INVESTMENT SUB-ADVISORY AGREEMENT
NATIONS SEPARATE ACCOUNT TRUST
THIS AGREEMENT is made as of January 1, 2003, by and between BANC OF
AMERICA CAPITAL MANAGEMENT, LLC, a North Carolina limited liability company (the
"Adviser"), XXXXXXX CAPITAL MANAGEMENT, LLC, a Delaware limited liability
corporation (the "Sub-Adviser"), and NATIONS SEPARATE ACCOUNT TRUST, a Delaware
statutory trust (the "Trust"), on behalf of those series of the Trust now or
hereafter identified on Schedule I (each a "Portfolio" and collectively, the
"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 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
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
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 Portfolio,
including but not limited to:
(a) Managing the investment and reinvestment of all assets, now or
hereafter acquired by each Portfolio, including determining what
securities and other investments are to be purchased or sold for
each Portfolio and executing transactions accordingly;
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(b) Transmitting trades to each Portfolio's custodian for settlement
in accordance with each 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, or making determinations under authority
delegated by the Adviser or the Trust, as to the manner in which
voting rights, rights to consent to Portfolio action and any
other rights pertaining to each Portfolio's portfolio securities
shall be exercised; provided, however, that the Sub-Adviser shall
be given reasonable prior notice should the Adviser or the Trust
determine to direct the Sub-Adviser in its exercise of such
rights;
(e) Making recommendations to the Adviser and the Board with respect
to 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 within its possession or control to the Adviser, the
Board or to the 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 required books and records with respect to the
investment decisions and securities transactions for each
Portfolio;
(h) Furnishing any and all other services, subject to review by the
Board, that the Adviser from time to time reasonably determines
to be necessary 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 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;
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(c) The Sub-Adviser acknowledges that the Master Portfolios may
engage in transactions with certain investment sub-advisers in
the Nations Funds Family (and their affiliated persons) in
reliance on exemptions under Rule 10f-3, Rule 12d3-1, Rule 17a-10
and Rule 17e-1 under the 1940 Act. Accordingly, the Sub-Adviser
hereby agrees that it will not consult with any other investment
sub-adviser of a Nations Fund in the Nations Fund Family
concerning transactions for a Master Portfolio in securities or
other investments, other than for purposes of complying with the
conditions of Rule 12d3-1(a) and (b). With respect to a Master
Portfolio with one or more investment sub-advisers in addition to
the Sub-Adviser, the Sub-Adviser shall be limited to providing
investment advice only with respect to the portion of the Master
Portfolio's assets as the Adviser may determine from time to
time, and shall not consult with any other investment sub-adviser
to the Master Portfolio that is a principal underwriter or an
affiliated person of a principal underwriter concerning
transactions for the Master Portfolio in securities or other
investments.
(d) Not make loans to any person for the purpose of purchasing or
carrying Portfolio interests;
(e) Place, or arrange for the placement of, all orders pursuant to
its investment determinations for the 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 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; and
(f) Adhere to the investment objective, strategies, policies and
procedures of the Trust adopted on behalf of each Portfolio.
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 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
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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
Portfolio or the size of the position obtainable for or disposed of by a
Portfolio.
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 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 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.
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 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 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
Portfolios. Ordinary operating expenses include, but are not limited to,
brokerage commissions and other transaction charges, taxes, legal, auditing,
printing, or governmental fees, other Portfolio service providers' fees and
expenses, expenses of issue,
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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 incurred by it in connection with
its services under this Agreement.
9. COMPENSATION. Except as otherwise provided herein, for the services
provided to each 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 Portfolio 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 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,
employees or agents, in connection with the performance of their duties under
this Agreement, from reckless disregard by it or its officers, directors,
employees or agents 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, employees or agents.
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 Portfolio as of the date set forth on Schedule I when
each such Portfolio is added thereto. The Agreement shall continue in effect for
a 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 Portfolio at
least annually:
(a)(i) by the Board or (ii) by the vote of "a majority of the
outstanding voting securities" of the 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.
12. TERMINATION. This Agreement may be terminated without payment of any
penalty at any time by:
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(a) the Trust with respect to a Portfolio, by vote of the Board or by
vote of a majority of a 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 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 Xxx Xxxx xx Xxxxxxx Xxxxx, 00xx Xxxxx,
000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx 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 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000,
Attention: General Counsel. 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
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a change in control of the Sub-Adviser; (iv) any change in the portfolio manager
of a 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 Portfolio; and
(vi) any material violation of the Sub-Adviser's code of ethics.
19. RELEASE. The names "Nations Separate Account Trust" and "Trustees of
Nations Separate Account 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 Portfolio of the Trust must look solely to the property
belonging to such 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 "MARSICO". Sub-Adviser hereby consents to and grants a
non-exclusive license for the use by the Trust to the phrase "Xxxxxxx Capital",
the identifying word "Marsico" in the name of the Portfolios and any logo or
symbol authorized by the Sub-Adviser. Such consent is conditioned upon the
Trust's employment of Sub-Adviser or its affiliates as sub-investment adviser to
the Portfolios. Sub-Adviser may from time to time use the phrase "Xxxxxxx
Capital" or the identifying word "Marsico" or logos or symbols used by
Sub-Adviser in other connections and for other purposes, including without
limitation in the names of other investment companies, corporations or
businesses that it may manage, advise, sponsor or own or in which it may have a
financial interest. Sub-Adviser may require the Trust to cease using the phrase
"Xxxxxxx Capital" or the identifying word "Marsico" in the name of the
Portfolios or any logo or symbol authorized by Sub-Adviser if the Trust ceases
to employ Sub-Adviser or an affiliate thereof as sub-investment adviser.
24. 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 Portfolio except in accordance with such policies and
procedures as may be mutually agreed to in writing. The parties hereto agree
that the Sub-Adviser shall be permitted to include in its promotional or
marketing literature statements to the effect that it manages the portfolio
investments of any Nations Fund(s) with respect to which it serves as investment
sub-adviser.
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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 SEPARATE ACCOUNT TRUST
on behalf of the 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
XXXXXXX CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxxxxxx X. Xxxxxxx
President
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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 Portfolio,
computed daily and payable monthly at the annual rates listed below as a
percentage of the average daily net assets of the Portfolio:
RATE OF
PORTFOLIO COMPENSATION EFFECTIVE DATE
--------- ------------ ---------------
Nations Marsico Focused Equities Portfolio 0.45% 04/12/01
Nations Xxxxxxx Growth Portfolio 0.45% 04/12/01
Nations Marsico International Opportunities Portfolio 0.45% 05/01/01
Nations Marsico 21st Century Portfolio 0.45% 05/01/01
Nations Marsico XxxXxx Growth Portfolio 0.45% 11/02/04
Approved: November 21, 2002
Last Amended: November 2, 2004
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IN WITNESS WHEREOF, the parties hereto have caused this amended Schedule I
to be executed by their officers designated below as of the 2nd day of November,
2004.
NATIONS SEPARATE ACCOUNT TRUST
on behalf of the Portfolios
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Xxxxxx X. Xxxxxxx
Secretary
BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxx Xxxxxx
------------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Investment Officer
XXXXXXX CAPITAL MANAGEMENT, LLC
By: /s/ Xxxxxxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxxxxxx X. Xxxxxxx
President
