CUSTODY AGREEMENT
THIS AGREEMENT is made as of the April 16, 2001 by and between
The Bank of New York, a New York corporation authorized to do a banking business
("Custodian"), and Nations Master Investment Trust, a Delaware business trust
("Master Trust").
W I T N E S S E T H
WHEREAS, Master Trust is a registered open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, Master Trust desires to retain Custodian to serve as
custodian for Master Trust, on behalf of its portfolios listed on Schedule I
(individually a "Portfolio" and collectively the "Portfolios") and to provide
the services described herein, and Custodian is willing to serve and to provide
such services; and
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, Master Trust and Custodian hereby agree as follows:
1. Appointment. Master Trust hereby appoints Custodian to act as
custodian of its portfolio securities, cash and other property on the terms set
forth in this Agreement. Custodian accepts such appointment and agrees to
furnish the services herein set forth in return for the compensation as provided
in Paragraph 23 hereof. Custodian agrees to comply with all relevant provisions
of the 1940 Act and applicable rules and regulations thereunder.
Master Trust may from time to time issue separate series or classes,
and classify and reclassify shares of any such series or class. Master Trust
shall promptly specify to Custodian in writing such series or classes, or any
reclassification and thereafter 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 Master Trust as are called for under
this Agreement shall identify the series or class to which such report,
confirmation or notice pertains.
2. Delivery of Documents. Master Trust has furnished Custodian with
copies properly certified or authenticated of each of the following:
(a) resolutions of Master Trust's Board of Trustees
authorizing the appointment of Custodian as custodian of portfolio securities,
cash and other property of Master Trust, respectively, and approving and
consenting to this Agreement;
(b) schedules identifying and containing the signatures of all
of Master Trust's officers and any other persons authorized to issue Oral
Instructions and to sign Written Instructions, as hereinafter defined, on behalf
of the Portfolios of Master Trust;
(c) Master Trust's current Registration Statement on Form N-1A
under the 1940 Act, as filed with the Securities and Exchange Commission (the
"SEC"), relating to shares of beneficial interest of Master Trust, without par
value (the "Shares");
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(d) the current prospectuses and statement of additional
information of each of the Portfolios, including all amendments and supplements
thereto (the "Prospectuses"); and
(e) a copy of the opinion of counsel for Master Trust, filed
with the SEC as part of Master Trust's current registration statement.
Master Trust will furnish Custodian from time to time with
copies, properly certified or authenticated, of all amendments of or supplements
to any of the foregoing, if any.
3. Definitions.
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means any of Master Trust's officers, and any other person,
whether or not any such person is an officer or employee of Master Trust, duly
authorized by the Board of Trustees of Master Trust to give Oral and Written
Instructions to Custodian on behalf of Master Trust and listed on a schedule
provided to Custodian pursuant to Section 2 of this Agreement. Authorized
Persons duly authorized by the Board of Trustees of Master Trust 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").
(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 appropriately safeguarded (whether by password protection or
other means) electronic or telecommunications media including but not limited to
S.W.I.F.T., LASER, computer-to-computer interface, dedicated transmission line
and tested telex.
(g) "Oral Instructions". As used in this Agreement, the term
"Oral Instructions" means oral instructions actually received by Custodian from
an Authorized Person or from a person reasonably believed by Custodian to be an
Authorized Person.
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(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 signed or reasonably believed by Custodian to be signed by two
officers of Master Trust listed on a schedule provided to Custodian pursuant to
Section 2 of this Agreement.
(i) "Property". The term "Property", as used in this
Agreement, means:
(i) any and all securities and other property of
Master Trust which Master Trust may from time to time deliver to Custodian, as
applicable, or which Custodian may from time to time hold for Master Trust;
(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; and
(iv) proceeds of the sale of Shares received by
Custodian from time to time from or on behalf of Master Trust.
(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 a
resolution of Master Trust's Board of Trustees approving deposits by 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
Custodian, signed or reasonably believed by Custodian to be signed by an
appropriate number of Authorized Person(s), and the term Written Instructions
shall also include Instructions, except that Instructions need not be signed or
reasonably believed to be signed by any Authorized Person(s) where such
Instructions are transmitted by Software pursuant to Paragraph 26A. A fax
receipt or comparable confirmation of transmission of any Written Instructions
shall be deemed evidence of actual receipt by Custodian.
4. Delivery and Registration of the Property. Master Trust shall
deliver or cause to be delivered to Custodian all securities and all monies
owned by the Portfolios, 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 sub-custodian appointed, with approval of Master Trust,
by Custodian pursuant to Paragraphs 7, 27, or 28(g) hereof. Custodian will not
be responsible for such securities and such monies until actually received by
it. All securities delivered to Custodian or any such sub-custodian (other than
in bearer form) shall be registered in the name of the Portfolio or in the name
of a nominee of a Portfolio or in the name of Custodian or any nominee of
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
Master Trust, pursuant to Paragraphs 7, 27, or 28(g) hereof or shall be properly
endorsed and in form for transfer satisfactory to Custodian.
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5. Voting and Other Rights. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by Master Trust. Custodian's only duty with respect to such rights
shall be to mail to Master Trust within two (2) business days following receipt
by Custodian any documents received by Custodian as custodian, including notices
of corporate action, proxies, proxy soliciting materials and offering circulars,
with any elections or proxies for securities registered in a nominee name
executed by such nominee. In addition, Custodian shall provide notice of
Custodian's receipt of such documents by electronic means (e.g., posting notice
on LASER), as agreed between the parties. Where warrants, options, tenders or
other securities have fixed expiration dates, Master Trust understands that in
order for Custodian to act, Custodian must receive Master Trust's instructions
at its offices in New York, addressed as 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 Custodian may reasonably notify Master Trust). Absent
Custodian's timely receipt of such instructions, such instructions will expire
without liability to Custodian. Custodian shall have no duty to forward to
Master Trust any annual, quarterly or special reports issued by companies whose
securities are held by Custodian hereunder.
6. Receipt and Disbursement of Money.
(a) Custodian shall open and maintain a custody account for
each Portfolio of Master Trust, subject only to draft or order by 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 Portfolios. Custodian shall make
payments of cash to, or for the account of, each Portfolio from such cash only:
(i) for the purchase of securities for the Portfolios 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 Portfolios under the terms of this
Agreement and, with respect to each Portfolio, and under the terms of any
investment advisory agreements, administration agreements or distribution
agreements; (iii) upon receipt of Written Instructions for payments in
connection with the conversion, exchange or surrender of securities owned or
subscribed to by the Portfolios and held by or to be delivered to Custodian;
(iv) to a sub-custodian pursuant to Paragraphs 7, 27, or 28(g) hereof; (v) for
the redemption of Shares; or (vi) upon receipt of an Officer's Certificate for
other corporate purposes.
