EX-99.B8(a)
MUTUAL FUND CUSTODY AND SUB-CUSTODY AGREEMENT
THIS AGREEMENT is made as of the 18th day of October, 1996 by
and among NationsBank of Texas, N.A., a national banking association
("Custodian"), The Bank of New York, a New York corporation authorized to do a
banking business ("Sub-Custodian"), and Nations Fund, Inc., a Maryland
corporation (the "Company").
W I T N E S S E T H
WHEREAS, the Company is a registered open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Company desires to retain Custodian to serve as
custodian for the Company, on behalf of its portfolios listed on Schedule I
(individually a "Fund" and collectively the "Funds") and to provide the services
described herein, and Custodian is willing to serve and to provide such
services; and
WHEREAS, Custodian and Company each desires to retain
Sub-Custodian to serve as the Company's sub-custodian and provide the services
described herein, and Sub-Custodian is willing to so serve and to provide such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the Company, Custodian and Sub-Custodian hereby
agree 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 23 hereof. The Custodian agrees to comply with all relevant
provisions of the 1940 Act and applicable rules and regulations thereunder.
Custodian and Company each hereby appoints Sub-Custodian to act as a
sub-custodian of the portfolio securities, cash and other property of the
Company on the terms set forth in this Agreement. Sub-Custodian accepts such
appointment and agrees to furnish the services herein set forth in return for
the compensation as provided in Paragraph 23 hereof, Sub-Custodian agrees to
comply with all relevant provisions of the 1940 Act and applicable rules and
regulations thereunder applicable to Sub-Custodian's performance of its services
hereunder.
The Company may from time to time issue separate series or classes, and
classify and reclassify shares of any such series or class. Custodian or the
Company shall promptly specify to Sub-Custodian in writing such series or
classes, or any reclassification, and thereafter Sub-Custodian shall identify to
each such series or class Property, as hereinafter defined, belonging to such
series or class, and such reports, confirmations and notices to the Company
called for under this Agreement shall identify the series or class to which such
report, confirmation or notice pertains.
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2. Delivery of Documents. The Company has furnished to the Custodian
and Sub-Custodian copies properly certified or authenticated of each of the
following:
(a) Resolutions of the Company's Board of Directors
authorizing the appointment of Custodian and Sub-Custodian as a custodian and
sub-custodian of portfolio securities, cash and other property of the Company,
respectively, and approving and consenting to 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 current Registration Statement on Form N-1A
under the 1940 Act and the Securities Act of 1933, as amended (the "1933 Act"),
as filed with the Securities and Exchange Commission (the "SEC"), relating to
shares of beneficial interest of the Company, without par value (the "Shares");
(e) The current prospectuses and statements of additional
information of each of the Funds, including all amendments and supplements
thereto (the "Prospectuses"); and
(f) A copy of the opinion of counsel for the 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.
The Company shall furnish to Custodian and Sub-Custodian from
time to time copies, properly certified or authenticated, of all amendments of
or supplements to any of the foregoing.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any of the 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 to Custodian and Sub-Custodian on behalf of the Company and listed
on Schedule A, which may be amended from time to time. Authorized Persons duly
authorized by the Board of Directors of the Company to buy and sell foreign
currency on a spot and forward basis and options to buy and sell foreign
currency are denoted by an asterisk thereon.
(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees and any book-entry system maintained by a clearing agency
registered with the SEC under Section 17A of the Securities Exchange Act of 1934
(the "1934 Act").
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(c) "Composite Currency Unit". Shall mean the European
Currency Unit or any other composite unit consisting of the aggregate of
specified amounts of specified Currencies as such unit may be constituted from
time to time.
(d) "Currency". Shall mean money denominated in a lawful
currency of any country or the European Currency Unit.
(e) "FX Transaction". Shall mean any transaction for the
purchase by one party of an agreed amount in one Currency against the sale by it
to the other party of an agreed amount in another Currency.
(f) "Instructions". Shall mean instruction communications
transmitted by electronic or telecommunications media including S.W.I.F.T.,
computer-to-computer interface, dedicated transmission line, facsimile
transmission (which may be signed or unsigned) and tested telex.
(g) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by Custodian or
Sub-Custodian from an Authorized Person or from a person reasonably believed by
Custodian or Sub-Custodian to be an Authorized Person.
(h) "Officer's Certificate". The term "Officer's Certificate"
as used in this Agreement means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending device, and actually received by
Custodian or Sub-Custodian signed or reasonably believed by Custodian or
Sub-Custodian to be signed by two officers of the Company listed on Schedule B.
(i) "Property". The term "Property", as used in this
Agreement, means:
(i) any and all securities and other property of the
Company which the Company or Custodian may from time to time deliver to
Custodian or Sub-Custodian, as applicable, or which Custodian or Sub-Custodian
may from time to time hold for the Company;
(ii) all income in respect of any securities or other
property described in immediately preceding clause (i);
(iii) all proceeds of sales of any of such securities
or other property described in preceding clause (i) actually received by
Custodian or Sub-Custodian; and
(iv) proceeds of the sale of Shares received by
Custodian or Sub-Custodian from time to time from or on behalf of the Company.
(j) "Securities Depository". As used in this Agreement, the
term "Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC or its successor or successors and its nominee or
nominees; and shall also mean any other registered clearing agency, its
successor or successors specifically identified in a certified copy of
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a resolution of the Company's Board of Directors approving deposits by the
Custodian or Sub-Custodian therein.
(k) "Written Instructions". As used in this Agreement,
"Written Instructions" means instructions delivered by hand, mail, tested
telegram, cable, telex, or facsimile sending device, and actually received by
the Custodian or Sub-Custodian, signed or reasonably believed by the Custodian
or Sub-Custodian to be signed by two Authorized Persons, and the term Written
Instructions shall also include Instructions.
4A. Services of Custodian. The Custodian shall be responsible for
oversight and monitoring of the performance by the Sub-Custodian of the duties
assumed by it hereunder. Such oversight and monitoring shall include, but not be
limited to, coordinating communication between the Funds' investment adviser(s)
and the Sub-Custodian with respect to Fund trading activity, assisting with
failed trade resolution, reviewing Fund cash management activity with the
Sub-Custodian, reviewing posting of income to Fund accounts, monitoring
Sub-Custodian's reporting of corporate actions to the Funds' investment
adviser(s) and communications related thereto, facilitating the establishment of
Fund accounts on the Sub-Custodian's custody system, and assisting in the
resolution of any issues between the Sub-Custodian and the Funds.
In no case, however, shall the Custodian have physical custody of any
of the Funds' securities, cash or other monies.
4B. Delivery and Registration of the Property. Custodian or the Company
shall deliver or cause to be delivered to Sub-Custodian all securities and all
monies owned by the Funds, including cash received for the issuance of Shares,
at any time during the period of this Agreement, except for securities and
monies to be delivered to any other sub-custodian appointed, with approval of
Company, by Custodian or Sub-Custodian pursuant to Paragraphs 7, 27, or 28(g)
hereof. Sub-Custodian will not be responsible for such securities and such
monies until actually received by it. All securities delivered to Sub-Custodian
(other than in bearer form) shall be registered in the name of the Fund or in
the name of a nominee of a Fund or in the name of Sub-Custodian or any nominee
of Sub-Custodian (with or without indication of fiduciary status) or in the name
of any sub-custodian or any nominee of such sub-custodian appointed, with
approval of Company, pursuant to Paragraphs 7, 27, or 28(g) hereof or shall be
properly endorsed and in form for transfer satisfactory to Sub-Custodian.
5. Voting Rights. With respect to all securities, however registered,
it is understood that the voting and other rights and powers shall be exercised
by the Company. Sub-Custodian's only duty shall be to mail to the Company within
two (2) business days following receipt by the Sub-Custodian any documents
received by Sub-Custodian as sub-custodian, including proxy statements and
offering circulars, with any proxies for securities registered in a nominee name
executed by such nominee. Where warrants, options, tenders or other securities
have fixed expiration dates, the Company understands that in order for
Sub-Custodian to act, Sub-Custodian must receive the Company's instructions at
its offices in New York, addressed as Sub-Custodian may from time to time
request, by no later than noon (New York City time) at least one (1) business
day prior to the last scheduled date to act with respect thereto (or such
earlier date or time as Sub-Custodian may reasonably notify the Company and
Custodian). Absent Sub-
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Custodian's timely receipt of such instructions, such instructions will expire
without liability to Sub-Custodian. Corporate reports need not be forwarded to
the Company.
6. Receipt and Disbursement of Money.
(a) Sub-Custodian shall open and maintain a custody account
for each Fund of the Company, subject only to draft or order by Sub-Custodian
acting pursuant to the terms of this Agreement, and, subject to Paragraphs 7,
27, or 28(g) hereof, shall hold in such account, subject to the provisions
hereof, all cash received by it from or for the Funds. Sub-Custodian shall make
payments of cash to, or for the account of, each Fund from such cash only (i)
for the purchase of securities for the Funds as provided in Paragraph 14 hereof;
(ii) upon receipt of an Officer's Certificate for the payment of dividends or
other distributions on or with respect to Shares, or for the payment of
interest, taxes, administration, distribution or advisory fees or expenses which
are to be borne by the Funds under the terms of this Agreement and, with respect
to each Fund, and under the terms of any investment advisory agreements,
administration agreement or distribution agreement; (iii) upon receipt of
Written Instructions for payments in connection with the conversion, exchange or
surrender of securities owned or subscribed to by the Funds and held by or to be
delivered to Sub-Custodian; (iv) to a sub-custodian or co-custodian pursuant to
Paragraphs 7, 27, or 28(g) hereof; or (v) for the redemption of Shares; or (vi)
upon receipt of an Officer's Certificate for other corporate purposes.
(b) Sub-Custodian is hereby authorized to endorse and collect
all checks, drafts or other orders for the payment of money received as
custodian for the Funds.
