SUB-ADMINISTRATION AGREEMENT
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of April
16, 2001 by and among THE BANK OF NEW YORK ("BNY"), BANC OF AMERICA ADVISORS,
LLC ("BAALLC") and NATIONS MASTER INVESTMENT TRUST ("Master Trust").
WHEREAS, Master Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, BAALLC serves as the Co-Administrator for the investment
portfolios of Master Trust pursuant to a separate Co-Administration Agreement;
and
WHEREAS, BAALLC desires to retain BNY to render certain
sub-administrative and other services to Master Trust and to BAALLC, as
Co-Administrator of Master Trust, and BNY is willing to render such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment and Duties as Sub-Administrator.
(a) BAALLC hereby appoints BNY to act as Sub-Administrator of Master
Trust and to render sub-administrative services for each portfolio of Master
Trust listed on Schedule I (individually, a "Portfolio" and collectively, the
"Portfolios") and BNY hereby accepts such appointment and agrees to render the
services and duties set forth in Schedule II as it may be amended from time to
time, for the compensation and on the terms herein provided. Each new investment
portfolio established in the future by Master Trust or BAALLC will become a
"Portfolio" for all purposes hereunder when BNY receives a revised Schedule I
from BAALLC or Master Trust that includes such new portfolio.
(b) Subject to the other provisions of this Section 1, in performing
all services under this Agreement, BNY shall (i) act in conformity with Master
Trust's Declaration of Trust and Bylaws (the "Bylaws"), the 1940 Act and the
rules thereunder, including but not limited to Rules 31a-1 to 31a-3, and other
applicable laws and regulations, as the same may be amended from time to time,
and Master Trust's Registration Statement, as such Registration Statement may be
amended from time to time; (ii) consult and coordinate with BAALLC and Master
Trust, as necessary and appropriate; and (iii) advise and report to BAALLC and
Master Trust, as necessary or appropriate, with respect to any compliance
matters that come to its attention. In performing all services under this
Agreement BNY shall meet the minimum quality of service standards set forth on
Schedule III.
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(c) Master Trust has furnished BNY and BAALLC with copies properly
certified or authenticated of each of the following: (i) Master Trust's
Declaration of Trust or other organizational document and all amendments thereto
(the "Declaration"); (ii) Master Trust's Bylaws; (iii) resolutions of Master
Trust's Board of Trustees or other governing body (the "Board") authorizing the
execution, delivery and performance of this Agreement by Master Trust; (iv)
Master Trust's most recent Post-Effective Amendment to its Registration
Statement on Form N-1A (the "Registration Statement") under the 1940 Act (File
No. 811-09347), as filed with the Securities and Exchange Commission (the "SEC")
relating to interests in the Portfolios (the "Interests"); (iv) the Portfolios'
current Prospectus(es); (v) the Portfolios' current Statement(s) of Additional
Information; and (vi) the pricing procedures applicable to the calculation of
the Portfolios' net asset values as approved by Master Trust's Board (the
"Pricing Procedures"). It is solely Master Trust's responsibility to furnish BNY
from time to time with copies, properly certified or authenticated, of all
amendments of or supplements to the foregoing, and BNY will not be held to have
knowledge of any such amendments or supplements until the same are actually
received by BNY. Furthermore, Master Trust will provide BNY with any other
documents that BNY and BAALLC may reasonably request and will notify BNY and
BAALLC as soon as possible of any matter materially affecting either BNY's or
BAALLC's performance of its services under this Agreement.
(d) Subject to the direction and approval of Master Trust's Board and
appropriate officers and the provisions of this Agreement, BNY shall provide to
each Portfolio the administrative services set forth on Schedule II attached
hereto. In performing such services hereunder, BNY shall provide, at its
expense, office space, facilities, equipment and personnel. BNY shall not
provide any services relating to the management, investment advisory or
sub-advisory functions of any Portfolio, distribution of Interests of any
Portfolio, maintenance of any Portfolio's financial records (except as otherwise
agreed by the parties) or any services normally performed by the Portfolios'
counsel or independent accountants. Upon receipt of Master Trust's prior written
consent, BNY may delegate any of its duties and obligations hereunder to any
delegee or agent whenever and on such terms and conditions as it deems necessary
or appropriate. Unless expressly agreed in writing, BNY shall not be relieved of
liability or responsibility for the performance of any duties or obligations
delegated to a delegee or agent, provided that BNY shall have no liability for
duties or obligations that are delegated to a delegee or agent at the
instruction of Master Trust or BAALLC. Master Trust and BAALLC shall cause their
respective officers, and shall use reasonable efforts to cause Master Trust's or
BAALLC's legal counsel and independent accountants to cooperate with BNY and to
provide BNY, upon BNY's reasonable written request, such information, documents
and advice relating to such Portfolio as is within the possession or knowledge
of such persons, in order to enable BNY to perform its duties hereunder. Such
cooperation or provision of information, documents or advice shall be at no cost
to BNY, provided BNY's request is reasonable and BAALLC shall have been notified
of the request. In connection with its duties hereunder, BNY shall be entitled
to reasonably rely upon any documents relating to a Portfolio provided to BNY by
any of the aforementioned persons. BNY may apply to Master Trust or BAALLC for
written instructions with respect to any matter arising in connection with BNY's
performance hereunder. If, after a reasonable period of time, BNY receives no
response to any such application, BNY may then notify Master Trust or BAALLC of
reasonable action that BNY shall take if written instructions
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are not received within a stated period of time after such notice, and then BNY
shall not be liable for taking such reasonable action as if written instructions
had been provided. BNY is entitled to reasonably rely and act in accordance with
written instructions believed to have been given by authorized persons and shall
incur no costs for such reasonable reliance. BNY shall have no duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement and Schedule II hereto, and no covenant
or obligation shall be implied against BNY in connection with this Agreement.