(b) Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as Custodian
for the Portfolios.
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, Custodian shall hold and physically segregate
in a separate account with respect to each Portfolio, identifiable from those of
any other person, all securities and non-cash property received by it for the
Portfolios. All such securities and non-cash property are to be held or disposed
of by Custodian for each Portfolio pursuant to the terms of this Agreement. In
the absence of Written
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Instructions accompanied by a certified resolution authorizing the specific
transaction by Master Trust's Board of Trustees, and subject to Paragraph 25
hereof, Custodian shall have no power or authority to withdraw, deliver, assign,
hypothecate, pledge or otherwise dispose of any such securities and investments,
except in accordance with the express terms provided for in this Agreement. In
no case may any trustee, officer, employee or agent of Master Trust withdraw any
securities. In connection with its duties under this Paragraph 7(a), Custodian
may enter into sub-custodian agreements with other banks or trust companies for
the receipt of certain securities and cash to be held by Custodian for the
account of a Portfolio pursuant to this Agreement, provided Custodian obtains
the prior written approval of Master Trust to any such sub-custody arrangement.
Custodian will provide Master Trust with a copy of each sub-custodian agreement
it executes pursuant to this Paragraph 7(a). 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 Portfolios.
Notwithstanding anything herein to the contrary, this Paragraph 7(a) shall not
apply to 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,
Custodian shall furnish Master Trust with confirmations and a summary of all
transfers to or from the account of each Portfolio during said day. Where
securities are transferred to the account of any Portfolio established at a
Securities Depository or the Book Entry System pursuant to Paragraph 8 herein,
Custodian shall also, by book-entry or otherwise, identify as belonging to such
Portfolio the quantity of securities in a fungible bulk of securities registered
in the name of Custodian (or its nominee) or shown in Custodian's account on the
books of a Securities Depository or the Book-Entry System. At least monthly and
from time to time, Custodian shall furnish Master Trust with a detailed
statement of the Property held for each Portfolio under this Agreement.
(c) Notwithstanding any provision elsewhere contained herein,
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 Master Trust stating that any such instruments or
certificates are available. Master Trust shall deliver to 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, 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 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 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 Custodian (or any nominee of
Custodian) as Custodian for the Portfolio, 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 Master
Trust's relevant margin account agreement. Whenever any such
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instruments or certificates are available, 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 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 Custodian of payment therefor. Any such instrument or
certificate delivered to Custodian shall be held by Custodian hereunder in
accordance with, and subject to, the provisions of this Agreement.
8. Use of Securities Depository or the Book-Entry System. Master Trust
shall deliver to Custodian a certified vote of the Board of Trustees of Master
Trust approving, authorizing and instructing 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 Portfolios 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 Portfolios,
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 Portfolios deposited by
Custodian in a Securities Depository or the Book-Entry System will at all times
be segregated from any assets and cash controlled by Custodian in other than a
fiduciary or custodian capacity. Subject to Paragraph 28(m) hereof, 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 Custodian that relate
to the Portfolios' participation in a Securities Depository or the Book-Entry
System will at all times during Custodian's regular business hours be open to
inspection by Master Trust's duly authorized employees or agents and Master
Trust's independent auditors in accordance with applicable regulations, it being
understood, however, that such records may be kept in an off-site Custodian
storage location and Master Trust will be furnished with all information in
respect of the services rendered to it as it may require.
(c) Custodian will provide Master Trust with copies of any
report obtained by Custodian on the system of internal accounting control of the
Securities Depository or Book-Entry System promptly after receipt of such a
report by Custodian. Custodian will also provide Master Trust with such reports
on its own system of internal control as Master Trust may reasonably request
from time to time.
9. Instructions Consistent With the Charter, Etc. Unless otherwise
provided in this Agreement, Custodian shall act only upon Officer's
Certificates, Oral Instructions and/or Written Instructions. 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
Declaration of Trust or By-Laws or any vote of Master Trust's Board of Trustees,
or any committee thereof. Custodian shall be entitled to rely upon any Oral
Instructions or Written
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Instructions actually received by Custodian pursuant to this Agreement, and upon
any certificate, oral instructions, or written instructions reasonably believed
by Custodian to be an Officer's Certificate, Oral Instructions or Written
Instructions. Master Trust agrees to forward to Custodian, Written Instructions
confirming Oral Instructions in such manner that the Written Instructions are
received by Custodian at the close of business of the same day that such Oral
Instructions are given to Custodian. Master Trust agrees that the fact that such
confirming Written Instructions are not received by Custodian shall in no way
affect the validity of any of the transactions authorized by Master Trust by
giving Oral Instructions, and that Custodian's records with respect to the
content of Oral Instructions shall be controlling.
10. Transactions Not Requiring Instructions. 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. Custodian shall
subject to Paragraph 28(f) hereof:
(i) Collect and receive for the account of any
Portfolio, 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 Portfolio, and promptly advise Master Trust
of such receipt and shall credit such income, as collected, to such Portfolio of
Master Trust. From time to time, Custodian may elect, but shall not be so
obligated, to credit the account with interest, dividends or principal payments
on the payable or contractual settlement date, in anticipation of receiving same
from a payor, central depository, Securities Depository, broker or other agent
employed by Master Trust or Custodian. Any such crediting and posting shall be
at Master Trust's sole risk, and 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 Master Trust all reports, written
information or notices actually received by Custodian as 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 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 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 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 Portfolios and 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 Master Trust and each of its Portfolios, 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
Portfolio's securities received by the Portfolios 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 Portfolios held by 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
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
Custodian without prior notice to or consent from Master Trust and which may be
amended to delete a publication with the prior notice and consent from Master
Trust;
(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; and
(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 Master Trust or the
investment adviser to Master Trust of an 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,
Custodian is authorized to sell the fraction received and credit Master Trust's
account. Unless specifically instructed to the contrary in writing, 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 Custodian is called
for partial redemption by the issuer of such Property, 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 Custodian in its reasonable
discretion.
(b) Miscellaneous Transactions. 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 Master Trust 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
Portfolios or Custodian or a nominee of either, or for exchange of 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 Custodian.
