INVESTMENT SUB-ADVISORY AGREEMENT
SEI INSTITUTIONAL INVESTMENTS TRUST
AGREEMENT made this 14th day of June, 1996, between SEI Financial
Management Corporation, (the "Adviser") and BEA Associates (the
"Sub-Adviser").
WHEREAS, SEI Institutional Investments Trust, a Massachusetts business trust
(the "Trust") is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Adviser has entered into an Investment Advisory Agreement dated
June 14, 1996 (the "Advisory Agreement") with the Trust, pursuant to which the
Adviser will act as investment adviser to the High Yield Bond Portfolio (the
"Portfolio"), which is a series of the Trust; and
WHEREAS, the Adviser, with the approval of the Trust, desires to retain the
Sub-Adviser to provide investment advisory services to the Adviser in connection
with the management of the Portfolio, and the Sub-Adviser is willing to render
such investment advisory services.
NOW, THEREFORE, the parties hereto agree as follows:
1. DUTIES OF THE SUB-ADVISER. Subject to supervision by the Adviser and the
Trust's Board of Trustees, the Sub-Adviser shall manage the investment of
all of the securities and other assets of the Portfolio entrusted to it
hereunder (the "Assets") including the purchase, retention and disposition
of the Assets, in accordance with the Portfolio's investment objectives,
policies and restrictions as stated in the Portfolio's prospectus and
statement of additional information, as currently in effect and as amended
or supplemented from time to time (referred to collectively as the
"Prospectus"), and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the direction of
the Adviser, determine from time to time what Assets will be purchased,
retained or sold by the Portfolio, and what portion of the Assets will be
invested or held uninvested in cash.
(b) In the performance of its duties and obligations under this Agreement, the
Sub-Adviser shall act in conformity with the investment objectives,
policies and limitations with respect to the Portfolio set forth in the
Trust's Declaration of Trust (as defined herein) and the Prospectus and
with applicable instructions and directions of the Adviser and of the Board
of Trustees of the Trust and will conform to and comply with the
requirements of the 1940 Act, the Internal Revenue Code of 1986, and all
other applicable federal and state laws and regulations, as each is amended
from time to time.
(c) The Sub-Adviser shall determine the Assets to be purchased or sold by the
Portfolio as provided in subparagraph (a) and will place orders with or
through such persons, brokers or dealers, including the Sub-Adviser or
affiliates thereof, in accordance with the policy with respect to brokerage
set forth in the Portfolio's Registration Statement and Prospectus or as
the Trust's Board of Trustees or the Adviser may direct from time to time,
in conformity with federal securities laws. In executing Portfolio
transactions and selecting brokers or dealers, the Sub-Adviser will use its
best efforts to seek on behalf of the 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-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 Portfolio and/or other
accounts over which the Sub-Adviser or an affiliate of the Sub-Adviser may
exercise investment discretion. The Sub-Adviser is authorized to pay to a
broker or dealer who provides such brokerage and research services a
commission for executing a portfolio transaction for the Portfolio 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 Portfolio and the accounts as
to which the Sub-Adviser excercises investment discretion. It is recognized
that the services provided by such brokers or dealers may be useful to the
Sub-Adviser in connection with the Sub-Adviser's services to other clients.
In no instance, however, will any of the Portfolio's Assets be purchased
from or sold to the Adviser, Sub-Adviser, the Trust's principal underwriter,
or any affiliated person of either the Trust, the Sub-Adviser or the
principal underwriter, acting as principal in the transaction, except to the
extent permitted by the Securities and Exchange Commission and the 1940 Act.
On occasions when the Sub-Adviser deems the purchase or sale of a security
to be in the best interest of the Portfolio as well as other customers, the
Sub-Adviser may, to the extent permitted by applicable laws and regulations,
but shall not be obligated to, aggregate the securities to be sold or
purchased in order to obtain the best execution and lower brokerage
commissions, if any. In such event, allocation of the securities so
purchased or sold, as well as expenses incurred in the transaction, will be
made by the Sub-Adviser in the manner it considers to be fair and equitable
and consistent with its fiduciary obligation to the Portfolio, and, if
applicable, to other customers.
The Adviser acknowledges that in order to comply with federal securities
laws and related regulatory requirements, there may be periods when the
Sub-Adviser will not be permitted to initiate or recommend certain types of
transactions in the securities or issuers for which affiliates of the
Sub-Adviser are performing investment banking services, and neither the
Trust nor the Adviser will be advised of that fact. For example, during
certain periods when affiliates of the Sub-Adviser are engaged in an
underwriting or other distribution of a company's securities, the
Sub-Adviser may be prohibited from purchasing or recommending the purchase
of certain securities of that company for its clients. Similarly, the
Sub-Adviser may on occasion be prohibited from selling or recommending the
sale of securities of a company for which affiliates are providing
investment banking services.
