EXHIBIT 23(h)4
SUB-ADMINISTRATION AGREEMENT
This SUB-ADMINISTRATION AGREEMENT (the "Agreement") is made as of
January 1, 2003 by and among THE BANK OF NEW YORK ("BNY"), BACAP Distributors,
LLC ("BACAP Distributors") and NATIONS MASTER INVESTMENT TRUST ("Master
Trust").
WHEREAS, Master Trust is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act");
WHEREAS, BACAP Distributors serves as the Administrator for the
investment portfolios of Master Trust pursuant to a separate Administration
Agreement; and
WHEREAS, BACAP Distributors desires to retain BNY to render certain
sub-administrative and other services to Master Trust and to BACAP
Distributors, as Administrator of Master Trust, and BNY is willing to render
such services.
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. Appointment and Duties as Sub-Administrator.
(a) BACAP Distributors hereby appoints BNY to act as
Sub-Administrator of Master Trust and to render sub-administrative services for
each portfolio of Master Trust listed on Schedule I (individually, a
"Portfolio" and collectively, the "Portfolios") and BNY hereby accepts such
appointment and agrees to render the services and duties set forth in Schedule
II as it may be amended from time to time, for the compensation and on the
terms herein provided. Each new investment portfolio established in the future
by Master Trust or BACAP Distributors will become a "Portfolio" for all
purposes hereunder when BNY receives a revised Schedule I from BACAP
Distributors or Master Trust that includes such new portfolio.
(b) Subject to the other provisions of this Section 1, in
performing all services under this Agreement, BNY shall (i) act in conformity
with Master Trust's Declaration of Trust and Bylaws (the "Bylaws"), the 1940
Act and the rules thereunder, including but not limited to Rules 31a-1 to
31a-3, and other applicable laws and regulations, as the same may be amended
from time to time, and Master Trust's Registration Statement, as such
Registration Statement may be amended from time to time; (ii) consult and
coordinate with BACAP Distributors and Master Trust, as necessary and
appropriate; and (iii) advise and report to BACAP Distributors and Master
Trust, as necessary or appropriate, with respect to any compliance matters that
come to its attention. In performing all services under this Agreement BNY
shall meet the minimum quality of service standards set forth on Schedule III.
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(c) Master Trust has furnished BNY and BACAP Distributors with
copies properly certified or authenticated of each of the following: (i) Master
Trust's Declaration of Trust or other organizational document and all
amendments thereto (the "Declaration"); (ii) Master Trust's Bylaws; (iii)
resolutions of Master Trust's Board of Trustees or other governing body (the
"Board") authorizing the execution, delivery and performance of this Agreement
by Master Trust; (iv) Master Trust's most recent Post-Effective Amendment to
its 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 interests in the Portfolios (the
"Interests"); (iv) the Portfolios' current Prospectus(es); (v) the Portfolios'
current Statement(s) of Additional Information; and (vi) the pricing procedures
applicable to the calculation of the Portfolios' net asset values as approved
by Master Trust's Board (the "Pricing Procedures"). It is solely Master Trust's
responsibility to furnish BNY from time to time with copies, properly certified
or authenticated, of all amendments of or supplements to the foregoing, and BNY
will not be held to have knowledge of any such amendments or supplements until
the same are actually received by BNY. Furthermore, Master Trust will provide
BNY with any other documents that BNY and BACAP Distributors may reasonably
request and will notify BNY and BACAP Distributors as soon as possible of any
matter materially affecting either BNY's or BACAP Distributors' performance of
its services under this Agreement.
(d) Subject to the direction and approval of Master Trust's Board
and appropriate officers and the provisions of this Agreement, BNY shall provide
to each Portfolio the administrative services set forth on Schedule II attached
hereto. In performing such services hereunder, BNY shall provide, at its
expense, office space, facilities, equipment and personnel. BNY shall not
provide any services relating to the management, investment advisory or
sub-advisory functions of any Portfolio, distribution of Interests of any
Portfolio, maintenance of any Portfolio's financial records (except as otherwise
agreed by the parties) or any services normally performed by the Portfolios'
counsel or independent accountants. Upon receipt of Master Trust's prior written
consent, BNY may delegate any of its duties and obligations hereunder to any
delegee or agent whenever and on such terms and conditions as it deems necessary
or appropriate. Unless expressly agreed in writing, BNY shall not be relieved of
liability or responsibility for the performance of any duties or obligations
delegated to a delegee or agent, provided that BNY shall have no liability for
duties or obligations that are delegated to a delegee or agent at the
instruction of Master Trust or BACAP Distributors. Master Trust and BACAP
Distributors shall cause their respective officers, and shall use reasonable
efforts to cause Master Trust's or BACAP Distributors' legal counsel and
independent accountants to cooperate with BNY and to provide BNY, upon BNY's
reasonable written request, such information, documents and advice relating to
such Portfolio as is within the possession or knowledge of such persons, in
order to enable BNY to perform its duties hereunder. Such cooperation or
provision of information, documents or advice shall be at no cost to BNY,
provided BNY's request is reasonable and BACAP Distributors shall have been
notified of the request. In connection with its duties hereunder, BNY shall be
entitled to reasonably rely upon any documents relating to a Portfolio provided
to BNY by any of the aforementioned persons. BNY may apply to Master Trust or
BACAP Distributors for written instructions with respect to any matter arising
in connection with BNY's performance hereunder. If, after a reasonable period of
time, BNY receives no response to any such application, BNY may then notify
Master Trust or BACAP
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Distributors of reasonable action that BNY shall take if written instructions
are not received within a stated period of time after such notice, and then BNY
shall not be liable for taking such reasonable action as if written instructions
had been provided. BNY is entitled to reasonably rely and act in accordance with
written instructions believed to have been given by authorized persons and shall
incur no costs for such reasonable reliance. BNY shall have no duties or
responsibilities whatsoever except such duties and responsibilities as are
specifically set forth in this Agreement and Schedule II hereto, and no covenant
or obligation shall be implied against BNY in connection with this Agreement.
