CUSTODY AGREEMENT
THIS AGREEMENT is made this 15th day of October, 1996 by and between
Nations LifeGoal Funds, Inc. (the "Company") on behalf of its portfolios listed
on Schedule I, as such Schedule may be amended from time to time (individually a
"Fund" and collectively the "Funds") and NationsBank of Texas, N.A., a national
banking association (the "Custodian").
W I T N E S S E T H
WHEREAS, the Company is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Company desires to retain the Custodian to serve as the
Company's custodian and the Custodian is willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT. The Company hereby appoints the Custodian to act
as custodian of its portfolio securities, cash and other property on the terms
set forth in this Agreement. The Custodian accepts such appointment and agrees
to furnish the services herein set forth in return for the compensation as
provided in Paragraph 24 of this Agreement. The Custodian agrees to comply with
all relevant provisions of the 1940 Act and applicable rules and regulations
thereunder. The Company may from time to time issue separate series, classes or
classify and reclassify shares of any such series or class. The Custodian shall
identify to each such series or class Property, as hereinafter defined,
belonging to such series or class and in such reports, confirmations and notices
and to the Company called for under this Agreement shall identify the series or
class to which such report, confirmation or notice pertains.
2. DELIVERY OF DOCUMENTS. The Company has furnished the Custodian
with copies properly certified or authenticated of each of the following:
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(a) Resolutions of the Company's Board of Directors
authorizing the appointment of the Custodian as Custodian of the portfolio
securities, cash and other property of the Company and approving this Agreement;
(b) Schedule A identifying and containing the signatures of
the Company's officers and/or other persons authorized to issue Oral
Instructions and to sign Written Instructions, as hereinafter defined, on behalf
of the Company;
(c) Schedule B setting forth the names and signatures of the
present officers of the Company;
(d) The Company's Articles of Incorporation filed with the
State of Maryland and all amendments thereto (such as currently in effect and as
they shall from time to time be amended, are herein called the "Charter");
(e) The Company's By-Laws and all amendments thereto (such
By-Laws, as currently in effect and as they shall from time to time be amended,
are herein called the "By-Laws");
(f) Resolutions of the Company's Board of Directors appointing
the investment advisers and sub-adviser of the Company and resolutions of the
Company's Board of Directors and the Company's shareholders approving (i) the
Investment Advisory Agreement (the "Investment Advisory Agreement") dated
October 15, 1996 between the Company, on behalf of the Portfolios, and
NationsBanc Advisors, N.A. ("NBAI"); (ii) the Sub-Advisory Agreement (the
"Sub-Advisory Agreement") dated October 15, 1996 among the Company, on behalf of
the Portfolios, NBAI and TradeStreet Investment Associates, Inc. ("TradeStreet")
(as used herein the Adviser shall mean NBAI and/or TradeStreet as the context
may require);
(g) The Investment Advisory Agreement, dated October 15, 1996;
(h) The Sub-Advisory Agreement, dated October 15, 1996;
(i) The Distribution Agreement, dated October 15, 1996,
between the Company and Xxxxxxxx Inc. ("Xxxxxxxx");
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(j) The Administration Agreement, dated October 15, 1996,
between the Company on behalf of the Funds and Xxxxxxxx;
(k) The Co-Administration Agreement, dated October 15, 1996,
between the Company and First Data Investor Services Group, Inc.
(l) The Company's Notification of Registration filed pursuant
to Section 8(a) of the 1940 Act, as filed with the Securities and Exchange
Commission (the "SEC");
(m) The Company's current Registration Statement on Form N-1A
under the 1940 Act and the Securities Act of 1933, as amended ("xxx 0000 Xxx")
as filed with the SEC, relating to shares of common stock of the Company,
without par value (the "Shares");
(n) The current prospectuses and statements of additional
information of each of the Funds, including all amendments and supplements
thereto (the "Prospectuses"). The Company will furnish the Custodian from time
to time with copies of all amendments of or supplements to the foregoing, if
any. The Company will also furnish the Custodian with a copy of the opinion of
counsel for the Company with respect to the validity of the Shares and the
status of such Shares under the 1933 Act filed with the SEC, and any other
applicable federal law or regulation; and
(o) Before any Fund of the Company engages in any transactions
regulated by the Commodity Futures Trading Commission ("CFTC"), a copy of either
(i) a filed notice of eligibility to claim the exclusion from the definition of
"commodity pool operator" contained in Section 2(a)(1)(A) of the Commodity
Exchange Act ("CEA") that is provided in Rule 4.5 under the CEA, together with
all supplements as are required by the CFTC, or (ii) a letter which has been
granted to the Company by the CFTC which states that the Company will not be
treated as a "pool" as defined in Section 4.10(d) of the CFTC's General
Regulations, or (iii) a letter which has been granted to the Company by the CFTC
which states that the CFTC will not take any enforcement action if the Company
does not register as a "commodity pool operator."
The Company will furnish the Custodian from time to time with copies,
properly certified or authenticated, of all amendments of or supplements to the
foregoing, if any.
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3. DEFINITIONS.
(a) "AUTHORIZED PERSON". As used in this Agreement, the term
"Authorized Person" means any of the Company's officers, and any other person,
whether or not any such person is an officer or employee of the Company, duly
authorized by the Board of Directors of the Company to give Oral and Written
Instructions on behalf of the Company and listed on Schedule A, which may be
amended from time to time.