11. Transactions Requiring Instructions. Upon receipt of Oral or
Written Instructions, and not otherwise, 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 Portfolios as owners of any
securities may be exercised;
(b) deliver any securities held for any Portfolio 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 Portfolio 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
Portfolio 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 Portfolios;
(e) subject to Paragraph 25(b) hereof, release securities
belonging to any Portfolio to any bank or trust company for the purpose of
pledge or hypothecation to secure any loan incurred by such Portfolio; provided,
however, that securities shall be released only upon payment to 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 Portfolio upon the
exercise of a covered call option written by such Portfolio on such securities;
(g) release and deliver securities owned by a Portfolio in
connection with any repurchase agreement entered into on behalf of such
Portfolio, but subject to Paragraph 28(m) hereof, only on receipt of payment
therefor; and pay out monies of such Portfolio 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. 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 Portfolio, 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 Portfolios and Master Trust with the procedures
required by a securities or option exchange, (ii) for the purpose of compliance
by the Portfolios and Master Trust 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) Master Trust shall furnish Custodian with appropriate
evidence of action by Master Trust's Board of Trustees declaring and authorizing
the payment of any dividends and distributions. Upon receipt by Custodian of an
Officer's Certificate with respect to dividends and distributions declared by
Master Trust's Board of Trustees and payable to interestholders of any Portfolio
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
Master Trust, and Master Trust's administrator or transfer agent, Custodian
shall pay to the Portfolio's transfer agent, as agent for the interestholders,
an amount equal to the amount indicated in said Officer's Certificate as payable
by the Portfolio to such interestholders for distribution in cash by the
transfer agent to such interestholders.
(b) Custodian may enter into separate custodial agreements
with various futures commission merchants ("FCMs") that Master Trust uses (each
an "FCM Agreement"), pursuant to which the Portfolios' margin deposits in any
transactions involving futures contracts and options on futures contracts will
be held by 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 the FCM and Master Trust ("FCM Contract"), SEC rules
governing such segregated accounts, Commodity Futures Trading Commission
("CFTC") rules and the rules of the applicable commodities exchange. Such FCM
Agreements shall only be entered into by Custodian upon receipt by Custodian of
Written Instructions from Master Trust which state that: (i) an FCM Contract has
been entered into; (ii) Master Trust is in compliance with all the rules and
regulations of the CFTC; and (iii) the FCM Agreement is acceptable to Master
Trust. 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.
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14. Purchase of Securities. Promptly after each purchase of securities
by Master Trust on behalf of any Portfolio, Master Trust shall deliver to
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 Portfolio for
which the purchase was made. Custodian shall upon receipt of securities
purchased by or for Master Trust pay out of the monies held for the account of
Master Trust 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
Portfolios or Master Trust shall deliver to 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 Master Trust upon such sale; (f)
the name of the broker through whom or the person to whom the sale was made; and
(g) the Portfolio for which the sale was made. Custodian shall, subject to
Paragraph 28(m) hereof, deliver the securities against payment of the total
amount payable to Master Trust 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 Portfolios and
Master Trust which are in the possession of Custodian shall be the property of
Master Trust. Such books and records shall be prepared and maintained as
required by the 1940 Act and other applicable securities laws, rules and
regulations. The SEC, Master Trust, or Master Trust's authorized
representatives, shall have access to such books and records at all times during
Custodian's normal business hours. Upon the reasonable request of Master Trust,
copies of any such books and records shall be provided by Custodian to Master
Trust or Master Trust's authorized representative, and Master Trust shall
reimburse Custodian reasonable expenses for providing such copies. Upon
reasonable request of Master Trust, Custodian shall provide in hard copy, tape
or on micro-film, or such other medium as agreed to among Master Trust and
Custodian, and any books and records maintained by Custodian.
17. Reports.
(a) Custodian shall furnish Master Trust the following
reports:
(i) such periodic and special reports as Master Trust
may reasonably request from time to time;
(ii) a monthly statement summarizing all transactions
and entries for the account of each Portfolio;
(iii) a monthly report of portfolio securities
belonging to each Portfolio showing the adjusted average cost of each issue and
market value at the end of such month;
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(iv) a monthly report of the cash account of each
Portfolio showing disbursements;
(v) the reports to be furnished to Master Trust
pursuant to Rule 17f-4 under the 1940 Act; and
(vi) such other information as may be agreed upon
from time to time between Master Trust and Custodian.
(b) Subject to Paragraphs 5 and 27(g) hereof, Custodian shall
transmit promptly to Master Trust any proxy statement, proxy materials, notice
of a call or conversion or similar communications actually received by Custodian
as custodian of the Property.
(c) 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 Custodian by a pricing or similar service utilized or
subscribed to by Custodian. 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. Custodian shall cooperate with Master
Trust's independent certified public accountants and shall take all reasonable
action in the performance of its obligations under this Agreement, to assure
that the necessary information is made available to such accountants.
19. Confidentiality. Custodian agrees on behalf of itself and its
employees to treat all record and other information relative to Master Trust,
its prior, present or potential interestholders, its service providers 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 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's only
obligation shall be to notify Master Trust thereof. 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 Master Trust.
20. Equipment Failures. In the event of equipment failures beyond
Custodian's control, Custodian shall take reasonable steps to minimize service
interruptions but shall not have any further liability with respect thereto.
Notwithstanding the foregoing, Custodian shall maintain sufficient back up
electronic data processing equipment to enable Custodian to fulfill its
obligations under this Agreement consistent with standard industry practices.
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21. Right to Receive Advice.
(a) Advice of Portfolio. If Custodian shall be in doubt as to
any action to be taken or omitted by it, either may request, and shall receive,
from Master Trust clarification or advice, including Oral or Written
Instructions.
(b) Advice of Counsel. If Custodian shall be in doubt as to
any question of law involved in any action to be taken or omitted by Custodian,
it may request at its option advice from its own counsel, at its own expense, or
advice from Master Trust's counsel.
(c) Conflicting Advice. In case of conflict between
directions, advice or Oral or Written Instructions received by Custodian
pursuant to subparagraph (a) of this paragraph and advice received by Custodian
pursuant to subparagraph (b) of this paragraph, Custodian shall be entitled to
rely on and follow the advice received pursuant to subparagraph (b) alone.
(d) Protection of Custodian. 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 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's properly taking or omitting to take such action.