(e) Master Trust and BACAP Distributors, for itself and not for
the others, hereby represents and warrants to BNY, which representations and
warranties shall be deemed to be continuing, that: (i) it is duly organized and
existing under the laws of the jurisdiction of its organization, with full
power to carry on its business as now conducted, to enter into this Agreement
and to perform its obligations hereunder; (ii) this Agreement has been duly
authorized, executed and delivered by it in accordance with all requisite
action and constitutes a valid and legally binding obligation, enforceable in
accordance with its terms; (iii) it is conducting its business substantially in
compliance with all applicable laws and regulations, both state and federal,
and has obtained all regulatory licenses, approvals and consents necessary to
carry on its business as now conducted; (iv) there is no statute, regulation,
rule, order or judgment binding on it and no provision of its Declaration or
Bylaws, nor of any mortgage, indenture, credit agreement or other contract
binding on it or affecting its property which would prohibit its execution or
performance of this Agreement; and (v) Master Trust and BACAP Distributors will
use reasonable efforts to promptly notify BNY of any errors or omissions
contained in any reports, calculations, valuations and other items of
information, provided that any failure by Master Trust or BACAP Distributors to
detect any such errors or omissions shall not relieve BNY of any resulting
liability therefrom. To the extent that BACAP Distributors has actual knowledge
of any such error or omission and fails to use reasonable efforts to promptly
notify BNY, BNY shall be relieved of any liability that BNY may have mitigated
had BACAP Distributors provided notice of such error or omission to BNY.
(f) BNY hereby represents and warrants to Master Trust and BACAP
Distributors, which representations and warranties shall be deemed to be
continuing, that: (i) it is duly organized and existing under the laws of the
jurisdiction of its organization, with full power to carry on its business as
now conducted, to enter into this Agreement and to perform its obligations
hereunder; (ii) this Agreement has been duly authorized, executed and delivered
by it in accordance with all requisite action and constitutes a valid and
legally binding obligation, enforceable in accordance with its terms; and (iii)
it is conducting its business substantially in compliance with all applicable
laws and regulations, both state and federal, and has obtained all regulatory
licenses, approvals and consents necessary to carry on its business as now
conducted; there is no statute, regulation, rule, order or judgment binding on
it and no provision of its Declaration or Bylaws, nor of any mortgage,
indenture, credit agreement or other contract binding on it or affecting its
property which would prohibit its execution or performance of this Agreement.
2. Compensation. For the services to be rendered, the facilities
to be furnished and the compensation and other expenses to be borne by BNY, as
provided for in this Agreement,
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BNY shall be entitled to receive a monthly fee from BACAP Distributors and
reimbursement for out-of-pocket expenses as set forth in Schedule IV to this
Agreement. It is understood that BACAP Distributors shall be responsible for
BNY's monthly fee for its services hereunder, and BNY agrees that it shall have
no claim against Master Trust or the Portfolios with respect to compensation
under this Agreement.
3. Recordkeeping. BNY shall, as agent for Master Trust, and
subject to the direction and approval of Master Trust's Board and the
provisions of this Agreement, maintain and keep current the books, accounts and
other documents, if any, pursuant to the services and duties provided by BNY as
set forth in Schedule II of this Agreement, and preserve any such books,
accounts and other documents in accordance with the applicable provisions of
Rule 31a-2 of the 1940 Act. Such books, accounts and other documents shall be
made available upon reasonable request for inspection by officers, employees
and auditors of Master Trust and BACAP Distributors during BNY's normal
business hours. All records maintained and preserved by BNY pursuant to this
Agreement which Master Trust is required to maintain and preserve in accordance
with Rule 31a-2 of the 1940 Act shall be and remain the property of Master
Trust and shall be surrendered to Master Trust promptly upon request in the
form in which such records have been maintained and preserved. Upon reasonable
request of Master Trust, BNY shall provide in data files or hard copy,
whichever Master Trust shall reasonably elect, any records included in any such
delivery which are maintained by BNY on a computer disc, or are similarly
maintained, and Master Trust shall reimburse BNY for its expenses of providing
such hard copy.
