INVESTMENT ADVISORY AGREEMENT
NATIONS MASTER INVESTMENT TRUST
THIS AGREEMENT is made as of January 1, 2003, by and between NATIONS
MASTER INVESTMENT TRUST, a Delaware statutory trust ("Master Trust"), and BANC
OF AMERICA CAPITAL MANAGEMENT, LLC, a North Carolina limited liability company
(the "Adviser"), on behalf of those series of Master Trust now or hereafter
identified on Schedule I (each, a "Master Portfolio" and collectively, the
"Master Portfolios").
WHEREAS, Master 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, Master Trust desires that the Adviser manage the investment
operations of the Master Portfolios and the Adviser desires to manage said
operations; and
WHEREAS, the Board of Trustees of Master Trust (the "Board"), including
a majority of the Trustees who are not "interested persons" (as defined herein)
of any party to this Agreement, have approved this arrangement;
NOW, THEREFORE, in consideration of the promises and mutual covenants
herein contained, it is agreed between the parties hereto as follows:
1. APPOINTMENT OF ADVISER. Master Trust hereby appoints the
Adviser and the Adviser hereby agrees to manage the investment operations of
each Master Portfolio subject to the terms of this Agreement and subject to the
supervision of the Board. Master Trust and the Adviser contemplate that certain
duties of the Adviser under this Agreement may be delegated to one or more
investment sub-adviser(s) (the "Sub-Adviser(s)") pursuant to separate investment
sub-advisory agreement(s) (the "Sub-Advisory Agreement(s)"). The Adviser may, in
its discretion, provide services under this Agreement through its own employees
or through one or more affiliated companies that are qualified to act as
investment advisers under applicable law and are under common control of Bank of
America Corporation.
2. SERVICES OF ADVISER. The Adviser shall perform, or arrange for
the performance of, the management services necessary for the investment
operations 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 and
other investments are to be purchased or sold for
each Master Portfolio and executing transactions
accordingly;
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(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 Master 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 Board with respect to
Master Portfolio investment policies and procedures,
and carrying out such investment policies and
procedures as are adopted by the Board;
(f) Supplying reports, evaluations, analyses, statistical
data and information to the Board or to the Master
Portfolios' officers and other service providers as
the Board may reasonably request from time to time or
as may be necessary or appropriate for the operation
of Master 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 Master Portfolio;
(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 this Agreement or as the Board
may reasonably request from time to time.
3. RESPONSIBILITIES OF ADVISER. In carrying out its obligations
under this Agreement, the 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 Master
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;
(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
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with any broker or dealer (including any affiliated
broker or dealer). In executing portfolio
transactions and selecting brokers or dealers, the
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 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 Adviser may
also consider whether such broker or dealer furnishes
research and other information or services to the
Adviser;
(e) Adhere to the investment objective, strategies and
policies and procedures of Master Trust adopted on
behalf of each Master Portfolio; and
(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 Master Portfolio, the 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 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.
4. CONFIDENTIALITY OF INFORMATION. Each party agrees that it will
treat confidentially all information provided by the other 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. DELEGATION OF DUTIES. Subject to the approval of the Board
and, if required, the shareholders of the Master Portfolios, the Adviser may
delegate to one or more Sub-Adviser(s) any or all of its duties hereunder,
provided that the Adviser shall continue to supervise and monitor the
performance of the duties delegated to the Sub-Adviser(s) and any such
delegation shall not relieve the Adviser of its duties and obligations under
this Agreement. The Adviser shall be solely responsible for compensating the
Sub-Adviser(s) for performing any of the duties delegated to them. The Adviser
may request that Master Trust pay directly to the Sub-Adviser(s) the portion of
the Adviser's compensation that the Adviser is obligated to pay to the
Sub-
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Adviser(s). If Master Trust agrees to such request, it will pay such portion to
the Sub-Adviser(s) on behalf of the Adviser, thereby reducing the compensation
paid to the Adviser by the amount paid directly to the Sub-Adviser(s). However,
such an arrangement will not relieve the Adviser of its responsibility for
compensating the Sub-Adviser(s). In the event that any Sub-Adviser appointed
hereunder is terminated, the Adviser may provide investment advisory services
pursuant to this Agreement through its own employees or through one or more
affiliated companies that are qualified to act as investment advisers under
applicable law and are under common control of Bank of America Corporation or
through other Sub-Adviser(s) as approved by Master Trust in accordance with
applicable law.
6. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the 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
Adviser to be suitable for two or more accounts managed by the Adviser, the
available securities or investments may be allocated in a manner believed by the
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. Nothing in this Agreement shall limit or restrict the right of any of
the 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 Adviser's right to engage in any other business or to render
services of any kind to any other corporation, firm, individual or association.
7. DELIVERY OF DOCUMENTS. Master Trust has furnished the Adviser
with copies, properly certified or authenticated, of each of the following:
(a) Master 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) Master Trust's Bylaws, if any;
(c) 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
(d) any and all applicable policies and procedures
approved by the Board.
Master Trust will promptly furnish the Adviser with copies of any and
all amendments of or additions or supplements to the foregoing.
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8. BOOKS AND RECORDS. In compliance with the requirements of Rule
31a-3 under the 1940 Act, the Adviser hereby agrees that all records that it
maintains for each Master Portfolio under this Agreement are the property of
Master Trust and further agrees to surrender promptly to Master Trust any of
such records upon request. The 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.
9. EXPENSES OF THE MASTER PORTFOLIOS. Except to the extent
expressly assumed by the Adviser and except to any extent required by law to be
paid or reimbursed by the Adviser, the 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 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, the cost of preparing and distributing reports and notices
to shareholders and interest payments and other fees or charges associated with
any credit facilities established by or on behalf of the Master Portfolios.
10. COMPENSATION. Except as otherwise provided herein, for the
services provided to each Master Portfolio and the expenses assumed pursuant to
this Agreement, Master Trust will pay the Adviser and the Adviser will accept as
full compensation therefor a fee determined in accordance with Schedule I
attached hereto; provided, however, that the compensation paid to the Adviser
shall be reduced by any amount paid by Master Trust directly to the
Sub-Advisor(s) pursuant to Section 5 of this Agreement. In addition, the Adviser
or its affiliated persons may receive compensation or reimbursement of
recordkeeping, bookkeeping, accounting, administrative and transactional fees or
charges incurred in connection with any credit facilities established by or on
behalf of the Master Portfolios. The fees or charges attributable to each Master
Portfolio shall be a separate charge to such Master Portfolio and shall be the
several (and not joint or joint and several) obligation of each such Master
Portfolio. Master Trust and the 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.
11. LIABILITY OF ADVISER. The Adviser shall not be liable for any
error of judgment or mistake of law or for any loss suffered by Master 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 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 or obligations and 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
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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 Master 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 Master 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:
(a) Master 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 Adviser;
or
(b) the Adviser with respect to a Master Portfolio, upon
sixty (60) days' written notice to Master Trust.
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. 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.
15. 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 Master Trust shall be One Bank of America Plaza, 000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Secretary, and that of
the Adviser shall be One Bank of America Plaza, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: President.
16. RELEASE. The names "Nations Master Investment Trust" and
"Trustees of Nations Master Investment Trust" refer respectively to Master 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 Master Trust arising, directly or indirectly, under this
Agreement will be satisfied solely out of the assets of Master Trust and that no
Trustee, officer or shareholder shall be personally liable for any such
liabilities. All persons dealing with any
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Master Portfolio of Master Trust must look solely to the property belonging to
such Master Portfolio for the enforcement of any claims against Master Trust.
17. 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.
18. 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.
19. COUNTERPARTS. This Agreement may be executed in any number 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/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
President
BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President
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SCHEDULE I
The Master Trust shall pay the Adviser, as full compensation for
services provided and expenses assumed hereunder, an 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 0.55% 2/14/00
Nations Xxxxxxx 21st Century Master Portfolio 0.75% 4/7/00
Nations Xxxxxxx International Opportunities Master Portfolio 0.80% 8/1/00
Nations SmallCap Value Master Portfolio 0.90% 4/30/02
Nations Strategic Growth Master Portfolio 0.65% 5/10/02
Approved: November 21, 2002
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