AMENDED AND RESTATED CUSTODY AGREEMENT
THIS AGREEMENT is made as of the 2nd day of July, 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
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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, by a Custody Agreement made as of the 21st day of
May, 1999 (the "Original Custody Agreement") Master Trust retained Custodian to
serve as custodian for Master Trust, on behalf of its portfolios listed on
Schedule I (individually a "Master Portfolio" and collectively the "Master
Portfolios") and to provide the services described therein, and Custodian agreed
to serve and to provide such services; and
WHEREAS, Master Trust and Custodian desire to amend and
restate the Original Custody Agreement in a single agreement (hereinafter the
"Agreement");
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) votes 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 Master Portfolios
of Master Trust;
(c) Master Trust's current registration statement on Form N-1A
(the "Registration Statement") under the 1940 Act (File No.
811-09347), as filed with the Securities and Exchange
Commission (the "SEC"), relating to the Master Portfolios'
shares of beneficial interest, without par value (the
"Shares");
(d) the current prospectus(es) and statement(s) of additional
information of each of the Master Portfolios, including all
amendments and supplements thereto (collectively 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.
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(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").
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(c) "Composite Currency Unit". Shall mean the European
Currency Unit or any other composite unit consisting of the aggregate of
specified amounts of specified Currencies as such unit may be constituted
from time to time.
(d) "Currency". Shall mean money denominated in a lawful
currency of any country or the European Currency Unit.
(e) "FX Transaction". Shall mean any transaction for the
purchase by one party of an agreed amount in one Currency against the sale by it
to the other party of an agreed amount in another Currency.
(f) "Instructions". Shall mean instruction communications
transmitted by 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.
(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 not include any Eligible Securities Depository as
defined in Paragraph 27B hereof and shall mean The Depository Trust Company, a
clearing agency
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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
vote 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
Master 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 Master Portfolio or in the
name of a nominee of a Master 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.
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.
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6. Receipt and Disbursement of Money.
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(a) Custodian shall open and maintain a custody account for each Master
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 Master Portfolios. Custodian shall make
payments of cash to, or for the account of, each Master Portfolio from such cash
only: (i) for the purchase of securities for the Master 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 Master Portfolios under the terms of this
Agreement and, with respect to each Master 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 Master 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
Master Portfolios.
7. Receipt of Securities.
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(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 Master Portfolio, identifiable from those of any
other person, all securities and non-cash property received by it for the Master
Portfolios. All such securities and non-cash property are to be held or disposed
of by Custodian for each Master Portfolio pursuant to the terms of this
Agreement. In the absence of Written Instructions accompanied by a certified
vote 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
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Master 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 Master 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 Master Portfolio during said day. Where securities are
transferred to the account of any Master 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 Master
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 Master 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 Master 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 instruments or
certificates are available, Custodian shall, notwithstanding any provision in
this
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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 Master 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 Master
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 Master 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
Master 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
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way inconsistent with any provision of the Declaration of Trust 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 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 Master
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 Master Portfolio, and promptly advise Master
Trust of such receipt and shall credit such income, as collected, to such Master
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
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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 Master Portfolios and Custodian shall have
no responsibility for fluctuations in exchange rates affecting any such
conversions;
(iii) Endorse and deposit for collection in the name of
Master Trust and each of its Master 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 Master
Portfolio's securities received by the Master 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 Master 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
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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;
(iii) for transfer of securities into the name of the Master
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 Master Portfolios as owners of any
securities may be exercised;
(b) deliver any securities held for any Master 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 Master 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 Master
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 Master
Portfolios;
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(e) subject to Paragraph 25(b) hereof, release securities belonging to
any Master Portfolio to any bank or trust company for the purpose of pledge or
hypothecation to secure any loan incurred by such Master 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 Master Portfolio upon the
exercise of a covered call option written by such Master Portfolio on such
securities;
(g) release and deliver securities owned by a Master Portfolio in
connection with any repurchase agreement entered into on behalf of such Master
Portfolio, but subject to Paragraph 28(m) hereof, only on receipt of payment
therefor; and pay out monies of such Master Portfolio in connection with such
repurchase agreements, but only upon the delivery of the securities;
(h) otherwise transfer, exchange or deliver securities in accordance
with Oral or Written Instructions 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 Master 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 Master Portfolios and Master Trust with the
procedures required by a securities or option exchange, (ii) for the purpose of
compliance by the Master Portfolios and Master Trust with the 1940 Act and
Release No. 10666 or any subsequent release, releases or any other guidance 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.
