SUB-ADVISORY AGREEMENT
NATIONS MASTER INVESTMENT TRUST
THIS AGREEMENT is made as of this 21st day of May, 1999, by and between
NATIONSBANC ADVISORS, INC., a North Carolina corporation (the "Adviser"),
CHICAGO EQUITY PARTNERS CORPORATION, a Delaware 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 ("Commission") under the Investment Company Act of 1940, as amended
("1940 Act") as an open-end, management investment company;
WHEREAS, the Adviser is registered with the Commission under the
Investment Advisers Act of 1940, as amended (the "Advisers Act") and engages in
the business of acting as an investment adviser;
WHEREAS, the Sub-Adviser is also registered with the Commission under
the Advisers Act as an investment adviser and engages in the business of acting
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 acts 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, and other good and valuable consideration, the receipt of which is
hereby acknowledged, it is agreed between the parties hereto as follows:
1. APPOINTMENT OF SUB-ADVISER. The Adviser hereby appoints the
Sub-Adviser to act as investment sub-adviser or co-investment sub-adviser 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. SERVICES OF SUB-ADVISER. Subject to the oversight and supervision of
the Adviser and the Trust's Board of Trustees, the Sub-Adviser will provide a
continuous investment program for the Master Portfolios, including investment
research and management with respect to all equity securities and investments.
Pursuant to the foregoing, the Sub-Adviser will determine from time to time what
securities and other investments will be purchased, retained or sold by the
Master Portfolios. The Sub-Adviser will provide the services rendered by it
under this Agreement in accordance with the investment criteria and policies
established from time to time for the Master Portfolios by the Adviser, the
Master Portfolios' investment objectives, strategies and restrictions as stated
in the Master Portfolios' Prospectuses and Statement of Additional Information,
the operating policies and procedures of the Master Portfolios, and resolutions
of the Trust's Board of Trustees.
1
The Sub-Adviser further agrees that it will:
(a) Provide information to the Master Portfolios' accountant for the
purpose of updating the Master Portfolios' cash availability
throughout the day as required;
(b) Maintain historical tax lots for each portfolio security held by
the Master Portfolios;
(c) Transmit trades to the Trust's custodian for proper settlement in
accordance with the Trust's procedures and as may be directed by
the Trust or the Adviser;
(d) Maintain all books and records with respect to the Master
Portfolios that are required to be maintained under Rule 31a-l(f)
under the 1940 Act;
(e) Supply the Adviser, the Trust and the Trust's Board of Trustees
with reports, statistical data and economic information as
requested; and
(f) Prepare a quarterly broker security transaction summary and, if
requested in advance, monthly security transaction listing for
the Master Portfolios.
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;
2
(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 any 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 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 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 its clients, including 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 Adviser, 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;
(e) will adhere to the policies and procedures of the Trust adopted
on behalf of the Master Portfolios;
(f) 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;
3
(g) will use reasonable efforts to perform its duties and obligations
under this Agreement without: (a) any failure of its computer
systems, or those used by it in the performance of its duties
hereunder, properly to record, store, process, calculate or
present calendar dates falling on and after, and time spans
including, September 9, 1999, January 1, 2000 or February 29,
2000 (the "Subject Dates") as a result of the occurrence, or use
of data containing, any such Subject Dates; (b) any failure of
its computer systems, or those used by it in the performance of
its duties hereunder, to calculate any information dependent on
or relating to dates on or after the Subject Dates; or (c) any
loss of functionality or performance with respect to the
maintenance of records or processing of data containing dates
falling on or after the Subject Dates ((a), (b), and (c) above
shall be referred to as "Y2K Failures"). Notwithstanding the
above, the Sub-Adviser shall not be liable for any Y2K Failures
caused by Y2K Failures in a third party system with which the
Sub-Adviser interfaces or from which the Sub-Adviser receives
data in connection with the performance of its duties hereunder;
and
(h) 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 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.
4
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.
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 Company 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 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.
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.
5
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 dated as of 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, 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 number of
counterparts, each of which shall be deemed an original.
6
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
-------------------------
A. Xxx Xxxxxx
President and Chairman of
the Board of Trustees
NATIONSBANC ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------
Xxxxxx X. Xxxxxx
President
CHICAGO EQUITY PARTNERS CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-------------------------
Xxxxx X. Xxxxxx
President
7
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:
Master Portfolio Rate of Compensation
---------------- --------------------
Nations Blue Chip Master Portfolio 0.25%
Approved: December 2, 1998
8
