INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT made as of this 24th day of March, 2005 by and between Nuveen
Asset Management, a Delaware corporation and a federally registered investment
adviser ("Manager"), and Spectrum Asset Management, Inc., a Connecticut
corporation and a federally registered investment adviser ("Sub-Adviser").
WHEREAS, Manager serves as the investment manager for the Nuveen
Tax-Advantaged Floating Rate Fund (the "Fund"), a closed-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act") pursuant to an Investment Management Agreement between
Manager and the Fund (as such agreement may be modified from time to time, the
"Management Agreement"); and
WHEREAS, Manager desires to retain Sub-Adviser to furnish investment
advisory services for the Fund's investment portfolio, upon the terms and
conditions hereafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. Manager hereby appoints Sub-Adviser to provide certain
sub-investment advisory services to the Fund for the period and on the terms
set forth in this Agreement. Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein
provided.
2. Services to be Performed. Subject always to the supervision of Fund's Board
of Trustees and the Manager, Sub-Adviser will furnish an investment program
in respect of, make investment decisions for, and place all orders for the
purchase and sale of securities for the Fund's investment portfolio, all on
behalf of the Fund and as described in the Fund's initial registration
statement on Form N-2 as declared effective by the Securities and Exchange
Commission, consistent with the investment objectives and restrictions of
the Fund described therein and as they may subsequently be changed by the
Fund's Board of Trustees and publicly described and as the Sub-Adviser is
notified of such changes. In the performance of its duties, Sub-Adviser will
satisfy its fiduciary duties to the Fund, will monitor the Fund's
investments in securities selected for the Fund by the Sub-Adviser
hereunder, and will comply with the provisions of the Fund's Declaration of
Trust and By-laws, as amended from time to time, and the investment
objectives, policies and restrictions of the Fund, to the extent the
Sub-Adviser has been notified of such objectives, policies and restrictions.
Manager will provide Sub-Adviser with current copies of the Fund's
Declaration of Trust, By-laws, prospectus and any amendments thereto, and
any written objectives, policies, procedures or limitations not appearing
therein as they may be relevant to Sub-Adviser's performance under this
Agreement. Sub-Adviser and Manager will each make its officers and employees
available to the other from time to time at reasonable times to review
investment policies of the Fund and to consult with each other regarding the
investment affairs of the Fund. Sub- Adviser will report to the Board of
Trustees and to Manager with respect to the implementation of such program.
Manager shall arrange for the Fund's custodian to forward to Sub-Adviser or
Sub-Adviser's designated proxy agent on a timely basis copies of all proxies
and shareholder communications relating to securities in which assets of the
Fund's investment portfolio are invested. The Sub-Adviser will vote all such
proxies delivered to Sub-Adviser or Sub-Adviser's designated proxy agent
consistent with the Sub-Adviser's proxy voting guidelines and the best
interests of the Fund. The Sub-Adviser will maintain appropriate records
detailing its voting of proxies on behalf of the Fund and upon reasonable
request will provide a report setting forth the proposals voted on and how
the Fund's shares were voted, including the name of the corresponding
issuers.
