SUB-ADVISORY AGREEMENT
NATIONS MASTER INVESTMENT TRUST
AGREEMENT made as of October 15, 1999 among BANC OF AMERICA ADVISORS,
INC., a North Carolina corporation (herein called the "Adviser"), XXXXXXX
INVESTMENT PARTNERS, L.P., a California limited partnership (herein called the
"Sub-Adviser") and NATIONS MASTER INVESTMENT TRUST (the "Trust"), a Delaware
business trust, on behalf of the portfolios of the Trust as now or hereafter may
be identified on Schedule I hereto (each a "Master Portfolio" and collectively,
the "Master Portfolios").
RECITALS
WHEREAS, the Trust is registered with the Securities and Exchange
Commission (the "Commission") under the Investment Company Act of 1940, as
amended (the "1940 Act"), as an open-end series management investment company;
and
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; and
WHEREAS, the Sub-Adviser is also registered under the Advisers Act, as
an investment adviser and engages in the business of acting as an investment
adviser; and
WHEREAS, the Adviser and the Trust have entered into an Investment
Advisory Agreement (the "Investment Advisory Agreement"), pursuant to which the
Adviser shall act 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 whereof is
hereby acknowledged, the parties hereto agree as follows:
1. Appointment.
The Adviser hereby appoints the Sub-Adviser to act as
investment sub-adviser to the Master Portfolios for the period and on the terms
set forth in this Agreement. The Sub-Adviser accepts such appointment and agrees
to furnish the services herein set forth for the compensation herein provided.
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 securities and investments, except for such cash
balances of the Master Portfolios as may, from time to time, be managed by the
Adviser. 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, policies 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 Master Portfolios' Board of Trustees.
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;
(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. Other Covenants.
The Sub-Adviser agrees that it will:
(a) 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;
(b) 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;
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(c) Place orders pursuant to its investment determinations for
the Master Portfolios either directly with the issuer or with
any 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 the Master Portfolios 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 the
brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934) provided
to the Master Portfolios 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 the prior approval of the Adviser and 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 the Master Portfolios 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
the Master Portfolios. 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 Adviser, 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, the Trust's principal underwriter or any
affiliated person of either the Trust, the Adviser,
Sub-Adviser, or the Trust's principal underwriter, acting as
principal in the transaction, except to the extent permitted
by the Commission;
(d) Treat confidentially and as proprietary information of the
Trust, all records and other information relative to the Trust
maintained by the Sub-Adviser, 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 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;
(e) Adhere to the policies and procedures of the Trust adopted
on behalf of the Master Portfolios and delivered to the
Sub-Adviser; and
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(f) Maintain a policy and practice of conducting its
sub-investment advisory services hereunder independently of
its, and any of its affiliates', commercial banking
operations. When the Sub-Adviser makes investment
recommendations for the Master Portfolios, its investment
advisory personnel will not inquire or take into consideration
whether the issuers of securities proposed for purchase or
sale for the Master Portfolios' accounts are customers of its,
or any of its affiliates', commercial department. In dealing
with commercial customers, the commercial department of the
Sub-Adviser, or any of its affiliates, will not inquire or
take into consideration whether securities of those customers
are held by the Master Portfolios.
4. 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 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 the Master Portfolios or the
size of the position obtainable for or disposed of by the Master Portfolios.
5. 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
the Master Portfolios are the property of the Trust and further agrees to
surrender promptly to the Trust any of such records upon the Trust's 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.
6. 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, custodial charges and other transaction costs,
if any) purchased or sold for the Master Portfolios.
7. Compensation.
The Adviser shall pay the Sub-Adviser, as compensation for
services rendered hereunder, fees, payable monthly, at the annual rates
indicated on Schedule I hereto, as such Schedule may be supplemented and amended
from time to time. 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 Portfolios with
respect to compensation under this Agreement.
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The average daily net asset value of the Master Portfolios
shall be determined in the manner set forth in the Declaration of Trust and
registration statement of the Trust, as amended from time to time.
8. Limitation of Liability.
The Sub-Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Trust in connection with the
performance of this Agreement, except that the Sub-Adviser shall be liable to
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 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.
9. Term and Approval.
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.
10. Termination.
This Agreement may be terminated at any time with respect to:
(a) a Master Portfolio, without the payment of any penalty,
by vote of the Trust's Board of Trustees or by vote of a majority
of a Master Portfolio's outstanding voting securities, or by the
Adviser, upon sixty (60) days' written notice to the other parties
to this Agreement.
(b) by the Sub-Adviser on 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, the term "assignment" for purposes of this paragraph having the
meaning defined in Section 2(a)(4) of the 1940 Act.
11. Amendment of This Agreement.
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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. To the extent required by the 1940 Act, no amendment of
this Agreement shall be effective until approved by vote of a majority of the
outstanding voting securities of the Master Portfolios.
12. Miscellaneous.
The captions in this Agreement are included for convenience of
reference only, and in no way define or limit 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.
13. Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers of the day and year first
written above.
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
BANC OF AMERICA ADVISORS, INC.
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
President
XXXXXXX INVESTMENT
PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxx
---------------------------------
Xxxxxxx X. Xxxxx
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 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 International Value Master Portfolio .50% of average daily net assets
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