(e) Master Trust and BAALLC, for itself and not for the others, hereby
represents and warrants to BNY, which representations and warranties shall be
deemed to be continuing, that: (i) it is duly organized and existing under the
laws of the jurisdiction of its organization, with full power to carry on its
business as now conducted, to enter into this Agreement and to perform its
obligations hereunder; (ii) this Agreement has been duly authorized, executed
and delivered by it in accordance with all requisite action and constitutes a
valid and legally binding obligation, enforceable in accordance with its terms;
(iii) it is conducting its business substantially in compliance with all
applicable laws and regulations, both state and federal, and has obtained all
regulatory licenses, approvals and consents necessary to carry on its business
as now conducted; (iv) there is no statute, regulation, rule, order or judgment
binding on it and no provision of its Declaration or Bylaws, nor of any
mortgage, indenture, credit agreement or other contract binding on it or
affecting its property which would prohibit its execution or performance of this
Agreement; and (v) Master Trust and BAALLC will use reasonable efforts to
promptly notify BNY of any errors or omissions contained in any reports,
calculations, valuations and other items of information, provided that any
failure by Master Trust or BAALLC to detect any such errors or omissions shall
not relieve BNY of any resulting liability therefrom. To the extent that BAALLC
has actual knowledge of any such error or omission and fails to use reasonable
efforts to promptly notify BNY, BNY shall be relieved of any liability that BNY
may have mitigated had BAALLC provided notice of such error or omission to BNY.
(f) BNY hereby represents and warrants to Master Trust and BAALLC,
which representations and warranties shall be deemed to be continuing, that: (i)
it is duly organized and existing under the laws of the jurisdiction of its
organization, with full power to carry on its business as now conducted, to
enter into this Agreement and to perform its obligations hereunder; (ii) this
Agreement has been duly authorized, executed and delivered by it in accordance
with all requisite action and constitutes a valid and legally binding
obligation, enforceable in accordance with its terms; and (iii) it is conducting
its business substantially in compliance with all applicable laws and
regulations, both state and federal, and has obtained all regulatory licenses,
approvals and consents necessary to carry on its business as now conducted;
there is no statute, regulation, rule, order or judgment binding on it and no
provision of its Declaration or Bylaws, nor of any mortgage, indenture, credit
agreement or other contract binding on it or affecting its property which would
prohibit its execution or performance of this Agreement.
2. Compensation. For the services to be rendered, the facilities to be
furnished and the compensation and other expenses to be borne by BNY, as
provided for in this Agreement, BNY shall be entitled to receive a monthly fee
from BAALLC and reimbursement for out-of-pocket expenses as set forth in
Schedule IV to this Agreement. It is understood that BAALLC
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shall be responsible for BNY's monthly fee for its services hereunder, and BNY
agrees that it shall have no claim against Master Trust or the Portfolios with
respect to compensation under this Agreement.
3. Recordkeeping. BNY shall, as agent for Master Trust, and subject to
the direction and approval of Master Trust's Board and the provisions of this
Agreement, maintain and keep current the books, accounts and other documents, if
any, pursuant to the services and duties provided by BNY as set forth in
Schedule II of this Agreement, and preserve any such books, accounts and other
documents in accordance with the applicable provisions of Rule 31a-2 of the 1940
Act. Such books, accounts and other documents shall be made available upon
reasonable request for inspection by officers, employees and auditors of Master
Trust and BAALLC during BNY's normal business hours. All records maintained and
preserved by BNY pursuant to this Agreement which Master Trust is required to
maintain and preserve in accordance with Rule 31a-2 of the 1940 Act shall be and
remain the property of Master Trust and shall be surrendered to Master Trust
promptly upon request in the form in which such records have been maintained and
preserved. Upon reasonable request of Master Trust, BNY shall provide in data
files or hard copy, whichever Master Trust shall reasonably elect, any records
included in any such delivery which are maintained by BNY on a computer disc, or
are similarly maintained, and Master Trust shall reimburse BNY for its expenses
of providing such hard copy.