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(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 Master 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,
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Custodian shall pay to the Master 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 Master 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 a "FCM
Agreement"), pursuant to which the Master Portfolios' margin deposits in any
transactions involving futures contracts and options on futures contracts will
be held by Custodian in accounts (each a "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 a 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 a FCM
Account to the FCM for which Custodian holds such an account may only occur in
accordance with the terms of the FCM Agreement.
14. Purchase of Securities. Promptly after each purchase of securities by
Master Trust on behalf of any Master 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 Master
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
Master Portfolios, 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 M aster Portfolio for which the sale was made. Custodian shall, subject
to Paragraph 28(m) hereof, deliver the securities against payment of the
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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 Master 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.
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(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 Master Portfolio;
(iii) a monthly report of portfolio securities belonging to
each Master Portfolio showing the adjusted average cost of each issue and market
value at the end of such month;
(iv) a monthly report of the cash account of each Master
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.
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(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.
21. Right to Receive Advice.
-----------------------
(a) Advice of Master Portfolio. If Custodian shall be in doubt as to
any action to be taken or omitted by Custodian, it 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.
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(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 shall pay to Custodian, in
addition to reimbursement of its out-of-pocket expenses, such compensation as
may be agreed upon from time to time in writing by 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
Securities Act of 1933 (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', 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 Xxxxxxxxx 00,
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xxxxx, xx 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 Master Portfolio which results in an overdraft because the moneys held by
Custodian in the separate account for such Master Portfolio shall be
insufficient to pay the total amount payable upon a purchase of securities by
such Master 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 Master 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 Master 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
Master Portfolio or in which the Master 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 Master 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 Master 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
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borrowing: (a) the Master Portfolio to which such borrowing relates; (b) the
name of the bank; (c) the amount and terms of the borrowing, which may be set
forth by incorporating by reference an attached promissory note, duly endorsed
by the Master 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 Master 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 Master 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 Master 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 Master 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 Master 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
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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 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 Master 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.
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(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 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 Master Portfolio shall enter into a FX Transaction, the
Master 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 Master Portfolio; (iii) the type and amount of
Currency to be sold by the Master 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
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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 Master 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 Master 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
Master 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 Master Portfolio.
The Master Portfolio shall bear all risks of investing in securities or holding
Currency. Without limiting the foregoing, the Master 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 Master Portfolio of securities or any cash held outside
the Master 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 Master Portfolio for any loss resulting
from any of the foregoing events.
27A. Duties of Custodian with Respect to Property of any Master
-----------------------------------------------------------
Portfolio Held Outside of the United States by a Foreign Sub-Custodian.
-----------------------------------------------------------------------
(a) Custodian is authorized and instructed to employ, as sub-custodian
for each Master Portfolio's Foreign Assets, as defined in Rule 17f-5 under the
1940 Act, Eligible Foreign Custodians as defined in said Rule 17f-5 selected
from time to time by Custodian as the Foreign Custody Manager appointed by
Master Trust's Board of
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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
Master 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 Master
Portfolio the Foreign Assets of such Master 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 Master 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 Master Portfolio
if and to the extent that Master Trust or such Master 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.
(e) Custodian will supply to Master Trust from time to time, as
mutually agreed upon, statements in respect of the Foreign Assets of each Master
Portfolio held by Foreign Sub-Custodians, including but not limited to, an
identification of entities having possession of each Master Portfolio's Foreign
Assets, and advises or notifications of any transfers of Foreign Assets to or
from each custodial account maintained by a Foreign Sub-Custodian for Custodian
on behalf of the Master Portfolio.
