INVESTMENT SUB-ADVISORY AGREEMENT
AGREEMENT MADE THIS 1st day of January,
2011, by and between Nuveen Fund Advisors, Inc.,
a Delaware corporation and a registered investment
adviser ( Manager ), and Nuveen Asset
Management, LLC, a Delaware limited liability
company and a registered investment adviser
( Sub-Adviser ).
WHEREAS, Manager is the investment manager
for the Funds listed on Schedule A hereto (each a
Fund and collectively the Funds ), each a series
of Nuveen Multistate Trust II (the Trust ), an
open-end management investment company
registered under the Investment Company Act of
1940, as amended ( 1940 Act ); and
Adviser as its agent to furnish investment advisory
services for each Fund, 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 with respect
to the portion of each Funds portfolio
allocated by Manager to Sub-Adviser for the
period and on the terms set forth in this
Agreement. Sub-Adviser accepts such
appointments 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 Manager and the
Trusts Board of Trustees (the Board ), 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 portion of each Funds
investment portfolio allocated by Manager to Sub-
Adviser. In the performance of its duties, Sub-
Adviser will satisfy its fiduciary duties to the
Trust, will monitor each Funds investments, and
will comply with the provisions of the Trusts
Declaration of Trust and By-laws, each as
amended from time to time (the Trust
Documents ), and the stated investment objectives,
policies and restrictions of each Fund. Manager
will provide Sub-Adviser with current copies of
the Trust Documents, each Funds prospectus and
Statement of Additional Information and any
amendments thereto, and any objectives, policies
or restrictions not appearing therein as they may be
relevant to Sub-Advisers 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 each Fund and to
consult with each other regarding the investment
affairs of each Fund. Sub-Adviser will report to
Manager and the Board with respect to the
implementation of its investment program for each
Fund.
Sub-Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of
portfolio securities for each Fund, and is directed
to use its best efforts to obtain best execution,
which includes most favorable net results and
execution of each Funds 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 Sub-Adviser will
not be deemed to have acted unlawfully, or to have
breached a fiduciary duty to the Trust or the Funds,
or be in breach of any obligation owing to the
Trust or the Funds under this Agreement, or
otherwise, solely by reason of its having caused a
Fund to pay a member of a securities exchange, a
broker or a dealer a commission for effecting a
securities transaction for a Fund in excess of the
amount of commission another member of an
exchange, broker or dealer would have charged if
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 Sub-Advisers overall
responsibilities with respect to its accounts,
including the Funds, as to which it exercises
investment discretion. In addition, if in the
judgment of Sub-Adviser, a Fund would be
benefited by supplemental services, Sub-Adviser is
authorized to pay spreads or commissions to
brokers or dealers furnishing such services in
excess of spreads or commissions which another
broker or dealer may charge for the same
transaction, provided that Sub-Adviser determines
in good faith that the commission or spread paid is
reasonable in relation to the services provided.
Sub-Adviser will properly communicate to the
officers and trustees of the Trust such information
relating to transactions for each Fund as they may
reasonably request. In no instance will portfolio
securities be purchased from or sold to Manager,
Sub-Adviser or any affiliated person of the Trust,
Manager or Sub-Adviser, except as may be
permitted under the 1940 Act, and under no
circumstances will Sub-Adviser select brokers or
dealers for Fund transactions on the basis of Fund
share sales by such brokers or dealers.
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;
(c) will report regularly to Manager and the
Board and will make appropriate persons available
for the purpose of reviewing with representatives
of Manager and the Board on a regular basis at
reasonable times the management of the Funds,
including, without limitation, review of the general
investment strategies of the Funds, the
performance of the Funds 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 prepare such books and records with
respect to each Funds securities transactions as
requested by Manager and will furnish Manager
and the Board such periodic and special reports as
Manager or the Board may reasonably request; and
(e) 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 Funds, 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
Funds securities are priced on a given day) that
may materially impact the pricing of one or more
securities in Sub-Advisers portion of the portfolio.
In addition, upon the request of Manager, Sub-
Adviser will assist Manager in evaluating the
impact that such an event may have on the net
asset value of the Funds and in determining a
recommended fair value of the affected security or
securities. Sub-Adviser shall not be liable for any
valuation determined or adopted by the Funds, the
Funds custodian and/or portfolio accounting
agent, as contemplated in this Agreement, unless
such determination is made based upon
information provided by Sub-Adviser that is
materially incorrect or incomplete as a result of
Sub-Advisers gross negligence.
3. 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 commission, if any)
purchased for each Fund.
4. Compensation. For the services provided and
the expenses assumed pursuant to this Agreement,
Manager will pay Sub-Adviser, and Sub-Adviser
agrees to accept as full compensation therefor, a
portfolio management fee for each Fund equal to a
percentage (as set forth on Schedule A) of the
remainder of (a) the investment management fee
payable by each Fund to Manager based on
average daily net assets pursuant to the
Management Agreement between Manager and the
Trust, less (b) any management fees, expenses,
supermarket fees and alliance fees waived,
reimbursed or paid by Manager in respect of each
Fund.