4. Standard of Care; Indemnification.
(a) BNY shall at all times act in good faith and agrees to use its best
efforts to fulfill its obligations under this Agreement, but assumes no
responsibility for loss or damage to Master Trust unless such loss or damage is
caused by BNY's own negligence, bad faith or willful misconduct or that of its
directors, officers or employees. BNY shall be responsible hereunder for all
direct damages resulting from its own negligence, bad faith or willful
misconduct, provided however that it shall not be responsible for lost profits
or lost business arising under or in connection with this Agreement. It is
understood and agreed that for purposes of this Section 4(a), "direct damages"
shall include, but shall not be limited to, all legal costs, penalties,
reimbursement for excess distribution and redemption payments, repurchasing
costs for servicing agents and reimbursement to the Portfolios for net asset
value breaks (as calculated under the Pricing Procedures).
(b) Master Trust, on behalf of each Portfolio, will indemnify BNY
against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses of a
defense against any claim, demand, action or suit), relating to the particular
Portfolio and arising from any one or more of the following: (i) errors in
records or instructions, explanations, information, specifications or
documentation of any kind, as the case may be, supplied to BNY by any person
described in Section 1 hereof or by any third party described in Section 5; (ii)
action or inaction taken or omitted to be taken by BNY pursuant to written or
oral instructions described in this Agreement (or otherwise without bad faith,
negligence or willful misconduct); (iii) any action taken or omitted to be taken
by BNY in good faith in accordance with the advice or opinion of counsel for a
Portfolio, Master Trust, BAALLC (obtained in accordance with the procedures set
forth in this Agreement) or its own counsel; (iv) any improper use by the
Portfolio, Master Trust, BAALLC or their respective agents, of any
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valuations or computations supplied by BNY pursuant to this Agreement; (v) the
method of valuation of the securities and the method of computing a Portfolio's
net asset value or any other amount computed by BNY hereunder, provided BNY has
followed the Pricing Procedures; and (vi) any valuation of securities, net asset
value or other amount provided by a Portfolio or BAALLC. BNY will not confess
any claim or settle or make any compromise in any instance in which Master Trust
will be asked to provide indemnification, except with Master Trust's prior
written consent. Any amounts payable by Master Trust under this Section 4(b)
shall be satisfied only against the assets of the Portfolio involved in the
claim, demand, action or suit and not against the assets of any other investment
portfolio of Master Trust.
5. Portfolio Accounting and Other Services.
(a) BNY, in performing the services required of it under the terms of
this Agreement, shall be entitled to rely fully on the accuracy and validity of
any and all instructions, explanations, information, specifications and
documentation furnished to it by a Portfolio and shall have no duty or
obligation to review the accuracy, validity or propriety of such instructions,
explanations, information, specifications or documentation, including, without
limitation, evaluations of securities; the amounts or formula for calculating
the amounts and times of accrual of a Portfolio's liabilities and expenses; the
amounts receivable and the amounts payable on the sale or purchase of
securities; and amounts receivable or amounts payable for the sale or redemption
of Portfolio Interests effected by or on behalf of the Portfolio. In the event
BNY's computations hereunder rely, in whole or in part, upon information,
including, without limitation, bid, offer or market values of securities or
other assets, or accruals of interest or earnings thereon, from a pricing or
similar service utilized, or subscribed to, by BNY which BNY in its judgment
deems reliable, or any other third party pricing source designated by Master
Trust, BNY shall not be responsible for, under any duty to inquire into, or
deemed to make any assurances with respect to, the accuracy or completeness of
such information. BNY shall not be required to inquire into any valuation of
securities or other assets by the Portfolio or any third party described in this
Section, even though BNY in performing services similar to the services provided
pursuant to this Agreement for others may receive different valuations of the
same or different securities of the same issuers.
(b) Subject to the provisions of this Agreement and the direction and
approval of Master Trust's Board, BNY shall perform the computations described
in Schedule II at such times and dates and in the manner specified or described
in the then-current Prospectus(es) of a Portfolio. To the extent valuation of
securities or a computation specified or described in a Portfolio's Pricing
Procedures or then-current effective Prospectus is at any time inconsistent with
any applicable laws or regulations, Master Trust or BAALLC shall immediately so
notify BNY in writing and thereafter shall furnish BNY at all appropriate times
with the values of such securities and such Portfolio's net asset value or other
amounts otherwise to be calculated by BNY, or, subject to the prior approval of
BNY, instruct BNY in writing to value securities and make such computations in a
manner which Master Trust or BAALLC then represents in writing to be consistent
with all applicable laws and regulations. Master Trust or BAALLC may also from
time to time, subject to the prior approval of BNY, instruct BNY in writing to
make computations other than as specified in this Section of this Agreement. By
giving such instruction, Master Trust or BAALLC shall be deemed to have
represented that such instruction
5
is consistent with all applicable laws and regulations and the then-current
effective Prospectus of the particular Portfolio. Master Trust or BAALLC shall
have sole responsibility for determining the method of valuation of securities
and the method of computations, and all computations, valuation of securities
and the method of computing each Portfolio's net asset value shall be subject to
approval by Master Trust and BAALLC. BNY shall not be liable for relying on any
price provided by any pricing service believed by BNY to be reliable, and Master
Trust or BAALLC shall furnish values when the same are not available from a
pricing service utilized by BNY, with such furnishing to constitute an
instruction to BNY to rely on the provided values.