7. Receipt of Securities.
(a) Except as provided by Paragraphs 7(c), 8, 27, or 28(g)
hereof, and except as otherwise directed by Oral or Written Instructions
described in Paragraph 11 hereof, Sub-Custodian shall hold and physically
segregate in a separate account with respect to each Fund, identifiable from
those of any other person, all securities and non-cash property received by it
for the Funds. All such securities and non-cash property are to be held or
disposed of by Sub-Custodian for each Fund pursuant to the terms of this
Agreement. In the absence of Written Instructions accompanied by a certified
resolution authorizing the specific transaction by the Company's Board of
Directors, and subject to Paragraph 25 hereof, Sub-Custodian shall have no power
or authority to withdraw, deliver, assign, hypothecate, pledge or otherwise
dispose of any such securities and investments, except in accordance with the
express terms provided for in this Agreement. In no case may any director,
officer, employee or agent of the Company or of Custodian withdraw any
securities. In connection with its duties under this Paragraph 7(a),
Sub-Custodian may, with the prior written approval of Company and Custodian,
enter into sub-custodian agreements with other banks or trust companies for the
receipt of certain securities and cash to be held by Sub-Custodian for the
account of a Fund pursuant to this Agreement; provided that each such bank or
trust company has an aggregate capital, surplus and undivided profits, as shown
by its last published report, of not less than one million dollars ($1,000,000)
for a Sub-Custodian subsidiary or affiliate, or of not less than twenty million
dollars ($20,000,000) for a sub-custodian that is not a subsidiary or affiliate
of Sub-Custodian and that in either case such bank or trust company agrees with
Sub-Custodian to comply with the provisions of the 1940 Act
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and applicable rules and regulations thereunder applicable to its performance of
its services. Sub-Custodian will provide the Company and Custodian with a copy
of each sub-custodian agreement it executes pursuant to this Paragraph 7(a).
Sub-Custodian shall be liable for acts or omissions of any such sub-custodian
selected by it pursuant to this Paragraph 7(a), under the standards of care
provided for herein, except for any such sub-custodian engaged at the specific
direction of the Funds. Notwithstanding anything herein to the contrary, this
Paragraph 7(a) shall not apply to Sub-Custodian's engagement of foreign
sub-custodians, which shall instead be governed by Paragraph 27 hereof.
(b) Promptly after the close of business on each day,
Sub-Custodian shall furnish the Company and/or Custodian with confirmations and
a summary of all transfers to or from the account of each Fund during said day.
Where securities are transferred to the account of any Fund established at a
Securities Depository or the Book Entry System pursuant to Paragraph 8 hereof,
Sub-Custodian shall also, by book-entry or otherwise, identify as belonging to
such Fund the quantity of securities in a fungible bulk of securities registered
in the name of Sub-Custodian (or its nominee) or shown in Sub-Custodian's
account on the books of a Securities Depository or the Book-Entry System. At
least monthly and from time to time, Sub-Custodian shall furnish the Company
and/or Custodian with a detailed statement of the Property held for each Fund
under this Agreement.
(c) Notwithstanding any provision elsewhere contained herein,
Sub-Custodian shall not be required to obtain possession of any instrument or
certificate representing any futures contract, any option, or any futures
contract option until after it shall have determined, or shall have received an
Officer's Certificate from the Company stating that any such instruments or
certificates are available. The Company shall deliver to Sub-Custodian such an
Officer's Certificate no later than the business day preceding the availability
of any such instrument or certificate. Prior to such availability, Sub-Custodian
shall comply with the 1940 Act in connection with the purchase, sale,
settlement, closing out or writing of futures contracts, options, or futures
contract options by making payments or deliveries specified in such Officer's
Certificates or Written Instructions received by Sub-Custodian in connection
with any such purchase, sale, writing, settlement or closing out upon its
receipt from a broker, dealer, or futures commission merchant of a statement or
confirmation reasonably believed by Sub-Custodian to be in the form customarily
used by brokers, dealers, or future commission merchants with respect to such
futures contracts, options, or futures contract options, as the case may be,
confirming that the same is held by such broker, dealer or futures commission
merchant, in book-entry form or otherwise, in the name of Sub-Custodian (or any
nominee of Sub-Custodian) as Sub-Custodian for the Fund, provided, however, that
notwithstanding the foregoing, and subject to Paragraph 13(b) hereof, payments
to or deliveries from any margin account, and payments with respect to future
contracts, options, or future contract options to which a margin account
relates, shall be made in accordance with the terms and conditions of the
Company's relevant margin account agreement. Whenever any such instruments or
certificates are available, Sub-Custodian shall, notwithstanding any provision
in this Agreement to the contrary, make payment for any futures contract,
option, or futures contract option for which such instruments or such
certificates are available against the delivery to Sub-Custodian of such
instrument or such certificate, and deliver any futures contract, option or
futures contract option for which such instruments or such certificates are
available only against receipt by Sub-Custodian of payment therefor. Any such
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instrument or certificate delivered to Sub-Custodian shall be held by
Sub-Custodian hereunder in accordance with, and subject to, the provisions of
this Agreement.
8. Use of Securities Depository or the Book-Entry System. Custodian or
the Company shall deliver to Sub-Custodian a certified resolution of the Board
of Directors of the Company approving, authorizing and instructing Sub-Custodian
on a continuous and ongoing basis until instructed to the contrary by Written
Instructions (i) to deposit in a Securities Depository or the Book-Entry System
all securities of the Funds held hereunder eligible for deposit therein and (ii)
to utilize a Securities Depository or the Book-Entry System to the extent
possible in connection with the performance of its duties hereunder, including
without limitation settlements of purchases and sales of securities by the
Funds, and deliveries and returns of securities loaned, subject to repurchase
agreements or used as collateral in connection with borrowings. Without limiting
the generality of such use, the following provisions shall apply thereto:
(a) Securities and any cash of the Funds deposited by
Sub-Custodian in a Securities Depository or the Book-Entry System will at all
times be segregated from any assets and cash controlled by Sub-Custodian in
other than a fiduciary or custodian capacity. Subject to Paragraph 28(m) hereof,
Sub-Custodian and its sub-custodians, if any, will pay out money only upon
receipt of securities and will deliver securities only upon receipt of money,
absent Written Instructions to the contrary.
(b) All books and records maintained by Sub-Custodian that
relate to the Funds' participation in a Securities Depository or the Book-Entry
System will at all times during Sub-Custodian's regular business hours be open
to inspection by the Company's and/or Custodian's duly authorized employees or
agents and the Company's independent auditors in accordance with applicable
regulations, it being understood, however, that such records may be kept in an
off site Sub-Custodian storage location and the Company and Custodian will be
furnished with all information in respect of the services rendered to it as it
may require.
(c) Sub-Custodian will provide the Company with copies of any
report obtained by Sub-Custodian on the system of internal accounting control of
the Securities Depository or Book-Entry System promptly after receipt of such a
report by Sub-Custodian. Sub-Custodian will also provide the Company and/or
Custodian with such reports on its own system of internal control as the Company
and/or Custodian may reasonably request from time to time.
9. Instructions Consistent With the Charter, Etc. Unless otherwise
provided in this Agreement, Custodian and Sub-Custodian shall act only upon
Officer's Certificates, Oral Instructions and/or Written Instructions. Custodian
and Sub-Custodian may assume that any Officer's Certificate, Oral Instructions
or Written Instructions received hereunder are not in any way inconsistent with
any provision of the Charter or Code of Regulations or any vote or resolution of
the Company's Board of Directors, or any committee thereof. Custodian and
Sub-Custodian shall be entitled to rely upon any Oral Instructions or Written
Instructions actually received by Custodian and Sub-Custodian pursuant to this
Agreement, and upon any certificate, oral instructions, or written instructions
reasonably believed by Custodian and Sub-Custodian to
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be, respectively, an Officer's Certificate, Oral Instructions or Written
Instructions. The Company and Custodian agree to forward to Custodian and
Sub-Custodian, as the case may be, Written Instructions confirming Oral
Instructions in such manner that the Written Instructions are received by
Custodian and Sub-Custodian at the close of business of the same day that such
Oral Instructions are given to Custodian and Sub-Custodian. The Company and
Custodian agree that the fact that such confirming Written Instructions are not
received by Sub-Custodian shall in no way affect the validity of any of the
transactions authorized by the Company by giving Oral Instructions, and that
Sub-Custodian's records with respect to the content of Oral Instructions shall
be controlling.
10. Transactions-Not Requiring Instructions. Sub-Custodian is
authorized to take the following action without Oral Instructions, Written
Instructions, or an Officer's Certificate:
(a) Collection of Income and Other Payments. Sub-Custodian
shall subject to Paragraph 28(f) hereof:
(i) collect and receive for the account of any Fund,
all income and other payments and distributions, including (without limitation)
stock dividends, rights, warrants and similar items, included or to be included
in the Property of any Fund, and promptly advise the Company and Custodian of
such receipt and shall credit such income, as collected, to such Fund of the
Company. From time to time, Sub-Custodian may elect, but shall not be so
obligated, to credit the account with interest, dividends or principal payments
on payable or contractual settlement date, in anticipation of receiving same
from a payor, central depository, Securities Depository, broker or other agent
employed by the Company or Sub-Custodian. Any such crediting and posting shall
be at the Company's sole risk, and Sub-Custodian shall be authorized to reverse
(A) any such advance posting in the event it does not receive good funds from
any such payor, central depository, Securities Depository, broker or agent, and
(B) any other payment or crediting, including, without limitation, payments made
by check or draft, in the event it does not receive good funds or final payment.
(ii) with respect to securities of foreign issue, and
subject to Paragraph 27 hereof, effect collection of dividends, interest and
other income, and to promptly transmit to the Company and Custodian all reports,
written information or notices actually received by Sub-Custodian as
sub-custodian, including notices of any call for redemption, offer of exchange,
right of subscription, reorganization, or other proceedings affecting such
securities, or any default in payments due thereon. It is understood, however,
that Sub-Custodian shall be under no responsibility for any failure or delay in
effecting such collections or giving such notice with respect to securities of
foreign issue, regardless of whether or not the relevant information is
published in any financial service available to it unless such failure or delay
is due to Sub-Custodian's own negligence. Collections of income in foreign
currency are, to the extent possible, to be converted into United States dollars
unless otherwise instructed in writing, and in effecting such conversion
Sub-Custodian may use such methods or agencies as it may see fit, including the
facilities of its own foreign division at customary rates. All risk and expenses
incident to such collection and conversion are for the account of the Funds and
Sub-Custodian shall have no responsibility for fluctuations in exchange rates
affecting any such conversions.
