval of a
majority of the Board of Trustees; and
FURTHER VOTED, that BONY is permitted to use the CREST system
for book-entry settlement of United Kingdom and Irish securities
37
transactions on behalf of the Funds of the Trust, including with
respect to eligible Fund assets, if any, currently held in the vaults
of The Bank of New York, London and Allied Irish Banks, plc.
IN WITNESS WHEREOF, I hereunto set my hand as of the 18th day of
October 1996.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
Xxxxxxx X. Xxxxx, Xx.
Secretary
38
APPENDIX E
FEE SCHEDULE FOR NATIONSBANK OF TEXAS, N.A.
The funds of Nations Fund Trust, Nations Fund, Inc. (except Nations
International Equity Fund) and Nations Institutional Reserves, and each of
Hatteras Income Securities, Inc. and Nations Balanced Target Maturity Fund, Inc.
("Funds" and each a "Fund") shall pay to the Custodian on a pro rata basis, with
each Fund's pro rata share to be determined based on the number of Funds covered
by this Agreement, the following fees:
1. $300,000 per annum, to be paid monthly in payments of $25,000, for
custodian services for up to and including fifty (50) Funds; and
2. $6,000 per annum, to be paid in equal monthly payments, for
custodian services for each additional Fund above fifty (50) Funds.
The Funds covered under this Appendix are set forth below.
NATIONS FUND TRUST:
1. Nations Government Money Market Fund
2. Nations Tax Exempt Fund
3. Nations Value Fund
4. Nations Capital Growth Fund
5. Nations Emerging Growth Fund
6. Nations Equity Index Fund
7. Nations Managed Index Fund
8. Nations Managed SmallCap Index Fund
9. Nations Managed Value Index Fund
10. Nations Managed SmallCap Value Index Fund
11. Nations Disciplined Equity Fund
12. Nations Balanced Assets Fund
13. Nations Short-Intermediate Government Fund
14. Nations Short-Term Income Fund
15. Nations Diversified Income Fund
16. Nations Strategic Fixed Income Fund
17. Nations Municipal Income Fund
18. Nations Short-Term Municipal Income Fund
19. Nations Intermediate Municipal Bond Fund
20. Nations Florida Intermediate Municipal Bond Fund
21. Nations Florida Municipal Bond Fund
22. Nations Georgia Intermediate Municipal Bond Fund
23. Nations Georgia Municipal Bond Fund
24. Nations Maryland Intermediate Municipal Bond Fund
25. Nations Maryland Municipal Bond Fund
39
26. Nations North Carolina Intermediate Municipal Bond Fund
27. Nations North Carolina Municipal Bond Fund
28. Nations South Carolina Intermediate Municipal Bond Fund
29. Nations South Carolina Municipal Bond Fund
30. Nations Tennessee Intermediate Municipal Bond Fund
31. Nations Tennessee Municipal Bond Fund
32. Nations Texas Intermediate Municipal Bond Fund
33. Nations Texas Municipal Bond Fund
34. Nations Virginia Intermediate Municipal Bond Fund
35. Nations Virginia Municipal Bond Fund
NATIONS FUND, INC.:
36. Nations Prime Fund
37. Nations Treasury Fund
38. Nations Equity Income Fund
39. Nations Government Securities Fund
NATIONS INSTITUTIONAL RESERVES:
40. Nations Cash Reserves Fund
41. Nations Treasury Reserves Fund
42. Nations Government Reserves Fund
43. Nations Municipal Reserves Fund
44. HATTERAS INCOME SECURITIES, INC.
45. NATIONS BALANCED TARGET MATURITY FUND, INC.
Dated: October 18, 1996
Amended: June 4, 1997
40