(c) BNY shall be responsible for determining and properly reflecting in
the computations made by it under this Agreement: (i) the taxable nature of any
distribution or amount received or deemed received by, or payable to, a
Portfolio; (ii) the taxable nature or effect on a Portfolio or its shareholders
of any corporate actions, class actions, tax reclaims, tax refunds, or similar
events; (iii) the taxable nature or taxable amount of any distribution or
dividend paid, payable or deemed paid, by a Portfolio to its shareholders; (iv)
the effect under any federal, state, or foreign income tax laws of a Portfolio
making or not making any distribution or dividend payment, or any election with
respect thereto; or (v) any tax accounting; provided, however, that if BNY is
not certain of the taxable nature, amount or effect of any such item, it may
seek instructions regarding the proper treatment of such item from Master Trust
or BAALLC in accordance with the procedures set forth in Section 1(e), above,
and shall have no liability for acting in reliance on such instructions.
6. Termination of Agreement.
(a) This Agreement shall become effective as of the date first set
forth above and shall remain in full force and effect unless terminated pursuant
to the provisions of Section 6(b).
(b) This Agreement may be terminated at any time without payment of any
penalty, upon 60 days' written notice to BNY by BAALLC or by vote of the Board
of Master Trust; or upon 180 days' written notice to BAALLC and Master Trust by
BNY. Upon any such termination, BNY will cooperate with and assist Master Trust,
BAALLC, their agents and any successor administrator(s) or sub-administrator(s)
in the substitution/conversion process. In connection with any termination of
this Agreement, unless BNY is in breach of this Agreement, the Portfolios and
BAALLC agree to pay BNY any compensation and reimbursement for out-of-pocket
expenses as may then be due and payable, as well as agreed-upon out-of-pocket
expenses incurred in connection with a termination. If BNY is in breach of this
Agreement, the Portfolios and BAALLC may offset any compensation or
reimbursement amounts owed to BNY by the amount of damages, costs and expenses
incurred as a result of BNY's breach, including costs, expenses and reasonable
incremental fees for a period not to exceed one year incurred in connection with
a conversion by Master Trust and BAALLC to a successor service provider. In the
event of a dispute as to the amount of such damages, the Portfolios and BAALLC
agree to escrow the set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
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7. Amendments. Except as expressly provided in the first paragraph of
Section 1, no provision of this Agreement may be amended or modified orally, but
only by an instrument in writing signed by the party against which enforcement
of the amendment or modification is sought.
8. Confidentiality. All books, records, information and data pertaining
to the business of Master Trust, or its prior, present or potential shareholders
that are exchanged or received in connection with the performance of BNY's
duties under this Agreement shall remain confidential and shall not be disclosed
to any other person, except as specifically authorized by Master Trust or as may
be required by law, and shall not be used for any purpose other than performance
of its responsibilities and duties hereunder, and except that BNY retains the
right to disclose matters subject to confidentiality to its examiners,
regulators, internal or external auditors, its accountants, its internal and
external counsel, and to any other entity whenever it is advised by its internal
or external counsel that it is reasonably likely that BNY would be liable for a
failure to do so. BNY will endeavor to provide written notice to Master Trust
and BAALLC at least five business days prior to any disclosures pursuant to this
Section 8, but, provided it shall have provided as much notice as is reasonably
practicable under the circumstances, BNY shall have no liability for any failure
to do so.
9. Service to Other Companies. Master Trust and BAALLC acknowledge that
BNY now provides, will continue to provide and may in the future provide
administrative or other services to other investment companies or series of
investment companies, and Master Trust and BAALLC have no objection to BNY so
doing. Master Trust and BAALLC further acknowledge that the persons employed by
BNY to assist in the performance of BNY's duties under this Agreement may not
devote their full time to such service and nothing contained in this Agreement
shall be deemed to limit or restrict the right of BNY or any affiliate of BNY to
engage in and devote time and attention to other businesses or to render
services of whatever kind or nature.
10. Miscellaneous.
(a) This Agreement shall be construed in accordance with the laws of
the State of New York, without regard to conflict of laws principles thereof.
Each Portfolio, Master Trust and BAALLC hereby consent to the jurisdiction of a
state or federal court situated in New York City, New York in connection with
any dispute arising hereunder. To the extent that in any such jurisdiction any
of the aforementioned persons may now or hereafter be entitled to claim, for
itself or its assets, immunity from suit, execution, attachment (before or after
judgment) or other legal process, each irrevocably agrees not to claim, and it
hereby waives, such immunity.
(b) In case any provision in or obligation under this Agreement shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations shall not in any
way be affected or impaired thereby, and if any provision is inapplicable to any
person or circumstances, it shall nevertheless remain applicable to all other
persons and circumstances.
