INTERIM
INVESTMENT SUB-ADVISORY AGREEMENT
NATIONS MASTER INVESTMENT TRUST
THIS AGREEMENT is made as of May 11, 2004 among BANC OF AMERICA CAPITAL
MANAGEMENT, LLC, a North Carolina limited liability company (herein called the
"Adviser"), CAUSEWAY CAPITAL MANAGEMENT LLC, a Delaware limited liability
company (herein called the "Sub-Adviser") and NATIONS MASTER INVESTMENT TRUST, a
Delaware statutory trust (the "Trust"), on behalf of those series of the Trust
now or hereafter 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") as an open-end series 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 in the ▇▇▇▇ ▇▇▇) 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 among 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:
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(a) Managing the investment and reinvestment of all assets now or
hereafter acquired by each Master Portfolio, or such portion
of the assets of each Master Portfolio as the Adviser may
determine from time to time, including determining what
securities 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 interestholder communications
relating to the Master Portfolios, including interestholder
reports;
(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 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 required books and records with respect to the
investment decisions and securities transactions for each
Master 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 Master
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Portfolio issued thereunder that the Adviser communicates to
the Sub-Adviser;
(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) 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 Master Portfolio interests;
(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;
and
(f) Adhere to the investment objective, strategies, policies, and
procedures of the Trust adopted on behalf of each Master
Portfolio and communicated to the Sub-Adviser.
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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
apply to any information that is public when provided or thereafter becomes
public or which is required or requested 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 Trust's Bylaws, if any;
(c) 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
(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 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
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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 expenses, expenses of issue, sale, redemption and repurchase of shares,
expenses of registering and qualifying shares for sale, expenses relating to
Board and interestholder meetings and the cost of preparing and distributing
reports and notices to interestholders. 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 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.
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, board
members, employees or agents, in connection with the performance of their duties
under this Agreement, from reckless disregard by it or its officers, board
members, 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, board members, employees or agents.
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,
board members, employees or agents, in connection with the performance of their
duties under this Agreement, from reckless disregard by it or its officers,
board members, 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, board members, employees or agents; 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
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to the Master Portfolios' or the Adviser's or any of their officers',
trustees'/directors', employees' or agents' own willful misfeasance, bad faith
or negligence, or to the reckless disregard by the Master Portfolios or the
Adviser or any of their officers, trustees/directors, employees or agents of
their duties under this Agreement, or to any violations of securities laws,
rules, regulations, statutes or codes, whether federal or state, by the Master
Portfolios or the Adviser or any of their officers, trustees/directors,
employees or agents.
12. TERM AND APPROVAL. This Agreement will become effective as of the
date set forth herein above, and shall continue in effect until the earlier of:
(a) such time as a new investment sub-advisory agreement is approved by a
majority of the outstanding voting securities of the Master Portfolio; or (b)
the 150th day, or such other time that is granted by the Commission, following
the termination of the prior agreements dated January 1, 2003 among the Adviser,
INVESCO Global Asset Management (N.A.), Inc. and the Trust and among the
Adviser, ▇▇▇▇▇▇ Investment Management, LLC and the Trust.
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. PROXY VOTING PROCEDURES. The Sub-Adviser represents that it has
adopted and implemented written policies and procedures that are reasonably
designed to ensure that the Sub-Adviser votes proxies in the best interest of
the Master Portfolios in compliance with the requirements of Rule 206(4)-6 under
the Advisers Act. The Sub-Adviser shall present to the Board its policies,
procedures and other guidelines for voting proxies at least annually, and must
notify the Adviser or the Board promptly of material changes to any policies and
procedures, including any substantive changes to its procedures for addressing
conflicts of interest. The Sub-Adviser is not required to notify the Adviser or
the Board of changes relating to any guidelines
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for voting specific types of proxies except as part of the annual presentation.
Upon request, the Sub-Adviser shall provide the Trust with a copy of its
policies, procedures and other guidelines or a description of such policies,
procedures and guidelines for the purpose of filing such document(s) in the
Trust's Prospectus or as otherwise required by the 1940 Act and the rules
promulgated thereunder.
16. 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.
17. 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.
18. 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.
19. 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 ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Secretary,
that of the Adviser shall be ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, and that of
the Sub-Adviser shall be ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, 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.
20. RELEASE. The names "Nations Master Investment Trust" and "Trustees
of Nations 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 interestholder shall be personally liable for any such liabilities.
All persons dealing with any Master Portfolio
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of the Trust must look solely to the property belonging to such Master Portfolio
for the enforcement of any claims against the Trust.
21. 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.
22. 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.
23. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original.
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 Master Portfolio except in accordance with such
policies and procedures as may be mutually agreed to in writing. Notwithstanding
the foregoing, the Sub-Adviser may include the names "Nations International
Equity Fund" or "Nations International Equity Master Portfolio" on its client
list used in marketing materials.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers as of the day and year first written
above.
NATIONS MASTER INVESTMENT TRUST,
on behalf of the Master Portfolios
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
BANC OF AMERICA CAPITAL
MANAGEMENT, LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Director, Chief Administrative
Officer, Senior Vice President and Treasurer
CAUSEWAY CAPITAL MANAGEMENT LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Operating Officer
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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 under
the Sub-Adviser's management:
MASTER PORTFOLIO RATE OF COMPENSATION EFFECTIVE DATE
---------------- -------------------- --------------
Nations International Equity Master Portfolio 0.43% May 11, 2004
Approved: April 7, 2004
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