Nothing in this Paragraph 21(d) shall excuse Custodian when an action or
omission on the part of Custodian constitutes willful misfeasance or bad faith,
or negligence or reckless disregard by Custodian of its duties under this
Agreement.
22. Compliance with Governmental Rules and Regulations. Custodian
undertakes to comply with the laws, rules and regulations of governmental
authorities having jurisdiction over Custodian and its express duties hereunder.
23. Compensation. As compensation for the services rendered by
Custodian during the term of this Agreement, Master Trust and/or Banc of America
Advisors, LLC shall pay to Custodian, in addition to reimbursement of its
out-of-pocket expenses and in accordance with the co-administration agreement
among Master Trust, Banc of America Advisors, LLC and Xxxxxxxx Inc. dated April
16, 2001, such compensation as may be agreed upon from time to time in writing
by Master Trust and Custodian as set forth in Schedule III.
24. Indemnification. Master Trust agrees to indemnify 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 Custodian's, or such nominees',
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willful misconduct or negligence or reckless disregard of its duties under this
Agreement. For the purposes of this Agreement, including, without limitation,
for purposes of Paragraphs 24 and 28, neither Custodian's acceptance of
Instructions in accordance with Paragraph 26A nor 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, as defined in Paragraph 27, shall, in and of itself, constitute,
or be deemed to constitute, a breach by Custodian of this Agreement or
negligence, willful misconduct, or reckless disregard of its duties by
Custodian, provided the relevant agreement between Custodian and a Foreign
Sub-Custodian satisfies the requirements of Rule 17f-5.
25. Overdrafts or Indebtedness.
(a) Custodian shall advance funds under this Agreement with
respect to any Portfolio which results in an overdraft because the moneys held
by Custodian in the separate account for such Portfolio shall be insufficient to
pay the total amount payable upon a purchase of securities by such Portfolio, 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 Portfolio for some other
reason, or if Master Trust is for any other reason indebted to Custodian,
including any indebtedness to The Bank of New York under Master Trust'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 Custodian to
Master Trust for such Portfolio 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 Schedule III
to this Agreement. In addition, Master Trust hereby agrees that to the extent of
such overdraft or indebtedness, Custodian shall have a continuing lien, security
entitlement and security interest in and to any property at any time held by it
for the benefit of such Portfolio or in which the Portfolio may have an interest
which is then in Custodian's possession or control or in possession or control
of any third party acting on Custodian's behalf. Master Trust authorizes
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 Portfolio's credit on Custodian's books. In addition, Master
Trust 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 Master
Trust had outstanding a Reverse Repurchase Agreement or such a borrowing, it
shall prior to 1:00 p.m., New York City time, advise Custodian, in writing, of
each such borrowing, shall specify the Portfolio to which the same relates, and
shall not incur any indebtedness not so specified other than from Custodian.
(b) Master Trust will cause to be delivered to Custodian by
any bank (including, if the borrowing is pursuant to a separate agreement,
Custodian) from which it borrows money for investment or for temporary or
emergency purposes using securities held by 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 Master Trust
against delivery of a stated amount of collateral. Master Trust shall promptly
deliver to Custodian Written Instructions specifying with respect to each such
borrowing: (a) the Portfolio to which such borrowing relates; (b) the name of
the bank; (c) the amount and terms of the
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borrowing, which may be set forth by incorporating by reference an attached
promissory note, duly endorsed by the Portfolio, 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 Portfolio 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 Portfolio's prospectus. 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.
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. 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). Master Trust shall cause all securities released from
collateral status to be returned directly to Custodian, and Custodian shall
receive from time to time such return of collateral as may be tendered to it. In
the event that Master Trust fails to specify in Written Instructions the
Portfolio, 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
Custodian, Custodian shall not be under any obligation to deliver any
securities.
26A. Instructions.
(a) It is understood and agreed that Custodian may, from time
to time, provide software to Master Trust for purposes of enabling a Portfolio
to transmit Instructions to Custodian (the "Software"). Such Software has been
designed to include password protection or other features to restrict the use of
the Software to Authorized Persons; provided, however, that the Custodian makes
no warranty or representations of any kind with respect to such protections or
features, express or implied, including, but not limited to, any implied
warranties of merchantability or fitness for a particular purpose. Master Trust
and the Custodian shall use commercially reasonable efforts to develop other
mechanisms (i) to enable Master Trust to restrict the use of the Software to
Authorized Persons, (ii) to identify transmissions from a terminal other than an
authorized terminal, and (iii) for the prompt and accurate transmission of
Instructions by Authorized Persons to Custodian. It is further understood and
agreed that Custodian may provide specialized hardware or other equipment to
enable Master Trust and the Portfolios to utilize the Software. With respect to
any such Software, Custodian grants to Master Trust and its service providers a
personal, nontransferable and nonexclusive license to use the Software solely
for the purpose of transmitting Instructions to, and receiving communications
from, Custodian in connection with its account(s). Master Trust and its service
providers agree 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 Custodian. At no time shall Master Trust be obligated
to use the Software to transmit Instructions to Custodian.
(b) Master Trust 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
Custodian; provided, however, that the parties
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acknowledge and agree that if any specialized equipment is necessary to enable
Master Trust to utilize the Software, Custodian shall, at its own expense,
provide and maintain such equipment.
(c) Master Trust acknowledges that the Software, all databases
made available to Master Trust by utilizing the Software (other than databases
relating solely to the assets of the Portfolios 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 Custodian. Master Trust shall
keep the Information confidential by using the same care and discretion that
Master Trust 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 Custodian. Upon termination of this Agreement or the Software
license granted hereunder for any reason, Master Trust shall return to Custodian
all copies of the Information which are in its possession or under its control
or which Master Trust distributed to third parties.
(d) Custodian reserves the right to modify the Software from
time to time upon reasonable prior notice and Master Trust shall, if it desires
in its sole discretion to continue to use the Software, install new releases of
the Software as Custodian may direct. Master Trust agrees not to modify or
attempt to modify the Software without Custodian's prior written consent. Master
Trust acknowledges that any modifications to the Software, whether by Master
Trust or Custodian and whether with or without Custodian's consent, shall become
the property of Custodian.
(e) Where the method for transmitting Instructions by Master
Trust involves an automatic systems acknowledgment to Master Trust by Custodian
of its receipt of such Instructions, including any transmission of Instructions
using the Software, then (i) if an acknowledgment is not actually received by
Master Trust, Custodian shall not be deemed to have received any such
Instructions, and (ii) if an acknowledgment is actually received by Master
Trust, the Custodian shall be deemed to have received such Instructions and
shall be responsible for any error, omission, interruption or delay in
connection with the transmission of such Instructions; provided, however, that
Master Trust shall promptly review all acknowledgments actually received and
notify the Custodian in the event of any apparent discrepancy.