(b) "BOOK-ENTRY SYSTEM". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees and any book-entry system maintained by a clearing agency
registered with the SEC under Section 17A of the Securities Exchange Act of 1934
(the "1934 Act").
(c) "ORAL INSTRUCTIONS". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by the Custodian
from an Authorized Person or from a person reasonably believed by the Custodian
to be an Authorized Person. The Company agrees to deliver to the Custodian, at
the time and in the manner specified in Paragraph 9 of this Agreement Written
Instructions confirming Oral Instructions.
(d) "OFFICER'S CERTIFICATE". The term "Officer's Certificate"
as used in this Agreement means instructions delivered by hand, mail, tested
telegram, cable, telex, facsimile sending device, and received by the Custodians
signed by two officers of the Company listed on Schedule B.
(e) "PROPERTY". The term "Property", as used in this
Agreement, means:
(i) any and all securities and other property of the
Company which the Company may from time to time deposit, or
cause to be deposited, with the Custodian or which the
Custodian may, from time to time, hold for the Company;
(ii) all income in respect of any other such securities or
other property;
(iii) all proceeds of the sales of any of such securities
or other property; and
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(iv) all proceeds of the sale of securities issued by the
Company, which are received by the Custodian from time to time
from or on behalf of the Company.
(f) "SECURITIES DEPOSITORY". As used in this Agreement, the
term "Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of a
resolution of the Company's Board of Directors approving deposits by the
Custodian therein.
(g) "WRITTEN INSTRUCTIONS". As used in this Agreement,
"Written Instructions" means instructions delivered by hand, mail, tested
telegram, cable, telex, facsimile sending device, and received by the Custodian,
signed by two Authorized Persons.
4. DELIVERY AND REGISTRATION OF THE PROPERTY. The Company will
deliver or cause to be delivered to the Custodian all securities and all monies
owned by it, including cash received for the issuance of its Shares, at any time
during the period of this Agreement, except for securities and monies to be
delivered to any sub-custodian appointed pursuant to Paragraph 7 hereof. The
Custodian will not be responsible for such securities and such monies until
actually received by it. All securities delivered to the Custodian or to any
such sub-custodian (other than in bearer form) shall be registered in the name
of the Company or in the name of a nominee of the fund or in the name of the
Custodian or any nominee of the Custodian (with or without indication of
fiduciary status) or in the name of any sub-custodian or any nominee of such
sub-custodian appointed pursuant to Paragraph 7 hereof or shall be properly
endorsed and in form for transfer satisfactory to the Custodian.
5. VOTING RIGHTS. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by the Company. The Custodian's only duty shall be to mail to the
Company any documents received, including proxy statements and offering
circulars, with any proxies for securities registered in a nominee name executed
by such nominee. Where warrants, options, tenders or other securities have fixed
expiration dates, the Company understands that in order for the Custodian to
act, the Custodian must receive the Company's instructions at its offices in New
York, addressed as the Custodian may from time to time request, by no later than
noon (New York City time) at least one business day prior to the last scheduled
date to act with respect thereto (or such earlier date or time as the Custodian
may reasonably notify the Company). Absent the Custodian's timely receipt of
such instructions, such instructions will expire without liability to the
Custodian. Corporate reports need not be forwarded to the Company.
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6. RECEIPT AND DISBURSEMENT OF MONEY.
(a) the Custodian shall open and maintain a custody account
for each Fund of the Company, subject only to draft or order by the Custodian
acting pursuant to the terms of this Agreement, and shall hold in such account,
subject to the provisions hereof, all cash received by it from or for the
Company. The Custodian shall make payments of cash to, or for the account of,
each Fund of the Company from such cash only (i) for the purchase of securities
for the Company as provided in paragraph 14 hereof; (ii) upon receipt of an
Officer's Certificate for the payment of dividends or other distributions of
shares, or for the payment of interest, taxes, administration, distribution or
advisory fees or expenses which are to be borne by the Company under the terms
of this Agreement, and, with respect to each Fund, and Investment Advisory
Agreement, Sub-Advisory Agreement, Administration Agreement or Distribution
Agreement; (iii) upon receipt of Written Instructions for payments in connection
with the conversion, exchange or surrender of securities owned or subscribed to
by the Company and held by or to be delivered to the Custodian; (iv) to a
sub-custodian pursuant to Paragraph 7 hereof; or (v) for the redemption of Fund
Shares; or (vi) upon receipt of an Officer's Certificate for other corporate
purposes. No payment pursuant to (i) above shall be made unless the Custodian
has received a copy of the broker's or dealer's confirmation or the payee's
invoice as appropriate.
(b) The Custodian is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of money received as
custodian for the Company.
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(c) In the event that a payment required to be made under this
Agreement exceeds the cash available in the account of a Fund, the Custodian, in
its discretion, may advance to the Fund an amount equal to that excess and such
advance will be deemed a loan from Custodian to the Fund, payable on demand,
bearing interest at such fair market rate as may be agreed upon from time to
time by the parties hereto. Custodian may not unreasonably decline to advance
funds. In exercising its discretion under this Paragraph 6(c), Custodian
recognizes the interest of a Fund in avoiding failed trades and in meeting
redemption requests on a same-day basis, and will inform the Fund immediately
whenever Custodian anticipates that it may, in the future, be necessary to
exercise its discretion to decline an advance of funds. In any event, where
practicable, Custodian will give a Fund at least three business days' notice
before declining to advance funds. In this regard, the parties agree to
cooperate in good faith to minimize the need for advances under this Paragraph
6(c).