Sub-Adviser is authorized to select the brokers or dealers that will execute
the purchases and sales of portfolio securities for the Fund, and is
directed to use its commercially reasonable efforts to obtain best
execution, which includes most favorable net results and execution of the
Fund's orders, taking into account all appropriate factors, including price,
dealer spread or commission, size and difficulty of the transaction and
research or other services provided. It is understood that the Sub-Adviser
will not be deemed to have acted unlawfully, or to have breached a fiduciary
duty to the Fund, or be in breach of any obligation owing to the Fund under
this Agreement, or otherwise, solely by reason of its having caused the Fund
to pay a member of a securities exchange, a broker or a dealer (including
the Sub-Adviser's internal broker-dealer) a commission for effecting a
securities transaction for the Fund in excess of the amount of commission
another member of an exchange, broker or dealer would have charged if the
Sub-Adviser determined in good faith that the commission paid was reasonable
in relation to the brokerage or research services provided by such member,
broker or dealer, viewed in terms of that particular transaction or the
Sub-Adviser's overall responsibilities with respect to its accounts,
including the Fund, as to which it exercises investment discretion. In
addition, if in the judgment of the Sub-Adviser, the Fund would be benefited
by supplemental services, the Sub-Adviser is authorized to pay spreads or
commissions to brokers or dealers furnishing such services in excess of
spreads or commissions that another broker or dealer may charge for the same
transaction, provided that the Sub-Adviser determined in good faith that the
commission or spread paid was reasonable in relation to the services
provided. The Sub-Adviser will properly communicate to the officers and
trustees of the Fund such information relating to transactions for the Fund
as they may reasonably request. In no instance will portfolio securities be
purchased from or sold to the Manager, Sub-Adviser or any affiliated person
of the Fund, Manager, or Sub-Adviser, except as may be permitted under the
1940 Act.
Sub-Adviser further agrees that it:
a) will use the same degree of skill and care in providing such services as
it uses in providing services to fiduciary accounts for which it has
investment responsibilities;
b) will conform to all applicable Rules and Regulations of the Securities
and Exchange Commission in all material respects and in addition will
conduct its activities under this Agreement in accordance with any
applicable regulations of any governmental authority pertaining to its
investment advisory activities;
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c) will report regularly to Manager and to the Board of Trustees of the
Fund and will make appropriate persons available for the purpose of
reviewing with representatives of Manager and the Board of Trustees on a
regular basis at reasonable times the management of the Fund, including,
without limitation, review of the general investment strategies of the
Fund, the performance of the Fund's investment portfolio in relation to
standard industry indices and general conditions affecting the
marketplace and will provide various other reports from time to time as
reasonably requested by Manager;
d) will monitor the pricing of portfolio securities, and events relating to
the issuers of those securities and the markets in which the securities
trade in the ordinary course of managing the portfolio securities of the
Fund, and will notify Manager promptly of any issuer-specific or market
events or other situations that occur (particularly those that may occur
after the close of a foreign market in which the securities may
primarily trade but before the time at which the Fund's securities are
priced on a given day) that may materially impact the pricing of one or
more securities in the portfolio. In addition, Sub-Adviser will assist
Manager in evaluating the impact that such an event may have on the net
asset value of the Fund and in determining a recommended fair value of
the affected security or securities; and
e) will prepare such books and records with respect to the Fund's
securities transactions for the Fund's investment portfolio as
reasonably requested by the Manager and will furnish Manager and Fund's
Board of Trustees such periodic and special reports as the Board or
Manager may reasonably request.
3. Representations of Manager. Manager hereby represents that it:
a) is registered as an investment adviser under the Investment Advisers Act
of 1940, as amended (the "Advisers Act") and will continue to be so
registered for so long as this Agreement remains in effect;
b) is not prohibited by the 1940 Act or the Advisers Act from performing
investment advisory services to the Fund;
c) has met, and will continue to meet for so long as this Agreement remains
in effect, any applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory
agency, or the applicable licensing requirements for the use of any
trademarks necessary to be met in order to perform investment advisory
services for the Fund; and
d) will immediately notify the Sub-Adviser of the occurrence of any event
that would disqualify the Manager from serving as an investment adviser
of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
4. Representations of Sub-Adviser. Sub-Adviser hereby represents that it:
a) is registered as an investment adviser under the Advisers Act and will
continue to be so registered for so long as this Agreement remains in
effect;
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b) is not prohibited by the 1940 Act or the Advisers Act from performing
investment advisory services to the Fund;
c) has met, and will continue to meet for so long as this Agreement remains
in effect, any applicable federal or state requirements, or the
applicable requirements of any regulatory or industry self-regulatory
agency necessary to be met in order to perform investment advisory
services for the Fund; and
d) will immediately notify the Manager of the occurrence of any event that
would disqualify the Sub-Adviser from serving as an investment adviser
of an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
5. Expenses. During the term of this Agreement, Sub-Adviser will pay all
expenses incurred by it in connection with its activities under this
Agreement other than the cost of securities (including brokerage commissions
and other related expenses) purchased for the Fund.
