CUSTODY AGREEMENT
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THIS AGREEMENT is made this 8th day of June, 2001 by and between
Nations Funds Trust (the "Trust") 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 Bank of America, N.A., a national banking
association (the "Custodian").
W I T N E S S E T H
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WHEREAS, the Trust is registered as an open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act");
and
WHEREAS, the Trust desires to retain the Custodian to serve as the
Trust'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 Trust hereby appoints the Custodian to act as
custodian of its portfolio securities, cash and other property on the terms set
forth in this Agreement. The Custodian accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Paragraph 24 of this Agreement. The Custodian agrees to comply with all
relevant provisions of the 1940 Act and applicable rules and regulations
thereunder. The Trust 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 Trust called for under this Agreement shall identify the series or
class to which such report, confirmation or notice pertains.
2. Delivery of Documents. The Trust has furnished the Custodian with
copies properly certified or authenticated of each of the following:
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(a) Resolutions of the Trust's Board of Trustees authorizing the
appointment of the Custodian as Custodian of the portfolio securities, cash and
other property of the Trust and approving this Agreement;
(b) Schedule A identifying and containing the signatures of the
Trust's officers and/or other persons authorized to issue Oral Instructions and
to sign Written Instructions, as hereinafter defined, on behalf of the Trust;
(c) Schedule B setting forth the names and signatures of the
present officers of the Trust;
(d) The Trust's Declaration of Trust filed with the State of
Delaware 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 Trust's By-Laws (if any) 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 Trust's Board of Trustees appointing the
investment advisers and sub-adviser of the Trust and resolutions of the Trust's
Board of Trustees and the Trust's shareholders approving (i) the Investment
Advisory Agreement (the "Investment Advisory Agreement") dated June 8, 2001,
between the Trust, on behalf of the Portfolios, and Banc of America Advisors,
LLC ("BA Advisors"); (ii) the Sub-Advisory Agreement (the "Sub-Advisory
Agreement") dated June 8, 2001 among the Trust, on behalf of the Portfolios, BA
Advisors and Banc of America Capital Management, LLC ("BACAP") (as used herein
the Adviser shall mean BA Advisors and/or BACAP as the context may require);
(g) The Investment Advisory Agreement, dated June 8, 2001;
(h) The Sub-Advisory Agreement, dated June 8, 2001;
(i) The Distribution Agreement, dated June 8, 2001, between the
Trust and Xxxxxxxx Inc. ("Xxxxxxxx");
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(j) The Administration Agreement, dated June 8, 2001, between the
Trust on behalf of the Funds and Xxxxxxxx;
(k) The Co-Administration Agreement, dated June 8, 2001, between
the Trust and PFPC Inc.
(l) The Trust'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 Trust'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 Trust, 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 Trust will furnish the Custodian from time to
time with copies of all amendments of or supplements to the foregoing, if any.
The Trust will also furnish the Custodian with a copy of the opinion of counsel
for the Trust with respect to the validity of the Shares and the status of such
Shares under the 1933 Act filed with the SEC, and any other applicable federal
law or regulation; and
(o) Before any Fund of the Trust 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 Trust by the CFTC which states that the Trust 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 Trust by the CFTC which states that
the CFTC will not take any enforcement action if the Trust does not register as
a "commodity pool operator."
The Trust 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.
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(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any of the Trust's officers, and any other person,
whether or not any such person is an officer or employee of the Trust, duly
authorized by the Board of Trustees of the Trust to give Oral and Written
Instructions on behalf of the Trust 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 Trust 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 Trust 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 Trust
which the Trust 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 Trust;
(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
Trust, which are received by the Custodian from time to time from or on behalf
of the Trust.
(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 Trust's Board of Trustees 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 Trust 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 Trust 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 Trust. The Custodian's only duty shall be to mail to the
Trust 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 Trust understands that in order for the Custodian to act,
the Custodian must receive the Trust's
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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 Trust).
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 Trust.
6. Receipt and Disbursement of Money.
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(a) the Custodian shall open and maintain a custody account for
each Fund of the Trust, 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 Trust. The
Custodian shall make payments of cash to, or for the account of, each Fund of
the Trust from such cash only (i) for the purchase of securities for the Trust
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 Trust 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
Trust 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 Trust.
(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
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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.