4. Standard of Care; Indemnification.
(a) BNY shall at all times act in good faith and agrees to use
its best efforts to fulfill its obligations under this Agreement, but assumes
no responsibility for loss or damage to Master Trust unless such loss or damage
is caused by BNY's own negligence, bad faith or willful misconduct or that of
its directors, officers or employees. BNY shall be responsible hereunder for
all direct damages resulting from its own negligence, bad faith or willful
misconduct, provided however that it shall not be responsible for lost profits
or lost business arising under or in connection with this Agreement. It is
understood and agreed that for purposes of this Section 4(a), "direct damages"
shall include, but shall not be limited to, all legal costs, penalties,
reimbursement for excess distribution and redemption payments, repurchasing
costs for servicing agents and reimbursement to the Portfolios for net asset
value breaks (as calculated under the Pricing Procedures).
(b) Master Trust, on behalf of each Portfolio, will indemnify BNY
against and hold it harmless from any and all losses, claims, damages,
liabilities or expenses (including reasonable counsel fees and expenses of a
defense against any claim, demand, action or suit), relating to the particular
Portfolio and arising from any one or more of the following: (i) errors in
records or instructions, explanations, information, specifications or
documentation of any kind, as the case may be, supplied to BNY by any person
described in Section 1 hereof or by any third party described in Section 5;
(ii) action or inaction taken or omitted to be taken by BNY pursuant to written
or oral instructions described in this Agreement (or otherwise without bad
faith, negligence or willful misconduct); (iii) any action taken or omitted to
be taken by BNY in good faith in accordance with the advice or opinion of
counsel for a Portfolio, Master Trust, BACAP
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Distributors (obtained in accordance with the procedures set forth in this
Agreement) or its own counsel; (iv) any improper use by the Portfolio, Master
Trust, BACAP Distributors or their respective agents, of any valuations or
computations supplied by BNY pursuant to this Agreement; (v) the method of
valuation of the securities and the method of computing a Portfolio's net asset
value or any other amount computed by BNY hereunder, provided BNY has followed
the Pricing Procedures; and (vi) any valuation of securities, net asset value
or other amount provided by a Portfolio or BACAP Distributors. BNY will not
confess any claim or settle or make any compromise in any instance in which
Master Trust will be asked to provide indemnification, except with Master
Trust's prior written consent. Any amounts payable by Master Trust under this
Section 4(b) shall be satisfied only against the assets of the Portfolio
involved in the claim, demand, action or suit and not against the assets of any
other investment portfolio of Master Trust.
5. Portfolio Accounting and Other Services.
(a) BNY, in performing the services required of it under the
terms of this Agreement, shall be entitled to rely fully on the accuracy and
validity of any and all instructions, explanations, information, specifications
and documentation furnished to it by a Portfolio and shall have no duty or
obligation to review the accuracy, validity or propriety of such instructions,
explanations, information, specifications or documentation, including, without
limitation, evaluations of securities; the amounts or formula for calculating
the amounts and times of accrual of a Portfolio's liabilities and expenses; the
amounts receivable and the amounts payable on the sale or purchase of
securities; and amounts receivable or amounts payable for the sale or
redemption of Portfolio Interests effected by or on behalf of the Portfolio. In
the event BNY's computations hereunder rely, in whole or in part, upon
information, including, without limitation, bid, offer or market values of
securities or other assets, or accruals of interest or earnings thereon, from a
pricing or similar service utilized, or subscribed to, by BNY which BNY in its
judgment deems reliable, or any other third party pricing source designated by
Master Trust, BNY shall not be responsible for, under any duty to inquire into,
or deemed to make any assurances with respect to, the accuracy or completeness
of such information. BNY shall not be required to inquire into any valuation of
securities or other assets by the Portfolio or any third party described in
this Section, even though BNY in performing services similar to the services
provided pursuant to this Agreement for others may receive different valuations
of the same or different securities of the same issuers.
(b) Subject to the provisions of this Agreement and the direction
and approval of Master Trust's Board, BNY shall perform the computations
described in Schedule II at such times and dates and in the manner specified or
described in the then-current Prospectus(es) of a Portfolio. To the extent
valuation of securities or a computation specified or described in a
Portfolio's Pricing Procedures or then-current effective Prospectus is at any
time inconsistent with any applicable laws or regulations, Master Trust or
BACAP Distributors shall immediately so notify BNY in writing and thereafter
shall furnish BNY at all appropriate times with the values of such securities
and such Portfolio's net asset value or other amounts otherwise to be
calculated by BNY, or, subject to the prior approval of BNY, instruct BNY in
writing to value securities and make such computations in a manner which Master
Trust or BACAP Distributors then represents in writing to be consistent with all
applicable laws and regulations. Master Trust
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or BACAP Distributors may also from time to time, subject to the prior approval
of BNY, instruct BNY in writing to make computations other than as specified in
this Section of this Agreement. By giving such instruction, Master Trust or
BACAP Distributors shall be deemed to have represented that such instruction is
consistent with all applicable laws and regulations and the then-current
effective Prospectus of the particular Portfolio. Master Trust or BACAP
Distributors shall have sole responsibility for determining the method of
valuation of securities and the method of computations, and all computations,
valuation of securities and the method of computing each Portfolio's net asset
value shall be subject to approval by Master Trust and BACAP Distributors. BNY
shall not be liable for relying on any price provided by any pricing service
believed by BNY to be reliable, and Master Trust or BACAP Distributors shall
furnish values when the same are not available from a pricing service utilized
by BNY, with such furnishing to constitute an instruction to BNY to rely on the
provided values.
