SUB-ADMINISTRATION AGREEMENT
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of
January 1, 2003 by and among THE BANK OF NEW YORK ("BNY"), BACAP Distributors,
LLC ("BACAP Distributors") 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, BACAP Distributors serves as the Administrator for the
investment portfolios of Master Trust pursuant to a separate Administration
Agreement; and
WHEREAS, BACAP Distributors desires to retain BNY to render certain
sub-administrative and other services to Master Trust and to BACAP Distributors,
as 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) BACAP Distributors 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 BACAP Distributors will become a "Portfolio" for all purposes hereunder
when BNY receives a revised Schedule I from BACAP Distributors 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 BACAP
Distributors and Master Trust, as necessary and appropriate; and (iii) advise
and report to BACAP Distributors 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 BACAP Distributors 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 BACAP Distributors may reasonably
request and will notify BNY and BACAP Distributors as soon as possible of any
matter materially affecting either BNY's or BACAP Distributors' 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 BACAP Distributors. Master Trust and BACAP
Distributors shall cause their respective officers, and shall use reasonable
efforts to cause Master Trust's or BACAP Distributors' 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 BACAP Distributors 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
BACAP Distributors 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 BACAP
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Distributors of reasonable action that BNY shall take if written instructions
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 BACAP Distributors, 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 BACAP Distributors 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 BACAP Distributors to detect any such errors or
omissions shall not relieve BNY of any resulting liability therefrom. To the
extent that BACAP Distributors 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 BACAP Distributors
provided notice of such error or omission to BNY.
(f) BNY hereby represents and warrants to Master Trust and BACAP
Distributors, 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,
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BNY shall be entitled to receive a monthly fee from BACAP Distributors and
reimbursement for out-of-pocket expenses as set forth in Schedule IV to this
Agreement. It is understood that BACAP Distributors 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 BACAP Distributors 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, BACAP
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Distributors (obtained in accordance with the procedures set forth in this
Agreement) or its own counsel; (iv) any improper use by the Portfolio, Master
Trust, BACAP Distributors or their respective agents, of any 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 BACAP Distributors. 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 BACAP
Distributors 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 BACAP
Distributors then represents in writing to be consistent with all applicable
laws and regulations. Master Trust
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or BACAP Distributors 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
BACAP Distributors shall be deemed to have represented that such instruction is
consistent with all applicable laws and regulations and the then-current
effective Prospectus of the particular Portfolio. Master Trust or BACAP
Distributors 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 BACAP Distributors. 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 BACAP Distributors 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 BACAP Distributors 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 BACAP Distributors or by
vote of the Board of Master Trust; or upon 180 days' written notice to BACAP
Distributors and Master Trust by BNY. Upon any such termination, BNY will
cooperate with and assist Master Trust, BACAP Distributors, 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 BACAP
Distributors 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 BACAP Distributors 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 BACAP Distributors
to a successor service provider. In the
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event of a dispute as to the amount of such damages, the Portfolios and BACAP
Distributors agree to escrow the set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
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 BACAP Distributors 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 BACAP
Distributors 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 BACAP
Distributors have no objection to BNY so doing. Master Trust and BACAP
Distributors 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 BACAP Distributors 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.
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(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.
(c) Each and every right granted to BNY, Master Trust or BACAP
Distributors 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
BACAP Distributors 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 BACAP Distributors 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 BACAP Distributors
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
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Secretary
To BACAP Distributors:
BACAP Distributors, LLC
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Secretary
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To BNY:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Grunston
(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.
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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: /s/ Xxx Xxxxxx
--------------
Xxx Xxxxxx
Vice President
BACAP DISTRIBUTORS, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Senior Vice President
Chief Operating Officer
NATIONS MASTER INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
President
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SCHEDULE I
1. High Yield Portfolio
Approved: November 21, 2002
Last Amended: March 27, 2003
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IN WITNESS WHEREOF, the parties hereto have caused this amended
Schedule I to be executed by their officers designated below as of the 27th day
of March, 2003.