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(c) Each and every right granted to BNY, Master Trust or BAALLC
hereunder or under any other document delivered hereunder or in connection
herewith, or allowed it by law or equity, shall be cumulative and may be
exercised from time to time. No failure on the part of BNY, Master Trust or
BAALLC to exercise, and no delay in exercising, any right will operate as a
waiver thereof, nor will any single or partial exercise by BNY, Master Trust or
BAALLC of any right preclude any other or future exercise thereof or the
exercise of any other right.
(d) BNY shall not be responsible for delays or errors that occur by
reason of circumstances beyond its reasonable control in the performance of its
duties under this Agreement, provided that reasonable back-up and disaster
recovery systems are in place, including, without limitation, labor
difficulties, mechanical breakdowns, computer breakdowns or malfunctions
(hardware or software), flood or catastrophe, acts of God, failures of
transportation, communication or power supply, or other similar circumstances.
Nor shall BNY be responsible for delays or failures to supply the information or
services specified in this Agreement where such delays or failures are caused by
the failure of any person(s) other than BNY to supply any instructions,
explanations, information, specifications or documentation deemed necessary by
BNY in the performance of its duties under this Agreement.
(e) Any notice or other instrument authorized or required by this
Agreement to be given in writing to Master Trust, BNY and/or BAALLC shall be
sufficiently given if addressed to that party and received by it at its office
set forth below or at such other place as it may from time to time designate in
writing.
To Master Trust:
Nations Master Investment Trust
000 Xxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Xx.
To BAALLC:
Banc of America Advisors, LLC
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxx
To BNY:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
00xx Xxxxx Xxx Xxxx,
XX 00000 Attention: [_________]
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(f) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement may not be assigned by BNY, nor may BNY delegate
responsibility for the performance of any of its duties hereunder, without the
written consent of the other parties hereto.
(g) This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(h) The captions of 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.
(i) This Agreement constitutes the entire agreement between the parties
hereto with respect to the provision by BNY of sub-administrative services and
the receipt of fees therefor, and supersedes all prior arrangements or
understandings, written or oral, with respect to the provision by BNY of such
services and the receipt of fees therefor.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
THE BANK OF NEW YORK
By:
------------------------------
Name:
Title:
BANC OF AMERICA ADVISORS, LLC
By: /s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President and
Chief Operating Officer
NATIONS MASTER INVESTMENT TRUST
By: /s/ Xxxxxxx Xxxx
------------------------------
Xxxxxxx Xxxx
Assistant Secretary
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SCHEDULE I
1. High Yield Portfolio
2. International Bond Portfolio
Adopted: February 22, 2001
I-1
SCHEDULE II
PORTFOLIO ADMINISTRATION SERVICES
BNY shall perform the following sub-administrative services, in
addition to any other services agreed to from time to time:
o Monitor and document compliance by the Portfolios with their policies and
restrictions as delineated in their Prospectuses and Statements of
Additional Information, including any supplements or amendments thereto,
and with the rules and regulations under the 1940 Act utilizing Xxxxxxx
River Development's compliance monitoring system or by such other means as
the parties may agree. BAALLC shall be responsible for communicating such
policies and restrictions, including any changes thereto, to BNY by such
means as the parties agree.
o Provide income attribution summary schedules necessary for year-end tax
reporting, including the attached examples. Provide a gross up for foreign
taxes on a per share basis and the redesignation of income and capital
gains on a per share basis.
o Prepare federal, state, excise and local income tax returns for the
Portfolios and file such returns upon the approval of the Portfolios'
independent accountants; monitor, report on and prepare periodic worksheet
and tax provision packages with respect to Sub-Chapter M qualifications;
prepare and file all Form 1099s with respect to the Portfolios' Trustees;
monitor compliance with Section 4982 of the Internal Revenue Code;
calculate and maintain records pertaining to original issue discount and
premium amortization as required; identify wash sales and all other
book/tax differences, and report results to the Portfolios' independent
accountants and Portfolios' management; and such other duties relating to
federal and/or state tax compliance as the parties may agree. BNY shall be
responsible for providing all pertinent tax information to the Portfolios'
independent accountants.
o Prepare Return of Capital Statement of Position 93-2 adjustments.
o Support BAALLC in its preparation of the schedules and provide BAALLC
unaudited quarterly and semi-annual and audited annual financial statements
and schedules of Portfolio investments by providing, without limitation,
each Portfolios' schedule of investments and general ledger in electronic
format and/or hard copy, as required, and such other information as may be
necessary to complete such financial reports.
o Prepare statistical reports for outside information services (referenced in
Schedule V), and such other information services as the parties may agree,
including the ICI expense survey.
o Prepare calculations for capital gains pursuant to IRS rules in conjunction
with BAALLC and the Portfolios' independent accountants.
o Attend Portfolio shareholder and Board of Trustees meetings as requested by
BAALLC, including making such presentations as are appropriate, and, with
respect to the Portfolio
II-1
administration services described herein, provide such periodic and special
reports to Master Trust and BAALLC as Master Trust and BAALLC shall
reasonably request.
PORTFOLIO ACCOUNTING AND OTHER SERVICES
BNY shall provide all accounting and recordkeeping services necessary
and appropriate for the business of the Portfolios, including but not limited to
those set forth below.
