EX-99.23d9
INVESTMENT SUB-ADVISORY AGREEMENT
NATIONS MASTER INVESTMENT TRUST
THIS AGREEMENT is made as of February 14, 2000, by and between BANC OF
AMERICA ADVISORS, INC., a North Carolina corporation (the "Adviser"), MACKAY
XXXXXXX, LLC, a Delaware limited liability company (the "Sub-Adviser"), and
NATIONS MASTER INVESTMENT TRUST, a Delaware business trust (the "Trust"), on
behalf of those series of the Trust now or hereafter identified on Schedule I
(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 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 Master Portfolio 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
Master Portfolios;
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
Sub-Adviser and the Sub-Adviser hereby agrees to manage the portfolio
investments of each Master Portfolio 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
necessary for the management of the portfolio investments of each Master
Portfolio, including but not limited to:
(a) Managing the investment and reinvestment of all assets,
now or hereafter acquired by each Master Portfolio,
including determining what securities
-2-
and other investments are to be purchased or sold for
each Master Portfolio and executing transactions
accordingly;
(b) Transmitting trades to each Master Portfolio's custodian
for settlement in accordance with each Master
Portfolio'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 Master Portfolio action and
any other rights pertaining to each Master Portfolio's
portfolio securities shall be exercised;
(e) Making recommendations to the Adviser and the Board with
respect to Master Portfolio 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
Master Portfolios' 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 books and records with respect to the
investment decisions and securities transactions for
each Master Portfolio required by applicable law;
(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
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 Master
Portfolio 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;
-3-
(c) Not make loans to any person for the purpose of
purchasing or carrying Master Portfolio shares;
(d) Place, or arrange for the placement of, all orders
pursuant to its investment determinations for the Master
Portfolios either directly with the issuer or with any
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 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 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 Master Portfolio; and
(f) Meet the service level performance standards that the
parties may agree to from time to time.
4. CONFIDENTIALITY OF INFORMATION. Each party agrees that it will treat
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 Master Portfolio. 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
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 Master
Portfolio or the size of the position obtainable for or disposed of by a Master
Portfolio.
6. DELIVERY OF DOCUMENTS. The Trust will provide the Sub-Adviser with
copies, properly certified or authenticated, of each of the following:
-4-
(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 Master Portfolio
(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
under the 1940 Act, the Sub-Adviser hereby agrees that all records that it
maintains for each Master Portfolio 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 MASTER PORTFOLIOS. Except to the extent expressly
assumed by the 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
Master Portfolios. Ordinary operating expenses include, but are not limited to,
brokerage commissions and other transaction charges, taxes, legal, auditing,
printing, or governmental fees, other Master Portfolio service providers' fees
and expenses, including those related to third party pricing of portfolio
securities, 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. The Sub-Adviser shall pay all other
expenses directly incurred by it in connection with its services under this
Agreement.
9. COMPENSATION. Except as otherwise provided herein, 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 determined in 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 Master Portfolio with respect to compensation under this
Agreement. To the extent that the advisory fee that the Trust would be obligated
to pay to the Adviser with respect to a Master Portfolio pursuant to the
Investment Advisory Agreement is reduced or reimbursed, the fee that the
Sub-Adviser would otherwise receive pursuant to this Agreement shall be reduced
or reimbursed proportionately.
-5-
10. 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 its duties under this
Agreement, except a loss resulting from a breach of fiduciary duty with respect
to the receipt of compensation for services, from willful misfeasance, bad faith
or negligence on the part of the Sub-Adviser or any of its officers, directors
or employees, in connection with the performance of their duties under this
Agreement, from reckless disregard by it or its officers, directors or employees
of any of their obligations and duties under this Agreement, or from any
violations of securities laws, rules, regulations, statutes and codes, whether
federal or state, by the Sub-Adviser or any of its officers, directors or
employees.
11. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless
the Master Portfolios and the Adviser from and against any and all direct or
indirect claims, losses, liabilities or damages (including reasonable attorney's
fees and other related expenses) resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services, from willful misfeasance,
bad faith or negligence on the part of the Sub-Adviser or any of its officers,
directors or employees, in connection with the performance of their duties under
this Agreement, from reckless disregard by it or its officers, directors or
employees of any of their obligations and duties under this Agreement, or
resulting from any violations of securities laws, rules, regulations, statutes
and codes, whether federal or state, by the Sub-Adviser or any of its officers,
directors or employees; provided, however, that the Sub-Adviser shall not be
required to indemnify or otherwise hold the Master Portfolios or the Adviser
harmless under this Section 11 where the claim against, or the loss, liability
or damage experienced by the Master Portfolios or the Adviser, is caused by or
is otherwise directly related to the Master Portfolios' or the Adviser's own
willful misfeasance, bad faith or negligence, or to the reckless disregard by
the Master Portfolios or the Adviser of their duties under this Agreement.