(c) BNY shall be responsible for determining and properly
reflecting in the computations made by it under this Agreement: (i) the taxable
nature of any distribution or amount received or deemed received by, or payable
to, a Portfolio; (ii) the taxable nature or effect on a Portfolio or its
shareholders of any corporate actions, class actions, tax reclaims, tax
refunds, or similar events; (iii) the taxable nature or taxable amount of any
distribution or dividend paid, payable or deemed paid, by a Portfolio to its
shareholders; (iv) the effect under any federal, state, or foreign income tax
laws of a Portfolio making or not making any distribution or dividend payment,
or any election with respect thereto; or (v) any tax accounting; provided,
however, that if BNY is not certain of the taxable nature, amount or effect of
any such item, it may seek instructions regarding the proper treatment of such
item from Master Trust or BACAP Distributors in accordance with the procedures
set forth in Section 1(e), above, and shall have no liability for acting in
reliance on such instructions.
6. Termination of Agreement.
(a) This Agreement shall become effective as of the date first
set forth above and shall remain in full force and effect unless terminated
pursuant to the provisions of Section 6(b).
(b) This Agreement may be terminated at any time without payment
of any penalty, upon 60 days' written notice to BNY by BACAP Distributors or by
vote of the Board of Master Trust; or upon 180 days' written notice to BACAP
Distributors and Master Trust by BNY. Upon any such termination, BNY will
cooperate with and assist Master Trust, BACAP Distributors, their agents and
any successor administrator(s) or sub-administrator(s) in the
substitution/conversion process. In connection with any termination of this
Agreement, unless BNY is in breach of this Agreement, the Portfolios and BACAP
Distributors agree to pay BNY any compensation and reimbursement for
out-of-pocket expenses as may then be due and payable, as well as agreed-upon
out-of-pocket expenses incurred in connection with a termination. If BNY is in
breach of this Agreement, the Portfolios and BACAP Distributors may offset any
compensation or reimbursement amounts owed to BNY by the amount of damages,
costs and expenses incurred as a result of BNY's breach, including costs,
expenses and reasonable incremental fees for a period not to exceed one year
incurred in connection with a conversion by Master Trust and BACAP Distributors
to a successor service provider. In the
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event of a dispute as to the amount of such damages, the Portfolios and BACAP
Distributors agree to escrow the set-off amount.
(c) Sections 4 and 8 shall survive this Agreement's termination.
7. Amendments. Except as expressly provided in the first
paragraph of Section 1, no provision of this Agreement may be amended or
modified orally, but only by an instrument in writing signed by the party
against which enforcement of the amendment or modification is sought.
8. Confidentiality. All books, records, information and data
pertaining to the business of Master Trust, or its prior, present or potential
shareholders that are exchanged or received in connection with the performance
of BNY's duties under this Agreement shall remain confidential and shall not be
disclosed to any other person, except as specifically authorized by Master
Trust or as may be required by law, and shall not be used for any purpose other
than performance of its responsibilities and duties hereunder, and except that
BNY retains the right to disclose matters subject to confidentiality to its
examiners, regulators, internal or external auditors, its accountants, its
internal and external counsel, and to any other entity whenever it is advised
by its internal or external counsel that it is reasonably likely that BNY would
be liable for a failure to do so. BNY will endeavor to provide written notice
to Master Trust and BACAP Distributors at least five business days prior to any
disclosures pursuant to this Section 8, but, provided it shall have provided as
much notice as is reasonably practicable under the circumstances, BNY shall
have no liability for any failure to do so.
9. Service to Other Companies. Master Trust and BACAP
Distributors acknowledge that BNY now provides, will continue to provide and
may in the future provide administrative or other services to other investment
companies or series of investment companies, and Master Trust and BACAP
Distributors have no objection to BNY so doing. Master Trust and BACAP
Distributors further acknowledge that the persons employed by BNY to assist in
the performance of BNY's duties under this Agreement may not devote their full
time to such service and nothing contained in this Agreement shall be deemed to
limit or restrict the right of BNY or any affiliate of BNY to engage in and
devote time and attention to other businesses or to render services of whatever
kind or nature.
10. Miscellaneous.
(a) This Agreement shall be construed in accordance with the laws
of the State of New York, without regard to conflict of laws principles
thereof. Each Portfolio, Master Trust and BACAP Distributors hereby consent to
the jurisdiction of a state or federal court situated in New York City, New
York in connection with any dispute arising hereunder. To the extent that in
any such jurisdiction any of the aforementioned persons may now or hereafter be
entitled to claim, for itself or its assets, immunity from suit, execution,
attachment (before or after judgment) or other legal process, each irrevocably
agrees not to claim, and it hereby waives, such immunity.
