SUB-ADVISORY AGREEMENT
NATIONS MASTER INVESTMENT TRUST
THIS AGREEMENT is made as of this 21st day of May, 1999, by and among
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
TRADESTREET INVESTMENT ASSOCIATES, INC., a Maryland corporation (the
"Sub-Adviser"), and NATIONS MASTER INVESTMENT TRUST, a Delaware business trust
(the "Trust"), on behalf of those portfolios of the Trust now or hereafter
identified on Schedule I hereto (each a "Master Portfolio" and collectively, the
"Master Portfolios").
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") as an open-end, management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act");
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") as an
investment adviser;
WHEREAS, the Sub-Adviser also is registered with the Commission under
the Advisers Act as an investment adviser;
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser shall act as investment adviser with respect to the Master Portfolios;
and
WHEREAS, pursuant to such Investment Advisory Agreement, the Adviser,
with the approval of the Trust, wishes to retain the Sub-Adviser for purposes of
rendering advisory services to the Adviser and the Trust in connection with the
Master Portfolios upon the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints, and the
Trust hereby approves, the Sub-Adviser to render investment research and
advisory services to the Adviser and the Trust with respect to the Master
Portfolios, under the supervision of the Adviser and subject to the policies and
control of the Trust's Board of Trustees, and the Sub-Adviser hereby accepts
such appointment, all subject to the terms and conditions contained herein.
2. INVESTMENT SERVICES. Subject to the supervision of the Adviser and
the Trust's Board of Trustees, the Sub-Adviser will provide a continuous
investment program for each Master Portfolio, including investment research and
management with respect to all securities, investments, cash and cash
equivalents in each Master Portfolio. The Sub-Adviser will determine from time
to time what securities and other investments will be purchased, retained or
sold by the Master Portfolios and will place the daily orders for the purchase
or sale of securities. The Sub-Adviser will provide the services rendered by it
under this Agreement in accordance with each Master Portfolio's investment
objective, policies and restrictions as stated in the Prospectus and votes of
the Trust's Board of Trustees. The Sub-Adviser shall provide such additional
services related to the continuous investment program, including recordkeeping
services, as may reasonably be requested from time to time by the Trust or the
Adviser.
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3. CONTROL BY BOARD OF TRUSTEES. As is the case with respect to the
Adviser under the Investment Advisory Agreement, any investment activities
undertaken by the Sub-Adviser pursuant to this Agreement, as well as any other
activities undertaken by the Sub-Adviser with respect to the Trust, shall at all
times be subject to any directives of the Board of Trustees of the Trust.
4. OTHER COVENANTS. In carrying out its obligations under this
Agreement, the Sub-Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of
the Commission and will in addition conduct its activities under this Agreement
in accordance with other applicable law, including but not limited to the 1940
Act and the Advisers Act;
(b) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for which it has
investment responsibilities;
(c) will not make loans to any person to purchase or carry
Master Portfolio shares;
(d) will place orders pursuant to its investment
determinations for the Master Portfolios either directly with the issuer or with
any broker or dealer. Subject to the other provisions of this paragraph, in
executing portfolio transactions and selecting brokers or dealers, the
Sub-Adviser will use its best efforts to seek on behalf of each Master Portfolio
the best overall terms available. In assessing the best overall terms available
for any transaction, the Sub-Adviser shall consider all factors that it deems
relevant, including the breadth of the market in the security, the price of the
security, the financial condition and execution capability of the broker or
dealer, and the reasonableness of the commission, if any, both for the specific
transaction and on a continuing basis. In evaluating the best overall terms
available, and in selecting the broker/dealer to execute a particular
transaction, the Sub-Adviser may also consider the brokerage and research
services (as those terms are defined in Section 28(e) of the Securities Exchange
Act of 1934, as amended) provided to the Master Portfolio(s) and/or other
accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser exercises
investment discretion. The Sub-Adviser is authorized, subject to the prior
approval of the Trust's Board of Trustees, to pay to a broker or dealer who
provides such brokerage and research services a commission for executing a
portfolio transaction for any Master Portfolio which is in excess of the amount
of commission another broker or dealer would have charged for effecting that
transaction if, but only if, the Sub-Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker or dealer, viewed in terms of that particular