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(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
Fund's securities received by the Funds as a result of a stock dividend, share
split-up or reorganization, recapitalization, readjustment or other
rearrangement or distribution of rights or similar securities issued with
respect to any portfolio securities of the Funds held by Sub-Custodian
hereunder;
(v) present for payment and collect the amount
payable upon all securities which may mature or be called, redeemed or retired,
or otherwise become payable on the date such securities become payable, but,
with respect to calls, early redemptions, or early retirements, only if
Sub-Custodian either (i) receives a written notice of the same or (ii) notice of
the same appears in one or more of the publications then listed in Appendix A
hereto, which Appendix may be amended to add other publications at any time by
Sub-Custodian without prior notice to or consent from the Company or Custodian
and which may be amended to delete a publication with the prior notice and
consent from the Company and Custodian;
(vi) subject to Paragraphs 28(e) and (f) hereof, take
any action which may be necessary and proper in connection with the collection
and receipt of such income and other payments and the endorsement for collection
of checks, drafts and other negotiable instructions;
(vii) with respect to domestic securities, to
exchange securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is changed, and to
surrender securities at maturity or when advised by the Company or the
investment adviser to the Company of earlier call for redemption, against
payment therefor in accordance with accepted industry practice. When fractional
shares of stock of a declaring corporation are received as a stock distribution,
Sub-Custodian is authorized to sell the fraction received and credit the
Company's account. Unless specifically instructed to the contrary in writing,
Sub-Custodian is authorized to exchange securities in bearer form for securities
in registered form. If any Property registered in the name of a nominee of
Sub-Custodian is called for partial redemption by the issuer of such Property,
Sub-Custodian is authorized to allot the called portion to the respective
beneficial holders of the Property in such manner deemed to be fair and
equitable by Sub-Custodian in its reasonable discretion.
(b) Miscellaneous Transactions. Sub-Custodian is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor in the following cases:
(i) for examination by a broker selling for the
account of the Company in accordance with street delivery custom;
(ii) for the exchange for interim receipts or
temporary securities for definitive securities;
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(iii) for transfer of securities into the name of the
Funds or Sub-Custodian or a nominee of either, or for exchange or securities for
a different number of bonds, certificates, or other evidence, representing the
same aggregate face amount or number of units bearing the same interest rate,
maturity date and call provisions, if any; provided that, in any such case, the
new securities are to be delivered to Sub-Custodian.
11. Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions, and not otherwise, Sub-Custodian, directly or through the
use of a Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated
in such Oral or Written Instructions, proxies, consents, authorizations, and any
other instruments whereby the authority of the Funds as owners of any securities
may be exercised;
(b) Deliver any securities held for any Fund against receipt
of other securities or cash issued or paid in connection with the liquidation,
reorganization, refinancing, merger, consolidation or recapitalization of any
corporation, or the exercise of any conversion privilege;
(c) Deliver any securities held for any Fund to any protective
committee, reorganization committee or other person in connection with the
reorganization, refinancing, merger, consolidation, recapitalization or sale of
assets of any corporation, against receipt of such certificates or deposit,
interim receipts or other instruments or documents as may be issued to it to
evidence such delivery;
(d) Make such transfers or exchanges of the assets of any Fund
and take such other steps as shall be stated in said instructions to be for the
purposes of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of the Funds;
(e) Subject to Paragraph 25(b) hereof, release securities
belonging to any Fund to any bank or trust company for the purpose of pledge or
hypothecation to secure any loan incurred by such Fund; provided, however, that
securities shall be released only upon payment to Sub-Custodian of the monies
borrowed, except that in cases where additional collateral is required to secure
a borrowing already made, subject to proper prior authorization, further
securities may be released for that purpose; and pay such loan upon redelivery
to it of the securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(f) Deliver any securities held for any Fund upon the exercise
of a covered call option written by such Fund on such securities;
(g) Release and deliver securities owned by a Fund in
connection with any repurchase agreement entered into on behalf of such Fund,
but subject to Paragraph 28(m) hereof, only on receipt of payment therefor; and
pay out monies of such Fund in connection with such repurchase agreements, but
only upon the delivery of the securities;
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(h) otherwise transfer, exchange or deliver securities in
accordance with Oral or Written Instructions specifying the purpose of such
transfer, including without limitation, loans of securities, short sales, or
reverse repurchase agreements, and subject to Paragraph 7(a) hereof.
12. Segregated Accounts. Sub-Custodian shall upon receipt of Written or
Oral Instructions establish and maintain a segregated account or accounts on its
records for and on behalf of any Fund, into which account or accounts shall be
credited, but only pursuant to an Officer's Certificate or Written Instructions
specifying the particular securities and/or amount of cash, cash and/or
securities, including securities in the Book-Entry System (i) for the purposes
of compliance by the Funds and the Company with the procedures required by a
securities or option exchange, (ii) for the purpose of compliance by the Funds
and the Company with the 1940 Act and Release No. 10666 or any subsequent
release or releases of the SEC relating to the maintenance of segregated
accounts by registered investment companies, and (iii) for other proper
corporate purposes.
13. Dividends and Distributions.
(a) The Company and/or Custodian shall furnish Sub-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 Sub-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
Custodian and Sub-Custodian, the Company, and the Company's administrator or
transfer agent, Sub-Custodian shall pay to the Fund's transfer agent, as agent
for the shareholders, an amount equal to the amount indicated in said Officer's
Certificate as payable by the Fund to such shareholders for distribution in cash
by the transfer agent to such shareholders.
(b) Sub-Custodian may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that the Company or Custodian
uses (each an "FCM Agreement"), pursuant to which the Funds' margin deposits in
any transactions involving futures contracts and options on futures contracts
will be held by Sub-Custodian in accounts (each an "FCM Account") subject to the
disposition by the FCM involved in such contracts in accordance with the
customer contract between FCM and the Company ("FCM Contract"), SEC rules
governing such segregated accounts, Commodities and Futures Trading Commission
("CFTC") rules and the rules of the applicable commodities exchange. Such FCM
Agreements shall only be entered into by Sub-Custodian upon receipt by
Sub-Custodian of Written Instructions from the Company which state that (i) an
FCM Contract has been entered into; (ii) the Company is in compliance with all
the rules and regulations of the CFTC; and (iii) the FCM Agreement is acceptable
to the Company. Transfers of initial margin shall be made into an FCM Account
only upon Written Instructions; transfers of premium and variation margin may be
made into an FCM Account pursuant to Oral Instructions. Transfers of funds from
an FCM Account to the FCM for which Custodian holds such an account may only
occur in accordance with the terms of the FCM Agreement.
11
14. Purchase of Securities. Promptly after each purchase of securities
by the Company on behalf of any Fund, the Company or Custodian shall deliver to
Sub-Custodian Oral or Written Instructions specifying with respect to each such
purchase: (a) the name of the issuer and the title of the securities, (b) the
number of shares of the principal amount purchased and accrued interest, if any,
(c) the dates of purchase and settlement, (d) the purchase price per unit, (e)
the total amount payable upon such purchase, (f) the name of the person from
whom or the broker through whom the purchase was made and (g) the Fund for which
the purchase was made. Sub-Custodian shall upon receipt of securities purchased
by or for the Company pay out of the monies held for the account of the Company
the total amount payable to the person from whom or the broker through whom the
purchase was made, provided that the same conforms to the total amount payable
as set forth in such Oral or Written Instructions.
15. Sales of Securities. Promptly after each sale of securities by the
Funds, the Company or Custodian shall deliver to Sub-Custodian Oral or Written
Instructions, specifying with respect to each such sale: (a) the name of the
issuer and the title of the security, (b) the number of shares or principal
amount sold, and accrued interest, if any, (c) the dates of sale, (d) the sale
price per unit, (e) the total amount payable to the 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. Sub-Custodian shall, subject to
Paragraph 28(m) hereof, deliver the securities against payment 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.
16. Records. The books and records pertaining to the Funds and the
Company which are in the possession of Sub-Custodian shall be the property of
the Company. Such books and records shall be prepared and maintained as required
by the 1940 Act and other applicable securities laws and rules and regulations.
The SEC, the Company, or the Company's authorized representatives, shall have
access to such books and records at all times during Sub-Custodian's normal
business hours. Upon the reasonable request of the Company or Custodian, copies
of any such books and records shall be provided by Sub-Custodian to the
Custodian, the Company or the Company's authorized representative, and the
Company shall reimburse Sub-Custodian reasonable expenses for providing such
copies. Upon reasonable request of the Company or the Custodian, Sub-Custodian
shall provide in hard copy, tape or on micro-film, or such other medium as
agreed to among the Company, Custodian and Sub-Custodian, and any books and
records maintained by Sub-Custodian.
17. Reports.
(a) Sub-Custodian shall furnish the Company and Custodian the
following reports:
(i) such periodic and special reports as the Company
and Custodian may reasonably request from time to time;
(ii) a monthly statement summarizing all transactions
and entries for the account of each Fund;
12
(iii) a monthly report of portfolio securities
belonging to each Fund showing the adjusted average cost of each issue and
market value at the end of such month;
(iv) a monthly report of the cash account of each
Fund showing disbursements;
(v) the reports to be furnished to the 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/or Custodian and Sub-Custodian.
(b) Subject to Paragraphs 5 and 27(g) hereof, Sub-Custodian
shall transmit promptly to the Company any proxy statement, proxy materials,
notice of a call or conversion or similar communications actually received by
Sub-Custodian as custodian of the Property.
(c) Sub-Custodian shall report as the market value at the end
of each month the last closing bid, offer or sale price to the extent, and as
the same, is furnished to Sub-Custodian by a pricing or similar service utilized
or subscribed to by Sub-Custodian. Sub-Custodian shall not be responsible for,
have any liability with respect to, or be under any duty to inquire into, nor
deemed to make any assurances with respect to, the accuracy or completeness of
such information, even if The Bank of New York in performing services for
others, including services similar to those performed hereunder, receives
different valuations of the same or different securities of the same issuer.
18. Cooperation with Accountants. Each of the Custodian and
Sub-Custodian shall cooperate with the Company's independent certified public
accountants and shall take all reasonable action in the performance of its
obligations under this Agreement, and obligations under Rule 17f-2 under the
1940 Act to the extent such rule is applicable, to assure that the necessary
information is made available to such accountants.
19. Confidentiality. Each of Custodian and Sub-Custodian agrees on
behalf of itself and its employees to treat all record and other information
relative to the Company, its prior, present or potential shareholders, its
managers and its prior, present or potential customers, as confidential
information, and to protect and safeguard the same to the extent required by
applicable law, provided, however, that Custodian and Sub-Custodian may make
such disclosure as required by applicable law, regulation, court order, decrees
or legal process and upon receipt of any of the foregoing requiring such
disclosure, Custodian and Sub-Custodian's only obligation shall be to notify the
Company thereof. Each of Custodian and Sub-Custodian further agrees not to
otherwise use such records and information for any purpose other than
performance of its responsibilities and duties hereunder, except after prior
notification to and approval in writing by the Company.
20. Equipment Failures. In the event of equipment failures beyond
Sub-Custodian's control, Sub-Custodian shall take reasonable steps to minimize
service interruptions but neither it nor Custodian shall have any further
liability with respect thereto. Notwithstanding the
13
foregoing, Sub-Custodian shall maintain sufficient back up electronic data
processing equipment to enable Sub-Custodian to fulfill its obligations under
this Agreement consistent with standard industry practices.