Required Records; Ledgers and Journals
BNY shall keep current the following accounts and records relating to
the business of the Portfolios, in such form as is required by the 1940 Act and
the rules thereunder, and generally accepted accounting principles, to support
all filings under applicable federal and state tax laws and regulations and as
may be mutually agreed to among Master Trust, BAALLC and BNY, and shall make
available to BAALLC and/or Master Trust upon request:
1. Cash Receipts Journal
2. Cash Disbursements Journal
3. Dividends Paid and Payable Schedule (book vs. tax basis)
4. Purchase and Sales Journals - Portfolio Securities
5. Realized/Unrealized Gain (Loss) Reports
6. Subscription and Redemption Journals
7. Security Ledgers - Transaction Report and Tax Lot Holdings Report
8. Broker Ledger - Commission Report
9. Daily Expense Accruals
10. Daily Interest Accruals
11. Daily Trial Balance
12. Portfolio Interest Receivable and Income Journal
13. Portfolio Dividend Receivable and Income Register
14. Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security
15. Aged Receivables (dividends, interest, tax reclaiming)
16. Portfolio Turnover Rate
17. Cash reconciliations
18. Position reconciliations
BNY will be responsible for maintaining, in accordance with Section 31
and the rules thereunder of the 1940 Act, all books and records so required and
generated in the course of performing their duties under this agreement.
Further, at a minimum, BNY shall maintain on-site the above referenced reports
as of each month end for the most recent fiscal year-ended and the current
fiscal year.
II-2
Daily Accounting Services
BNY shall perform the following services on each Business Day:
1. Calculate Net Asset Value (NAV), and Public Offering Price (POP) Per Share
Pursuant to SEC formulas:
o Update the valuation of security positions held by each Portfolio's
portfolio in accordance with the Portfolio's Pricing Procedures and any
other appropriate procedures established by the Board and BAALLC as BAALLC
shall provide BNY in writing
o When instructed by BAALLC, enter manual prices supplied by broker and link
to pricing procedures
o Calculate each Portfolio's NAV/POP in accordance with the applicable
Pricing Procedures approved by Master Trust's Board of Trustees and
prepare NAV proof sheet. Review components of change in NAV for
reasonableness based on the tolerance levels as BAALLC shall direct BNY in
writing
o Review variance reporting for price changes in individual securities using
variance levels established by Portfolio and report to Portfolio portfolio
managers and to BAALLC
o Review for ex-dividend items indicated by pricing sources; trace to
general ledger for agreement
o Communicate required pricing and yield information (NAV/POP), as
appropriate, to BAALLC and, electronically, to NASDAQ and to such other
third parties as designated by the Portfolios with respect to its various
distribution channels. In addition, provide Portfolio share activity to
BAALLC.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
o Calculate, subject to the approval of BAALLC, net investment income
available for distribution daily as appropriate
o Calculate daily dividend rate, and 1, 7, 30-day yields/SEC yields
o Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
o Receive daily cash and transaction statements from the Portfolios'
Custodian
o Complete daily bank cash reconciliations (including documentation of any
reconciling items) and notify the Portfolios' Custodian
o Report investable cash to BAALLC and Portfolio sub-advisers
4. Daily Expense Accruals:
o Accrue individual expenses on a daily basis based on Instructions provided
by BAALLC, except for those instances where such an adjustment would cause
a full xxxxx break in NAV, in which case such adjustment will be included
in the calculation of NAV on the day received
II-3
o If applicable, accrue daily amortization of organization expense as
instructed by BAALLC
o If applicable, accrue daily Rule 12b-1 Plan expenses
o Adjust expense accruals as instructed by BAALLC and provide reports as
requested by BAALLC
5. Verify and Record All Daily Income Accruals for Debt Issues:
o Track income and provide year end tax schedules
o Review and verify all interest and amortization reports
o Periodic tie-out of receivables
o Ensure security masters denote proper interest and amortization methods as
per the fund set up sheets as instructed by BAALLC
6. Monitor Securities:
o Review each Portfolios' portfolio holding and current days security trades
for dividend activity
o Interface with Portfolios' Custodian for timely collection and postings of
corporate actions, dividends and interest pre-payments
7. Enter All Security Trades:
o Review verification of trade and interest calculations
o Verify settlement through custodian statements
o Maintain security ledger transaction reporting
o Maintain tax lot holdings
o Determine realized gains or losses on security trades
o Provide broker commission information
8. Enter All Portfolio Share Transactions:
o Periodically reconcile dividend payable amounts
o Process activity identified on reports
o Verify settlement through custodian statements
o Reconcile to report balances
o Process and track capital stock gain/loss activity
9. Prepare Daily Trial Balance:
o Post manual entries to general ledger
o Post custodian bank activity
o Require automated settled transactions between custody and activity
records (prepare, clear and post)