transaction or in terms of the overall responsibilities of the Sub-Adviser to
the particular Master Portfolio and to the Trust. In addition, the Sub-Adviser
is authorized to take into account the sale of shares of the Trust in allocating
purchase and sale orders for portfolio securities to brokers or dealers
(including brokers and dealers that are affiliated with the Sub-Adviser or the
Trust's principal underwriter), provided that the Sub-Adviser believes that the
quality of the transaction and the commission are comparable to what they would
be with other qualified firms. In no instance, however, will portfolio
securities be purchased from or sold to the Sub-Adviser or the Trust's principal
underwriter for the Master Portfolios or an affiliated person of either acting
as principal or broker, except as permitted by the Commission or applicable law;
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(e) will maintain a policy and practice of conducting its
investment advisory services hereunder independently of the commercial banking
operations of its affiliates. In making investment recommendations for a Master
Portfolio, its investment advisory personnel will not inquire or take into
consideration whether the issuer (or related supporting institution) of
securities proposed for purchase or sale for the Master Portfolio's account are
customers of the commercial departments of its affiliates. In dealing with
commercial customers, such commercial departments will not inquire or take into
consideration whether securities of those customers are held by the Master
Portfolio; and
(f) will treat confidentially, and as proprietary information
of the Trust, all records and other information relative to the Trust and prior,
present or potential interestholders, and will not use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder (except after prior notification to and approval in writing by
the Trust, which approval shall not be unreasonably withheld and may not be
withheld and will be deemed granted where the Sub-Adviser may be exposed to
civil or criminal contempt proceedings for failure to comply, when requested to
divulge such information by duly constituted authorities, or when so requested
by the Trust).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-Adviser
hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to
furnish similar services to others so long as its services under this Agreement
are not impaired thereby. To the extent that the purchase or sale of securities
or other investments of the same issuer may be deemed by the Sub-Adviser to be
suitable for two or more accounts managed by the Sub-Adviser, the available
securities or investments may be allocated in a manner believed by the
Sub-Adviser to be equitable to each account. It is recognized that in some cases
this procedure may adversely affect the price paid or received by a Master
Portfolio or the size of the position obtainable for or disposed of by a Master
Portfolio.
6. BOOKS AND RECORDS. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for each Master Portfolio are the property of the Trust and further
agrees to surrender promptly to the Adviser or the Trust any of such records
upon request. The Sub-Adviser further agrees to preserve for the periods
prescribed by Rule 31a-2 under the 1940 Act the records required to be
maintained by Rule 31a-1 under the 1940 Act.
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7. EXPENSES. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities, commodities and other investments
(including brokerage commissions and other transaction charges, if any)
purchased or sold for the Master Portfolios. In addition, the Sub-Adviser
acknowledges that the Adviser has agreed, pursuant to the Investment Advisory
Agreement, that, if the aggregate expenses borne by any Master Portfolio in any
fiscal year exceed the applicable expense limitations imposed by the securities
regulations of any state in which its shares are registered or qualified for
sale to the public, the Adviser together with the Master Portfolio's
administrator(s) shall reimburse such Master Portfolio for such excess in
proportion to the fees otherwise payable to them for such year. If, for any
fiscal year of a Master Portfolio, the amount of the aggregate advisory fee
which the Trust would otherwise be obligated to pay is reduced pursuant to
expense limitation provisions of the Investment Advisory Agreement, the fee
which the Sub-Adviser would otherwise receive pursuant to this Agreement shall
be reduced proportionately.
8. COMPENSATION. For the services provided to each Master Portfolio and
the expenses assumed pursuant to this Agreement, the Adviser will pay the
Sub-Adviser and the Sub-Adviser will accept as full compensation therefor a fee
for that Master Portfolio determined in accordance with Schedule I attached
hereto. The Adviser and the Sub-Adviser may, from time to time, agree to reduce,
limit or waive the amounts payable hereunder with respect to one or more Master
Portfolios for such period or periods they deem advisable. It is understood that
the Adviser shall be responsible for the Sub-Adviser's fee for its services
hereunder, and the Sub-Adviser agrees that it shall have no claim against the
Trust or the Master Portfolio with respect to compensation under this Agreement.