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(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 Trust. All such securities and non-cash property
are to be held or disposed of by the Custodian for each Fund of the Trust
pursuant to the terms of this Agreement. In the absence of Written Instructions
accompanied by a certified resolution authorizing the specific transaction by
the Trust's Board of Trustees, 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 Trustee, officer, employee or agent of
the Trust withdraw any securities except as provided in this Agreement and
pursuant to a duly adopted resolution of the Board of Trustees. 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 Trust 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
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($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
Trust with a copy of each sub-custodian agreement it executes relating to the
Trust. 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.
(b) Promptly after the close of business on each day the Custodian
shall furnish the Trust with confirmations and a summary of all transfers to or
from the account of each Fund of the Trust during said day. Where securities are
transferred to the account of any Fund of the Trust 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 Trust 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
Trust shall deliver to the Custodian a certified resolution of the Board of
Trustees of the Trust 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 Trust 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 Trust, 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 Trust 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 Trust has given the Custodian Written Instructions
to the contrary.
(b) All books and records maintained by the Custodian that relate
to the Trust 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 Trust's duly authorized employees or agents and the Trust's
independent auditors in accordance with applicable regulations, and the Trust
will be furnished with all information in respect of the services rendered to it
as it may require.
(c) The Custodian will provide the Trust 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 Trust with such
reports on its own system of internal control as the Trust may reasonably
request from time to time.
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 Trust's
Board of Trustees, 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 Trust 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 Trust 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 Trust by giving Oral Instructions. The
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Trust 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 Trust results from the negligence
or willful misconduct of the Custodian. In accordance with instructions from the
Trust, as required by accepted industry practice or as the Custodian may elect
in effecting the execution of the Trust 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 Trust, 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 Trust, or to any other party which
has secured judgment in a court of law against the Trust which creates an
overdraft in the accounts or overdelivery of Property shall be deemed a loan by
the Custodian to the Trust, 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
Trust, 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 Trust, and promptly advise the
Trust of such receipt and shall credit such income, as collected, to such Fund
of the Trust. 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 Trust or
the Custodian. Any such crediting and posting shall be at the Trust'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 Trust 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 Trust 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
Trust and each of its Funds, checks, drafts, or other orders for the payment of
money on the same day as received;
(iv) receive and hold for the account of each of the Trust's
all securities received by the Trust 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 Trust held by the Custodian hereunder;
(v) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed or retired, or otherwise
become payable on the date such securities become payable;
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(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 Trust
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
Trust 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 Trust 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 Trust as owner of any securities
may be exercised;
b) Deliver any securities held for any Fund of the Trust 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 Trust 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 Trust 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 Trust;
(e) Release securities belonging to any Fund of the Trust to any
bank or trust company for the purpose of pledge or hypothecation to secure any
loan incurred by the Trust; 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 Trust upon the exercise of
a covered call option written by the Trust on such securities;
(g) Release and deliver securities owned by the Trust in
connection with any repurchase agreement entered into on behalf of any Fund of
the Trust, but only on receipt of payment therefor; and pay out monies of the
Trust 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 Trust, 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 Trust 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 Trust shall furnish the Custodian with appropriate
evidence of action by the Trust's Board of Trustees declaring and authorizing
the payment of any dividends and distributions. Upon receipt by the Custodian of
an Officer's Certificate with respect to dividends and distributions declared by
the Trust's Board of Trustees and payable to shareholders of any Fund who are
entitled to receive cash for fractional shares and those who have elected in the
proper manner to receive their distributions on dividends in cash, and in
conformance with procedures mutually agreed upon by the Custodian, the Trust and
the Trust's Administrator or transfer agent, the Custodian shall pay to the
Fund's transfer agent, as agent for the shareholders,
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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 Trust'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 Trust, the Custodian and the Trust's Administrator and Transfer
Agent.
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 Trust,
the Custodian, the Trust'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 Trust uses (each an
"FCM Agreement"), pursuant to which the Trust'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 Trust ("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 Trust which stated that (i) an FCM
Contract has been entered into; and (ii) the Trust 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 Trust 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
Trust, 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 Trust designated by the
Board of Trustees who shall not otherwise be authorized to have access to the
Trust's securities. Such notation shall be on serially numbered forms and shall
be preserved for at least one year.