(f) (i) Master Trust agrees that where it delivers to
Custodian Instructions hereunder using the Software, it shall be Master Trust's
sole responsibility to ensure that only persons duly authorized by Master Trust
and the correct number of such persons transmit such Instructions to Custodian
and Master Trust will cause all such persons to treat applicable use and
authorization codes, passwords and authentication keys with extreme care, and
authorizes Custodian to act in accordance with and rely upon Instructions
received by it pursuant hereto using the Software. (ii) Master Trust hereby
represents, acknowledges and agrees that it is fully informed of the protections
and risks associated with the various methods of transmitting Instructions to
Custodian and that there may be more secure methods of transmitting Instructions
to Custodian than the method(s) selected by Master Trust. (iii) With respect to
all Oral Instructions and all Written Instructions other than Instructions
delivered to Custodian using the Software provided by Custodian, Custodian shall
exercise all commercially reasonable efforts to
16
form a reasonable belief that each such instruction has been given by an
Authorized Person and, where required, signed by an appropriate number of
Authorized Person(s).
(g) Master Trust shall notify Custodian of any errors,
omissions or interruptions in, or delay or unavailability of, its ability to
send Instructions using the Software provided by Custodian 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. 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 Master Trust whenever Custodian
learns or reasonably should have learned, of any errors, omissions or
interruption in, or delay or unavailability of, Master Trust's ability to send
Instructions using the Software provided by Custodian.
26B. FX Transactions
(a) Whenever a Portfolio shall enter into an FX Transaction,
the Portfolio shall promptly deliver to Custodian a Certificate or Oral
Instructions specifying with respect to such FX Transaction: (i) the Series to
which such FX Transaction is specifically allocated; (ii) the type and amount of
Currency to be purchased by the Portfolio; (iii) the type and amount of Currency
to be sold by the Portfolio; (iv) the date on which the Currency to be purchased
is to be delivered; (v) the date on which the Currency to be sold is to be
delivered; and (vi) 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, 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, 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 Portfolio 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 Portfolio has been received in full.
(c) Any foreign exchange transaction effected by Custodian in
connection with this Agreement may be entered with Custodian, any office, branch
or subsidiary of The Bank of New York, or any Foreign Sub-Custodian (as defined
below) acting as principal or otherwise through customary banking channels. The
Portfolio may issue a standing Certificate with respect to foreign exchange
transactions but Custodian may establish rules or limitations concerning any
foreign exchange facility made available to the Portfolio. The Portfolio shall
17
bear all risks of investing in securities or holding Currency. Without limiting
the foregoing, the Portfolio 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
Portfolio of securities or any cash held outside the Portfolio's jurisdiction or
denominated in Currency other than its home jurisdiction or the conversion of
cash from one Currency into another Currency. 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 Custodian nor any Foreign Sub-Custodian shall be liable to the Portfolio
for any loss resulting from any of the foregoing events.
27. Duties of Custodian with Respect to Property of any Portfolio Held
Outside of the United States.
(a) Custodian is authorized and instructed to employ, as
sub-custodian for each Portfolio's foreign securities and other assets, the
foreign banking institutions and foreign securities depositories and clearing
agencies selected from time to time by Custodian as the Foreign Custody Manager
appointed by Master Trust's Board of Trustees ("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 Custodian
(each such agreement, a "Foreign Sub-Custodian Agreement"). Upon receipt of an
Officer's Certificate, Master Trust may designate any additional foreign
sub-custodian with which Custodian has an agreement for such entity to act as
Custodian's agent, as its sub-custodian and any such additional foreign
sub-custodian shall be deemed a Foreign Sub-Custodian hereunder. Upon receipt of
an Officer's Certificate, Custodian shall cease using any one or more Foreign
Sub-Custodians for the Portfolio's assets.
(b) Each Foreign Sub-Custodian Agreement shall be
substantially in the form delivered to Master Trust herewith and will not be
amended in a way that materially or adversely affects Master Trust without
Master Trust's prior written consent.
(c) Custodian shall identify on its books as belonging to each
Portfolio the Foreign Securities of such Portfolio held by each Foreign
Sub-Custodian. At the election of Master Trust, it shall be entitled to be
subrogated to any claims by Master Trust or any Portfolio against a Foreign
Sub-Custodian as a consequence of any loss, damage, cost, expense, liability or
claim sustained or incurred by Master Trust or any Portfolio if and to the
extent that Master Trust or such Portfolio has been made whole by Custodian for
any such loss, damage, cost, expense, liability or claim.
(d) Upon request of Master Trust, Custodian will, consistent
with the terms of the applicable Foreign Sub-Custodian Agreement, use reasonable
efforts to arrange for the independent accountants of Master Trust 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 Custodian on behalf of Master Trust.
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(e) Custodian will supply to Master Trust from time to time,
as mutually agreed upon, statements in respect of the securities and other
assets of each Portfolio held by Foreign Sub-Custodians, including but not
limited to, an identification of entities having possession of each Portfolio'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 Custodian on behalf of the Portfolio.
(f) 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 Custodian to have a material
adverse effect on Master Trust or any Portfolio it will promptly notify Master
Trust in writing of such breach. Custodian also agrees to use reasonable and
diligent efforts to enforce its rights under the relevant Foreign Sub-Custodian
Agreement.
(g) Custodian shall transmit promptly to Master Trust all
notices, reports or other written information received pertaining to the
Portfolios' 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
Master Trust or any Portfolio and delivery of securities maintained for the
account of Master Trust or any Portfolio 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.
(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 Custodian shall be to take all appropriate and
reasonable action at Master Trust's expense to recover such loss or damage from
the Foreign Sub-Custodian. It is expressly understood and agreed that
Custodian's sole responsibility and liability shall be limited to amounts so
recovered from the Foreign Sub-Custodian.
28. Concerning Custodian.
(a) (i) Custodian shall exercise care and diligence and act in
good faith and use all commercially reasonable efforts in the performance of its
duties hereunder. Custodian shall be responsible to Master Trust for its own
failure or the failure of any sub-custodian that it shall appoint (other than a
foreign sub-custodian referred to in Paragraph 27 or a sub-custodian appointed
by Custodian at the specific direction of Master Trust) or that of its employees
or agents, to perform its 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 Custodian, or on the part of its employees or agents, or reckless
disregard of such duties, obligations and responsibilities.