THE BANK OF NEW YORK
By: /s/ Xxx Xxxxxx
--------------
Xxx Xxxxxx
Vice President
BACAP DISTRIBUTORS, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Senior Vice President
Chief Operating Officer
NATIONS MASTER INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxxx
---------------------
Xxxxxx X. Xxxxxxx
Secretary
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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:
- 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. BACAP Distributors shall be responsible for
communicating such policies and restrictions, including any changes
thereto, to BNY by such means as the parties agree.
- Provide income attribution summary schedules necessary for year-end tax
reporting. 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.
- 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.
- Prepare Return of Capital Statement of Position 93-2 adjustments.
- Support BACAP Distributors in its preparation of the schedules and provide
BACAP Distributors 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.
- 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.
- Prepare calculations for capital gains pursuant to IRS rules in conjunction
with BACAP Distributors and the Portfolios' independent accountants.
- Attend Portfolio shareholder and Board of Trustees meetings as requested by
BACAP Distributors, including making such presentations as are appropriate,
and, with respect to the
II-1
Portfolio administration services described herein, provide such periodic
and special reports to Master Trust and BACAP Distributors as Master Trust
and BACAP Distributors 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, BACAP Distributors and BNY, and
shall make available to BACAP Distributors 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:
- 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 BACAP
Distributors as BACAP Distributors shall provide BNY in writing
- When instructed by BACAP Distributors, enter manual prices supplied by
broker and link to pricing procedures
- 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 BACAP Distributors
shall direct BNY in writing
- Review variance reporting for price changes in individual securities
using variance levels established by Portfolio and report to Portfolio
portfolio managers and to BACAP Distributors
- Review for ex-dividend items indicated by pricing sources; trace to
general ledger for agreement
- Communicate required pricing and yield information (NAV/POP), as
appropriate, to BACAP Distributors 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 BACAP Distributors.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
- Calculate, subject to the approval of BACAP Distributors, net
investment income available for distribution daily as appropriate
- Calculate daily dividend rate, and 1, 7, 30-day yields/SEC yields
- Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
- Receive daily cash and transaction statements from the Portfolios'
Custodian
- Complete daily bank cash reconciliations (including documentation of
any reconciling items) and notify the Portfolios' Custodian
- Report investable cash to BACAP Distributors and Portfolio
sub-advisers
4. Daily Expense Accruals:
- Accrue individual expenses on a daily basis based on Instructions
provided by BACAP Distributors, except for those instances where such
an adjustment would cause a full
II-3
xxxxx break in NAV, in which case such adjustment will be included in
the calculation of NAV on the day received
- If applicable, accrue daily amortization of organization expense as
instructed by BACAP Distributors
- If applicable, accrue daily Rule 12b-1 Plan expenses
- Adjust expense accruals as instructed by BACAP Distributors and
provide reports as requested by BACAP Distributors
5. Verify and Record All Daily Income Accruals for Debt Issues:
- Track income and provide year end tax schedules
- Review and verify all interest and amortization reports
- Periodic tie-out of receivables
- Ensure security masters denote proper interest and amortization
methods as per the fund set up sheets as instructed by BACAP
Distributors
6. Monitor Securities:
- Review each Portfolios' portfolio holding and current days security
trades for dividend activity
- Interface with Portfolios' Custodian for timely collection and
postings of corporate actions, dividends and interest pre-payments
7. Enter All Security Trades:
- Review verification of trade and interest calculations
- Verify settlement through custodian statements
- Maintain security ledger transaction reporting
- Maintain tax lot holdings
- Determine realized gains or losses on security trades
- Provide broker commission information
8. Enter All Portfolio Share Transactions:
- Periodically reconcile dividend payable amounts
- Process activity identified on reports
- Verify settlement through custodian statements
- Reconcile to report balances
- Process and track capital stock gain/loss activity
9. Prepare Daily Trial Balance:
- Post manual entries to general ledger
- Post custodian bank activity
II-4
- Require automated settled transactions between custody and activity
records (prepare, clear and post)
- Post shareholder and security transactions
- Post and verify income and expense accruals and resolve differences