6. Compensation. For the services provided and the expenses assumed pursuant to
this Agreement, Manager will pay the Sub-Adviser, and the Sub-Adviser agrees
to accept as full compensation therefor, a portfolio management fee equal to
the portion specified below of the investment management fee payable by the
Fund to the Manager, pursuant to the Management Agreement, with respect to
the Fund net assets (including net assets attributable to FundPreferred
Shares and the principal amount of any borrowings), as the net amount of
such fee is reduced by the obligation of Manager to reimburse certain fees
and expenses to the Fund pursuant to an Expense Reimbursement Agreement of
even date herewith by and between the Fund and the Manager, as such
agreement may be modified from time to time:
Percentage of Net
Daily Net Assets Management Fee
Up to $125 million 50.0%
$125 million to $150 million 47.5%
$150 million to $175 million 45.0%
$175 million to $200 million 42.5%
$200 million and over 40.0%
The portfolio management fee shall accrue on each calendar day, and shall be
payable monthly on the first business day of the next succeeding calendar
month. The daily fee accrual shall be computed by multiplying the fraction
of one divided by the number of days in the calendar year by the applicable
annual rate of fee, and multiplying this product by the net assets of the
Fund, determined in the manner established by the Fund's Board of Trustees,
as of the close of business on the last preceding business day on which the
Fund's net asset value was determined.
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For the month and year in which this Agreement becomes effective or
terminates, there shall be an appropriate proration on the basis of the
number of days that the Agreement is in effect during the month and year,
respectively.
Manager shall not agree to amend the financial terms of the Expense
Reimbursement Agreement or the Management Agreement to the detriment of the
Sub-Adviser by operation of this Section 6 without the express written
consent of the Sub-Adviser.
7. Services to Others. Manager understands, and has advised Fund's Board of
Trustees, that Sub-Adviser now acts, or may in the future act, as an
investment adviser to other investment portfolios including investment
companies, provided that whenever the Fund and one or more other investment
advisory clients of Sub-Adviser have available funds for investment,
investments suitable and appropriate for each will be allocated in a manner
believed by Sub- Adviser to be equitable to each. Manager recognizes, and
has advised Fund's Board of Trustees, that in some cases this procedure may
adversely affect the size of the position that the Fund may obtain in a
particular security. It is further agreed that, on occasions when the
Sub-Adviser deems the purchase or sale of a security to be in the best
interests of the Fund as well as other accounts, it may, to the extent
permitted by applicable law, but will not be obligated to, aggregate the
securities to be so sold or purchased for the Fund with those to be sold or
purchased for other accounts in order to obtain favorable execution and
lower brokerage commissions. In addition, Manager understands, and has
advised Fund's Board of Trustees, that the persons employed by Sub-Adviser
to assist in Sub-Adviser's duties under this Agreement will not devote their
full such efforts and service to the Fund. It is also agreed that the
Sub-Adviser may use any supplemental research obtained for the benefit of
the Fund in providing investment advice to its other investment advisory
accounts or for managing its own accounts.
8. Limitation of Liability. The Sub-Adviser shall not be liable for, and
Manager will not take any action against the Sub-Adviser to hold Sub-Adviser
liable for, any error of judgment or mistake of law or for any loss suffered
by the Fund (including, without limitation, by reason of the purchase, sale
or retention of any security) in connection with the performance of the
Sub-Adviser's duties under this Agreement, except for a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Sub-Adviser in the performance of its duties under this Agreement, or by
reason of its reckless disregard of its obligations and duties under this
Agreement.
9. Term; Termination; Amendment. This Agreement shall become effective with
respect to the Fund on the same date as the Management Agreement between the
Fund and the Manager becomes effective, provided that it has been approved
by a vote of a majority of the outstanding voting securities of the Fund in
accordance with the requirements of the 1940 Act, and shall remain in full
force until August 1, 2006 unless sooner terminated as hereinafter provided.