(f) Custodian shall transmit promptly to Master Trust all notices,
reports or other written information received pertaining to the Master
Portfolios' Foreign Assets, including without limitation, notices of corporate
action, proxies and proxy solicitation materials.
(g) Notwithstanding any provision of this Agreement to the contrary,
settlement and payment for securities received for the account of Master Trust
or
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any Master Portfolio and delivery of securities maintained for the account of
Master Trust or any Master 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.
(h) 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, unless Custodian has
breached its standard of care set forth in Paragraph 28 hereof, Custodian's sole
responsibility and liability shall be limited to amounts so recovered from the
Foreign Sub-Custodian.
27B. Property of Any Master Portfolio Held Outside of the United
------------------------------------------------------------------
States by a Foreign Depository.
---------------------------------
(a) Custodian is authorized and instructed to employ, and to authorize
any Foreign Sub-Custodian to employ, an Eligible Securities Depository as
defined in Rule 17f-7 under the 1940 Act (the "Rule") to hold foreign securities
and other assets of each Master Portfolio. The use of any particular Eligible
Securities Depository as defined in the Rule shall be authorized by an Officer's
Certificate provided to Custodian specifying, or by delivery of Oral or Written
Instructions contemplating or requiring the use of, such Eligible Securities
Depository. Use of any such Eligible Securities Depository shall be subject to
the rules and procedures of any such Eligible Securities Depository.
(b) Master Trust hereby represents and warrants, which representations
and warranties shall be continuing and shall be deemed to be reaffirmed upon any
delivery of an Officer's Certificate specifying such an Eligible Securities
Depository, or any giving of Oral or Written Instructions contemplating or
requiring the use of a Foreign Depository, as the case may be, that Master Trust
or its investment advisor has determined that the custody arrangements of such
Eligible Securities Depository provide reasonable safeguards against the custody
risks associated with maintaining assets with such Eligible Securities
Depository within the meaning of the Rule.
(c) With respect to each Eligible Securities Depository as defined in
the Rule, Custodian shall exercise reasonable care, prudence, and diligence such
as a person having responsibilities for the safekeeping of the Master
Portfolio's Foreign Assets would exercise in (i) providing the Master Portfolio
and its investment adviser with an analysis of the custody risks associated with
maintaining assets with the Foreign Depository, and (ii) monitoring such custody
risks on a continuing basis and promptly notifying the Master Portfolio and its
investment adviser of any material change in such
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risks. Custodian shall also provide to a Master Portfolio with respect to the
status of an institution as an Eligible Securities Depository information
gathered from Foreign Sub-Custodians or trade associations of which Custodian is
a member and other publicly available information obtained by Custodian. The
Master Portfolio acknowledges and agrees that such analysis and monitoring shall
not include any evaluation of Country Risks. Custodian will endeavor to include
in its analysis and monitoring, where appropriate among other things, a Foreign
Depository's expertise and market reputation, the quality of its services, its
financial strength, any insurance or indemnification arrangements, the extent
and quality of regulation and independent examination of the depository, its
standing in published ratings, its internal controls and other procedures for
safeguarding investments, and any related legal protections. As used herein the
term "Country Risks" shall mean with respect to any Foreign Depository: (a) the
financial infrastructure of the country in which it is organized, but not of any
Foreign Depository to the extent covered by an analysis described in clause (i)
of this Section, (b) such country's prevailing settlement practices, (c)
nationalization, expropriation or other governmental actions, (d) such country's
regulation of the banking or securities industry, (e) currency controls,
restrictions, devaluations or fluctuations, and (f) market conditions which
affect the order execution of securities transactions or affect the value of
securities.
(d) With respect to any losses or damages arising out of or relating to
any actions or omissions of any Eligible Securities Depository as defined in the
Rule, 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 Eligible Securities Depository. It is expressly understood
and agreed that, unless Custodian has breached its standard of care set forth in
Paragraph 28 hereof, Custodian's sole responsibility and liability shall be
limited to amounts so recovered from the Eligible Securities Depository.