12. TERM AND APPROVAL. This Agreement will become effective as of the
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 Master Portfolio as of the date set forth on Schedule
I when each such Master Portfolio is added thereto. The Agreement shall continue
in effect for a Master Portfolio 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
Master Portfolio at least annually:
(a)(i) by the Board 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.
13. TERMINATION. This Agreement may be terminated without payment of
any penalty at any time by:
-6-
(a) the Trust with respect to a Master Portfolio, by vote of
the Board or by vote of a majority of a Master
Portfolio'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 Master
Portfolio, 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 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. CODE OF ETHICS. The Sub-Adviser represents that it has adopted a
written code of ethics complying with the requirements of Rule 17j-1 under the
1940 Act and will provide the Adviser or the Trust with a copy of such code, any
amendments or supplements thereto and its policies and/or procedures implemented
to ensure compliance therewith.
15. INSURANCE. The Sub-Adviser shall maintain for the term of this
Agreement and provide evidence thereof to the Trust or the Adviser a blanket
bond and professional liability (error and omissions) insurance in an amount
reasonably acceptable to Adviser.
16. REPRESENTATIONS AND WARRANTIES. Each party to this Agreement
represents and warrants that the execution, delivery and performance of its
obligations under this Agreement are within its powers, have been duly
authorized by all necessary actions and that this Agreement constitutes a legal,
valid and binding obligation enforceable against it in accordance with its
terms. The Sub-Adviser further represents and warrants that it is duly
registered as an investment adviser under the Advisers Act.
17. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
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.
18. NOTICES. Any notices under this Agreement shall be in writing,
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 MacKay
Xxxxxxx, LLC, 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxx, Esq. The Sub-Adviser agrees to promptly notify the Adviser and the Trust
in writing of the occurrence of any event which could have a material impact on
the performance of its duties under this Agreement, including but not limited to
(i) the occurrence of any event which could disqualify the Sub-Adviser from
serving as an investment adviser pursuant to Section 9 of the 1940 Act; (ii) any
material change in the Sub-Adviser's business activities; (iii) any event that
would constitute a change in control
-7-
of the Sub-Adviser; (iv) any change in the portfolio manager or portfolio
management team of a Master Portfolio; (v) the existence of any pending or
threatened audit, investigation, examination, complaint or other inquiry (other
than routine audits or regulatory examinations or inspections) relating to any
Master Portfolio; and (vi) any material violation of the Sub-Adviser's code of
ethics.
19. RELEASE. The names "Nations Master Investment Trust" and "Trustees
of Nations Master Investment 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 Master Portfolio of the Trust must look solely to the
property belonging to such Master Portfolio for the enforcement of any claims
against the Trust.
20. MISCELLANEOUS. This Agreement contains the entire understanding of
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.
21. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, Delaware law and the federal securities laws, including the
1940 Act and the Advisers Act.
22. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
23. USE OF THE NAME "NATIONS FUNDS". The Sub-Adviser agrees that it
will not use the name "Nations Funds", any derivative thereof, or the name of
the Adviser, the Trust or any Master Portfolio except in accordance with such
policies and procedures as may be mutually agreed to in writing.
-8-
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/ Xxxxx X. Xxxxx, Xx.
---------------------------------
Xxxxx X. Xxxxx, Xx.
Assistant Secretary
BANC OF AMERICA ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
President
MACKAY XXXXXXX, LLC
By:/s/ Xxxxxx X. Nisi
---------------------------------
Xxxxxx X. Nisi
General Counsel
-9-
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:
RATE OF
MASTER PORTFOLIO COMPENSATION EFFECTIVE DATE
Nations High Yield Bond Master Portfolio 0.40% of average daily net 2/14/00
assets up to and including
$100 million; 0.375% of
average daily net assets in
excess of $100 million and
up to and including $200
million; and 0.35% of
average daily net assets in
excess of $200 million
Approved: December 9, 1999
-10-