- Prepare general ledger
- Post corporate action activity
10. Review and Reconcile Custodian Statements:
- Verify all posted interest, dividends, expenses, and shareholder and
security payments/receipts, etc. when requested
- Post all cash settlement activity to trial balance
- Reconcile to ending cash balance accounts
- Report to BACAP Distributors the status of past due items and failed
trades with the custodian
- Reconcile cash exception Income items, tax reclaims and past due
income items with custody area
11. Preparation of Accounting Reports:
- Price Variance Report
- Trial Balance
- Portfolio Valuation
- NAV Calculation Report
- Cash Availability
- Change in NAV
- Non-standard entries
- Stale Price Report
- Other such reports as may be reasonably be requested by BACAP
Distributors
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 BACAP Distributors:
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:
- SEC yield reporting
- Income by state reporting
II-5
- Standard Industry Code Valuation Report (please provide BACAP
Distributors' industry code classifications/is there a standard for
all funds)
- Alternative Minimum Tax Income segregation schedule
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 BACAP Distributors with information to assist BACAP Distributors in
the preparation of NSAR filings
Other Core Services
BNY shall provide the following services:
- Accrete discounts and amortize premiums to put and call events as
directed by BACAP Distributors and in a manner acceptable under
generally accepted accounting principles
- Process principal repayments on mortgage backed securities
- Update variable securities with current rates
- Process corporate action events through a primary vender feed, and
monitor results via Reuters, Bloomberg, or other available sources as
the parties may agree
- Perform automated portfolio pricing with a second vendor as requested
by BACAP Distributors
- 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:
- Calculating the daily portfolio weighted average maturity
- Report portfolio diversification based on trade/security information
provided by BACAP Distributors by:
Country, State, Tier, Liquidity, Asset Backed Securities,
Industry, Letter of Credit
II-6
- Listing percentage of portfolio maturing in specified intervals (i.e.,
number of days)
- Providing issuer and guarantor diversification exception reporting
International Portfolios: BNY shall provide the following services:
- Report in base and local currency
- Processing of tax liability on foreign income subject to approval of
BACAP Distributors
- Daily variance analysis performed on FX rates for security position
held
- Produce automated bifurcation reporting in compliance with IRC Section
988
- Xxxx to market security receivables and payables on a daily basis
- 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
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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
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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 BACAP Distributors (Money Market
Portfolios) and sent weekly to BACAP Distributors (all other Portfolios)
- Issues communicated to BACAP Distributors same day
- Outstanding items addressed within 1 business day
-----------------------------------------------------------------------------------------------------------------------------------
10. Position Reconciliations - Performed daily and sent weekly to BACAP Distributors
- Issues communicated to BACAP Distributors 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 BACAP
Distributors/Independent tax personnel (PWC)
- Tax provision packages including
Sub-M and excise tax amounts/
distributions
- Estimates of tax requirements prepared as required by BACAP Distributors
- Identification of all book/tax for proper tax planning
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%
-----------------------------------------------------------------------------------------------------------------------------------
III-2
-----------------------------------------------------------------------------------------------------------------------------------
SERVICE STANDARD
-----------------------------------------------------------------------------------------------------------------------------------
accuracy based upon written instructions from BACAP Distributors
-----------------------------------------------------------------------------------------------------------------------------------
14. Management Reports - Provided to BACAP Distributors within 10 business days of month end
-----------------------------------------------------------------------------------------------------------------------------------
15. Year end tax reports - Provided to BACAP Distributors 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 BACAP Distributors
-----------------------------------------------------------------------------------------------------------------------------------
III-3
SCHEDULE IV
IV-1
PORTFOLIO PRICING, FUND ACCOUNTING
FUND ADMINISTRATION AND BOOK & TAX ALLOCATION SERVICES
FEE SCHEDULE
FOR
BACAP DISTRIBUTORS, 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.
IV-2
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