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(ii) Without limiting the generality of the foregoing
or any other provision of this Agreement, in no event shall Custodian be liable
to the Portfolio or any third party nor, except as otherwise provided in this
subparagraph 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 may, with respect to questions of law arising under
any FCM Agreement, apply for and obtain the advice and opinion of counsel to
Master Trust at the expense of Master Trust, 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. Custodian shall
be liable to Master Trust 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 Custodian or any of its
employees or agents.
(iii) Custodian's liability pursuant to the last
sentence of subparagraph (a)(i) shall include, but not be limited to,
reimbursing Master Trust 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 Master Trust receives notice of the
commencement of any action, suit, or proceeding (an "Action"), or notice that
any Action may be commenced, for which Custodian may be liable to Master Trust
pursuant to this Paragraph 28, Master Trust shall give notice to Custodian of
the commencement of the Action or of the possibility that an Action will be
commenced. Any omission to notify Custodian will not relieve Custodian from any
liability which it may have under this Paragraph, except to the extent the
failure to notify Custodian prejudices the rights of Custodian. 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 Custodian:
(1) notifies Master Trust in writing of Custodian's intention to assume such
defense; and (2) retains legal counsel reasonably satisfactory to Master Trust
to conduct the defense of such Action. If Custodian advises Master Trust that it
does not wish to exercise full control of any defense, compromise or settlement
of any Action, Custodian shall be responsible for the fees and expenses of
counsel selected by Master Trust, in addition to any other amounts for which
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 Custodian so assumes the defense of any such Action,
Master Trust 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 Master Trust
unless: (a) Custodian has agreed to pay such fees and expenses, (b) any relief
other than the payment of money damages is sought against Master Trust, or (c)
Master Trust 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 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 Custodian is liable pursuant to
this Paragraph will be paid by Custodian. Master Trust will not settle or
compromise any such Action for which Custodian is liable pursuant to this
Paragraph without the prior written consent of Custodian, unless Custodian has
failed, after reasonable notice, to undertake control of such Action in the
manner provided in
20
this Paragraph. Custodian will not settle or compromise any such Action in which
any relief other than the payment of money damages is sought against Master
Trust without the consent of Master Trust, such consent not to be unreasonably
withheld. In the event that Custodian intends to settle or compromise any Action
in which solely money damages are sought, Custodian shall give Master Trust
fifteen (15) business days prior written notice.
(b) Without limiting the generality of the foregoing,
Custodian shall be under no obligation to inquire into, and shall not be liable
for:
(i) the validity of the issue of any securities
purchased, sold, or written by or for Master Trust or any Portfolio, 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 Master Trust;
(iv) the legality of any borrowing by Master Trust
using securities as collateral;
(v) the legality of any loan of portfolio securities,
or 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, Master Trust or any Portfolio might sustain as a
result of such loan. Custodian specifically, but not by way of limitation, shall
not be under any duty or obligation periodically to check or notify Master Trust
or any Portfolio that the amount of such cash collateral held by Custodian for
Master Trust is sufficient collateral for Master Trust, but such duty or
obligation shall be the sole responsibility of Master Trust. In addition,
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 Master
Trust during the period of such loan or at the termination of such loan,
provided, however, that Custodian shall promptly notify Master Trust 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 Portfolios, or whether such
segregated account provides the compliance intended to be achieved. In addition,
Custodian shall not be under any duty or obligation to see that any broker,
dealer, FCM or Clearing Member makes payment to the Portfolio of any variation
margin payment or similar payment which the Portfolio may be entitled to receive
from such broker, dealer, FCM or Clearing Member, to see that any payment
received by Custodian from any broker, dealer, FCM or Clearing Member is the
amount Master Trust is entitled to receive, or to notify Master Trust or a
Portfolio of Custodian's receipt or non-receipt of any such payment.
21
(c) Custodian shall not 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
Custodian on behalf of Master Trust until Custodian actually receives and
collects such money directly or by the final crediting of the account
representing the Portfolio's interest at the Book-Entry System or a Securities
Depository.
(d) Custodian shall not 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 shall have actually received timely
notice from such Securities Depository. In no event shall 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 Master Trust of an overdue amount on
securities held in a Securities Depository, Custodian shall make a claim against
a Securities Depository on behalf of Master Trust, except that Custodian shall
not 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) Custodian shall not be under any duty or obligation to
take action to effect collection of any amount due to Master Trust from a
transfer agent of Master Trust nor to take any action to effect payment or
distribution by the transfer agent of Master Trust of any amount paid by
Custodian to the transfer agent of Master Trust in accordance with this
Agreement.
(f) Custodian shall not 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 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 Portfolios, upon such terms and conditions as
may be approved in an Officer's Certificate or contained in an agreement
executed by Custodian and Master Trust and the appointed institution.
(h) Custodian shall not 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 Master Trust and specifically
allocated to a Portfolio are such as properly may be held by Master Trust or
such Portfolio under the provisions of its Prospectus, or (ii) to ascertain
whether any transactions by the Portfolio, whether or not involving Custodian,
are such transactions as may properly be engaged in by the Portfolio.
22
(i) Custodian shall charge its compensation and any expenses
with respect to the Portfolios of Master Trust incurred by Custodian in the
performance of its duties under this Agreement only against the money of the
Portfolio or Portfolios of Master Trust from which such compensation or expenses
is actually due and payable, and under no circumstances shall any compensation
or expenses due to Custodian be considered to be a joint, or joint and several,
obligation of the Portfolios of Master Trust. To the extent that Custodian is
entitled to recover from Master Trust any loss, damage, liability or expense
(including counsel fees) under this Agreement, 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 Portfolio or Portfolios of
Master Trust that is/are identified by Master Trust in an Officer's Certificate,
unless and until Master Trust instructs Custodian by an Officer's Certificate to
charge against money held by it for the account of a Portfolio such Portfolio's
pro rata share (based on such Portfolio's net asset value at the time of the
charge in proportion to the aggregate net asset value of all Portfolios at that
time) of the amount of such loss, damage, liability or expense (including
counsel fees).
