INVESTMENT SUB-ADVISORY AGREEMENT
COLUMBIA FUNDS MASTER INVESTMENT TRUST
THIS AGREEMENT is made as of September 30, 2005, by and between COLUMBIA
MANAGEMENT ADVISORS, LLC, a Delaware limited liability company (the "Adviser"),
MACKAY XXXXXXX LLC, a Delaware limited liability company (the "Sub-Adviser"),
and COLUMBIA FUNDS MASTER INVESTMENT TRUST, a Delaware statutory trust (the
"Trust"), on behalf of those series of the Trust now or hereafter identified on
Schedule I (each a "Master Portfolio" and collectively, the "Master
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 Master 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
Master 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
Master 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 Master
Portfolio, including but not limited to:
(a) Managing the investment and reinvestment of all assets, now or
hereafter acquired by each Master Portfolio, including
determining what securities
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and other investments are to be purchased or sold for each Master
Portfolio and executing transactions accordingly;
(b) Transmitting trades to each Master Portfolio's custodian for
settlement in accordance with each Master 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 as to the manner in which voting rights,
rights to consent to Master Portfolio action and any other rights
pertaining to each Master Portfolio's portfolio securities shall
be exercised;
(e) Making recommendations to the Adviser and the Board with respect
to Master 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 to the Adviser, the Board or to the Master
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 books and records with respect to the investment
decisions and securities transactions for each Master Portfolio
required by applicable law;
(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 Master 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 Columbia 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 Columbia Fund in the Columbia Funds 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 Master Portfolio shares;
(e) Place, or arrange for the placement of, all orders pursuant to
its investment determinations for the Master 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 Master
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;
(f) Adhere to the investment objective, strategies and policies and
procedures of the Trust adopted on behalf of each Master
Portfolio; and
(g) Meet the service level performance standards that the parties may
agree to from time to time.
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 Master 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
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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 Master
Portfolio or the size of the position obtainable for or disposed of by a Master
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 most recent prospectus(es) and statement(s) of additional
information relating to each Master 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
(c) 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 Master 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 MASTER 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
Master Portfolios. Ordinary operating expenses include, but are not limited to,
brokerage commissions and other transaction charges, taxes, legal, auditing,
printing, or governmental fees, other Master Portfolio service providers' fees
and
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expenses, including those related to third party pricing of portfolio
securities, 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 directly incurred by it in connection with its services under this
Agreement.
9. COMPENSATION. Except as otherwise provided herein, for the services
provided to each Master 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 Master Portfolio 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 Master Portfolio 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 or
employees, in connection with the performance of their duties under this
Agreement, from reckless disregard by it or its officers, directors or employees
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 or
employees.
11. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Master Portfolios 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 or employees, in connection with the performance of their duties under
this Agreement, from reckless disregard by it or its officers, directors or
employees 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 or employees; provided, however, that the Sub-Adviser shall not be
required to indemnify or otherwise hold the Master Portfolios or the Adviser
harmless under this Section 11 where the claim against, or the loss, liability
or damage experienced by the Master Portfolios or the Adviser, is caused by or
is otherwise directly related to the Master Portfolios' or the Adviser's own
willful misfeasance, bad faith or negligence, or to the reckless disregard by
the Master Portfolios or the Adviser of their duties under this Agreement.
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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 Master Portfolio as of the date set forth on Schedule
I when each such Master Portfolio is added thereto. The Agreement shall continue
in effect for a Master 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
Master Portfolio at least annually:
(a)(i) by the Board 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.
13. TERMINATION. This Agreement may be terminated without payment of any
penalty at any time by:
(a) the Trust with respect to a Master Portfolio, by vote of the
Board or by vote of a majority of a Master 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 Master
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.
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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 Xxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx, 00000, Attention: Secretary, that of the Adviser shall be Xxx
Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, 00000, Attention: President and that of
the Sub-Adviser shall be MacKay Xxxxxxx LLC, 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 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 a change in control
of the Sub-Adviser; (iv) any change in the portfolio manager or portfolio
management team of a Master 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
Master Portfolio; and (vi) any material violation of the Sub-Adviser's code of
ethics.
19. RELEASE. The names "Columbia Funds Master Investment Trust" and
"Trustees of Columbia Funds Master Investment 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 Master Portfolio of the Trust must
look solely to the property belonging to such Master 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.
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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 "COLUMBIA FUNDS". The Sub-Adviser agrees that it will
not use the name "Columbia Funds", any derivative thereof, or the name of the
Adviser, the Trust or any Master Portfolio 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.
COLUMBIA FUNDS MASTER INVESTMENT TRUST
on behalf of the Master Portfolios
By: /s/ Xxxxxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxxxxx X. Xxxxxx
President
COLUMBIA MANAGEMENT ADVISORS, LLC
By: /s/ Xxxxx Xxxxxx
------------------------------------
Xxxxx Xxxxxx
Executive Vice President
MACKAY XXXXXXX LLC
By: /s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx
Managing Director
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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:
RATE OF
MASTER PORTFOLIO COMPENSATION EFFECTIVE DATE
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Columbia High Income Master Portfolio 0.40% of average daily net 2/14/00
assets up to and including
$100 million; 0.375% of
average daily net assets in
excess of $100 million and
up to and including $200
million; and 0.35% of
average daily net assets in
excess of $200 million
Current as of the 30th day of September, 2006.
COLUMBIA FUNDS MASTER INVESTMENT TRUST
on behalf of the Master Portfolios
By: /s/ Xxxxxxxxxxx X. Xxxxxx
------------------------------------
Xxxxxxxxxxx X. Xxxxxx
President
COLUMBIA MANAGEMENT ADVISORS, LLC
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------------
Xxxx X. Xxxxxxxxx
Managing Director
MACKAY XXXXXXX LLC
By: /s/ Xxxxxxx Xxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Senior Managing Director
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