7. RECEIPT OF SECURITIES.
(a) Except as provided by Paragraph 8 hereof, the Custodian
shall hold and physically segregate in a separate account with respect to each
Fund, identifiable from those of any other person, all securities and non-cash
property received by it for the Company. All such securities and non-cash
property are to be held or disposed of by the Custodian for each Fund of the
Company pursuant to the terms of this Agreement. In the absence of Written
Instructions accompanied by a certified resolution authorizing the specific
transaction by the Company's Board of Directors, the Custodian shall have no
power or authority to withdraw, deliver, assign, hypothecate, pledge or
otherwise dispose of any such securities and investments, except in accordance
with the express terms provided for in this Agreement. In no case may any
director, officer, employee or agent of the Company withdraw any securities
except as provided in this Agreement and pursuant to a duly adopted resolution
of the Board of Directors. In connection with its duties under this Paragraph 7,
the Custodian may, at its own expense, enter into sub-custodian Agreements with
other banks or trust companies for the receipt of certain securities and cash to
be held by the Custodian for the account of a Fund of the Company pursuant to
this Agreement; provided that each such bank or trust company has an aggregate
capital, surplus and undivided profits, as shown by its last published report,
of not less than one million dollars ($1,000,000) for a Custodian subsidiary or
affiliate, or of not less than twenty million dollars ($20,000,000) for a
sub-custodian that is not a Custodian subsidiary or affiliate and that in either
case such bank or trust company agrees with the Custodian to comply with all
relevant provisions of the 1940 Act and applicable rules and regulations
thereunder. The Custodian will provide the Company with a copy of each
sub-custodian agreement it executes relating to the Company. The Custodian will
be liable for acts or omissions of any such sub-custodian, under the standards
of care provided for herein, of any bank or trust company that it chooses
pursuant to this Paragraph 7.
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(b) Promptly after the close of business on each day the
Custodian shall furnish the Company with confirmations and a summary of all
transfers to or from the account of each Fund of the Company during said day.
Where securities are transferred to the account of any Fund of the Company
established at a Securities Depository or the Book-Entry System pursuant to
Paragraph 8 herein, the Custodian shall also by book-entry or otherwise,
identify as belonging to such Fund the quantity of securities in a fungible bulk
of securities registered in the name of the Custodian (or its nominee) or shown
in the Custodian's account on the books of a Securities Depository or the
Book-Entry System. At least monthly and from time to time, the Custodian shall
furnish the Company with a detailed statement of the Property held for each Fund
under this Agreement.
8. USE OF SECURITIES DEPOSITORY OR THE BOOK-ENTRY SYSTEM. The
Company shall deliver to the Custodian a certified resolution of the Board of
Directors of the Company approving, authorizing and instructing the Custodian on
a continuous and ongoing basis until instructed to the contrary by Oral or
Written Instructions actually received by the Custodian (i) to deposit in a
Securities Depository or the Book-Entry System all securities of the Company
eligible for deposit therein and (ii) to utilize a Securities Depository or the
Book-Entry System to the extent possible in connection with the performance of
its duties hereunder, including without limitation settlements of purchases and
sales of securities by the Company, and deliveries and returns of securities
loaned, subject to repurchase agreements or used as collateral in connection
with borrowings. Without limiting the generality of such use, it is agreed that
the following provisions shall apply thereto:
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(a) Securities and any cash of the Company deposited in a
Securities Depository or the Book-Entry System will at all times be segregated
from any assets and cash controlled by the Custodian in other than a fiduciary
or custodian capacity. The Custodian and its sub-custodians, if any, will pay
out money only upon receipt of securities and will deliver securities only upon
receipt of money, unless the Company has given the Custodian Written
Instructions to the contrary.
(b) All books and records maintained by the Custodian that
relate to the Company participation in a Securities Depository or the Book-Entry
System will at all times during the Custodian's regular business hours be open
to the inspection of the Company's duly authorized employees or agents and the
Company's independent auditors in accordance with applicable regulations, and
the Company will be furnished with all information in respect of the services
rendered to it as it may require.
(c) The Custodian will provide the Company with copies of any
report obtained by the Custodian on the system of internal accounting control of
the Securities Depository or Book-Entry System promptly after receipt of such a
report by the Custodian. The Custodian will also provide the Company with such
reports on its own system of internal control as the Company may reasonably
request from time to time.
