FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
NATIONS FUNDS TRUST
THIS AGREEMENT is made as of [DATE], by and between BANC OF AMERICA
ADVISORS, LLC, a North Carolina corporation (the "Adviser"), BANC OF AMERICA
CAPITAL MANAGEMENT, LLC, a Maryland corporation (the "Sub-Adviser"), and NATIONS
FUNDS TRUST, a Delaware business trust (the "Trust"), on behalf of those series
of the Trust now or hereafter identified on Schedule I (each a "Fund" and
collectively, the "Funds").
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 as an investment
adviser under the Investment Advisers Act of 1940, as amended (the "Advisers
Act");
WHEREAS, the Sub-Adviser is also registered with the Commission as an
investment adviser under the Advisers Act;
WHEREAS, the Adviser and the Trust have entered into an investment
advisory agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser manages the investment operations of each Fund and may delegate certain
duties of the Adviser to one or more investment sub-adviser(s); and
WHEREAS, the Adviser, with the approval of the Board of Trustees of the
Trust (the "Board"), including a majority of the Trustees who are not
"interested persons" (defined herein) of any party to this Agreement, desires to
delegate to the Sub-Adviser the duty to manage the portfolio investments of the
Funds;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. Appointment of Sub-Adviser. The Adviser hereby appoints the
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Sub-Adviser and the Sub-Adviser hereby agrees to manage the portfolio
investments of each Fund subject to the terms of this Agreement and subject to
the supervision of the Adviser and the Board.
2. Services of Sub-Adviser. The Sub-Adviser shall perform all services
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necessary for the management of the portfolio investments of each Fund,
including but not limited to:
(a) Managing the investment and reinvestment of all assets,
now or hereafter acquired by each Fund, including
determining what securities and other investments are to
be purchased or sold for each Fund and executing
transactions accordingly;
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(b) Transmitting trades to each Fund's custodian for
settlement in accordance with each Fund's procedures and
as may be directed by the Trust;
(c) Assisting in the preparation of all shareholder
communications, including shareholder reports, and
participating in shareholder relations;
(d) Making recommendations as to the manner in which voting
rights, rights to consent to Fund action and any other
rights pertaining to each Fund's portfolio securities
shall be exercised;
(e) Making recommendations to the Adviser and the Board with
respect to Fund investment policies and procedures, and
carrying out such investment policies and procedures as
are approved by the Board or by the Adviser under
authority delegated by the Board to the Adviser;
(f) Supplying reports, evaluations, analyses, statistical
data and information to the Adviser, the Board or to the
Funds' officers and other service providers as the
Adviser or the Board may reasonably request from time to
time or as may be necessary or appropriate for the
operation of the Trust as an open-end investment company
or as necessary to comply with Section 3(a) of this
Agreement;
(g) Maintaining all required books and records with respect
to the investment decisions and securities transactions
for each Fund;
(h) Furnishing any and all other services, subject to review
by the Board, that the Adviser from time to time
determines to be necessary or useful to perform its
obligations under the Investment Advisory Agreement or as
the Board may reasonably request from time to time.
3. Responsibilities of Sub-Adviser. In carrying out its obligations
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under this Agreement, the Sub-Adviser agrees that it will:
(a) Comply with all applicable law, including but not limited
to the 1940 Act and the Advisers Act, the rules and
regulations of the Commission thereunder, and the
conditions of any order affecting the Trust or a Fund
issued thereunder;
(b) Use the same skill and care in providing such services as
it uses in providing services to other fiduciary accounts
for which it has investment responsibilities;
(c) Not make loans to any person for the purpose of
purchasing or carrying Fund shares;
(d) Place, or arrange for the placement of, all orders
pursuant to its investment determinations for the Funds
either directly with the issuer or with any
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broker or dealer (including any affiliated broker or
dealer). In executing portfolio transactions and
selecting brokers or dealers, the Sub-Adviser will use
its best efforts to seek on behalf of each Fund 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 or dealer to execute a particular
transaction, the Sub-Adviser may also consider whether
such broker or dealer furnishes research and other
information or services to the Sub-Adviser;
(e) Adhere to the investment objective, strategies and
policies and procedures of the Trust adopted on behalf of
each Fund;
(f) 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 Fund, the
Sub-Adviser's investment advisory personnel will not
inquire or take into consideration whether the issuers
(or related supporting institutions) of securities
proposed for purchase or sale for a Fund'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 Fund.