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(b) In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations shall
not in any way be affected or impaired thereby, and if any provision is
inapplicable to any person or circumstances, it shall nevertheless remain
applicable to all other persons and circumstances.
(c) Each and every right granted to BNY, Master Trust or BACAP
Distributors hereunder or under any other document delivered hereunder or in
connection herewith, or allowed it by law or equity, shall be cumulative and
may be exercised from time to time. No failure on the part of BNY, Master Trust
or BACAP Distributors to exercise, and no delay in exercising, any right will
operate as a waiver thereof, nor will any single or partial exercise by BNY,
Master Trust or BACAP Distributors of any right preclude any other or future
exercise thereof or the exercise of any other right.
(d) BNY shall not be responsible for delays or errors that occur
by reason of circumstances beyond its reasonable control in the performance of
its duties under this Agreement, provided that reasonable back-up and disaster
recovery systems are in place, including, without limitation, labor
difficulties, mechanical breakdowns, computer breakdowns or malfunctions
(hardware or software), flood or catastrophe, acts of God, failures of
transportation, communication or power supply, or other similar circumstances.
Nor shall BNY be responsible for delays or failures to supply the information
or services specified in this Agreement where such delays or failures are
caused by the failure of any person(s) other than BNY to supply any
instructions, explanations, information, specifications or documentation deemed
necessary by BNY in the performance of its duties under this Agreement.
(e) Any notice or other instrument authorized or required by this
Agreement to be given in writing to Master Trust, BNY and/or BACAP Distributors
shall be sufficiently given if addressed to that party and received by it at
its office set forth below or at such other place as it may from time to time
designate in writing.
To Master Trust:
Nations Master Investment Trust
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Secretary
To BACAP Distributors:
BACAP Distributors, LLC
One Bank of America Plaza
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Secretary
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To BNY:
The Bank of New York
00 Xxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Grunston
(f) This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement may not be assigned by BNY, nor may BNY delegate
responsibility for the performance of any of its duties hereunder, without the
written consent of the other parties hereto.
(g) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and which collectively shall be
deemed to constitute only one instrument.
(h) The captions of 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.
(i) This Agreement constitutes the entire agreement between the
parties hereto with respect to the provision by BNY of sub-administrative
services and the receipt of fees therefor, and supersedes all prior
arrangements or understandings, written or oral, with respect to the provision
by BNY of such services and the receipt of fees therefor.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be duly executed and delivered by their duly authorized officers as of the date
first written above.
THE BANK OF NEW YORK
By: /s/ Xxx Xxxxxx
----------------------------
Xxx Xxxxxx
Vice President
BACAP DISTRIBUTORS, LLC
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
Chief Operating Officer
NATIONS MASTER INVESTMENT TRUST
By: /s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx
President
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SCHEDULE I
1. High Yield Portfolio
2. International Bond Portfolio
Approved: November 21, 2002
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SCHEDULE II
PORTFOLIO ADMINISTRATION SERVICES
BNY shall perform the following sub-administrative services, in
addition to any other services agreed to from time to time:
- Monitor and document compliance by the Portfolios with their policies
and restrictions as delineated in their Prospectuses and Statements of
Additional Information, including any supplements or amendments
thereto, and with the rules and regulations under the 1940 Act
utilizing Xxxxxxx River Development's compliance monitoring system or
by such other means as the parties may agree. BACAP Distributors shall
be responsible for communicating such policies and restrictions,
including any changes thereto, to BNY by such means as the parties
agree.
- Provide income attribution summary schedules necessary for year-end
tax reporting. Provide a gross up for foreign taxes on a per share
basis and the redesignation of income and capital gains on a per share
basis.
- Prepare federal, state, excise and local income tax returns for the
Portfolios and file such returns upon the approval of the Portfolios'
independent accountants; monitor, report on and prepare periodic
worksheet and tax provision packages with respect to Sub-Chapter M
qualifications; prepare and file all Form 1099s with respect to the
Portfolios' Trustees; monitor compliance with Section 4982 of the
Internal Revenue Code; calculate and maintain records pertaining to
original issue discount and premium amortization as required; identify
wash sales and all other book/tax differences, and report results to
the Portfolios' independent accountants and Portfolios' management;
and such other duties relating to federal and/or state tax compliance
as the parties may agree. BNY shall be responsible for providing all
pertinent tax information to the Portfolios' independent accountants.
- Prepare Return of Capital Statement of Position 93-2 adjustments.
- Support BACAP Distributors in its preparation of the schedules and
provide BACAP Distributors unaudited quarterly and semi-annual and
audited annual financial statements and schedules of Portfolio
investments by providing, without limitation, each Portfolios'
schedule of investments and general ledger in electronic format and/or
hard copy, as required, and such other information as may be necessary
to complete such financial reports.
- Prepare statistical reports for outside information services
(referenced in Schedule V), and such other information services as the
parties may agree, including the ICI expense survey.
- Prepare calculations for capital gains pursuant to IRS rules in
conjunction with BACAP Distributors and the Portfolios' independent
accountants.