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9. INSTRUCTIONS CONSISTENT WITH THE CHARTER, ETC.. Unless
otherwise provided in this Agreement, the Custodian shall act only upon Oral and
Written Instructions. The Custodian may assume that any Oral or Written
Instructions received hereunder are not in any way inconsistent with any
provision of the Charter or By-Laws or any vote or resolution of the Company's
Board of Directors, or any committee thereof. The Custodian shall be entitled to
rely upon any Oral or Written Instructions actually received by the Custodian
pursuant to this Agreement. The Company agrees to forward to the Custodian
Written Instructions confirming Oral Instructions in such manner that the
Written Instructions are received by the Custodian at the close of business of
the same day that such Oral Instructions are given to the Custodian. The Company
agrees that the fact that such confirming Written Instructions are not received
by the Custodian shall in no way affect the validity of any of the transactions
authorized by the Company by giving Oral Instructions. The Company agrees that
the Custodian shall incur no liability in acting upon Oral Instructions given to
the Custodian hereunder concerning such transactions, provided that such
instructions reasonably appear to have been received from an Authorized Person,
unless any liability to the Company results from the negligence or willful
misconduct of the Custodian. In accordance with instructions from the Company,
as required by accepted industry practice or as the Custodian may elect in
effecting the execution of the Company instructions, advances of cash or other
Property made by the Custodian, arising from the purchase, sale, redemption,
transfer or other disposition of Property of the Company, or in connection with
the disbursement of funds to any party, or in payment of fees, expenses, claims
or liabilities owed to the Custodian by the Company, or to any other party which
has secured judgment in a court of law against the Company which creates an
overdraft in the accounts or overdelivery of Property shall be deemed a loan by
the Custodian to the Company, payable on demand, bearing interest at such rate
customarily charged by the Custodian for similar loans.
10. TRANSACTIONS NOT REQUIRING INSTRUCTIONS. The Custodian is
authorized to take the following action without Written Instructions:
(a) COLLECTION OF INCOME AND OTHER PAYMENTS. The Custodian
shall:
(i) collect and receive for the account of any Fund of the
Company, all income and other payments and distributions, including (without
limitation) stock dividends, rights, warrants and similar items, included or to
be included in the Property of any Fund of the Company, and promptly advise the
Company of such receipt and shall credit such income, as collected, to such Fund
of the Company. From time to time, the Custodian may elect, but shall not be so
obligated, to credit the account with interest, dividends or principal payments
on payable or contractual settlement date, in anticipation of receiving same
from a payor, central depository, broker or other agent employed by the Company
or the Custodian. Any such crediting and posting shall be at the Company's sole
risk, and the Custodian shall be authorized to reverse any such advance posting
in the event that it does not receive good funds from any such payor, central
depository, broker or agent.
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(ii) with respect to securities of foreign issue, effect
collection of dividends, interest and other income, and to notify the Company of
any call for redemption, offer of exchange, right of subscription,
reorganization, or other proceedings affecting such securities, or any default
in payments due thereon. It is understood, however, that the Custodian shall be
under no responsibility for any failure or delay in effecting such collections
or giving such notice with respect to domestic securities regardless of whether
or not the relevant information is published in any financial service available
to it unless such failure or delay is due to its negligence; however, this
sentence shall not be construed as creating any such responsibility with respect
to securities of non-foreign issue, other than such responsibility of the
Custodian. Collections of income in foreign currency are, to the extent
possible, to be converted into United States dollars unless otherwise instructed
in writing, and in effecting such conversion the Custodian may use such methods
or agencies as it may see fit, including the facilities of its own foreign
division at customary rates. All risk and expenses incident to such collection
and conversion is for the account of the Company and the Custodian shall have no
responsibility for fluctuations in exchange rates affecting any such conversion.
(iii) endorse and deposit for collection in the name of
the Company and each of its Funds, checks, drafts, or other orders for the
payment of money on the same day as received;
(iv) receive and hold for the account of each of the
Company's all securities received by the Company as a result of a stock
dividend, share or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued with
respect to any portfolio securities of the Company held by the Custodian
hereunder;
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(v) present for payment and collect the amount payable
upon all securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable;
(vi) take any action which may be necessary and proper in
connection with the collection and receipt of such income and other payments and
the endorsement for collection of checks, drafts and other negotiable
instructions;
(vii) with respect to domestic securities, to exchange
securities in temporary form for securities in definitive form, to effect an
exchange of the shares where the par value of stock is changed, and to surrender
securities at maturity or when advised of earlier call for redemption, against
payment therefor, in accordance with accepted industry practice. When fractional
shares of stock of a declaring corporation are received as a stock distribution,
the Custodian is authorized to sell the fraction received and credit the Company
account. Unless specifically instructed to the contrary in writing, the
Custodian is authorized to exchange securities in bearer form for securities in
registered form. If any Property registered in the name of a nominee of the
Custodian is called for partial redemption by the issuer of such Property, the
Custodian is authorized to allot the called portion to the respective beneficial
holders of the Property in such manner deemed to be fair and equitable by the
Custodian in its sole discretion.
(b) MISCELLANEOUS TRANSACTIONS. The Custodian is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor in the following cases:
(c) for examination by a broker selling for the account of the
Company in accordance with street delivery custom;
(d) for the exchange for interim receipts or temporary
securities for definitive securities;
(e) for transfer of securities into the name of the Company or
the Custodian or a nominee of either, or for exchange or securities for a
different number of bonds, certificates, or other evidence, representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to the Custodian.