The management fee shall accrue on each calendar
day, and shall be payable monthly on the second 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 each Fund, determined in the
manner established by the Board, as of the close of
business on the last preceding business day on which each
Funds net asset value was determined.
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.
5. Services to Others. Manager understands,
and has advised the Board, that Sub-Adviser now
acts, or may in the future act, as an investment
adviser to fiduciary and other managed accounts,
and as investment adviser or sub-investment
adviser to other investment companies that are not
series of the Trust, provided that whenever each
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 the Board, that in
some cases this procedure may adversely affect the
size of the position that each Fund may obtain in a
particular security. It is further agreed that, on
occasions when Sub-Adviser deems the purchase
or sale of a security to be in the best interests of
each 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 each 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 the Board, that the persons
employed by Sub-Adviser to assist in Sub-
Advisers duties under this Agreement will not
devote their full such efforts and service to the
Funds. It is also agreed that Sub-Adviser may use
any supplemental research obtained for the benefit
of the Funds in providing investment advice to its
other investment advisory accounts or for
managing its own accounts.
6. Limitation of Liability. Manager will not
take any action against Sub-Adviser to hold Sub-
Adviser liable for any error of judgment or mistake
of law or for any loss suffered by a Fund in
connection with the performance of Sub-Advisers
duties under this Agreement, except for a loss
resulting from Sub-Advisers willful misfeasance,
bad faith, or gross negligence in the performance
of its duties or by reason of its reckless disregard
of its obligations and duties under this Agreement.
7. Term; Termination; Amendment.
As to each Fund, this Agreement shall become
effective and shall run for an initial period as
specified for each Fund in Schedule A hereto. This
Agreement shall continue in force from year to
year thereafter with respect to each Fund, but only
as long as such continuance is specifically
approved for each 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 each Fund, Sub-Adviser may continue to serve
in such capacity for each 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
either party on sixty (60) days written notice to
Sub-Adviser. This Agreement may also be
terminated by the Trust with respect to a Fund by
action of the Board or by a vote of a majority of
the outstanding voting securities of such Fund on
sixty (60) days written notice to Sub-Adviser by
the Trust.
This Agreement may be terminated with respect to
each Fund at any time without the payment of any
penalty by Manager or the Board or by vote of a
majority of the outstanding voting securities of
each Fund in the event that it shall have been
established by a court of competent jurisdiction
that Sub-Adviser or any officer or director of Sub-
Adviser has taken any action which results in a
breach of the covenants of 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 Sub-Adviser to receive payments on any
unpaid balance of the compensation described in
Section 4 earned prior to such termination. This
Agreement shall automatically terminate in the
event the Management Agreement between
Manager and the Trust is terminated, assigned or
not renewed.
8. Notice. Any notice under this
Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other
party as set forth below:
If to Manager:
Nuveen Fund Advisors, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxxx
If to Sub-Adviser
Nuveen Asset Management, LLC
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxx
With a copy to:
Nuveen Investments, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: General Counsel
or such address as such party may designate for the receipt
of such notice.
9. 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.
9. Applicable Law. This Agreement shall be
construed in accordance with applicable federal
law and the laws of the State of Illinois.
IN WITNESS WHEREOF, Manager and Sub-
Adviser have caused this Agreement to be
executed as of the day and year first above written.
NUVEEN FUND ADVISORS, INC.,
a Delaware corporation
By: ______________________________
Title: Managing Director NUVEEN ASSET MANAGEMENT, LLC,
a Delaware limited liability company
By: _________________________________
Title: Managing Director
INVESTMENT SUB-ADVISORY AGREEMENT
Schedule A
Fund Name
Effective Date
Period End
Compensation Percentage
Nuveen California Municipal Bond Fund
January 1, 2011
August 1, 2012
60.0000%
Nuveen California High Yield Municipal Bond Fund
January 1, 2011
August 1, 2012
58.3333%
Nuveen California Insured Municipal Bond Fund
January 1, 2011
August 1, 2012
45.4545%
Nuveen Connecticut Municipal Bond Fund
January 1, 2011
August 1, 2012
45.4545%
Nuveen Massachusetts Municipal Bond Fund
January 1, 2011
August 1, 2012
45.4545%
Nuveen Massachusetts Insured Municipal Bond Fund
January 1, 2011
August 1, 2012
45.4545%
Nuveen New Jersey Municipal Bond Fund
January 1, 2011
August 1, 2012
45.4545%
Nuveen New York Municipal Bond Fund
January 1, 2011
August 1, 2012
45.4545%
Nuveen New York Insured Municipal Bond Fund
January 1, 2011
August 1, 2012
45.4545%
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