- Attend Portfolio shareholder and Board of Trustees meetings as
requested by BACAP Distributors, including making such presentations
as are appropriate, and, with respect to the
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Portfolio administration services described herein, provide such
periodic and special reports to Master Trust and BACAP Distributors as
Master Trust and BACAP Distributors shall reasonably request.
PORTFOLIO ACCOUNTING AND OTHER SERVICES
BNY shall provide all accounting and recordkeeping services necessary
and appropriate for the business of the Portfolios, including but not limited
to those set forth below.
Required Records; Ledgers and Journals
BNY shall keep current the following accounts and records relating to
the business of the Portfolios, in such form as is required by the 1940 Act and
the rules thereunder, and generally accepted accounting principles, to support
all filings under applicable federal and state tax laws and regulations and as
may be mutually agreed to among Master Trust, BACAP Distributors and BNY, and
shall make available to BACAP Distributors and/or Master Trust upon request:
1. Cash Receipts Journal
2. Cash Disbursements Journal
3. Dividends Paid and Payable Schedule (book vs. tax basis)
4. Purchase and Sales Journals - Portfolio Securities
5. Realized/Unrealized Gain (Loss) Reports
6. Subscription and Redemption Journals
7. Security Ledgers - Transaction Report and Tax Lot Holdings Report
8. Broker Ledger - Commission Report
9. Daily Expense Accruals
10. Daily Interest Accruals
11. Daily Trial Balance
12. Portfolio Interest Receivable and Income Journal
13. Portfolio Dividend Receivable and Income Register
14. Listing of Portfolio Holdings - showing cost, market value and
percentage of portfolio comprised of each security
15. Aged Receivables (dividends, interest, tax reclaiming)
16. Portfolio Turnover Rate
17. Cash reconciliations
18. Position reconciliations
BNY will be responsible for maintaining, in accordance with Section 31
and the rules thereunder of the 1940 Act, all books and records so required and
generated in the course of performing their duties under this agreement.
Further, at a minimum, BNY shall maintain on-site the above referenced reports
as of each month end for the most recent fiscal year-ended and the current
fiscal year.
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Daily Accounting Services
BNY shall perform the following services on each Business Day:
1. Calculate Net Asset Value (NAV), and Public Offering Price (POP) Per
Share Pursuant to SEC formulas:
- Update the valuation of security positions held by each
Portfolio's portfolio in accordance with the Portfolio's
Pricing Procedures and any other appropriate procedures
established by the Board and BACAP Distributors as BACAP
Distributors shall provide BNY in writing
- When instructed by BACAP Distributors, enter manual prices
supplied by broker and link to pricing procedures
- Calculate each Portfolio's NAV/POP in accordance with the
applicable Pricing Procedures approved by Master Trust's
Board of Trustees and prepare NAV proof sheet. Review
components of change in NAV for reasonableness based on the
tolerance levels as BACAP Distributors shall direct BNY in
writing
- Review variance reporting for price changes in individual
securities using variance levels established by Portfolio and
report to Portfolio portfolio managers and to BACAP
Distributors
- Review for ex-dividend items indicated by pricing sources;
trace to general ledger for agreement
- Communicate required pricing and yield information (NAV/POP),
as appropriate, to BACAP Distributors and, electronically, to
NASDAQ and to such other third parties as designated by the
Portfolios with respect to its various distribution channels.
In addition, provide Portfolio share activity to BACAP
Distributors.
2. Dividend Rates/Yields/Dollar Weighted Average Maturity:
- Calculate, subject to the approval of BACAP Distributors, net
investment income available for distribution daily as
appropriate
- Calculate daily dividend rate, and 1, 7, 30-day yields/SEC
yields
- Calculate dollar weighted average maturity
3. Determine and Report Cash Availability:
- Receive daily cash and transaction statements from the
Portfolios' Custodian
- Complete daily bank cash reconciliations (including
documentation of any reconciling items) and notify the
Portfolios' Custodian
- Report investable cash to BACAP Distributors and Portfolio
sub-advisers
4. Daily Expense Accruals:
- Accrue individual expenses on a daily basis based on
Instructions provided by BACAP Distributors, except for those
instances where such an adjustment would cause a full
II-3
xxxxx break in NAV, in which case such adjustment will be
included in the calculation of NAV on the day received
- If applicable, accrue daily amortization of organization
expense as instructed by BACAP Distributors
- If applicable, accrue daily Rule 12b-1 Plan expenses
- Adjust expense accruals as instructed by BACAP Distributors
and provide reports as requested by BACAP Distributors
5. Verify and Record All Daily Income Accruals for Debt Issues:
- Track income and provide year end tax schedules
- Review and verify all interest and amortization reports
- Periodic tie-out of receivables
- Ensure security masters denote proper interest and
amortization methods as per the fund set up sheets as
instructed by BACAP Distributors
6. Monitor Securities:
- Review each Portfolios' portfolio holding and current days
security trades for dividend activity
- Interface with Portfolios' Custodian for timely collection
and postings of corporate actions, dividends and interest