9. LIABILITY OF SUB-ADVISER. The Sub-Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Adviser
or the Trust in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance, bad
faith or gross negligence on the part of the Sub-Adviser in the performance of
its duties, or from reckless disregard by it of its obligations and duties under
this Agreement.
10. DURATION AND TERMINATION. This Agreement shall become effective
when approved, and shall continue in effect until the second anniversary of its
effective date. Thereafter, if not terminated, this Agreement shall continue in
effect for successive annual periods ending on January 1, provided that the
continuation of the Agreement is specifically approved at least annually:
(a)(i) by the Trust's Board of Trustees or (ii) by the vote
of "a majority of the outstanding voting securities" of the Master
Portfolio (as defined in Section 2(a)(42) of the 0000 Xxx); and
(b) by the affirmative vote of a majority of the Trustees
of the Trust who are not parties to this Agreement or "interested
persons" (as defined in the 0000 Xxx) of a party to this Agreement
(other than as Trustees of the Trust), by votes cast in person at
a meeting specifically called for such purpose.
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Notwithstanding the foregoing, this Agreement may be terminated as to any Master
Portfolio at any time, without the payment of any penalty, by the Trust (by vote
of the Trust's Board of Trustees or by vote of a majority of the outstanding
voting securities of the particular Master Portfolio), or by the Sub-Adviser or
Adviser on sixty (60) days' written notice to the other parties to this
Agreement. The notice provided for herein may be waived by the party entitled to
receipt thereof. This Agreement will immediately terminate in the event of its
assignment. As used in this Agreement, the terms "majority of the outstanding
voting securities," "interested persons" and "assignment" shall have the same
meanings as such terms have in the 1940 Act.
11. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. No amendment of this Agreement affecting a
Master Portfolio shall be effective until approved by vote of a majority of the
outstanding voting securities of such Master Portfolio. However, this shall not
prevent the Sub-Adviser from reducing, limiting or waiving its fee.
12. RELEASE. The names "Nations Master Investment Trust" and "Trustees
of Nations Master Investment Trust" refer respectively to the Trust created and
the Trustees, as trustees but not individually or personally, acting from time
to time under a Declaration of Trust and the Certificate of Trust, dated January
14, 1999, which is hereby referred to and a copy of which is on file at the
principal office of the Trust. The obligations of "Nations Master Investment
Trust" entered into in the name or on behalf thereof by any of the Trustees,
representatives or agents are made not individually, but in such capacities, and
are not binding upon any of the Trustees, interestholders, or representatives of
the Trust personally, but bind only the Trust Property (as defined in the
Declaration of Trust) and all persons dealing with any class of shares of the
Trust must look solely to the property belonging to such class for the
enforcement of any claims against the Trust.
13. MISCELLANEOUS. 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. 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 and shall be
governed by Delaware law.
14. COUNTERPARTS. This Agreement may be executed in any manner of
counterparts, each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed by their officers designated below as of the day and year first
above written.
NATIONS MASTER INVESTMENT TRUST
on behalf of the Master Portfolios
By: /s/ A. Xxx Xxxxxx
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A. Xxx Xxxxxx
President and Chairman of the
Board of Trustees
NATIONSBANC ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President
TRADESTREET INVESTMENT ASSOCIATES, INC.
By: /s/ Xxxxx Xxxx
------------------------------
Xxxxx Xxxx
President
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SCHEDULE I
The Adviser shall pay the Sub-Adviser, as full compensation for
services provided and expenses assumed hereunder, a sub-advisory fee for each
Master Portfolio, computed daily and payable monthly at the annual rates listed
below as a percentage of the average daily net assets of the Master Portfolio:
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RATE OF
MASTER PORTFOLIO COMPENSATION
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Nations Intermediate Bond Master Portfolio 0.15%
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Approved: December 2, 1998
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