4. Confidentiality of Information. Each party agrees that it will treat
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confidentially all information provided by another party regarding such other
party's business and operations, including without limitation the investment
activities or holdings of a Fund. All confidential information provided by a
party hereto shall not be disclosed to any unaffiliated third party without the
prior consent of the providing party. The foregoing shall not apply to any
information that is public when provided or thereafter becomes public or which
is required to be disclosed by any regulatory authority in the lawful and
appropriate exercise of its jurisdiction over a party, by any auditor of the
parties hereto, by judicial or administrative process or otherwise by applicable
law or regulation.
5. Services Not Exclusive. The services furnished by the Sub-Adviser
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hereunder are deemed not to be exclusive, and the Sub-Adviser shall be free to
furnish similar services to others so long as its provision of services under
this Agreement is 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 Fund
or the size of the position obtainable
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for or disposed of by a Fund. Nothing in this Agreement shall limit or restrict
the right of any of the Sub-Adviser's partners, officers or employees to engage
in any other business or to devote his or her time and attention in part to the
management or other aspects of any business, whether of a similar or dissimilar
nature, nor limit or restrict the Sub-Adviser's right to engage in any other
business or to render services of any kind to any other corporation, firm,
individual or association.
6. Delivery of Documents. The Trust will provide the Sub-Adviser with
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copies, properly certified or authenticated, of each of the following:
(a) the Trust's Certificate of Trust, as filed with the
Secretary of State of Delaware, and Declaration of Trust
(such Declaration of Trust, as presently in effect and as
from time to time amended, is herein called the
"Declaration of Trust");
(b) the most recent prospectus(es) and statement(s) of
additional information relating to each Fund (such
prospectus(es) together with the related statement(s) of
additional information, as presently in effect and all
amendments and supplements thereto, are herein called the
"Prospectus"); and
(c) any and all applicable policies and procedures approved
by the Board.
The Trust will promptly furnish the Sub-Adviser with copies of any and
all amendments of or additions or supplements to the foregoing.
7. Books and Records. In compliance with the requirements of Rule 31a-3
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under the 1940 Act, the Sub-Adviser hereby agrees that all records that it
maintains for each Fund under this Agreement are the property of the Trust and
further agrees to surrender promptly to the Trust or the Adviser 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.
8. Expenses of the Funds. Except to the extent expressly assumed by the
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Sub-Adviser and except to any extent required by law to be paid or reimbursed by
the Sub-Adviser, the Sub-Adviser shall have no duty to pay any ordinary
operating expenses incurred in the organization and operation of the Funds.
Ordinary operating expenses include, but are not limited to, brokerage
commissions and other transaction charges, taxes, legal, auditing, printing, or
governmental fees, other Fund service providers' fees and expenses, expenses of
issue, sale, redemption and repurchase of shares, expenses of registering and
qualifying shares for sale, expenses relating to Board and shareholder meetings,
and the cost of preparing and distributing reports and notices to shareholders.
9. Compensation. Except as otherwise provided herein, for the services
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provided to each Fund 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 determined in
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accordance with Schedule I attached hereto. It is understood that the Adviser
shall be solely responsible for compensating the Sub-Adviser for performing any
of the duties delegated to the Sub-Adviser and the Sub-Adviser agrees that it
shall have no claim against the Trust or any Fund with respect to compensation
under this Agreement. 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 Funds for such period or periods they deem appropriate.