pre-payments
7. Enter All Security Trades:
- Review verification of trade and interest calculations
- Verify settlement through custodian statements
- Maintain security ledger transaction reporting
- Maintain tax lot holdings
- Determine realized gains or losses on security trades
- Provide broker commission information
8. Enter All Portfolio Share Transactions:
- Periodically reconcile dividend payable amounts
- Process activity identified on reports
- Verify settlement through custodian statements
- Reconcile to report balances
- Process and track capital stock gain/loss activity
9. Prepare Daily Trial Balance:
- Post manual entries to general ledger
- Post custodian bank activity
II-4
- Require automated settled transactions between custody and
activity records (prepare, clear and post)
- Post shareholder and security transactions
- Post and verify income and expense accruals and resolve
differences
- Prepare general ledger
- Post corporate action activity
10. Review and Reconcile Custodian Statements:
- Verify all posted interest, dividends, expenses, and
shareholder and security payments/receipts, etc. when
requested
- Post all cash settlement activity to trial balance
- Reconcile to ending cash balance accounts
- Report to BACAP Distributors the status of past due items and
failed trades with the custodian
- Reconcile cash exception Income items, tax reclaims and past
due income items with custody area
11. Preparation of Accounting Reports:
- Price Variance Report
- Trial Balance
- Portfolio Valuation
- NAV Calculation Report
- Cash Availability
- Change in NAV
- Non-standard entries
- Stale Price Report
- Other such reports as may be reasonably be requested by BACAP
Distributors
Monthly/Quarterly Services
BNY shall provide the following services on a monthly or quarterly
basis, within such timeframe as may be mutually agreed upon by BNY, Master
Trust and BACAP Distributors:
1. Submission of Monthly Accounting Reports as mutually agreed upon
2. Reconcile Asset Listing to Custodian Asset Listing
3. Provide Monthly Analysis and Reconciliation of Trial Balance Accounts
4. Prepare Documentation Supporting the Preparation of:
- SEC yield reporting
- Income by state reporting
II-5
- Standard Industry Code Valuation Report (please provide BACAP
Distributors' industry code classifications/is there a
standard for all funds)
- Alternative Minimum Tax Income segregation schedule
5. Provide Upon Request Broker Commission and Net Trade Reports
Annual (and Semi-Annual) Accounting Services
BNY shall provide the following services on an annual and semi-annual
basis:
1. Supply auditors InvestOne reports supporting securities and
shareholder transactions, income and expense accruals, etc. during the
year in accordance with standard audit assistance requirements
2. Provide BACAP Distributors with information to assist BACAP
Distributors in the preparation of NSAR filings
Other Core Services
BNY shall provide the following services:
- Accrete discounts and amortize premiums to put and call
events as directed by BACAP Distributors and in a manner
acceptable under generally accepted accounting principles
- Process principal repayments on mortgage backed securities
- Update variable securities with current rates
- Process corporate action events through a primary vender
feed, and monitor results via Reuters, Bloomberg, or other
available sources as the parties may agree
- Perform automated portfolio pricing with a second vendor as
requested by BACAP Distributors
- Produce documents and respond to inquiries during account and
SEC examinations
Money Market Portfolios: Prepare daily xxxx to market reports and
analysis in compliance with Rule 2a-7 including:
- Calculating the daily portfolio weighted average maturity
- Report portfolio diversification based on trade/security
information provided by BACAP Distributors by:
Country, State, Tier, Liquidity, Asset Backed
Securities, Industry, Letter of Credit
II-6
- Listing percentage of portfolio maturing in specified
intervals (i.e., number of days)
- Providing issuer and guarantor diversification exception
reporting
International Portfolios: BNY shall provide the following services:
- Report in base and local currency
- Processing of tax liability on foreign income subject to
approval of BACAP Distributors
- Daily variance analysis performed on FX rates for security
position held
- Produce automated bifurcation reporting in compliance with
IRC Section 988
- Xxxx to market security receivables and payables on a daily
basis
- Determine portfolio exposure by country and currency
In addition to the above, BNY will provide additional support as
agreed upon from time to time (i.e., financial statement production).
II-7
SCHEDULE III
SERVICE LEVEL PERFORMANCE STANDARDS
SERVICE STANDARD
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1. Daily Cash Availability [ ] 100% accuracy and delivery by 9:00 a.m
EST for Money Market Portfolios and
9:30 a.m. EST for all others
[ ] Compensation for uninvested
cash at Nations Cash Reserves'
mill rate
2. Calculation of daily NAVs [ ] 100% accuracy by 5:00 p.m. EST
including pricing, expense accruals, cash
activity, manual entries, S/H activity.
Delivery by 5:45 p.m. EST
3. Review of daily NAVs [ ] 100% review by 5:30 p.m. EST
[ ] Review of NAV components for
reasonableness including analysis of
the change in the NAV and the
change in mill rates.
[ ] Review of price variance report
[ ] Review of manual proof
4. NASDAQ Reporting [ ] 100% accuracy and communication by
5:45 p.m. EST
5. Daily Pricing and Rate Report (DPRR) [ ] 100% accuracy in nightly transmission of
DPRRs
[ ] Money Market Portfolios-5:30 p.m.