21. Right to Receive Advice.
(a) Advice of Fund. If Custodian or Sub-Custodian shall be in
doubt as to any action to be taken or omitted by it, either may request, and
shall receive, from the Company clarification or advice, including Oral or
Written Instructions.
(b) Advice of Counsel. If Custodian or Sub-Custodian shall be
in doubt as to any question of law involved in any action to be taken or omitted
by Custodian or Sub-Custodian, either may request at its option advice from its
own counsel, at its own expense, or advice from the Company's counsel.
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions received by Custodian or
Sub-Custodian pursuant to subparagraph (a) of this paragraph and advice received
by Custodian or Sub-Custodian pursuant to subparagraph (b) of this paragraph,
Custodian and Sub-Custodian shall be entitled to rely on and follow the advice
received pursuant to subparagraph (b) alone.
(d) Protection of Sub-Custodian. Each of Custodian and
Sub-Custodian shall be protected in any action or inaction which it takes or
omits to take in reliance on any directions, advice or Oral or Written
Instructions received pursuant to subparagraphs (a) or (b) of this section which
it, after receipt of any such directions, advice or Oral or Written
Instructions, in good faith reasonably believes to be consistent with such
directions, advice or Oral or Written Instructions, as the case may be. Nothing
in this Paragraph 21 shall be construed as imposing upon Custodian or
Sub-Custodian any obligation (i) to seek such directions, advice or Oral or
Written Instructions, or (ii) to act in accordance with such directions, advice
or Oral or Written Instructions when received, unless, under the terms or
another provision of this Agreement, the same is a condition to Custodian or
Sub-Custodian's properly taking or omitting to take such action. Nothing in this
Paragraph 21(d) shall excuse Custodian or Sub-Custodian when an action or
omission on the part of Custodian or Sub-Custodian constitutes willful
misfeasance or bad faith, or negligence or reckless disregard by Custodian or
Sub-Custodian of its duties under this Agreement.
22. Compliance with Governmental Rules and Regulations. Each of
Custodian and Sub-Custodian undertakes to comply with the laws, rules and
regulations of governmental authorities having jurisdiction over Custodian and
Sub-Custodian and its express duties hereunder.
23. Compensation. As compensation for the services rendered by
Custodian and Sub-Custodian during the term of this Agreement, the Company shall
pay to Custodian and Sub-Custodian, in addition to reimbursement of its
out-of-pocket expenses, such compensation as may be agreed upon from time to
time in writing by the Company and Custodian and/or Sub-
14
Custodian, as applicable as set forth in Appendix E with respect to Custodian
and Appendix F with respect to Sub-Custodian.
24. Indemnification. The Company agrees to indemnify each of Custodian
and Sub-Custodian against, and hold harmless from all taxes, charges, expenses
(including reasonable fees and expenses of counsel), assessments, claims,
losses, demands and liabilities whatsoever (including, without limitation,
liabilities arising under the 1933 Act, the 1934 Act and the 1940 Act, and any
state and foreign securities laws, all as currently in effect or as may be
amended from time to time) and expenses, including without limitation,
reasonable attorney's fees and disbursements, howsoever arising or incurred
because of or in connection with this Agreement, except for such liability,
claim, loss, demand, charge, expense, tax or assessment arising out of either
Custodian's or Sub-Custodian's, or their nominees', willful misconduct or
negligence or reckless disregard of their duties under this Agreement. For the
purposes of this Agreement, including, without limitation, for purposes of
Paragraphs 24 and 28, neither Sub-Custodian's acceptance of Instructions in
accordance with Paragraph 26A nor Sub-Custodian's use of Foreign Sub-Custodians
pursuant to agreements that do not permit actual examination by independent
public accountants, nor the denial of examination by any Foreign Sub-Custodian,
shall, in and of itself, constitute, or be deemed to constitute, a breach by
Sub-Custodian of this Agreement or negligence, willful misconduct, or reckless
disregard of its duties by Sub-Custodian, provided the relevant agreement
between Sub-Custodian and a Foreign Sub-Custodian satisfies the requirements of
Rule 17f-5, exclusive of any requirements of such Rule imposed by Rule 17f-2.
25. Overdrafts or Indebtedness.
(a) Sub-Custodian shall advance funds under this Agreement
with respect to any Fund which results in an overdraft because the moneys held
by Sub-Custodian in the separate account for such Fund shall be insufficient to
pay the total amount payable upon a purchase of securities by such Fund, as set
forth in an Officer's Certificate or Oral or Written Instructions, or which
results in an overdraft in the separate account of such Fund for some other
reason, or if the Company is for any other reason indebted to Sub-Custodian,
including any indebtedness to The Bank of New York under the Company's Cash
Management and Related Services Agreement, (except a borrowing for investment or
for temporary or emergency purposes using securities as collateral pursuant to a
separate agreement and subject to the provisions of Paragraph 25(b) hereof),
such overdraft or indebtedness shall be deemed to be a loan made by
Sub-Custodian to the Company for such Fund payable on demand and shall bear
interest from the date incurred at a rate per annum (based on a 360-day year for
the actual number of days involved) equal to the overdraft rate specified in
Appendix F to this Agreement. In addition, the Company hereby agrees that
Sub-Custodian shall have a continuing lien and security interest in and to any
property at any time held by it for the benefit of such Fund or in which the
Fund may have an interest which is then in Sub-Custodian's possession or control
or in possession or control of any third party acting on Sub-Custodian's behalf.
The Company authorizes Sub-Custodian, in its sole discretion, at any time to
charge any such overdraft or indebtedness together with interest due thereon
against any balance of account standing to such Fund's credit on Sub-Custodian's
books. In addition, the Company hereby covenants that on each Business Day on
which either it intends to enter a Reverse Repurchase Agreement and/or otherwise
borrow from a third party, or which next succeeds a Business Day on which at the
close of business the Company had outstanding a
15
Reverse Repurchase Agreement or such a borrowing, it shall prior to 1:00 p.m.,
New York City time, advise Sub-Custodian, in writing, of each such borrowing,
shall specify the Fund to which the same relates, and shall not incur any
indebtedness not so specified other than from Sub-Custodian.
(b) The Company will cause to be delivered to Sub-Custodian by
any bank (including, if the borrowing is pursuant to a separate agreement,
Sub-Custodian) from which it borrows money for investment or for temporary or
emergency purposes using securities held by Sub-Custodian hereunder as
collateral for such borrowings, a notice or undertaking in the form currently
employed by such bank setting forth the amount which such bank will loan to the
Company against delivery of a stated amount of collateral. The Company shall
promptly deliver to Sub-Custodian Written Instruction specifying with respect to
each such borrowing: (a) the Fund to which such borrowing relates; (b) the name
of the bank, (c) the amount and terms of the borrowing, which may be set forth
by incorporating by reference an attached promissory note, duly endorsed by the
Fund, or other loan agreement, (d) the time and date, if known, on which the
loan is to be entered into, (e) the date on which the loan becomes due and
payable, (f) the total amount payable to the Fund on the borrowing date, (g) the
market value of securities to be delivered as collateral for such loan,
including the name of the issuer, the title and the number of shares or the
principal amount of any particular securities, and (h) a statement specifying
whether such loan is for investment purposes or for temporary or emergency
purposes and that such loan is in conformance with the 1940 Act and the Fund's
prospectus. Sub-Custodian shall deliver on the borrowing date specified in
Written Instructions the specified collateral and the executed promissory note,
if any, against delivery by the lending bank of the total amount of the loan
payable, provided that the same conforms to the total amount payable as set
forth in such Written Instructions. Sub-Custodian may, at the option of the
lending bank, keep such collateral in its possession, but such collateral shall
be subject to all rights therein given the lending bank by virtue of any
promissory note or loan agreement. Sub-Custodian shall deliver such securities
as additional collateral as may be specified in Written Instructions to
collateralize further any transaction described in this Paragraph 25(b). The
Company shall cause all securities released from collateral status to be
returned directly to Sub-Custodian, and Sub-Custodian shall receive from time to
time such return of collateral as may be tendered to it. In the event that the
Company fails to specify in Written Instructions the Fund, the name of the
issuer, the title and number of shares or the principal amount of any particular
securities to be delivered as collateral by Sub-Custodian, Sub-Custodian shall
not be under any obligation to deliver any securities.
26A. Instructions
(a) With respect to any software provided by the Sub-Custodian
to a Fund in order for the Fund to transmit Instructions to the Sub-Custodian
(the "Software"), the Sub-Custodian grants to the Company a personal,
nontransferable and nonexclusive license to use the Software solely for the
purpose of transmitting Instructions to, and receiving communications from, the
Sub-Custodian in connection with its account(s). The Company agrees not to sell,
reproduce, lease or otherwise provide, directly or indirectly, the Software or
any portion thereof to any third party without the prior written consent of the
Sub-Custodian. At no time shall Company be obligated to use the Software to
transmit Instructions to the Sub-Custodian.
16
(b) The Company shall obtain and maintain at its own cost and
expense all equipment and services, including but not limited to communications
services, necessary for it to utilize the Software and transmit Instructions to
the Sub-Custodian. The Sub-Custodian shall not be responsible for the
reliability, compatibility with the Software or availability of any such
equipment or services.
(c) The Company acknowledges that the Software, all data bases
made available to the Company by utilizing the Software (other than data bases
relating solely to the assets of the Funds and transactions with respect
thereto), and any proprietary data, processes, information and documentation
(other than those which are or become part of the public domain or are legally
required to be made available to the public) (collectively, the "Information"),
are the exclusive and confidential property of the Sub-Custodian. The Company
shall keep the Information confidential by using the same care and discretion
that the Company uses with respect to its own confidential property and trade
secrets and shall neither make nor permit any disclosure without the prior
written consent of the Sub-Custodian. Upon termination of this Agreement or the
Software license granted hereunder for any reason, the Company shall return to
the Sub-Custodian all copies of the Information which are in its possession or
under its control or which the Company distributed to third parties.
(d) The Sub-Custodian reserves the right to modify the
Software from time to time upon reasonable prior notice and the Company shall,
if it desires in its sole discretion to continue to use the software, install
new releases of the Software as the Sub-Custodian may direct. The Company agrees
not to modify or attempt to modify the Software without the Sub-Custodian's
prior written consent. The Company acknowledges that any modifications to the
Software, whether by the Company or the Sub-Custodian and whether with or
without the Sub-Custodian's consent, shall become the property of the
Sub-Custodian.