This Agreement shall continue in force from year to year thereafter with
respect to the Fund, but only as long as such continuance is specifically
approved for the Fund at least annually in the manner required by the 1940
Act and the rules and regulations thereunder; provided, however, that if the
continuation of this Agreement is not approved for
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the Fund, the Sub-Adviser may continue to serve in such capacity for the
Fund in the manner and to the extent permitted by the 1940 Act and the rules
and regulations thereunder.
This Agreement shall automatically terminate in the event of its assignment
and may be terminated at any time without the payment of any penalty by the
Manager on no less than sixty (60) days' written notice to the Sub-Adviser.
This Agreement may be terminated at any time without the payment of any
penalty by the Sub-Adviser on no less than sixty (60) days' written notice
to the Manager. This Agreement may also be terminated by the Fund with
respect to the Fund by action of the Board of Trustees or by a vote of a
majority of the outstanding voting securities of the Fund on no less than
sixty (60) days' written notice to the Sub-Adviser by the Fund.
This Agreement may be terminated with respect to the Fund at any time
without the payment of any penalty by the Manager, the Board of Trustees or
by vote of a majority of the outstanding voting securities of the Fund in
the event that it shall have been established by a court of competent
jurisdiction that the Sub-Adviser or any officer or director of the
Sub-Adviser has taken any action that results in a breach of the
representations of the Sub-Adviser set forth herein.
The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the rules
and regulations thereunder.
Termination of this Agreement shall not affect the right of the Sub-Adviser
to receive payments on any unpaid balance of the compensation described in
Section 6 earned prior to the effective date of such termination. This
Agreement shall automatically terminate in the event the Management
Agreement between the Manager and the Fund is terminated, assigned or not
renewed.
10. Notice. Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party
If to the Manager: If to the Sub-Adviser:
Nuveen Asset Management Spectrum Asset Management Inc.
000 Xxxx Xxxxxx Xxxxx 0 Xxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000 Xxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx Attention: Xxxx X. Xxxx
With a copy to: With a copy to:
Nuveen Investments, Inc. Wolf, Block, Xxxxxx and Xxxxx-Xxxxx LLP
000 Xxxx Xxxxxx Xxxxx 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel Attention: Xxxxxxx Xxxxxxxx XX
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or such address as each such party may designate for the receipt of such
notice.
11. Limitations on Liability. All parties hereto are expressly put on notice of
the Fund's Agreement and Declaration of Trust and all amendments thereto, a
copy of which is on file with the Secretary of the Commonwealth of
Massachusetts, and the limitation of shareholder and trustee liability
contained therein. The obligations of the Fund entered in the name or on
behalf thereof by any of the Trustees, representatives or agents are made
not individually but only in such capacities and are not binding upon any of
the Trustees, officers, or shareholders of the Fund individually but are
binding upon only the assets and property of the Fund, and persons dealing
with the Fund must look solely to the assets of the Fund and those assets
belonging to the subject Fund, for the enforcement of any claims.
12. 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 is held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement will not be affected thereby.
This Agreement will be binding upon and shall inure to the benefit of the
parties hereto and their respective successors.
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13. Applicable Law. This Agreement shall be construed in accordance with
applicable federal law and (except as to Section 9 hereof which shall be
construed in accordance with the laws of Massachusetts) the laws of the
State of Illinois.
IN WITNESS WHEREOF, the Manager and the Sub-Adviser have caused this Agreement
to be executed as of the day and year first above written.
NUVEEN ASSET MANAGEMENT, a SPECTRUM ASSET MANAGEMENT,
Delaware corporation INC., a Connecticut corporation
By: /s/ Xxxx X. Xxxx
By: /s/ Xxxxxxx X. Xxxxxxxxx -----------------------------------
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Title: Managing Director Title: Co-President
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