Exhibit 99.D2
FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
NATIONS FUNDS TRUST
THIS AGREEMENT is made as of [DATE], by and between BANC OF AMERICA
ADVISORS, INC., a North Carolina corporation (the "Adviser"), [SUB-ADVISER], a
[STATE] corporation (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. 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. 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 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;
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(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;
(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 Fund action and
any other rights pertaining to each Fund's portfolio
securities shall be exercised;
(e) Making recommendations to the Adviser and the Board
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;
(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. 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) Not make loans to any person for the purpose of
purchasing or carrying Fund shares;
(d) 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
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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 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
(e) Adhere to the investment objective, strategies and
policies and procedures of the Trust adopted on
behalf of each Fund.
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 Fund. 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. 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 presently in
effect and as from time to time amended, is herein
called the "Declaration of Trust");
(b) the Trust's Bylaws, if any;
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(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 Rule 31a-1 under the 1940 Act.
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 of
issue, 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 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. To the
extent that the advisory fee that the Trust would be obligated to pay to the
Adviser with respect to a Fund pursuant to the Investment Advisory Agreement is
reduced or reimbursed, the fee that the Sub-Adviser would otherwise receive
pursuant to this Agreement shall be reduced or reimbursed proportionately.
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
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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. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless
the Funds and the Adviser from and against any and all direct or indirect
claims, losses, liabilities or damages (including reasonable attorney's fees and
other related expenses) 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 resulting 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; provided, however, that the
Sub-Adviser shall not be required to indemnify or otherwise hold the Funds or
the Adviser harmless under this Section 11 where the claim against, or the loss,
liability or damage experienced by the Funds or the Adviser, is caused by or is
otherwise directly related to the Funds' or the Adviser's own willful
misfeasance, bad faith or negligence, or to the reckless disregard by the Funds
or the Adviser of their 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 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.
13. 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
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(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.
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 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
_________________________. 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 a change in control of the Sub-Adviser;
(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 Sub-Adviser's code of ethics.
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19. RELEASE. 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.
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 "NATIONS FUNDS". The Sub-Adviser acknowledges and
agrees that the name "Nations Funds" is the property of Bank of America
Corporation and/or its affiliates and that the Sub-Adviser will not use such
name 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:_________________________________
A. Xxx Xxxxxx
President and Chairman of
the Board of Trustees
BANC OF AMERICA ADVISORS, INC.
By:_________________________________
Xxxxxx X. Xxxxxx
President
[SUB-ADVISER NAME]
By:_________________________________
[NAME]
[TITLE]
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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
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Fund Name -.--%
Approved:
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