(e) The Sub-Custodian makes no warranties or representations
of any kind with regard to the Software or the method(s) by which the Company
may transmit Instructions to the Sub-Custodian, express or implied, including
but not limited to any implied warranties or merchantability or fitness for a
particular purpose.
(f) Where the method for transmitting Instructions by the
Company involves an automatic systems acknowledgment by the Sub-Custodian of its
receipt of such Instructions, then in the absence of such acknowledgment, the
Sub-Custodian shall not be liable for any failure to act pursuant to such
Instructions and the Company may not claim that such Instructions were received
by the Sub-Custodian, and the Company shall deliver a Certificate by some other
means.
(g) (i) The Company agrees that where it delivers to the
Sub-Custodian Instructions hereunder, it shall be the Company's sole
responsibility to ensure that only persons duly authorized by the Company and
the correct number of such persons transmit such Instructions to the
Sub-Custodian. The Company will cause all persons transmitting Instructions to
the Sub-Custodian to treat applicable use and authorization codes, passwords and
authentication keys with extreme care, and authorizes the Sub-Custodian to act
in accordance with and rely upon Instructions received by it pursuant hereto.
17
(ii) The Company hereby represents, acknowledges and
agrees that it is fully informed of the protections and risks associated with
the various methods of transmitting Instructions to the Sub-Custodian and that
there may be more secure methods of transmitting instructions to the
Sub-Custodian than the method(s) selected by the Company. The Company hereby
agrees that the security procedures (if any) to be followed in connection with
the Company's transmission of Instructions provide to it a commercially
reasonable degree of protection in light of its particular needs and
circumstances.
(h) The Company shall notify the Sub-Custodian of any errors,
omissions or interruptions in, or delay or unavailability of, its ability to
send Instructions as promptly as practicable, and in any event within 24 hours
after the earliest of (i) discovery thereof, (ii) the business day on which
discovery should have occurred through the exercise of reasonable care and (iii)
in the case of any error, the date of actual receipt of the earliest notice
which reflects such error, it being agreed that discovery and receipt of notice
may only occur on a business day. The Sub-Custodian shall, as promptly as
practicable, and in any event within 24 hours after the earliest of (i)
discovery thereof, (ii) the business day on which discovery should have occurred
through the exercise of reasonable care and (iii) in the case of any error, the
date of actual receipt of the earliest notice which reflects such error, it
being agreed that discovery and receipt of notice may only occur on a business
day, advise the Company whenever the Sub-Custodian learns of any errors,
omissions or interruption in, or delay or unavailability of, the Company's
ability to send Instructions.
26B. FX Transactions
(a) Whenever a Fund shall enter into an FX Transaction, the
Fund shall promptly deliver to the Sub-Custodian a Certificate or Oral
Instructions specifying with respect to such FX Transaction: (a) the Series to
which such FX Transaction is specifically allocated; (b) the type and amount of
Currency to be purchased by the Fund; (c) the type and amount of Currency to be
sold by the Fund; (d) the date on which the Currency to be purchased is to be
delivered; (e) the date on which the Currency to be sold is to be delivered; and
(f) the name of the person from whom or through whom such currencies are to be
purchased and sold. Unless otherwise instructed by a Certificate or Oral
Instructions, the Custodian shall deliver, or shall instruct a Foreign
Sub-Custodian to deliver, the Currency to be sold on the date on which such
delivery is to be made, as set forth in the Certificate, and shall receive, or
instruct a Foreign Sub-Custodian to receive, the Currency to be purchased on the
date as set forth in the Certificate.
(b) Where the Currency to be sold is to be delivered on the
same day as the Currency to be purchased, as specified in the Certificate or
Oral Instructions, the Sub-Custodian or a Foreign Sub-Custodian may arrange for
such deliveries and receipts to be made in accordance with the customs
prevailing from time to time among brokers or dealers in Currencies, and such
receipt and delivery may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
such receipts and deliveries, which responsibility and liability shall continue
until the Currency to be received by the Fund has been received in full.
18
(c) Any foreign exchange transaction effected by the
Sub-Custodian in connection with this Agreement may be entered with the
Sub-Custodian, any office, branch or subsidiary of The Bank of New York Company,
Inc., or any Foreign Sub-Custodian acting as principal or otherwise through
customary banking channels. The Fund may issue a standing Certificate with
respect to foreign exchange transactions but the Sub-Custodian may establish
rules or limitations concerning any foreign exchange facility made available to
the Fund. The Fund shall bear all risks of investing in Securities or holding
Currency. Without limiting the foregoing, the Fund shall bear the risks that
rules or procedures imposed by a Foreign Sub-Custodian or foreign depositories,
exchange controls, asset freezes or other laws, rules, regulations or orders
shall prohibit or impose burdens or costs on the transfer to, by or for the
account of the Fund of Securities or any cash held outside the Fund's
jurisdiction or denominated in Currency other than its home jurisdiction or the
conversion of cash from one Currency into another currency. The Sub-Custodian
shall not be obligated to substitute another Currency for a Currency (including
a Currency that is a component of a Composite Currency Unit) whose
transferability, convertibility or availability has been affected by such law,
regulation, rule or procedure. Neither the Sub-Custodian nor any Foreign
Sub-Custodian shall be liable to the Fund for any loss resulting from any of the
foregoing events.
27. Duties of Sub-Custodian with respect to Property of any Fund held
outside of the United States.
(a) Sub-Custodian is authorized and instructed to employ, as
sub-custodian for each Fund's Foreign Securities (as such term is defined in
paragraph (c)(1) of Rule 17f-5 under the 0000 Xxx) and other assets, the foreign
banking institutions and foreign securities depositories and clearing agencies
designated on Appendix C hereto ("Foreign Sub-Custodians") to carry out their
respective responsibilities in accordance with the terms of the sub-custodian
agreement between each such Foreign Sub-Custodian and Sub-Custodian (each such
agreement, a "Foreign Sub-Custodian Agreement"). Upon receipt of an Officer's
Certificate, together with a certified resolution substantially in the form
attached as Appendix D of the Company's Board of Directors, the Company may
designate any additional foreign sub-custodian with which Sub-Custodian has an
agreement for such entity to act as Sub-Custodian's agent, as its sub-custodian
and any such additional foreign sub-custodian shall be deemed added to Appendix
C hereto. Upon receipt of an Officer's Certificate, Sub-Custodian shall cease
the employment of any one or more Foreign Sub-Custodians for maintaining custody
of the Company's assets and such Foreign Sub-Custodian shall be deemed deleted
from Appendix C hereto.
(b) Each Foreign Sub-Custodian Agreement shall be
substantially in the form delivered to the Company herewith and will not be
amended in a way that materially adversely affects the Company without the
Company's prior written consent.
(c) Sub-Custodian shall identify on its books as belonging to
each Fund the Foreign Securities of such Fund held by each Foreign
Sub-Custodian. At the election of the Company, it shall be entitled to be
subrogated to the rights of Sub-Custodian with respect to any claims by the
Company or any Fund against a Foreign Sub-Custodian as a consequence of any
loss, damage, cost, expense, liability or claim sustained or incurred by the
Company or any Fund
19
if and to the extent that the Company or such Fund has not been made whole for
any such loss, damage, cost, expense, liability or claim.
(d) Upon request of the Company, Sub-Custodian will,
consistent with the terms of the applicable Foreign Sub-Custodian Agreement, use
reasonable efforts to arrange for the independent accountants of the Company to
be afforded access to the books and records of any Foreign Sub-Custodian insofar
as such books and records relate to the performance of such Foreign
Sub-Custodian under its agreement with Sub-Custodian on behalf of the Company.
(e) Sub-Custodian will supply to the Company and to the
Custodian from time to time, as mutually agreed upon, statements in respect of
the securities and other assets of each Fund held by Foreign Sub-Custodians,
including but not limited to, an identification of entities having possession of
each Fund's Foreign Securities and other assets, and advices or notifications of
any transfers of Foreign Securities to or from each custodial account maintained
by a Foreign Sub-Custodian for Sub-Custodian on behalf of the Fund.
(f) Sub-Custodian shall furnish annually to the Company and to
the Custodian, as mutually agreed upon, information concerning the Foreign
Sub-Custodians employed by Sub-Custodian. Such information shall be similar in
kind and scope to that furnished to the Company in connection with the Company's
initial approval of such Foreign Sub-Custodians and, in any event, shall include
information pertaining to (i) the Foreign Sub-Custodian's financial strength,
general reputation and standing in the countries in which they are located and
their ability to provide the custodial services required, and (ii) whether the
Foreign Sub-Custodians would provide a level of safeguards for safekeeping and
custody of securities not materially different from those prevailing in the
United States. Sub-Custodian shall monitor the general operating performance of
each Foreign Sub-Custodian. Sub-Custodian agrees that it will use reasonable
care in monitoring compliance by each Foreign Sub-Custodian with the terms of
the relevant Foreign Sub-Custodian Agreement and that if it learns of any breach
of such Foreign Sub-Custodian Agreement believed by Sub-Custodian to have a
material adverse effect on the Company or any Fund it will promptly notify the
Company and Custodian in writing of such breach. Sub-Custodian also agrees to
use reasonable and diligent efforts to enforce its rights under the relevant
Foreign Sub-Custodian Agreement.
(g) Sub-Custodian shall transmit promptly to the Company all
notices, reports or other written information received pertaining to the
Company's Foreign Securities, including without limitation, notices of corporate
action, proxies and proxy solicitation materials.
(h) Notwithstanding any provision of this Agreement to the
contrary, settlement and payment for securities received for the account of the
Company or any Fund and delivery of securities maintained for the account of the
Company or any Fund may be effected in accordance with the customary or
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivery of securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such securities from such
purchaser or dealer.
20
(i) With respect to any losses or damages arising out of or
relating to any actions or omissions of any Foreign Sub-Custodian, the sole
responsibility and liability of Sub-Custodian shall be to take all appropriate
and reasonable action at the Company's expense to recover such loss or damage
from the Foreign Sub-Custodian. It is expressly understood and agreed that
Sub-Custodian's sole responsibility and liability shall be limited to amounts so
recovered from the Foreign Sub-Custodian. Custodians' liability to the Company
under this paragraph (i) shall under no circumstances exceed the liability of
Sub-Custodian assumed hereunder.