o Post shareholder and security transactions
II-4
o Post and verify income and expense accruals and resolve differences
o Prepare general ledger
o Post corporate action activity
10. Review and Reconcile Custodian Statements:
o Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. when requested
o Post all cash settlement activity to trial balance
o Reconcile to ending cash balance accounts
o Report to BAALLC the status of past due items and failed trades with the
custodian
o Reconcile cash exception Income items, tax reclaims and past due income
items with custody area
11. Preparation of Accounting Reports:
o Price Variance Report
o Trial Balance
o Portfolio Valuation
o NAV Calculation Report
o Cash Availability
o Change in NAV
o Non-standard entries
o Stale Price Report
o Other such reports as may be reasonably be requested by BAALLC
Monthly/Quarterly Services
BNY shall provide the following services on a monthly or quarterly
basis, within such timeframe as may be mutually agreed upon by BNY, Master Trust
and BAALLC:
1. Submission of Monthly Accounting Reports as mutually agreed upon
2. Reconcile Asset Listing to Custodian Asset Listing
3. Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
4. Prepare Documentation Supporting the Preparation of:
o SEC yield reporting
o Income by state reporting
o Standard Industry Code Valuation Report (please provide BAALLC's industry
code classifications/is there a standard for all funds)
o Alternative Minimum Tax Income segregation schedule
II-5
5. Provide Upon Request Broker Commission and Net Trade Reports
Annual (and Semi-Annual) Accounting Services
BNY shall provide the following services on an annual and semi-annual
basis:
1. Supply auditors InvestOne reports supporting securities and shareholder
transactions, income and expense accruals, etc. during the year in accordance
with standard audit assistance requirements
2. Provide BAALLC with information to assist BAALLC in the preparation of NSAR
filings
Other Core Services
BNY shall provide the following services:
o Accrete discounts and amortize premiums to put and call events as directed
by BAALLC and in a manner acceptable under generally accepted accounting
principles
o Process principal repayments on mortgage backed securities
o Update variable securities with current rates
o Process corporate action events through a primary vender feed, and monitor
results via Reuters, Bloomberg, or other available sources as the parties
may agree
o Perform automated portfolio pricing with a second vendor as requested by
BAALLC
o Produce documents and respond to inquiries during account and SEC
examinations
Money Market Portfolios: Prepare daily xxxx to market reports and analysis
in compliance with Rule 2a-7 including:
o Calculating the daily portfolio weighted average maturity
o Report portfolio diversification based on trade/security information
provided by BAALLC by:
Country, State, Tier, Liquidity, Asset Backed Securities, Industry,
Letter of Credit
o Listing percentage of portfolio maturing in specified intervals (i.e.,
number of days)
o Providing issuer and guarantor diversification exception reporting
International Portfolios: BNY shall provide the following services:
o Report in base and local currency
II-6
o Processing of tax liability on foreign income subject to approval of
BAALLC
o Daily variance analysis performed on FX rates for security position held
o Produce automated bifurcation reporting in compliance with IRC Section 988
o Xxxx to market security receivables and payables on a daily basis
o Determine portfolio exposure by country and currency
In addition to the above, BNY will provide additional support as agreed
upon from time to time (i.e., financial statement production).
II-7
SCHEDULE III
SERVICE LEVEL PERFORMANCE STANDARDS
------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
------------------------------------------------------------ ---------------------------------------------------------------
1. Daily Cash Availability |_| 100% accuracy and delivery by 9:00 a.m. EST for Money
Market Portfolios and 9:30 a.m. EST for all others
|_| Compensation for uninvested cash at Nations Cash
Reserves' mill rate
------------------------------------------------------------ ---------------------------------------------------------------
2. Calculation of daily NAVs |_| 100% accuracy by 5:00 p.m. EST including pricing,
expense accruals, cash activity, manual entries, S/H
activity. Delivery by 5:45 p.m. EST
------------------------------------------------------------- --------------------------------------------------------------
3. Review of daily NAVs |_| 100% review by 5:30 p.m. EST
|_| Review of NAV components for reasonableness
including analysis of the change in the NAV
and the change in mill rates.
|_| Review of price variance report
|_| Review of manual proof
------------------------------------------------------------ ---------------------------------------------------------------
4. NASDAQ Reporting |_| 100% accuracy and communication by 5:45 p.m. EST
------------------------------------------------------------ ---------------------------------------------------------------
5. Daily Pricing and Rate Report (DPRR) |_| 100% accuracy in nightly transmission of DPRRs
|_| Money Market Portfolios-5:30 p.m. EST
|_| All other Portfolios- 6:00 p.m. EST
------------------------------------------------------------ ---------------------------------------------------------------