(d) The Sub-Adviser shall maintain all books and records with respect to
transactions involving the Assets required by subparagraphs (b)(5), (6),
(7), (9), (10) and (11) and paragraph (f) of Rule 31a-1 under the 1940 Act
and shall render to the Adviser or the Trust's Board of Trustees such
periodic and special reports as the Adviser or the Trust's Board of
Trustees may reasonably request.
The Sub-Adviser shall keep the books and records relating to the Assets
required to be maintained by the Sub-Adviser under this Agreement and shall
timely furnish to the Adviser all information relating to the Sub-Adviser's
services under this Agreement needed by the Adviser to keep the other books
and records of the Portfolio required by Rule 31a-1 under the 1940 Act. The
Sub-Adviser shall also furnish to the Adviser any other information
relating to the Assets that is required to be filed by the Adviser or the
Trust with the Securities and Exchange Commission ("SEC") or sent to
shareholders under the 1940 Act (including the rules adopted thereunder) or
any exemptive or other relief that the Adviser or the Trust obtains from
the SEC. The Sub-Adviser agrees that all records that it maintains on
behalf of the Portfolio are property of the Portfolio and the Sub-Adviser
will surrender promptly to the Portfolio any of such records upon the
Portfolio's request; provided, however, that the Sub-Adviser may retain a
copy of such records. In addition, for the duration of this Agreement, the
Sub-Adviser shall preserve for the periods prescribed by Rule 31a-2 under
the 1940 Act any such records as are required to be maintained by it
pursuant to this Agreement, and shall transfer said records to any
successor Sub-Adviser upon the termination of this Agreement (or, if there
is no successor Sub-Adviser, to the Adviser).
(e) The Sub-Adviser shall provide the Portfolio's custodian on each business
day with information relating to all transactions concerning the Assets and
shall provide the Adviser with such information upon request of the
Adviser.
(f) The investment management services provided by the Sub-Adviser under this
Agreement are not to be deemed exclusive and the Sub-Adviser shall be free
to render similar services to other clients, as long as such services do
not impair the services rendered to the Adviser or the Trust. The
Sub-Adviser may give advice, and take action, with respect to any of its
other clients that may differ from the advice given, or the time or nature
of action taken, with respect to the Portfolio. The Sub-Adviser shall have
no obligation to purchase or sell for the Portfolio or to recommend for
purchase or sale by the Portfolio, any securities that the Sub-Adviser, its
principals, affiliates or employees may purchase for themselves or for any
other clients.
(g) The Sub-Adviser shall promptly notify the Adviser of any financial
condition that is likely to impair the Sub-Adviser's ability to fulfill its
commitment under this Agreement.
Services to be furnished by the Sub-Adviser under this Agreement may be
furnished through the medium of any of the Sub-Adviser's partners, officers
or employees.
2. DUTIES OF THE ADVISER. The Adviser shall continue to have responsibility
for all services to be provided to the Portfolio pursuant to the Advisory
Agreement and shall oversee and review the Sub-Adviser's performance of its
duties under this Agreement; provided, however, that in connection with its
management of the Assets, nothing herein shall be construed to relieve the
Sub-Adviser of responsibility for compliance, with respect to the
Portfolio, with the Trust's Declaration of Trust (as defined herein), the
Prospectus, the instructions and directions of the Board of Trustees of the
Trust, the requirements of the 1940 Act, the Internal Revenue Code of 1986,
and all other applicable federal and state laws and regulations, as each is
amended from time to time.
3. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies properly certified or authenticated of each of the following
documents:
(a) The Trust's Agreement and Declaration of Trust, as filed with the Secretary
of State of the Commonwealth of Massachusetts (such Agreement and
Declaration of Trust, as in effect on the date of this Agreement and as
amended from time to time, herein called the "Declaration of Trust");
(b) By-Laws of the Trust (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, are herein called the
"By-Laws");
(c) Prospectus(es) of the Portfolio.
Copies of any amendments to the above documents will be furnished promptly
to the Sub-Adviser.
4. COMPENSATION TO THE SUB-ADVISER. For the services to be provided by the
Sub-Adviser pursuant to this Agreement, the Adviser will pay the
Sub-Adviser, and the Sub-Adviser agrees to accept as full compensation
therefor, a sub-advisory fee at the rate specified in the Schedule(s) which
is attached hereto and made part of this Agreement. The fee will be
calculated based on the average monthly market value of the Assets under
the Sub-Adviser's management and will be paid to the Sub-Adviser monthly.