28. Concerning Custodians.
(a) (i) The Custodian shall exercise care and diligence and
act in good faith and use all commercially reasonable efforts in the performance
of its duties hereunder. The Sub-Custodian shall exercise care and diligence and
act in good faith and use all commercially reasonable efforts in the performance
of its duties hereunder. The Custodian shall be responsible to the Company for
its own failure, or the failure of Sub-Custodian, or the failure of any
sub-custodian that either shall appoint (other than a foreign sub-custodian
referred to in Paragraph 27) or that of their respective employees or agents, to
perform their duties, obligations or responsibilities in accordance with this
Agreement, but only to the extent that such failure results from acts or
omissions that constitute willful misfeasance, bad faith or negligence on the
part of the Custodian or Sub-Custodian, or on the part of their respective
employees or agents, or reckless disregard of such duties, obligations and
responsibilities. The Sub-Custodian shall be responsible to the Company and to
the Custodian for its own failure, or the failure of any sub-custodian that it
shall appoint (other than a sub-custodian appointed by the Sub-Custodian at the
specific direction of the Custodian or the Company), or that of their respective
employees or agents, to perform their duties, obligations or responsibilities in
accordance with this Agreement, but only to the extent that such failure results
from acts or omissions that constitute willful misfeasance, bad faith or
negligence on the part of the Sub-Custodian or such sub-custodian, or on the
part of their respective employees or agents, or reckless disregard of such
duties, obligations and responsibilities.
(ii) Without limiting the generality of the foregoing
or any other provision of this Agreement, in no event shall Custodian or
Sub-Custodian be liable to the Fund or any third party nor, except as otherwise
provided in this sub-paragraph (a), shall Sub-Custodian be liable to Custodian,
for special, indirect or consequential damages or lost profits or loss of
business, arising under or in connection with this Agreement, even if previously
informed of the possibility of such damages and regardless of the form of
action. Custodian and/or Sub-Custodian may, with respect to questions of law
arising under any FCM Agreement, apply for and obtain the advice and opinion of
counsel to the Company at the expense of the Company, or of its own counsel at
its own expense, and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with such advice or opinion.
Sub-Custodian shall be liable to the Company for any loss or damage resulting
from the use of the Book-Entry System or any Securities Depository arising by
reason of any negligence or willful misconduct on the part of Sub-Custodian or
any of its employees or agents.
21
(iii) Sub-Custodian's liability pursuant to the last
sentence of subparagraph (a)(i) shall include, but not be limited to,
reimbursing Custodian for court-ordered damage awards, fines, penalties, and
judicially-approved settlements (and attorney's fees and disbursements relating
thereto) arising out of or in connection with the conduct giving rise to such
liability.
(iv) If Custodian receives notice of the commencement
of any action, suit, or proceeding (an "Action"), or notice that any Action may
be commenced, for which Sub-Custodian may be liable to Custodian pursuant to
this Paragraph 28, Custodian shall give notice to Sub-Custodian of the
commencement of the Action or of the possibility that an Action will be
commenced. Any omission to notify Sub-Custodian will not relieve Sub-Custodian
from any liability which it may have under this Paragraph, except to the extent
the failure to notify Sub-Custodian prejudices the rights of Sub-Custodian.
Sub-Custodian will be entitled at its sole expense and liability, to exercise
full control of the defense, compromise or settlement of any such Action,
provided that Sub-Custodian (1) notifies Custodian in writing of Sub-Custodian's
intention to assume such defense; and (2) retains legal counsel reasonably
satisfactory to Custodian to conduct the defense of such Action. If
Sub-Custodian advises Custodian that it does not wish to exercise full control
of any defense, compromise or settlement of any Action, Sub-Custodian shall be
responsible for the fees and expenses of counsel selected by Custodian, in
addition to any other amounts for which Sub-Custodian may be liable pursuant to
this Paragraph 28. The other person will cooperate with the person assuming the
defense, compromise or settlement of any Action in accordance with this
Paragraph in any manner that such person reasonably may request. If
Sub-Custodian so assumes the defense of any such Action, Custodian will have the
right to employ a separate counsel and to participate in (but not control) the
defense, compromise or settlement of the Action, but the fees and expenses of
such counsel will be at the expense of Custodian unless (a) Sub-Custodian has
agreed to pay such fees and expenses, (b) any relief other than the payment of
money damages is sought against Custodian, or (c) Custodian has been advised by
its counsel that there may be one or more defenses available to it which are
different from or additional to those available to Sub-Custodian and that a
conflict of interest therefore exists, and in any such case that portion of the
fees and expenses of such separate counsel that are reasonably related to
matters for which Sub-Custodian is liable pursuant to this Paragraph will be
paid by Sub-Custodian. Custodian will not settle or compromise any such Action
for which Sub-Custodian is liable pursuant to this Paragraph without the prior
written consent of Sub-Custodian, unless Sub-Custodian has failed, after
reasonable notice, to undertake control of such Action in the manner provided in
this Paragraph. Sub-Custodian will not settle or compromise any such Action in
which any relief other than the payment of money damages is sought against
Custodian without the consent of Custodian, such consent not to be unreasonably
withheld. In the event that Sub-Custodian intends to settle or compromise any
Action in which solely money damages are sought, Sub-Custodian shall give
Custodian fifteen (15) business days prior written notice.
(b) Without limiting the generality of the foregoing, neither
Custodian nor Sub-Custodian shall be under any obligation to inquire into, and
neither party shall be liable for:
22
(i) The validity of the issue of any securities
purchased, sold, or written by or for the Company or any Fund, the legality of
the purchase, sale or writing thereof, or the propriety of the amount paid or
received therefor;
(ii) The legality of the sale or redemption of any
Shares, or the propriety of the amount to be received or paid therefor;
(iii) The legality of the declaration or payment of
any dividend by the Company;
(iv) The legality of any borrowing by the Company
using securities as collateral;
(v) The legality of any loan of portfolio securities,
nor shall Custodian or Sub-Custodian be under any duty or obligation to see to
it that any cash collateral delivered to it by a broker, dealer, or financial
institution or held by it at any time as a result of such loan of portfolio
securities is adequate collateral for or against any loss Custodian,
Sub-Custodian, the Company or any Fund might sustain as a result of such loan.
The Custodian and Sub-Custodian specifically, but not by way of limitation,
shall not be under any duty or obligation periodically to check or notify the
Company or any Fund that the amount of such cash collateral held by
Sub-Custodian for the Company is sufficient collateral for the Company, but such
duty or obligation shall be the sole responsibility of the Company. In addition,
Custodian and Sub-Custodian shall be under no duty or obligation to see that any
broker, dealer or financial institution to which portfolio securities are lent
makes payment to it of any dividends or interest which are payable to or for the
account of the Company during the period of such loan or at the termination of
such loan, provided, however, that Sub-Custodian shall promptly notify the
Company in the event that such dividends or interest are not paid and received
when due; or
(vi) The sufficiency or value of any amounts of money
and/or securities held in any segregated account described in Paragraph 12(a)
hereof in connection with transactions by the Funds, or whether such segregated
account provides the compliance intended to be achieved. In addition, neither
Custodian nor Sub-Custodian shall be under any duty or obligation to see that
any broker, dealer, FCM or Clearing Member makes payment to the Fund of any
variation margin payment or similar payment which the Fund may be entitled to
receive from such broker, dealer, FCM or Clearing Member, to see that any
payment received by Sub-Custodian from any broker, dealer, FCM or Clearing
Member is the amount the Company is entitled to receive, or to notify the
Company or a Fund of Sub-Custodian's receipt or non-receipt of any such payment.
(c) Neither Custodian nor Sub-Custodian shall be liable for,
or considered to be sub-custodian or custodian of, any money, whether or not
represented by any check, draft, or other instrument for the payment of money,
received by Sub-Custodian on behalf of the Company until Sub-Custodian actually
receives and collects such money directly or by the final crediting of the
account representing the Fund's interest at the Book-Entry System or a
Securities Depository.
23
(d) Neither Custodian nor Sub-Custodian shall have any
responsibility or be liable for ascertaining or acting upon any calls,
conversions, exchange offers, tenders, interest rate changes or similar matters
relating to securities held in a Securities Depository, unless Custodian or
Sub-Custodian shall have actually received timely notice from such Securities
Depository. In no event shall Custodian or Sub-Custodian have any responsibility
or liability for the failure of any Securities Depository to collect, or for the
late collection or late crediting by a Securities Depository of any amount
payable upon securities deposited in a Securities Depository which may mature or
be redeemed, retired, called or otherwise become payable. Upon receipt of
Written Instructions from the Company of an overdue amount on securities held in
a Securities Depository Sub-Custodian shall make a claim against a Securities
Depository on behalf of the Company, except that neither Custodian nor
Sub-Custodian shall be under any obligation to appear in, prosecute or defend
any action suit or proceeding in respect to any securities held by a Securities
Depository which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense and liability be furnished as
often as may be required.
(e) Neither Custodian nor Sub-Custodian shall be under any
duty or obligation to take action to effect collection of any amount due to the
Company from a transfer agent of the Company nor to take any action to effect
payment or distribution by the transfer agent of the Company of any amount paid
by Sub-Custodian to the transfer agent of the Company in accordance with this
Agreement.
(f) Neither Custodian nor Sub-Custodian shall be under any
duty or obligation to take action to effect collection of any amount, if the
securities upon which such amount is payable are in default, or if payment is
refused after due demand or presentation, unless and until (i) it shall be
directed to take such action by Written Instructions and (ii) it shall be
assured to its reasonable satisfaction of reimbursement of its costs and
expenses in connection with any such action.
(g) Custodian and Sub-Custodian may in addition to the
employment of Foreign Sub-Custodians pursuant to Paragraphs 7 and 27, hereof
appoint one or more banking institutions as Depository or Depositories, as a
sub-custodian or as sub-custodians, or as a co-custodian or as co-custodians,
including, but not limited to, banking institutions located in foreign
countries, of securities and moneys at any time owned by the Fund, upon such
terms and conditions as may be approved in an Officer's Certificate or contained
in an agreement executed by Sub-Custodian, Custodian and the Company and the
appointed institution.
(h) Neither Custodian nor Sub-Custodian shall be under any
duty or obligation (i) to ascertain whether any securities at any time delivered
to, or held by it or by any Foreign Sub-Custodian, for the account of the
Company and specifically allocated to a Fund are such as properly may be held by
the Company or such Fund under the provisions of its Prospectus, or (ii) to
ascertain whether any transactions by the Fund, whether or not involving
Sub-Custodian, are such transactions as may properly be engaged in by the Fund.