10. Liability of Sub-Adviser. The Sub-Adviser shall not be liable for
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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 its duties under 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 negligence on the part of the Sub-Adviser or any of
its officers, directors, employees or agents, in the performance of their duties
under this Agreement, or from reckless disregard by it of obligations and duties
under this Agreement.
11. Term and Approval. This Agreement will become effective as of the
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date set forth herein above, and shall continue in effect until the second
anniversary of its effective date. This Agreement will become effective with
respect to each additional Fund as of the date set forth on Schedule I when each
such Fund is added thereto. The Agreement shall continue in effect for a Fund
after the second anniversary of the effective date for successive annual periods
ending on each anniversary of such date, provided that the continuation of the
Agreement is specifically approved for the Fund at least annually:
(a)(i) by the Board or (ii) by the vote of "a majority of the
outstanding voting securities" of the Fund (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.
12. Termination. This Agreement may be terminated without payment of
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any penalty at any time by:
(a) the Trust with respect to a Fund, by vote of the Board
or by vote of a majority of a Fund's outstanding voting
securities, upon sixty (60) days' written notice to the
other parties to this Agreement; or
(b) the Adviser or the Sub-Adviser with respect to a Fund,
upon sixty (60) days' written notice to the other
parties to this Agreement.
Any party entitled to notice may waive the notice provided for herein.
This Agreement shall automatically terminate in the event of its assignment,
unless an order is issued by the Commission conditionally or unconditionally
exempting such assignment from the provisions of
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Section 15(a) of the 1940 Act, in which event this Agreement shall remain in
full force and effect subject to the terms of such order. For the purposes of
this paragraph, the definitions contained in Section 2(a) of the 1940 Act and
the applicable rules under the 1940 Act shall apply.
14. Amendment of this Agreement. No provision of this Agreement may be
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changed, waived, discharged or terminated orally, except by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought.
15. Notices. Any notices under this Agreement shall be in writing,
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addressed and delivered or mailed postage paid to such address as may be
designated for the receipt of such notice. Until further notice, it is agreed
that the address of the Trust shall be c/o Stephens Inc., 000 Xxxxxx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000, Attention: Secretary, that of the Adviser shall be
Xxx Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: President and that of the Sub-Adviser shall be Xxx
Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: President.
16. Release. The names "Nations Funds Trust" and "Trustees of Nations
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Funds Trust" refer respectively to the Trust created by the Declaration of Trust
and the Trustees as Trustees but not individually or personally. All parties
hereto acknowledge and agree that any and all liabilities of the Trust arising,
directly or indirectly, under this Agreement will be satisfied solely out of the
assets of the Trust and that no Trustee, officer or shareholder shall be
personally liable for any such liabilities. All persons dealing with any Fund of
the Trust must look solely to the property belonging to such Fund for the
enforcement of any claims against the Trust.
17. Miscellaneous. This Agreement contains the entire understanding of
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the parties hereto. Each provision of this Agreement is intended to be
severable. 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.
18. Governing Law. This Agreement shall be governed by, and construed
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in accordance with, Delaware law and the federal securities laws, including the
1940 Act and the Advisers Act.
19. Counterparts. This Agreement may be executed in any number of
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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 FUNDS TRUST
on behalf of the Funds
By:
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A. Xxx Xxxxxx
President and Chairman of
the Board of Trustees
BANC OF AMERICA ADVISORS, LLC
By:
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Xxxxxx X. Xxxxxx
President
BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By:
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Xxxxxxx X. Xxxxxxxxx
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
Fund, computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Fund:
Rate of
Fund Compensation Effective Date
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Nations California Intermediate Municipal [ ___ ]% --/--/02
Bond Fund
Nations New York Municipal Bond Fund [ ___ ]% --/--/02
Nations New York Tax-Exempt Reserves [ ___ ]% --/--/02
Approved: November 28, 2001
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