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11. TRANSACTIONS REQUIRING INSTRUCTIONS. Upon receipt of Oral or
Written Instructions and not otherwise, the Custodian, directly or through the
use of a Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies, consents, authorizations, and any
other instruments whereby the authority of the Company as owner of any
securities may be exercised;
(b) Deliver any securities held for any Fund of the Company
against receipt of other securities or cash issued or paid in connection with
the liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
(c) Deliver any securities held for any Fund of the Company to
any protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, against receipt of such certificates or
deposit, interim receipts or other instruments or documents as may be issued to
it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of any Fund
of the Company and take such other steps as shall be stated in said instructions
to be for the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Company;
(e) Release securities belonging to any Fund of the Company to
any bank or trust company for the purpose of pledge or hypothecation to secure
any loan incurred by the Company; provided, however, that securities shall be
released only upon payment to the Custodian of the monies borrowed, except that
in cases where additional collateral is required to secure a borrowing already
made, subject to proper prior authorization, further securities may be released
for that purpose; and pay such loan upon redelivery to it of the securities
pledged or hypothecated therefor and upon surrender of the note or notes
evidencing the loan;
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(f) Deliver any securities held for the Company upon the
exercise of a covered call option written by the Company on such securities;
(g) Release and deliver securities owned by the Company in
connection with any repurchase agreement entered into on behalf of any Fund of
the Company, but only on receipt of payment therefor; and pay out monies of the
Company in connection with such repurchase agreements, but only upon the
delivery of the securities;
(h) Otherwise transfer, exchange or deliver securities in
accordance with Oral or Written Instructions.
12. SEGREGATED ACCOUNTS.
(a) The Custodian shall, upon receipt of Written or Oral
Instructions, establish and maintain a segregated account or accounts, on its
records, for and on behalf of any Fund of the Company, into which account or
accounts may be transferred cash and/or securities, including securities in the
Book-Entry System (i) for the purposes of compliance by the Company with the
procedures required by a securities or option exchange, providing such complies
with the Investment Company Act and Release No. 10666 or any subsequent release
or releases of the Securities and Exchange Commission relating to the
maintenance of segregated accounts by registered investment companies and (ii)
for other proper corporate purposes, but only, in the case of clause (ii), upon
receipt of Written Instructions.
13. DIVIDEND AND DISTRIBUTIONS.
(a) The Company shall furnish the Custodian with appropriate
evidence of action by the Company's Board of Directors declaring and authorizing
the payment of any dividends and distributions. Upon receipt by the Custodian of
an Officer's Certificate with respect to dividends and distributions declared by
the Company's Board of Directors and payable to shareholders of any Fund who are
entitled to receive cash for fractional shares and those who have elected in the
proper manner to receive their distributions on dividends in cash, and in
conformance with procedures mutually agreed upon by the Custodian, The Company
and the Company's Administrator or transfer agent, the Custodian shall pay to
the Fund's transfer agent, as agent for the shareholders, an amount equal to the
amount indicated in said Officer's Certificate as payable by the fund to such
shareholders for distribution in cash by the transfer agent to such
shareholders. In lieu of paying the Company's transfer agent cash dividends and
distributions, the Custodian may arrange for the direct payment of cash
dividends and distributions to shareholders by the Custodian in accordance with
such procedures and controls as are mutually agreed upon from time to time by
and among the Company, the Custodian and the Company's Administrator and
Transfer Agent.
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In accordance with the Prospectuses, the Internal Revenue Code of 1986,
as amended, and regulations promulgated thereunder, and with such procedures and
controls as are mutually agreed upon from time to time by and among the Company,
the Custodian, the Company's Administrator and Transfer Agent, the Custodian
shall arrange for the establishment of Individual Retirement Accounts ("IRAs")
as custodian accounts for such shareholders holding shares through XXX accounts.
(b) The Custodian may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that the Company uses (each
an "FCM Agreement"), pursuant to which the Company's margin deposits in any
transactions involving futures contracts and options on futures contracts will
be held by the Custodian in accounts (each an "FCM Account") subject to the
disposition by the FCM involved in such contracts in accordance with the
customer contract between FCM and the Company ("FCM Contract"), SEC rules
governing such segregated accounts, CFTC rules and the rules of the applicable
commodities exchange. Such FCM Agreements shall only be entered into upon
receipt of Written Instructions from the Company which stated that (i) an FCM
Contract has been entered into; and (ii) the Company is in compliance with all
the rules and regulations of the CFTC. Transfers of initial margin shall be made
into FCM Account only upon Written Instructions; transfers of premium and
variation margin may be made into an FCM Account pursuant to Oral Instructions.
Transfers of funds from an FCM Account to the FCM for which the Custodian holds
such an account may only occur upon certification by the FCM to the Custodian
that pursuant to the FCM Agreement and the FCM Contract, all conditions
precedent to its right to give the Custodian such instruction have been
satisfied.
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14. PURCHASE OF SECURITIES. Promptly after each purchase of
securities by the Adviser on behalf of any Fund, the Company shall deliver to
the Custodian Oral or Written Instructions specifying with respect to each such
purchase: (a) the name of the issuer and the title of the securities, (b) the
number of shares of the principal amount purchased and accrued interest, if any,
(c) the dates of purchase and settlement, (d) the purchase price per unit, (e)
the total amount payable upon such purchase, (f) the name of the person, from
whom, or the broker through whom, the purchase was made and (g) the Fund for
which the purchase was made. The Custodian shall, upon receipt of securities
purchased by or for the Company, pay out of the monies held for the account of
such Fund, the total amount payable to the person, from whom, or the broker
through whom, the purchase was made, provided that the same conforms to the
total amount payable as set forth in such Oral or Written Instructions.
