INVESTMENT SUB-ADVISORY AGREEMENT
NATIONS FUNDS TRUST
THIS AGREEMENT is made as of April 9, 2001, by and between BANC OF
AMERICA ADVISORS, INC., a North Carolina corporation (the "Adviser"), XXXXXXX
INVESTMENT PARTNERS, L.P., a California limited partnership (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.
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The Adviser hereby appoints the 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.
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The Sub-Adviser shall perform all services necessary for the management
of the portfolio investments of each Fund, including but not limited to:
(a) Managing, in its discretion, 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;
(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;
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(c) Assisting in the preparation of all shareholder communications,
including shareholder reports, and participating in shareholder
relations;
(d) Making determinations as to the manner in which voting rights
and/or any other rights pertaining to each Fund's securities
holdings shall be exercised; provided, however, that any such
determinations shall be subject to any policies, procedures or
directives approved by the Board and provided to the Sub-Adviser;
(e) Attending and participating in discussions and meetings with the
Adviser 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 and provided to the Sub-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.
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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 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) 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 broker or dealer (including any broker or
dealer affiliated with the Trust, the Adviser or any of their
affiliates; with listings of such affiliated brokers and dealers
to be provided to the Sub-Adviser by the Adviser on an annual
basis, and more frequently as changes occur). In executing
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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; and
(d) Adhere to the investment objective, strategies and policies and
procedures of the Trust adopted on behalf of each Fund including,
but not limited to, those stated in each of their prospectuses
and statements of additional information.
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
which is not generally known by third parties nor otherwise generally disclosed
publicly by such other party, including without limitation the investment
activities or holdings of a Fund, except as is otherwise mutually agreed upon by
the parties. Each party agrees that it will not unreasonably withhold its
agreement to disclosure of investment activities or holdings. 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 through disclosure by the party about whom the
information relates or becomes public without any wrongful act of the party
providing such information 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 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 Fund or the size of the
position obtainable for or disposed of by a Fund.
6. Delivery of Documents.
-------------------------
The Trust will provide the Sub-Adviser with 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
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presently in effect and as from time to time amended, is herein
called the "Declaration of Trust");
(b) the Trust's Bylaws, if any;
(c) 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
(d) 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 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 it under this
Agreement.
8. Expenses of the Funds.
------------------------
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 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 relating to the issue, sale
(including any sales loads), 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 incurred
by it in connection with its services under this Agreement.
9. Compensation.
---------------
Except as otherwise provided herein, for the services 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 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.
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 this Agreement, except that the Sub-Adviser
shall be liable to the Adviser or the Trust for any loss resulting from a breach
of fiduciary duty with respect to the receipt of compensation for services or
any loss resulting from willful misfeasance, bad faith
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or 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.
11. 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 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 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 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.
13. 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.
14. Insurance.
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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.
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15. 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.
16. 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.
17. Notices.
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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 Xxxxxxx Investment
Partners, L.P., 00000 Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention:
General Counsel. The Sub-Adviser agrees to promptly notify the Adviser and the
Trust, and the Adviser and the Trust agree to notify the Sub-Adviser, in writing
of the occurrence of any event which could have a material impact on the
performance of another party's duties under this Agreement, including but not
limited to (i) the occurrence of any event which could disqualify the Adviser or
the Sub-Adviser from serving as an investment adviser pursuant to Section 9 of
the 1940 Act; (ii) any material change in the notifying party's business
activities; (iii) any event that would constitute a change in control of the
notifying party; (iv) any change in the portfolio manager or portfolio
management team of a Fund; (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 Fund; and (vi)
any material violation of the notifying party's code of ethics.
18. Release.
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The names "Nations Funds Trust" and "Trustees of Nations 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. Nothing in this Section 18 shall be
deemed to limit the liabilities to which a Trustee, officer or shareholder of
the Trust may be subject under applicable law arising from such person's own
wrongful conduct.
19. 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.
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20. Governing Law.
-----------------
This Agreement shall be governed by, and construed in accordance with,
Delaware law and federal securities laws, including the 1940 Act and the
Advisers Act.
21. Counterparts.
----------------
This Agreement may be executed in any number of counterparts, each of
which shall be deemed an original.
22. 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 Fund except
in accordance with such policies and procedures as may be mutually agreed to in
writing.
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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: /s/ A. Xxx Xxxxxx
-----------------------------
A. Xxx Xxxxxx
President and Chairman of
the Board of Trustees
BANC OF AMERICA ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
President
XXXXXXX INVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Partner
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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
---- ------------ --------------
Nations Classic Value Fund 0.40% of the first 4/9/01
$500,000,000 in
assets; 0.35% of
assets in excess of
$500,000,000
Nations Global Value Fund 0.50% of the first 4/9/01
$1,000,000,000 in
assets; 0.45% of
assets in excess of
$1,000,000,000
Approved: February 22, 2001
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