16. Sales of Securities. Promptly after each sale of securities by the
Adviser, the Trust 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
16
principal amount sold, and accrued interest, if any, (c) the dates of sale, (d)
the sale price per unit, (e) the total amount payable to the Trust upon such
sale, (f) the name of the broker, through whom, or the person to whom, the sale
was made and (g) the Fund for which the sale was made. The Custodian shall
deliver the securities upon receipt of the total amount payable to the Trust
upon such sale, provided that the same conforms to the total amount payable as
set forth in such Oral and Written Instructions. 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 Trust which are
in the possession of the Custodian shall be the property of the Trust. 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 Trust, or the Trust'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 Trust promptly
upon request. Upon reasonable request of the Trust, copies of any such books and
records shall be provided by the Custodian to the Trust or the Trust's
authorized representative at the Trust's expense.
18. Reports.
(a) The Custodian shall furnish the Trust the following reports:
(i) such periodic and special reports as the Trust may
reasonably request;
(ii) a monthly statement summarizing all transactions and entries
for the account of each Fund of the Trust;
(iii) a monthly report of portfolio securities belonging to each
fund of the Trust 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
Trust showing disbursements;
17
(v) the reports to be furnished to the Trust pursuant to Rule
17f-4 under the 1940 Act; and
(vi) such other information as may be agreed upon from time to
time between the Trust and the Custodian.
(b) The Custodian shall transmit promptly to the Trust 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 Trust'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
Trust'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 Trust to comply with
the provisions of this Paragraph 19.
20. Confidentiality. The Custodian agrees on behalf of itself and its
employees to treat confidentially and as the proprietary information of the
Trust, all record and other information relative to the Trust 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 Trust, 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 Trust.
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21. Equipment Failures. In the event of equipment failures beyond the
Custodian's control, the Custodian shall, at no additional expense to the Trust,
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
Trust 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 Trust 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.
(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,
19
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 Trust
is subject to Rule 17f-2 and will undertake to assist the Trust in complying
with its obligations thereunder.
24. Compensation. As compensation for the services rendered by the
Custodian during the term of this Agreement, the Trust 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 Trust.
25. Indemnification. The Trust, 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
Trust, 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 Trust or to its shareholders (or any expenses
incident to such liability) arising out of (x) the Custodian's
20
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 Trust, 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 Trust 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.
26. Responsibility of The Custodian. The Custodian shall be under no
duty to take any action on behalf of the Trust 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
21
believes to be genuine, (b) the validity of the issue of any securities
purchased or sold by the Trust, 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 Trust. In any
case in which the Custodian does not receive any payment due the Trust within a
reasonable time after the Custodian has made proper demands for the same, it
shall so notify the Trust 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 Trust. 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
Trust as soon as reasonably practicable whenever income due on securities is not
collected in due course.
28. Duration and Termination. This Agreement shall be effective as of
the date hereof and shall continue until termination by the Trust 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 Trustees of the Trust, including a
majority of the Trustees 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 Trust 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 Trust to
the Trust, but may deliver them to a bank or trust company of its own selection,
22
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 Trust 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
Trust 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
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xxxxxx X.
Xxxxxx, Senior Vice President; (b) if to the Trust, at the address of Nations
Funds Trust, 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.
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
23
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 FUNDS TRUST
By: /s/ A. Xxx Xxxxxx ATTEST: /s/ Xxxxxxx X. Xxxxx
----------------------------- ------------------------------
A. Xxx Xxxxxx Secretary
President and Chairman of the
Board of Trustees
BANK OF AMERICA, N. A. ATTEST: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Senior Vice President
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
25
SCHEDULE A
AUTHORIZED PERSONS FOR
ORAL AND WRITTEN INSTRUCTIONS
Xxxxxx X. Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxxxx
Xxxxx Xxxxx
26
SCHEDULE B
OFFICERS OF THE TRUST
A. Xxx Xxxxxx President
Xxxxxxx X. Xxxxx, Xx. Treasurer
Xxxxxxx Xxxx Assistant Treasurer
Xxxxxxx X. Xxxxx, Xx. Secretary
Xxxxxxx X. Xxxxx Assistant Secretary
Xxxxxxx Xxxx Assistant Secretary
Xxxxxxx Xxxxxx Assistant Secretary
27
SCHEDULE C
FEE SCHEDULE
Each Portfolio of the Trust shall pay the Custodian the following annual fees:
1. 1.25% of 1.00% of the average daily net assets of each Fund;
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
Fund.
28
SCHEDULE I
The Custody Agreement between the Trust and the Custodian applies to
the following portfolios of the Trust:
Nations LifeGoal Growth Portfolio
Nations LifeGoal Balanced Growth Portfolio
Nations LifeGoal Income and Growth Portfolio
29