6. FundStation Report (SubM) |_| 100% accuracy and nightly transmission by 7:00 p.m.
EST
------------------------------------------------------------ ---------------------------------------------------------------
7. Processing of trade tickets |_| 100% accuracy and processed by T+1 if received by
the following cut-off times:
|_| All Portfolios (except International) - 10:00
am (T+1)
|_| International - 12:00 pm (T+1)
------------------------------------------------------------ ---------------------------------------------------------------
III-1
------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
------------------------------------------------------------ ---------------------------------------------------------------
|_| Same day settlements - 1:30 pm
------------------------------------------------------------ ---------------------------------------------------------------
8. Problem Resolution (general) |_| NAV impact analysis within 1 day
|_| Clear and timely communication of 100% of issues
|_| Ongoing Tracking
------------------------------------------------------------ ---------------------------------------------------------------
9. Cash reconciliations |_| Performed daily and sent daily to BAALLC (Money Market
Portfolios) and sent weekly to BAALLC (all other
Portfolios)
|_| Issues communicated to BAALLC same day
|_| Outstanding items addressed within 1 business day
------------------------------------------------------------ ---------------------------------------------------------------
10. Position Reconciliations |_| Performed daily and sent weekly to BAALLC
|_| Issues communicated to BAALLC same day
|_| Open issues addressed within 2 business days
------------------------------------------------------------ ---------------------------------------------------------------
11. Tax reporting
|_| Federal, state, tax returns |_| Tax provision package prepared within time parameters
as set by BAALLC/Independent tax personnel (PWC)
|_| Tax provision packages including Sub-M and
excise tax amounts/ distributions |_| Estimates of tax requirements prepared as required by
BAALLC for proper tax planning
|_| Identification of all book/tax differences
|_| Capital gain estimate preparations
------------------------------------------------------------ ---------------------------------------------------------------
12. Statistical Reports |_| Filed within the time parameters as set forth by each
statistical service
------------------------------------------------------------ ---------------------------------------------------------------
13. Expense accruals/payments |_| Payments made on the business day written
instructions from an authorized signator received
|_| Expense accruals made with 100% accuracy based upon
written instructions from BAALLC
------------------------------------------------------------ ---------------------------------------------------------------
III-2
------------------------------------------------------------ ---------------------------------------------------------------
SERVICE STANDARD
------------------------------------------------------------ ---------------------------------------------------------------
14. Management Reports |_| Provided to BAALLC within 10 business days of month
end
------------------------------------------------------------ ---------------------------------------------------------------
15. Year end tax reports |_| Provided to BAALLC within the time frame agreed to
------------------------------------------------------------ ---------------------------------------------------------------
16. Annual/Semi-Annual Reports |_| Provide Trial Balance within 5 business days after
annual/semi-annual period
|_| Provide additional financial statement support as
agreed to
------------------------------------------------------------ ---------------------------------------------------------------
17. Daily Reports |_| To be provided on the following day
|_| Provide detailed portfolio valuation
|_| Trial Balance
------------------------------------------------------------ ---------------------------------------------------------------
18. Daily Cash Sweep |_| 100% accuracy and communication by 2:00 p.m. EST
|_| Nations Cash Reserves
|_| AIM
|_| Nuveen
------------------------------------------------------------ ---------------------------------------------------------------
19. Post Dividends / Corporate Actions |_| 100% accuracy and posted on effective date
------------------------------------------------------------ ---------------------------------------------------------------
20. Monthly Reconciliations |_| Complete reconciliations within 10 business days
------------------------------------------------------------ ---------------------------------------------------------------
21. Reporting to Sub-Advisors |_| Provide nightly and other periodic reporting to
Nations Funds Sub-Advisors
------------------------------------------------------------ ---------------------------------------------------------------
22. Compliance |_| Provide compliance reports as requested by BAALLC
------------------------------------------------------------ ---------------------------------------------------------------
III-3
III-4
SCHEDULE IV
PORTFOLIO PRICING, FUND ACCOUNTING
FUND ADMINISTRATION AND BOOK & TAX ALLOCATION SERVICES
FEE SCHEDULE
FOR
BANC OF AMERICA ADVISORS, LLC
High Yield Portfolio
International Bond Portfolio
Per Fund/Per Annum
Portfolios
----------
6 basis points per annum on the first $500 million of each of the portfolio's
average net assets;
5 basis points on the next $500 million;
4 basis points on the next $250 million;
3 basis points on the next $250 million;
1/2 of one basis point on the excess.
System Development/Usage/Spectra Report Writer
----------------------------------------------
There will be no charges for developing systems interfaces with us or
for on-going usage of any Bank systems related to fund accounting or
administration services.
Accounting Out-of-Pocket Expenses
---------------------------------
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above fees.
Administration Out-of-Pocket Expenses
-------------------------------------
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
Billing Cycle
-------------
The above fees will be billed on a monthly basis.
Mutual Funds assets invested into the Nations Portfolios for Fund
Accounting, Sub-Administration and Custody services will not be billed for these
services at the mutual fund level.
IV-1
SCHEDULE V
All Database Companies Quarterly List
---------------------- --------------
AMG Data Services Lipper
Xxxxxx'x Morningstar
Bloomberg CDA Wiesenberger
CDA Wiesenberger Investment Company Institute
Commerce Clearing House (CCH) S&P Micropal
Forbes Institute for Economic Research
Institute for Economic Research Value Line
Interactive Data Services Media General Financial Services
Investment Company Institute LCG Associates
LCG Associates Closed End Fund Digest (Closed End Only)
Lipper Lipper - International (Closed End Only)
Media General
Xxxxx'x Investors Service
Morningstar
S&P Micropal
Strategic Insights
Value Line
V-1