(j) Custodian shall be entitled to rely upon any Officer's
Certificate, Written Instructions, notice or other instrument in writing
received by Custodian and reasonably believed by Custodian, to be an Officer's
Certificate or Written Instructions. Custodian shall be entitled to rely upon
any Oral Instructions actually received by Custodian. Master Trust agrees to
forward to Custodian Written Instructions confirming such Oral Instructions in
such manner so that such Written Instructions are received by 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
Custodian. Master Trust agrees that the fact that such confirming instructions
are not received, or that contrary instructions are received, by Custodian shall
in no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by Master Trust. Master Trust agrees that
Custodian shall not incur any liability to Master Trust in acting upon Oral
Instructions given to Custodian hereunder concerning such transactions provided
such instructions reasonably appear to have been received from an Authorized
Person.
(k) 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, Custodian shall not be under any duty
to inquire into, and Custodian shall not 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) Custodian shall provide Master Trust with any report
obtained by 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 Master Trust may reasonably request from time to
time.
(m) Subject to the foregoing provisions of this Agreement,
including, without limitation, those contained in Paragraph 27 hereof, Custodian
may deliver and receive securities, and receipts with respect to such
securities, and arrange for payments to be made and received by Custodian in
accordance with the customs prevailing from time to time among brokers or
dealers
23
in such securities. When Custodian is instructed to deliver securities against
payment, delivery of such securities and receipt of payment therefor may not be
completed simultaneously. The Portfolio assumes all responsibility and liability
for all credit risks involved in connection with Custodian's delivery of
securities pursuant to proper instructions of the Portfolio, which
responsibility and liability shall continue until final payment in full has been
received by Custodian.
(n) Custodian shall not 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.
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 Custodian shall on that date deliver directly to Master
Trust or a successor custodian designated by Master Trust all securities and
moneys then owned by Master Trust and held by 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 Master Trust in connection with a deconversion to a successor
custodian shall be limited to 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 Custodian, at Custodian's address, 00
Xxxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Ajosa;
(b) if to Master Trust, at the address of Master Trust, 000 Xxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxx, Xx., Secretary; or (c)
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.
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) Master Trust agrees that Custodian may be a counterparty
in any purchase or sale of foreign currency by or for Master Trust 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
24
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. Release. The names "Nations Master Investment Trust" and "Trustees
of Nations Master Investment Trust" refer respectively to Master Trust created
and the Trustees, as trustees but not individually or personally, acting from
time to time under a Declaration of Trust and Certificate of Trust dated January
14, 1999, which is hereby referred to and a copy of which is on file at the
principal office of Master Trust. The obligations of "Nations Master Investment
Trust" entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, Interestholders, or representatives of
Master Trust personally, but bind only Master Trust Property (as defined in the
Declaration of Trust), and all persons dealing with any class of Shares of
Master Trust Property, and all persons dealing with any class of Shares of
Master Trust must look solely to Master Trust Property belonging to such class
for the enforcement of any claims against Master Trust.
35. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
25
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.
NATIONS MASTER INVESTMENT TRUST
By: /s/ Xxxxxxx Xxxx
----------------------------
Xxxxxxx Xxxx
Assistant Secretary
THE BANK OF NEW YORK
By:
-------------------------------
26
SCHEDULE I
The Custody Agreement between Nations Master Investment Trust, and
Sub-Custodian applies to the following Portfolios of Master Trust:
High Yield Portfolio
International Bond Portfolio
Adopted: February 22, 2001
27
SCHEDULE II
I, Xxx Xxxxxx, a Vice President with THE BANK OF NEW YORK do hereby designate
the following publications:
The Bond Buyer
Depository Trust Company Services
Financial Daily Card Service
XX Xxxxxx Municipal Bond Service
London Financial Times
Standard & Poor's Called Bond Record
Wall Street Journal
28
SCHEDULE III
THE BANK OF NEW YORK
BAAI GLOBAL FEE SCHEDULE
FOR
HIGH YIELD PORTFOLIO
INTERNATIONAL BOND PORTFOLIO
--------------------------------------------------------------------------------
Argentina 18.00 70
------------------------------------------------- ---------------------- -------
Australia 4.00 50
------------------------------------------------- ---------------------- -------
Austria 5.00 50
------------------------------------------------- ---------------------- -------
Bahrain 60.00 175
------------------------------------------------- ---------------------- -------
Bangladesh 45.00 175
------------------------------------------------- ---------------------- -------
Belgium (regs. bds) 2.00 10
------------------------------------------------- ---------------------- -------
Belgium (equities and Cpn bds) 4.00 10
------------------------------------------------- ---------------------- -------
Bermuda 30.00 90
------------------------------------------------- ---------------------- -------
Bolivia 50.00 95
------------------------------------------------- ---------------------- -------
Botswana 35.00 65
------------------------------------------------- ---------------------- -------
Brazil 25.00 25
------------------------------------------------- ---------------------- -------
Bulgaria 50.00 100
------------------------------------------------- ---------------------- -------
Canada 2.00 15
------------------------------------------------- ---------------------- -------
Chile 25.00 70
------------------------------------------------- ---------------------- -------
China 20.50 60
------------------------------------------------- ---------------------- -------
Colombia 50.00 135
------------------------------------------------- ---------------------- -------
Costa Rica 15.00 60
------------------------------------------------- ---------------------- -------
Croatia 35.00 65
------------------------------------------------- ---------------------- -------
Cyprus 15.00 45
------------------------------------------------- ---------------------- -------
Czech Republic 23.00 60
------------------------------------------------- ---------------------- -------
Denmark 3.00 50
------------------------------------------------- ---------------------- -------
EASDAQ 7.00 55
------------------------------------------------- ---------------------- -------
Ecuador 55.00 100
------------------------------------------------- ---------------------- -------
Egypt 45.00 120
------------------------------------------------- ---------------------- -------
Estonia 7.00 20
------------------------------------------------- ---------------------- -------
Euro CD's 3.00 30
------------------------------------------------- ---------------------- -------
Euromarket 2.00 15
------------------------------------------------- ---------------------- -------
Finland 5.00 50
------------------------------------------------- ---------------------- -------
France 4.00 50
------------------------------------------------- ---------------------- -------
Germany 2.00 50
------------------------------------------------- ---------------------- -------
29
THE BANK OF NEW YORK
BAAI GLOBAL FEE SCHEDULE
FOR