28. Concerning Custodian.
--------------------
(a) (i) Custodian shall exercise reasonable care, prudence, 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.
(ii) Without limiting the generality of the foregoing or any other
provision of this Agreement, in no event shall Custodian be liable to the Master
Portfolio or any third party nor, except as otherwise provided in this
subparagraph for
-23-
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
-24-
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 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 Master 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 Master 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
Master 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 Master Portfolios, or whether such segregated
-25-
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 Master Portfolio of any variation margin
payment or similar payment which the Master 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
Master Portfolio of Custodian's receipt or non-receipt of any such payment.
(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 Master 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.
-26-
(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 Master 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 Master Portfolio are such as properly may be held by Master Trust
or such Master Portfolio under the provisions of its Prospectus, or (ii) to
ascertain whether any transactions by the Master Portfolio, whether or not
involving Custodian, are such transactions as may properly be engaged in by the
Master Portfolio.
(i) Custodian shall charge its compensation and any expenses with
respect to the Master Portfolios of Master Trust incurred by Custodian in the
performance of its duties under this Agreement only against the money of the
Master Portfolio or Master 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 Master 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
Master Portfolio or Master 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 Master Portfolio such Master Portfolio's pro rata share
(based on such Master Portfolio's net asset value at the time of the charge in
proportion to the aggregate net asset value of all Master 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
-27-
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 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 Master 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 Master 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
-28-
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's Secretary, 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 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 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
-29-
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.
-30-
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/ A. Xxx Xxxxxx
--------------------
A. Xxx Xxxxxx
President and Chairman of the Board of
Trustees
THE BANK OF NEW YORK
By: /s/ Xxx Xxxxxx
----------------
Xxx Xxxxxx
Vice President
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SCHEDULE I
----------
The Custody Agreement between Nations Master Investment Trust and
Sub-Custodian applies to the following Master Portfolios of Master Trust:
Nations Intermediate Bond Master Portfolio
Nations Blue Chip Master Portfolio
Nations International Equity Master Portfolio
Nations Xxxxxxx Focused Equities Master Portfolio
Nations Xxxxxxx Growth & Income Master Portfolio
Nations International Value Master Portfolio
Nations High Yield Bond Master Portfolio
Nations Xxxxxxx 21st Century Master Portfolio
Nations Xxxxxxx International Opportunities Master Portfolio
Approved: May 23, 2001
-32-
SCHEDULE II
-----------
PUBLICATIONS
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
New York Times
Standard & Poor's Called Bond Record
Wall Street Journal
-33-
SCHEDULE III
------------
Domestic Custodian Fee Schedule
For
Nations Master Investment Trust
Safekeeping/Income Collection/Reporting/DTC-ID Affirmation
All Systems Development and Usage Charges
-----------------------------------------
3/4ths of one basis point per annum on the aggregate
net assets of all Nations' Non-Money Market Funds up to
$10 billion.
1/2 of a basis point on the excess.
Security Transaction Charges/Paydowns
-------------------------------------
$ 5 Paydowns
$ 7 DTC/FRB/PTC
$ 15 Physicals, options, and futures
$ 40 Euro C/D's
Other Charges
-------------
$ 5 Bank official checks
$ 2 Money transfer in/out of the Fund's custodian account not
related to securities transactions.
Earnings Credits on Balances/Interest on Overdrafts
---------------------------------------------------
Earnings credits are provided to each Fund on 80% of the daily balance in the
domestic custodian account computed at the 90-day T-xxxx rate on the day of the
balance. Overdrafts, excluding bank errors, will cause a reduction of earnings
credits daily, computed at 1% above the average Federal Funds rate on the day of
the overdraft. Credits and debits will be accumulated daily and offset monthly
against the Bank's domestic custodian fees. To the extent a net debit is
accumulated, each Fund will be billed for the expense. To the extent a net
earnings credit is generated, such excess earnings credit can be carried forward
to the next succeeding month. However, no earnings credit will be carried
forward after year-end.