15. NOTATION. With respect to each deposit or withdrawal of
securities or when ordering the deposit or withdrawal of securities from
safekeeping, the Custodian shall sign a notation in respect of each such
deposit, withdrawal or order that shall show: (a) the date and time of the
deposit, withdrawal or order; (b) the title and amount of the securities or
other investments deposited, withdrawn or ordered to be withdrawn, and the
identification thereof by certificate numbers or otherwise; (c) the manner of
acquisition of the securities or similar investments deposited or the purpose
for which they have been withdrawn, or ordered to be withdrawn; and (d) if
withdrawn and delivered to another person, the name of such person. The time of
any deposit, withdrawal or order means the time of the formal recording of such
transactions on the books of the Custodian at the Custodian's close of business.
Such notation shall be transmitted promptly to an officer or director of the
Company designated by the Board of Directors who shall not otherwise be
authorized to have access to the Company's securities. Such notation shall be on
serially numbered forms and shall be preserved for at least one year.
16
16. SALES OF SECURITIES. Promptly after each sale of securities by
the Adviser, the Company shall deliver to the Custodian Oral or Written
Instructions, specifying with respect to each such sale: (a) the name of the
issuer and the title of the security, (b) the number of the shares or principal
amount sold, and accrued interest, if any, (c) the dates of sale, (d) the sale
price per unit, (e) the total amount payable to the Company upon such sale, (f)
the name of the broker, through whom, or the person to whom, the sale was made
and (g) the Fund for which the sale was made. The Custodian shall deliver the
securities upon receipt of the total amount payable to the Company upon such
sale, provided that the same conforms to the total amount payable as set forth
in such Oral and Written Instructions. Subject to the foregoing, the Custodian
may accept payment in such form as shall be satisfactory to it, and may deliver
securities and arrange for payment in accordance with the customs prevailing
among dealers in securities.
17. RECORDS. The books and records pertaining to the Company which
are in the possession of the Custodian shall be the property of the Company.
Such books and records shall be prepared and maintained as required by the 1940
Act, as amended, and other applicable securities laws and rules and regulations.
The SEC, the Company, or the Company's authorized representatives, shall have
access to such books and records at all times during the Custodian's normal
business hours, and such books and records shall be surrendered to the Company
promptly upon request. Upon reasonable request of the Company, copies of any
such books and records shall be provided by the Custodian to the Company or the
Company's authorized representative at the Company's expense.
18. REPORTS.
(a) The Custodian shall furnish the Company the following
reports:
(i) such periodic and special reports as the Company may
reasonably request;
17
(ii) a monthly statement summarizing all transactions and
entries for the account of each Fund of the Company;
(iii) a monthly report of portfolio securities belonging to
each fund of the Company showing the adjusted average
cost of each issue and the market value at the end of
such month;
(iv) a monthly report of the cash account of each Fund of the
Company showing disbursements;
(v) the reports to be furnished to the Company pursuant to
Rule 17f-4 under the 1940 Act; and
(vi) such other information as may be agreed upon from time
to time between the Company and the Custodian.
(b) The Custodian shall transmit promptly to the Company any
proxy statement, proxy materials, notice of a call or conversation or similar
communications received by it as Custodian of the Property.
19. COOPERATION WITH ACCOUNTANTS. The Custodian shall cooperate
with the Company's independent certified public accountant and shall take all
reasonable action in the performance of its obligations under this Agreement and
those under Rule 17f-2 under the 1940 Act ("Rule 17f-2") to the extent such Rule
is applicable, to assure that the necessary information is made available to
such accountant for the expression of its unqualified opinion with respect to,
including without limitation, the three audits required each year, the
certificates with respect to such annual audits and the opinion included in the
Company's semi-annual report on Form N-SAR, and will require each sub-custodian
appointed pursuant to paragraph 7 hereof to grant such access to the information
to the fund's independent certified public accountant. The Custodian shall
require any sub-custodian it appoints with respect to the Company to comply with
the provisions of this Paragraph 19.
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20. CONFIDENTIALITY. The Custodian agrees on behalf of itself and
its employees to treat confidentially and as the proprietary information of the
Company, all record and other information relative to the Company and its prior,
present or potential shareholders and relative to the managers and its prior,
present or potential customers, and not to use such records and information for
any purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by the Company, which
approval shall not be unreasonably withheld and may not be withheld where the
Custodian may be exposed to civil or criminal contempt proceedings for failure
to comply, when requested to divulge such information by duly constituted
authorities, or when so requested by the Company.
21. EQUIPMENT FAILURES. In the event of equipment failures beyond
the Custodian's control, the Custodian shall, at no additional expense to the
Company, take reasonable steps to minimize service interruptions but shall not
have liability with respect thereto. The Custodian shall enter into and shall
maintain in effect with appropriate parties one or more agreements making
reasonable provision for back up emergency use of electronic data processing
equipment to the extent appropriate equipment is available.
22. RIGHT TO RECEIVE ADVICE.
(a) ADVICE OF FUND. If the Custodian shall be in doubt as to
any action to be taken or omitted by it, it may request, and shall receive, from
the Company clarification or advice, including Oral or Written Instructions.
(b) ADVICE OF COUNSEL. If the Custodian shall be in doubt as
to any question of law involved in any action to be taken or omitted by the
Custodian, it may request advice at its own cost from counsel of its own
choosing (who may be counsel for the Company or the Custodian, at the option of
the Custodian).