HIGH YIELD PORTFOLIO
INTERNATIONAL BOND PORTFOLIO
--------------------------------------------------------------------------------
Ghana 35.00 70
------------------------------------------------- ---------------------- -------
Greece 30.00 145
------------------------------------------------- ---------------------- -------
Hong Kong 5.00 75
------------------------------------------------- ---------------------- -------
Hungary 50.00 175
------------------------------------------------- ---------------------- -------
Iceland 60.00 175
------------------------------------------------- ---------------------- -------
India 50.00 175
------------------------------------------------- ---------------------- -------
Indonesia 8.50 80
------------------------------------------------- ---------------------- -------
Ireland 3.50 45
------------------------------------------------- ---------------------- -------
Israel 35.00 55
------------------------------------------------- ---------------------- -------
Italy 4.00 50
------------------------------------------------- ---------------------- -------
Ivory Coast 40.00 155
------------------------------------------------- ---------------------- -------
Jamaica 35.00 50
------------------------------------------------- ---------------------- -------
Japan (bonds) 3.00 10
------------------------------------------------- ---------------------- -------
Japan (equities) 3.00 10
------------------------------------------------- ---------------------- -------
Jordan 45.00 140
------------------------------------------------- ---------------------- -------
Kazakhstan (T Bills) 35.00 140
------------------------------------------------- ---------------------- -------
Kazakhstan (Equities) 55.00 65
------------------------------------------------- ---------------------- -------
Kenya 35.00 65
------------------------------------------------- ---------------------- -------
Latvia (equities/bonds) 30.00 75
------------------------------------------------- ---------------------- -------
Latvia Gov't Bonds 15.00 75
------------------------------------------------- ---------------------- -------
Lebanon 25.00 90
------------------------------------------------- ---------------------- -------
Lithuania 20.00 50
------------------------------------------------- ---------------------- -------
Luxembourg 5.00 50
------------------------------------------------- ---------------------- -------
Malaysia 8.50 80
------------------------------------------------- ---------------------- -------
Malta 18.00 50
------------------------------------------------- ---------------------- -------
Mauritius** 60.00 175
------------------------------------------------- ---------------------- -------
Mexico 10.00 25
------------------------------------------------- ---------------------- -------
Morocco 35.00 110
------------------------------------------------- ---------------------- -------
Namibia 35.00 65
------------------------------------------------- ---------------------- -------
Netherlands 5.00 35
------------------------------------------------- ---------------------- -------
New Zealand 3.50 65
------------------------------------------------- ---------------------- -------
Nigeria 35.00 65
------------------------------------------------- ---------------------- -------
Norway 3.00 80
------------------------------------------------- ---------------------- -------
Oman 60.00 175
------------------------------------------------- ---------------------- -------
Pakistan 40.00 150
------------------------------------------------- ---------------------- -------
30
THE BANK OF NEW YORK
BAAI GLOBAL FEE SCHEDULE
FOR
HIGH YIELD PORTFOLIO
INTERNATIONAL BOND PORTFOLIO
--------------------------------------------------------------------------------
Panama 65.00 85
------------------------------------------------- ---------------------- -------
Peru 45.00 120
------------------------------------------------- ---------------------- -------
Philippines 8.50 80
------------------------------------------------- ---------------------- -------
Poland 35.00 125
------------------------------------------------- ---------------------- -------
Portugal 5.00 80
------------------------------------------------- ---------------------- -------
Romania 35.00 100
------------------------------------------------- ---------------------- -------
Russia Equities 45.00 175
------------------------------------------------- ---------------------- -------
Russia (Min. Fin Bonds 10.00 100
------------------------------------------------- ---------------------- -------
Singapore 5.00 80
------------------------------------------------- ---------------------- -------
Slovak Republic 35.00 150
------------------------------------------------- ---------------------- -------
Slovenia 25.00 110
------------------------------------------------- ---------------------- -------
South Africa 1.50 35
------------------------------------------------- ---------------------- -------
South Korea 12.00 25
------------------------------------------------- ---------------------- -------
Spain 5.00 50
------------------------------------------------- ---------------------- -------
Sri Lanka 20.00 70
------------------------------------------------- ---------------------- -------
Swaziland 35.00 65
------------------------------------------------- ---------------------- -------
Sweden 3.00 50
------------------------------------------------- ---------------------- -------
Switzerland 3.00 50
------------------------------------------------- ---------------------- -------
Taiwan 8.50 80
------------------------------------------------- ---------------------- -------
Thailand 5.00 45
------------------------------------------------- ---------------------- -------
Trinidad & Tobago 40.00 75
------------------------------------------------- ---------------------- -------
Tunisia 40.00 45
------------------------------------------------- ---------------------- -------
Turkey 12.00 75
------------------------------------------------- ---------------------- -------
Ukraine 30.00 45
------------------------------------------------- ---------------------- -------
United Kingdom 0.75 25
------------------------------------------------- ---------------------- -------
United Kingdom (gilts) 3.50 50
------------------------------------------------- ---------------------- -------
United States See below 7
------------------------------------------------- ---------------------- -------
Uruguay 50.00 65
------------------------------------------------- ---------------------- -------
Venezuela 25.00 80
------------------------------------------------- ---------------------- -------
Zambia 35.00 70
------------------------------------------------- ---------------------- -------
Zimbabwe 35.00 65
------------------------------------------------- ---------------------- -------
3/4ths of one basis point per annum on the aggregate net assets of all Nation
Non-Money Market Funds up to $10 billion.
31
1/2 of one basis point on the excess.
*Fee expressed in basis points per fund, per annum is calculated based upon
month end market value.
Other Charges
-------------
$5 Bank Official Check
$2 Money Transfers in/out of the fund's custodian account not related to
securities transactions.
Third Party Foreign Exchange Settlements
----------------------------------------
$10 per transaction/money movement
00
XXX XXXX XX XXX XXXX
BAAI GLOBAL FEE SCHEDULE
FOR
HIGH YIELD PORTFOLIO
INTERNATIONAL BOND PORTFOLIO
Minimum charges imposed by Agent Banks/Local Administrators
-----------------------------------------------------------
Brazil - 15 basis points for annual administrative charges
Chile - USD $17,500 - $20,000 per annum minimum administration charge
Colombia - USD $600 per month minimum administration charge
Ecuador - USD $800 monthly minimum per relationship
Egypt - USD $400 monthly minimum per relationship
Additional Charges
------------------
Charges incurred by The Bank of New York for local taxes, stamp duties or other
local duties and assessments stock exchange fees, postage and insurance for
shipping, extraordinary telecommunication fees or other unusual expenses which
are unique to a country in which our clients is investing will be in addition to
the stated fees.
33
SCHEDULE IV
OVERDRAFT RATE
34