-34-
Domestic Custodian Fee Schedule
For
Nations Master Investment Trust
Out-of-Pocket Expenses
----------------------
None.
Billing Cycle
-------------
The above fees are billed monthly.
Nations Master Investment Trust The Bank of New York
------------------------------- --------------------
Approved by: /s/ A. Xxx Xxxxxx Approved by: /s/ Xxx Xxxxxx
------------------- ----------------
A. Xxx Xxxxxx
President and Chairman of Xxx Xxxxxx
the Board of Trustees
Date: July 2, 2001 Vice President
Customer Contact
----------------
Portfolio trades are coordinated by a dedicated administrative group
reacting to instructions from your authorized persons.
The group consists of a senior officer in charge, administrators
assigned based on activity and complexity and ample backup on hand to
ensure responsiveness to your needs.
Safekeeping of Securities
-------------------------
We are a direct member of all major depositor systems, i.e., Depository
Trust Company, Federal Reserve Book Entry, Participants Trust Company,
etc.
Agreements are in place with sub-custodians for book-entry municipal
bond programs.
Arrangements have been completed for numerous multi-party repurchase
transactions.
Vault Operations are constantly monitored via closed-circuit security
systems.
-35-
Options/Futures
---------------
Issue escrow or depository receipts.
Collect premiums and effect closing purchase transactions for covered
call options.
Issue guarantee letters for put options.
Agreements are in place with numerous Futures Commission Merchants
(FCMs), to settle transactions and service maintenance margin
requirements.
Segregated accounts are maintained to comply with collateral agreements
with contra-brokers.
Income Collection/Paydowns
--------------------------
Dividends and interest due to the account are pre-posted on the payable
date.
Proceeds from maturing securities are credited on the redemption date.
Paydowns on GNMA, FNMA, FHLMC, and CMOs are posted on payable date and
credited in Federal Funds on the business day after payable date when
the factor is available (95% of issues held).
Securities requiring registration are held in our nominee name to
facilitate both sales and income collection.
Reports
-------
The following reports are provided to allow your staff to monitor
portfolio cash and security transactions:
Daily Custodian Account Journal includes portfolio and cash
transactions of the previous business day.
Cash Balance Projection Report includes all trades reported to us that
have not settled through the previous business day. Pending dividends,
interest, maturities and called bonds are also listed on this report.
Daily report of affirmed/unaffirmed trades.
List of Assets reflects securities and cash held in the custodian
account available daily, weekly, monthly, etc.
-36-
Monthly Cash Statement - summary of all Daily Custodian Account Journal
activity for the previous month.
Workstation
-----------
Our workstation will afford you the ability to review, edit, enter, and
transmit all trade settlement instructions to the Bank for processing.
Easily accessed via a PC, using a local telephone number, it increases
your flexibility to input and retrieve information while significantly
reducing your communication costs. The system is accessible 24 hours a
day, 7 days a week.
Our Cash Management Report is another of our on-line systems
capabilities providing real-time settlement data regarding the current
day's activity in your account. The activity would include pending and
settled trades, income, paydowns and maturity payments as well as cash
balances. This information puts effective cash management in your
hands.
Another of our dynamic on-line systems is called Q-TRAK. This on-line
module of our system can be used to notify the bank of any inquiries
regarding securities related problems. You can use Q-TRAK to route your
inquiries directly to your Custody Administrative Team. Q-TRAK allows
for prioritization of each inquiry and response, and permits you to
monitor progress on each item as it is being researched. Many of the
Bank's clients have found Q-TRAK to be an excellent tool in achieving
timely resolutions to their questions.
General Servicing
-----------------
Prompt notification of corporate actions.
Corporate literature directly forwarded upon receipt.
Proxies for securities held in our nominee are executed and forwarded
to the Fund for voting.
Payment of your authorized corporate expenses.
-37-
SCHEDULE IV
-----------
OVERDRAFT RATE
-38-