(c) CONFLICTING ADVICE. In case of conflict between
directions, advice or Oral or Written Instructions received by the Custodian
pursuant to subparagraph (a) of this paragraph and advice received by the
Custodian pursuant to subparagraph (b) of this paragraph, the Custodian shall be
entitled to rely on and follow the advice received pursuant to the latter
provision alone.
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(d) PROTECTION OF THE CUSTODIAN. The Custodian shall be
protected in any action or inaction which it takes or omits to take in reliance
on any directions, advice or Oral or Written Instructions received pursuant to
subparagraphs (a) or (b) of this section which the Custodian, after receipt of
any such directions, advice or Oral or Written Instructions, in good faith
believes to be consistent with such directions, advice or Oral or Written
Instructions, as the case may be. Nothing in this paragraph shall be construed
as imposing upon the Custodian any obligation (i) to seek such directions,
advice or Oral or Written Instructions, or (ii) to act in accordance with such
directions, advice or Oral or Written Instructions when received, unless, under
the terms or another provision of this Agreement, the same is a condition to the
Custodian's properly taking or omitting to take such action. Nothing in this
subparagraph shall excuse the Custodian when an action or omission on the part
of the Custodian constitutes willful misfeasance, bad faith, negligence or
reckless disregard by the Custodian of its duties under this Agreement.
23. COMPLIANCE WITH GOVERNMENTAL RULES AND REGULATIONS. The
Custodian undertakes to comply with all applicable requirements of the 1933 Act,
the 1934 Act, the 1940 Act and any laws, rules and regulations of governmental
authorities having jurisdiction with respect to the duties and obligations to be
performed by the Custodian hereunder. The Custodian acknowledges that the
Company is subject to Rule 17f-2 and will undertake to assist the Company in
complying with its obligations thereunder.
24. COMPENSATION. As compensation for the services rendered by the
Custodian during the term of this Agreement, the Company will pay to the
Custodian, in addition to reimbursement of its out-of-pocket expenses, monthly
fees as outlined in Schedule C, or as otherwise agreed upon from time to time in
writing by the Custodian and the Company.
20
25. INDEMNIFICATION. The Company, as sole owner of the Property,
agrees to indemnify and hold harmless the Custodian and its nominees from all
taxes, charges, expenses, assessments, claims, and liabilities (including,
without limitation, liabilities arising under the 1933 Act, the Act of 1934, the
1940 Act, the CEA, and any state and foreign securities and blue sky laws, all
as or to be amended from time to time) and expenses, including (without
limitation) attorney's fees and disbursements, arising directly or indirectly
(a) from the fact that securities included in the Property are registered in the
name of any such nominee or (b) without limiting the generality of the foregoing
clause (a) from any action or thing which the Custodian takes or does or omits
to take or do (i) at the request or at the direction of or in reliance on the
advice of the Company, or (ii) upon Oral or Written Instructions, PROVIDED, that
neither the Custodian nor any of its nominees or sub-custodians shall be
indemnified against any liability to any Fund of the Company or to its
shareholders (or any expenses incident to such liability) arising out of (x) the
Custodian's or such nominee's or sub-custodian's own willful misfeasance, bad
faith, negligence or reckless disregard of its duties under this Agreement or
any agreement between the Custodian and any nominee or sub-custodian or (y) the
Custodian's own negligent failure to perform its duties under this Agreement. In
the event of any advance of cash for any purpose made by the Custodian resulting
from Oral or Written Instructions of the Company, or in the event that the
Custodian or its nominee or sub-custodian shall incur or be assessed any taxes,
charges, expenses, assessments, claims or liabilities in connection with the
performance of this Agreement, except such as may arise from its or its
nominee's or sub-custodian's own negligent action, negligent failure to act,
willful misconduct, or reckless disregard, the Company shall promptly reimburse
the Custodian for such advance of cash or such taxes, charges, expenses,
assessment claims or liabilities. Notwithstanding anything to the contrary, any
one Fund shall not provide indemnification to the Custodian for any loss or
liability resulting from actions with respect to any other Fund.
21
26. RESPONSIBILITY OF THE CUSTODIAN. The Custodian shall be under
no duty to take any action on behalf of the Company except as specifically set
forth herein or as may be specifically agreed to by the Custodian in writing. In
the performance of its duties hereunder, the Custodian shall be obligated to
exercise care and diligence and to act in good faith and to use its best efforts
within reasonable limits to ensure the accuracy of all services performed under
this Agreement. The Custodian shall be responsible for its own negligent failure
or that of any sub-custodian it shall appoint to perform its duties under this
Agreement but to the extent that duties, obligations and responsibilities are
not expressly set forth in this Agreement, the Custodian shall not be liable for
any act or omission which does not constitute willful misfeasance, bad faith, or
negligence on the part of the Custodian or reckless disregard of such duties,
obligations and responsibilities. Without limiting the generality of the
foregoing or of any other provision of this Agreement, the Custodian in
connection with its duties under this Agreement shall not be under any duty or
obligation to inquire into and shall not be liable for or in respect of (a) the
validity or invalidity or authority or lack thereof of any advice, direction,
notice or other instrument which conforms to the applicable requirements of this
Agreement, if any, and which the Custodian believes to be genuine, (b) the
validity of the issue of any securities purchased or sold by the Company, the
legality of the purchase or sale thereof or the propriety of the amount paid or
received therefor, (c) the legality of the issue or sale of any Shares, or the
sufficiency of the amount to be received therefor, (d) delays or errors or loss
of data occurring by reason of circumstances beyond the Custodian's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Paragraph 21),
flood or catastrophe, acts of God, insurrection, war, riots, or failure of the
mail, transportation, communication or power supply.