EST
[ ] All other Portfolios- 6:00 p.m. EST
6. FundStation Report (SubM) [ ] 100% accuracy and nightly transmission
by 7:00 p.m. EST
7. Processing of trade tickets [ ] 100% accuracy and processed by T+1 if
received by the following cut-off times:
[ ] All Portfolios (except International)
- 10:00 am (T+1)
[ ] International - 12:00 pm (T+1)
[ ] Same day settlements - 1:30 pm
III-1
SERVICE STANDARD
------- --------
8. Problem Resolution (general) [ ] NAV impact analysis within 1 day
[ ] Clear and timely communication of 100%
of issues
[ ] Ongoing Tracking
9. Cash reconciliations [ ] Performed daily and sent daily to
BACAP Distributors (Money Market
Portfolios) and sent weekly to BACAP
Distributors (all other Portfolios)
[ ] Issues communicated to BACAP
Distributors same day
[ ] Outstanding items addressed within 1
business day
10. Position Reconciliations [ ] Performed daily and sent weekly to
BACAP Distributors
[ ] Issues communicated to BACAP
Distributors same day
[ ] Open issues addressed within 2 business
days
11. Tax reporting
[ ] Federal, state, tax returns [ ] Tax provision package prepared within
time parameters as set by BACAP
[ ] Tax provision packages including Distributors/Independent tax personnel
Sub-M and excise tax amounts/ (PWC)
distributions
[ ] Estimates of tax requirements prepared as
[ ] Identification of all book/tax required by BACAP Distributors for
differences proper tax planning
[ ] Capital gain estimate preparations
12. Statistical Reports [ ] Filed within the time parameters as set
forth by each statistical service
13. Expense accruals/payments [ ] Payments made on the business day
written instructions from an authorized
signator received
[ ] Expense accruals made with 100%
accuracy based upon written instructions
from BACAP Distributors
III-2
SERVICE STANDARD
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14. Management Reports [ ] Provided to BACAP Distributors within
10 business days of month end
15. Year end tax reports [ ] Provided to BACAP Distributors within
the time frame agreed to
16. Annual/Semi-Annual Reports [ ] Provide Trial Balance within 5 business
days after annual/semi-annual period
[ ] Provide additional financial statement
support as agreed to
17. Daily Reports [ ] To be provided on the following day
[ ] Provide detailed portfolio valuation
[ ] Trial Balance
18. Daily Cash Sweep [ ] 100% accuracy and communication by
2:00 p.m. EST
[ ] Nations Cash Reserves
[ ] AIM
[ ] Nuveen
19. Post Dividends / Corporate Actions [ ] 100% accuracy and posted on effective
date
20. Monthly Reconciliations [ ] Complete reconciliations within 10
business days
21. Reporting to Sub-Advisors [ ] Provide nightly and other periodic
reporting to Nations Funds Sub-Advisors
22. Compliance [ ] Provide compliance reports as requested
by BACAP Distributors
III-3
SCHEDULE IV
IV-1
PORTFOLIO PRICING, FUND ACCOUNTING
FUND ADMINISTRATION AND BOOK & TAX ALLOCATION SERVICES
FEE SCHEDULE
FOR
BACAP DISTRIBUTORS, LLC
HIGH YIELD PORTFOLIO
INTERNATIONAL BOND PORTFOLIO
PER FUND/PER ANNUM
PORTFOLIOS
6 basis points per annum on the first $500 million of each of the
portfolio's average net assets;
5 basis points on the next $500 million;
4 basis points on the next $250 million;
3 basis points on the next $250 million;
1/2 of one basis point on the excess.
SYSTEM DEVELOPMENT/USAGE/SPECTRA REPORT WRITER
There will be no charges for developing systems interfaces with us or
for on-going usage of any Bank systems related to fund accounting or
administration services.
ACCOUNTING OUT-OF-POCKET EXPENSES
The cost of prices for securities exclusively held by the each fund
obtained from third party pricing vendors will be in addition to the above
fees.
ADMINISTRATION OUT-OF-POCKET EXPENSES
These expenses are billed as they are incurred at cost. Out-of-pocket
expenses traditionally include, but are not limited to, cost associated with
attendance at Board Presentations, printing shareholders reports, express mail
charges, etc.
BILLING CYCLE
The above fees will be billed on a monthly basis.
IV-7
SCHEDULE V
All Database Companies Quarterly List
---------------------- --------------
AMG Data Services Lipper
Xxxxxx'x Morningstar
Bloomberg CDA Wiesenberger
CDA Wiesenberger Investment Company Institute
Commerce Clearing House (CCH) S&P Micropal
Forbes Institute for Economic Research
Institute for Economic Research Value Line
Interactive Data Services Media General Financial Services
Investment Company Institute LCG Associates
LCG Associates Closed End Fund Digest (Closed End Only)
Lipper Lipper - International (Closed End Only)
Media General
Xxxxx'x Investors Service
Morningstar
S&P Micropal
Strategic Insights
Value Line
V-1