(i) Sub-Custodian shall charge its compensation and any
expenses with respect to the Funds of the Company incurred by Sub-Custodian in
the performance of its duties
24
under this Agreement only against the money of the Fund or Funds of the Company
from which such compensation or expenses is actually due and payable, and under
no circumstances shall any compensation or expenses due to the Sub-Custodian be
considered to be a joint, or joint and several, obligation of the Funds of the
Company. To the extent that Sub-Custodian is entitled to recover from the
Company any loss, damage, liability or expense (including counsel fees) under
this Agreement, Sub-Custodian shall charge the amount due in respect of such
loss, damage, liability or expense (including counsel fees) only against the
money held by it for the Fund or Funds of the Company that is/are identified by
the Company in an Officer's Certificate, unless and until the Company instructs
Sub-Custodian by an Officer's Certificate to charge against money held by it for
the account of a Fund such Fund's pro rata share (based on such Fund's net asset
value at the time of the charge in proportion to the aggregate net asset value
of all Funds at that time) of the amount of such loss, damage, liability or
expense (including counsel fees).
(j) Custodian and Sub-Custodian shall be entitled to rely upon
any Officer's Certificate, Written Instructions, notice or other instrument in
writing received by Custodian or Sub-Custodian and reasonably believed by
Custodian or Sub-Custodian, as the case may be, to be an Officer's Certificate
or Written Instructions. Custodian and Sub-Custodian shall be entitled to rely
upon any Oral Instructions actually received by Custodian or Sub-Custodian. The
Company agrees to forward to Custodian or Sub-Custodian Written Instructions
confirming such Oral Instructions in such manner so that such Written
Instructions are received by Sub-Custodian, whether by hand delivery, telecopier
or other similar device, or otherwise, by the close of business of the same day
that such Oral Instructions are received by Sub-Custodian. The Company agrees
that the fact that such confirming instructions are not received, or that
contrary instructions are received, by Custodian or Sub-Custodian shall in no
way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Company. The Company agrees that neither
Custodian nor Sub-Custodian shall incur any liability to the Company in acting
upon Oral Instructions given to Custodian or Sub-Custodian hereunder concerning
such transactions provided such instructions reasonably appear to have been
received from an Authorized Person.
(k) Each of Custodian and Sub-Custodian shall be entitled to
rely upon any instrument, instruction or notice received by it and reasonably
believed by it to be given in accordance with the terms and conditions of any
FCM Agreement. Without limiting the generality of the foregoing, neither
Custodian nor Sub-Custodian shall be under any duty to inquire into, and neither
Custodian nor Sub-Custodian shall be liable for, the accuracy of any statements
or representations contained in any such instrument or other notice including,
without limitation, any specification of any amount to be paid to a broker,
dealer, futures commission merchant or clearing member.
(l) Sub-Custodian shall provide the Company with any report
obtained by Sub-Custodian on the system of internal accounting control of the
Book-Entry System, any Securities Depository utilized hereunder the Depository
or the Options Clearing Corporation, and with such reports on its own systems of
internal accounting control as the Company may reasonably request from time to
time.
25
(m) Subject to the foregoing provisions of this Agreement,
including, without limitation, those contained in Paragraph 27 hereof,
Sub-Custodian may deliver and receive securities, and receipts with respect to
such securities, and arrange for payments to be made and received by
Sub-Custodian in accordance with the customs prevailing from time to time among
brokers or dealers in such securities. When Sub-Custodian is instructed to
deliver securities against payment, delivery of such securities and receipt of
payment therefor may not be completed simultaneously. The Fund assumes all
responsibility and liability for all credit risks involved in connection with
Sub-Custodian's delivery of securities pursuant to proper instructions of the
Fund, which responsibility and liability shall continue until final payment in
full has been received by Sub-Custodian.
(n) Neither Custodian nor Sub-Custodian shall have any duties
or responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement, and no covenant or obligation shall be
implied in this Agreement against Custodian or Sub-Custodian.
(o) To the extent Custodian shall have discharged its
obligations to the Company under subparagraph (a)(i) of this paragraph 28 on
account of conduct of Sub-Custodian, its agents or employees, Custodian shall be
subrogated to all rights of the Company with respect to such conduct.
29. Termination. Any of the parties hereto may terminate this Agreement
by giving to the other parties a notice in writing specifying the date of such
termination, which shall be not less than ninety (90) days after the date of
giving of such notice. Upon the date set forth in such notice this Agreement
shall terminate, and Sub-Custodian shall on that date deliver directly to the
Custodian or a successor sub-custodian designated by the Company or Custodian
all securities and moneys then owned by the Company and held by Sub-Custodian,
after deducting all fees, expenses and other amounts for the payment or
reimbursement of which it shall then be entitled; provided, however, that
transaction fees and expenses payable by the Company in connection with a
deconversion to a successor sub-custodian shall be limited to Sub-Custodian's
actual direct cost.
30. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this paragraph) hereunder shall be in
writing or by confirm in telegram, cable, telex, or facsimile sending device.
Notices shall be addressed (a) if to Sub-Custodian, at Sub-Custodian's address,
00 Xxxxxxxxxx Xxxxxx, (00xx Xxxxx), Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx
Ajosa; (b) if to Custodian, at Custodian's address, NationsBank, 000 Xxxxx Xxxxx
Xxxxxx, XX0-000-00-00, Xxxxxxxxx, XX 00000, Attention: Xxxxx Xxxxx; (c) if to
the Company, at the address of the Company, 000 Xxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Xx., Secretary; or (d) if to none
of the foregoing, at such other address as shall have been notified to the
sender of any such Notice or other communication. Notice shall be deemed to have
been given when actually received by the other party. All postage, cable,
telegram, telex and facsimile sending device charges arising from the sending of
a Notice hereunder shall be paid by the sender.
26
31. Further Actions. Each party agrees to perform such further acts and
execute such further documents as it deems necessary to effectuate the purposes
hereof.
32. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
33. Miscellaneous.
(a) The Company agrees that Sub-Custodian may be a
counterparty in any purchase or sale of foreign currency by or for the Company
on a spot or forward basis, and on any option to buy or sell foreign currency.
(b) This Agreement embodies the entire Agreement and
understanding between the parties hereto, and supersedes all prior agreements
and understandings relating to the subject matter hereof. The captions in this
Agreement are included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their construction or
effect. This Agreement shall be deemed to be a contract made in New York and
governed by New York law. If any provision of this Agreement shall be held or
made invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors.
34. The names "Nations Fund" and "Directors of Nations Fund" refer
respectively to the Company created and the Directors, as Directors but not
individually or personally, acting from time to time under the Articles of
Incorporation of the Company dated December 13, 1983, which is hereby referred
to and a copy of which is on file at the office of the State Secretary of The
State of Maryland and at the principal office of the Company. The obligations of
"Nations Fund" entered into in the name or on behalf thereof by any of the
Directors, representatives or agents are made not individually, but in such
capacities, and are not binding upon any of the Directors, Shareholders, or
representatives of the Company personally, but bind only the Company Property,
and all persons dealing with any class of Shares of the Company Property, and
all persons dealing with any class of Shares of the Company must look solely to
the Company Property belonging to such class for the enforcement of any claims
against the Company.
27
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their officers designated below as of the day and
year first above written.
THE BANK OF NEW YORK NATIONSBANK OF TEXAS, N.A.
By: /s/ Xxxxxxx X. Grunston By: /s/ Xxxx X. Xxxxxx
------------------------- --------------------
Xxxxxxx X. Grunston Xxxx X. Xxxxxx
Vice-President Senior Vice-President
NATIONS FUND, INC.
By: /s/ Xxxxxxx X. Xxxxx, Xx.
--------------------------------
Xxxxxxx X. Xxxxx, Xx.
Secretary
28
SCHEDULE A
AUTHORIZED PERSONS FOR
ORAL AND WRITTEN INSTRUCTIONS
In addition to the Company's Officers, any one of the
following persons is authorized as an "Authorized Person" to give
"Oral Instructions" on behalf of the Company to the Custodian or
Sub-Custodian pursuant to the Mutual Fund Custody and Sub-Custody
Agreement among the Company, NationsBank of Texas, N.A. and The Bank
of New York, provided that no person shall be authorized or permitted
to withdraw Company investments or assets upon his/her mere receipt
(unless otherwise authorized with respect to a specific Fund or Funds
pursuant to a separate vote approved by the Board of Directors):
Xxxx Xxxxxx
Xxxxxx X. Xxxxxx
Xxxxxxx Xxxxx Xxxxxx
Xxxxxx Duck
Xxxxxxxxxxx Xxxxxxx
Xxxx Xxxx
Xxxxx Xxxxx
Xxxx Xxxxx
Xxxxxx Xxxxxxx
Xxxxx Xxxxxxxxxx
Xxxxxxx Xxxxxxx; and
In addition to the Company's Officers, any two of the
individuals named above is authorized as an "Authorized Person" to
give "Written Instructions" on behalf of the Company to the Custodian,
provided, however, that "Written Instructions" given in connection
with the issuance of checks and other drafts in payment of the
Company's operating expenses as provided therein must not be given
except upon prior written authorization of the Company's President,
Treasurer or Assistant Treasurer; and provided further that no one or
more persons shall be authorized or permitted to withdraw Company
investments or assets upon his/her or their mere receipt (unless
otherwise authorized with respect to a specific Fund or Funds pursuant
to a separate vote approved by the Board of Directors).
29
SCHEDULE B
-----------
OFFICERS OF NATIONS FUND, INC.
OFFICER POSITION
-------- -----------
A. Xxx Xxxxxx President and
Chairman of the Board
Xxxxxxx X. Xxxxx, Xx. Secretary
Xxxxxxx X. Xxxxx Assistant Secretary
Xxxxxx X. Xxxxxxx Assistant Secretary
Xxxxx X. Xxxxx Assistant Secretary
Xxxxxxx X. Xxxx Treasurer
Xxxxxx X. Xxxxxxx Assistant Treasurer
Xxxxxx Xxxx Assistant Treasurer
Amended: November 17, 1997
30
SCHEDULE I
The Mutual Fund Custody and Sub-Custody Agreement among Nations Fund,
Inc., Custodian and Sub-Custodian, applies to the following funds of the
Company:
Nations Prime Fund
Nations Treasury Fund
Nations Equity Income Fund
Nations Small Company Growth Fund
Nations Government Securities Fund
Nations U.S. Government Bond Fund
Nations International Equity Fund
Nations International Growth Fund
Nations International Stock Fund
Amended : December 9, 1997
31
APPENDIX A
I, , a Vice President with THE BANK OF NEW YORK do
hereby designate the following publications:
The Bond Buyer
Depository Trust Company Notices
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
00
XXXXXXXX X
The undersigned, Xxxxxxx X. Xxxxx, Xx., hereby certifies that he is the
duly elected and acting Secretary of Nations Fund, Inc., a Maryland corporation
(the "Company"), further certifies that the following resolutions were adopted
by the Board of Directors of the Company at a meeting duly held on October
11-12, 1996, at which a quorum was at all times present and that such
resolutions have not been modified or rescinded and are in full force and effect
as of the date hereof.