27. COLLECTION. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by the Custodian) shall be at the sole risk of the Company.
In any case in which the Custodian does not receive any payment due the Company
within a reasonable time after the Custodian has made proper demands for the
same, it shall so notify the Company in writing, including copies of all demand
letters, any written responses thereto, and memoranda of all oral responses
thereto, and to telephonic demands, and await instructions from the Company. The
Custodian shall not be obliged to take legal action for collection unless and
until reasonably indemnified to its satisfaction. The Custodian shall also
notify the Company as soon as reasonably practicable whenever income due on
securities is not collected in due course.
22
28. DURATION AND TERMINATION. This Agreement shall be effective as
of the date hereof and shall continue until termination by the Company or by the
Custodian on 60 days written notice provided that this Agreement shall terminate
at the end of two years from the date hereof unless the Agreement is approved on
an annual basis thereafter by the Board of Directors of the Company, including a
majority of the Directors who are not "interested persons" under the 1940 Act.
Upon any termination of this Agreement, pending appointment of a successor to
the Custodian or a vote of the shareholders of the Company to dissolve or to
function without a custodian of its cash, securities or other property, the
Custodian shall not deliver cash, securities or other property of the Company to
the Company, but may deliver them to a bank or trust company of its own
selection, having aggregate capital, surplus and undivided profits, as shown by
its last published report of not less than twenty million dollars ($20,000,000)
as a custodian for the Company to be held under terms similar to those of this
Agreement, PROVIDED, HOWEVER, that the Custodian shall not be required to make
any such delivery or payment until full payment shall have been made by the
Company of all liabilities constituting a charge on, or against, the properties
then held by the Custodian, or on or against the Custodian, and until full
payment shall have been made to the Custodian of all of its fee, compensation,
costs and expenses, subject to the provisions of Paragraph 21 of this Agreement.
29. NOTICES. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
Notices shall be addressed (a) if the Custodian, at the Custodian's address, 000
Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000-0000, Attention: ______; (b) if to the Company,
at the address of Nations LifeGoal Funds, Inc., 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Xx., Secretary; or (c) if to
neither of the foregoing, at such other address as shall have been notified to
the sender of any such Notice or other communication. Notice shall be deemed to
have been given when actually received by the other party. All postage, cable,
telegram, telex and facsimile sending device charges arising from the sending of
a Notice hereunder shall be paid by the sender.
23
30. FURTHER ACTIONS. Each party agrees to perform such further
acts and execute such further documents as are necessary to effectuate the
purposes hereof.
31. AMENDMENTS. This Agreement or any party hereof may be changed
or waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
32. MISCELLANEOUS. This Agreement embodies the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the subject matter hereof. The
captions in this Agreement are included for convenience of reference only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a contract made in
New York and governed by New York law. If any provision of this Agreement shall
be held or made invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and their
respective successors.
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their offices designated below as of the day and year first above
written.
NATIONS LIFEGOAL FUNDS, INC.
on behalf of the LifeGoal Portfolios
By: /s/ A. XXX XXXXXX ATTEST: /s/ XXXXXXX X. XXXXX, XX.
----------------- -------------------------
Name: A. Xxx Xxxxxx Secretary
Title: President and Chairman of the
Board of Directors
NATIONSBANK OF TEXAS, N.A. ATTEST: /s/ XXXXXX X. XXXXX
-------------------------
Senior Vice President
By: /s/ XXXX X. XXXXXX
----------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
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SCHEDULE A
AUTHORIZED PERSONS FOR
ORAL AND WRITTEN INSTRUCTIONS
XXXXXX XXXXXX
XXXXXXX X. XXXXX
XXXXXX X. XXXXXX
XXXXX XXXXX
XXXXXXX X. XXXXXXX
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SCHEDULE B
OFFICERS OF THE COMPANY
A. Xxx Xxxxxx President and Chief Executive Officer
Xxxxxxx X. Xxxx Treasurer
Xxxxxx X. Xxxxxxx Assistant Treasurer
Xxxxxxx X. Xxxxx, Xx. Secretary
Xxxxxxx X. Xxxxx Assistant Secretary
Xxxxxx X. Xxxxxxx Assistant Secretary
Xxxxx X. Xxxxx, Xx. Assistant Secretary
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SCHEDULE C
FEE SCHEDULE
Each Portfolio of the Company shall pay the Custodian the following annual fees:
1. 1.25% of 1.00% of the average daily net assets of each Portfolio;
2. $10.00 per Repurchase Collateral movement; and
3. $15.00 per Purchase, Sale and Maturity transaction
This fee will be paid monthly, based upon the average daily net assets of each
Portfolio.
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SCHEDULE I
The Custody Agreement between the Company and the Custodian applies to
the following portfolios of the Company:
LifeGoal Growth Portfolio
LifeGoal Balanced Growth Portfolio
LifeGoal Income and Growth Portfolio
29