COMPANY RESOLUTION
RESOLVED, that the Mutual Fund Custody and Sub-Custody
Agreement for each Fund as presented to this meeting be, and it hereby
is, approved, and that the appropriate Officers of the Company be, and
each hereby is, authorized and directed to execute and deliver the
Mutual Fund Custody and Sub-Custody Agreement on behalf of the Company,
in that form or with such changes as that Officer, with the advice of
counsel, deems necessary or desirable.
IN WITNESS WHEREOF, I have hereunto set my hand as of the day of
October 1996.
By:_______________________________
Xxxxxxx X. Xxxxx, Xx.
Secretary
33
APPENDIX C
SCHEDULE OF FOREIGN SUB-CUSTODIANS
------------------------------ ------------------------------------------------
COUNTRY ELIGIBLE FOREIGN CUSTODIAN
------------------------------ ------------------------------------------------
Argentina The Bank of Boston, Buenos Aires
------------------------------ ------------------------------------------------
Australia ANZ, Melbourne
------------------------------ ------------------------------------------------
Austria Creditanstalt, Vienna
------------------------------ ------------------------------------------------
Bangladesh Standard Chartered Bank, Dhaka
------------------------------ ------------------------------------------------
Belgium BBL, Brussels
------------------------------ ------------------------------------------------
Botswana Stanbic Bank, Botswana
------------------------------ ------------------------------------------------
Brazil The Bank of Boston, Sao Paolo
------------------------------ ------------------------------------------------
Canada Royal Bank of Canada
------------------------------ ------------------------------------------------
Chile The Bank of Boston, Xxxxxxxx
------------------------------ ------------------------------------------------
China (Shanghai) Standard Chartered, Shanghai
------------------------------ ------------------------------------------------
China (Shenzhen) Standard Chartered, Shenzhen
------------------------------ ------------------------------------------------
Colombia Cititrust, Bogota
------------------------------ ------------------------------------------------
Czech Republic CSOB, Prague
------------------------------ ------------------------------------------------
Denmark Den Danske Bank, Copenhagen
------------------------------ ------------------------------------------------
Ecuador Citibank, Quito
------------------------------ ------------------------------------------------
Egypt Citibank, Cairo
------------------------------ ------------------------------------------------
Euromarket CEDEL, Luxembourg
------------------------------ ------------------------------------------------
Finland Xxxxxx Bank, Helsinki
------------------------------ ------------------------------------------------
France Banque Paribas, Paris
------------------------------ ------------------------------------------------
Germany Dresdner Bank AG, Frankfurt
------------------------------ ------------------------------------------------
Ghana Merchant Bank Ghana, Accra
------------------------------ ------------------------------------------------
Greece National Bank of Greece, Athens
------------------------------ ------------------------------------------------
Hong Kong HSBC, Hong Kong
------------------------------ ------------------------------------------------
Hungary Citibank, Budapest
------------------------------ ------------------------------------------------
India HSBC, Bombay
------------------------------ ------------------------------------------------
Indonesia HSBC, Jakarta
------------------------------ ------------------------------------------------
Ireland Allied Irish Banks, plc.
------------------------------ ------------------------------------------------
Israel Bank Leumi, Tel Aviv
------------------------------ ------------------------------------------------
Italy Banca Commerciale Italiana, Milan
------------------------------ ------------------------------------------------
Japan Fuji Bank, Kabutochu, Tokyo
------------------------------ ------------------------------------------------
Xxxxxx British Bank of Middle East, Amman
------------------------------ ------------------------------------------------
Kenya Stanbic Bank Kenya
------------------------------ ------------------------------------------------
Korea Seoulbank, Seoul
------------------------------ ------------------------------------------------
Luxembourg Banque Int'l a Luxembourg
------------------------------ ------------------------------------------------
Malaysia Hong Kong Bank Malaysia Berhad, Kuala Lumpur
------------------------------ ------------------------------------------------
34
------------------------------ ------------------------------------------------
COUNTRY ELIGIBLE FOREIGN CUSTODIAN
------------------------------ ------------------------------------------------
Mexico Banamex, Mexico City
------------------------------ ------------------------------------------------
Morocco Banque Commerciale du Maroc, Casablanca
------------------------------ ------------------------------------------------
Namibia Stanbic Bank Namibia
------------------------------ ------------------------------------------------
Netherlands Mees Pierson, Amsterdam
------------------------------ ------------------------------------------------
New Zealand ANZ, Wellington
------------------------------ ------------------------------------------------
Nigeria Stanbic Bank Nigeria
------------------------------ ------------------------------------------------
Norway Den norske Bank, Oslo
------------------------------ ------------------------------------------------
Pakistan Standard Chartered, Karachi
------------------------------ ------------------------------------------------
Peru Citibank, Lima
------------------------------ ------------------------------------------------
Philippines HSBC, Manila
------------------------------ ------------------------------------------------
Poland Bank Handlowy, Warsaw
------------------------------ ------------------------------------------------
Portugal Banco Comercial Portugues, Lisbon
------------------------------ ------------------------------------------------
Singapore United Overseas Singapore
------------------------------ ------------------------------------------------
Slovak Republic CSOB, Bratislava
------------------------------ ------------------------------------------------
South Africa Standard Bank of South Africa, Johannesburg
------------------------------ ------------------------------------------------
Spain Banco Bilbao Vizcaya, Madrid
------------------------------ ------------------------------------------------
Sri Lanka Standard Chartered, Colombo
------------------------------ ------------------------------------------------
Swaziland Stanbic Bank Swaziland
------------------------------ ------------------------------------------------
Sweden Skandinaviska Enskilda Banken, Stockholm
------------------------------ ------------------------------------------------
Switzerland Bank Leu, Zurich
------------------------------ ------------------------------------------------
Taiwan HSBC, Taipei
------------------------------ ------------------------------------------------
Thailand Bangkok Bank, Bangkok
------------------------------ ------------------------------------------------
Turkey CITIBANK, Istanbul
------------------------------ ------------------------------------------------
United Kingdom The Bank of New York, London
------------------------------ ------------------------------------------------
United States The Bank of New York, New York
------------------------------ ------------------------------------------------
Uruguay The Bank of Boston, Montevideo
------------------------------ ------------------------------------------------
Venezuela Citibank, Caracas
------------------------------ ------------------------------------------------
Zambia Stanbic Bank Zambia
------------------------------ ------------------------------------------------
Zimbabwe Stanbic Bank Zimbabwe, Harare
------------------------------ ------------------------------------------------
35
APPENDIX D
The undersigned, Xxxxxxx X. Xxxxx, Xx., hereby certifies that he is the
duly elected and acting Secretary of Nations Fund, Inc., a Maryland corporation
(the "Company"), further certifies that the following resolutions were adopted
by the Board of Directors of the Company at a meeting duly held on October
11-12, 1996, at which a quorum was at all times present and that such
resolutions have not been modified or rescinded and are in full force and effect
as of the date hereof.
COMPANY VOTES
RESOLVED, that the sub-custody and maintenance of securities
and other assets owned by the Funds of the Company in countries other
than the United States is necessary, appropriate and desirable for the
efficient operation of the Funds; and
FURTHER RESOLVED, that pursuant to Rule 17f-5 under the 1940
Act, BONY, as custodian for the Funds of the Company, be, and it
hereby is, authorized and directed to use the foreign sub-custodians
and depositories in the indicated countries listed on the attached
Schedule, each such foreign sub-custodian and depository being an
eligible foreign custodian under Rule 17f-5 or being authorized to act
in such capacity pursuant to exemptive relief granted by the SEC.
FURTHER RESOLVED, that the Sub-Custodian Agreements between
BONY and its network banks, providing for, among other things, the
manner in which BONY will maintain the Company's Funds' foreign
securities and other assets with eligible foreign sub-custodians be,
and they hereby are, approved;
FURTHER RESOLVED, that the appropriate Officers of the Company
be, and each hereby is, authorized to execute such documents and to
take such actions as may be necessary or appropriate to carry out the
purposes and intent of the preceding resolutions, the execution and
delivery of such documents or taking of such action to be conclusive
evidence of the Board of Directors' approval;
FURTHER RESOLVED, that the attached Schedule of approved
foreign custodians may be amended from time to time with the approval
of a majority of the Board of Directors; and
36
FURTHER RESOLVED, that BONY is permitted to use the CREST
system for book-entry settlement of United Kingdom and Irish securities
transactions on behalf of the Funds of the Company, including with
respect to eligible Fund assets, if any, currently held in the vaults
of The Bank of New York, London and Allied Irish Banks, plc.
IN WITNESS WHEREOF, I hereunto set my hand as of the day of
October, 1996.
By:________________________________
Xxxxxxx X. Xxxxx, Xx.
Secretary
37
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
its Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Little Rock, State of Arkansas on the
29th, day of May, 1998.
NATIONS FUND, INC.
By: *
----------------------------
A. Xxx Xxxxxx
President and Chairman
of the Board of Directors
By: /s/ Xxxxxxx X. Xxxxx, Xx.
------------------------------
Xxxxxxx X. Xxxxx, Xx.
*Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the date indicated:
SIGNATURES TITLE DATE
* President and Chairman May 29, 1998
-------------------------------------- of the Board of Directors
(A. Xxx Xxxxxx) (Principal Executive Officer)
* Treasurer May 29, 1998
-------------------------------------- Vice President
(Xxxxxxx X. Xxxx) (Principal Financial and
Accounting Officer)
* Director May 29, 1998
--------------------------------------
(Xxxxxx X. Xxxxxx, III)
* Director May 29, 1998
--------------------------------------
(Xxxxx Xxxxx)
* Director May 29, 1998
--------------------------------------
(Xxxxxxx X. Xxxxx)
* Director May 29, 1998
--------------------------------------
(Xxxxxx X. Xxxxxx)
* Director May 29, 1998
-------------------------------------
(Xxxx X. Xxxxx, Xx.)
* Director May 29, 1998
--------------------------------------
(Xxxxxxx X. Xxxxxx)
* Director May 29, 1998
--------------------------------------
(Xxxxxx X. Word)
* Director May 29, 1998
----------------------------------------
(Xxxxx X. Xxxxxxx)
/s/ Xxxxxxx X. Xxxxx, Xx.
-----------------------------
Xxxxxxx X. Xxxxx, Xx.
*Attorney-in-Fact
38