Except as may otherwise be prohibited by law or regulation (including any
then current SEC staff interpretation), the Sub-Adviser may, in its
discretion and from time to time, waive a portion of its fee.
5. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not be
liable for any error of judgment or for any loss suffered by the Adviser in
connection with the performance of its obligations under this Agreement,
except a loss resulting from a breach of fiduciary duty with respect to the
receipt of compensation for services (in which case any award of damages
shall be limited to the period and the amount set forth in Section 36(b)(3)
of the 1940 Act), or a loss resulting from willful misfeasance, bad faith
or negligence on the Sub-Adviser's part in the performance of its duties or
from reckless disregard of its obligations and duties under this Agreement,
except as may otherwise be provided under provisions of applicable state
law which cannot be waived or modified hereby.
The Sub-Adviser shall not be responsible for any loss incurred by reason of
any act or omission of any broker-dealer; provided, however, that the
Sub-Adviser shall use reasonable care in its selection and use of brokers
in effecting transactions for the Portfolio. The Sub-Adviser shall have no
obligation to seek to obtain any material non-public ("inside") information
about any issuer of securities, nor to purchase or sell, or to recommend
for purchase or sale, for the Portfolio the securities of any issuer on the
basis of any such information as may come into its possession.
The Adviser acknowledges and agrees that the Sub-Adviser makes no
representation and warranty, express or implied, that any level of
performance or investment results will be achieved by the Portfolio or that
the Portfolio will perform comparably with any standard or index, including
other clients of the Sub-Adviser whether public or private.
6. REPORTS. During the term of this Agreement, the Adviser agrees to furnish
the Sub-Adviser at its principal office all prospectuses, proxy statements,
reports to stockholders, sales literature or other materials prepared for
distribution to stockholders of the Portfolios, the Trust or the public that
refer to the Sub-Adviser or its clients in any way prior to use thereof and
not to use such material if the Sub-Adviser reasonably objects in writing
within five business days (or such other period as may be mutually agreed)
after receipt thereof. The Sub-Adviser's right to object to such materials
is limited to the portions of such materials that expressly relate to the
Sub-Adviser; its services and its clients. The Adviser agrees to use its
reasonable best efforts to ensure that materials prepared by
its agents or its affiliates that refer to the Sub-Adviser or its clients
in any way are consistent with those materials previously approved by the
Sub-Adviser as referenced in the first sentence of this paragraph. Sales
literature may be furnished to the Sub-Adviser by first class or overnight
mail, facsimile transmission equipment or hand delivery.
7. PORTFOLIO COMPOSITION. The Adviser shall provide (or cause the Trust's
custodian to provide) timely information to the Sub-Adviser regarding such
matters as the composition of the Assets and cash available for investment
in the Portfolio and cash requirements (with respect to the redemption of
Portfolio shares) and such other information as the parties may reasonably
agree upon.
8. EXPENSES. The Sub-Adviser shall bear expenses incurred by it in connection
with its duties hereunder, including payment for compensation of and office
space for its officers and employees engaged in providing services
hereunder, but shall not be responsible for any expenses of the Trust.
9. CUSTODY. The cash and assets of the Portfolio shall be held by CoreStates
Bank, N A. (the "Custodian"), which the Adviser hereby represents has
agreed to act as custodian for the Portfolio. The Sub-Adviser shall at no
time have custody or physical control of the Assets in the Portfolio. In
addition, the Sub-Adviser shall not be liable for any act or omission of
the Custodian. The Sub-Adviser shall give instructions to the Custodian in
writing or orally (at the discretion of the Custodian) and confirmed in
writing as soon as practicable thereafter. The Adviser shall instruct the
Custodian to provide the Sub-Adviser with such periodic reports concerning
the status of the Portfolio as the Sub-Adviser and the Adviser may agree
from time to time. The Adviser shall provide the Sub-Adviser with a copy of
the Portfolio's agreement with the Custodian and any modification thereto
and will notify the Sub-Adviser in advance of a change in the Custodian.
10. REPRESENTATIONS AND WARRANTIES OF THE ADVISER. The Adviser represents and
warrants to the Sub-Adviser that (a) the Adviser has the authority to act
on behalf of the Trust and has and will continue to convey to the
Sub-Adviser all relevant information regarding the Trust and the Portfolio
including, but not limited to, any relevant investment restrictions of the
Trust and the Portfolio; (b) this Agreement has been duly authorized,
executed and delivered by the Adviser and constitutes its valid and binding
obligation, enforceable in accordance with its terms; (c) no governmental
authorizations, approvals, consents or filings are required in connection
with the execution, delivery or performance of this Agreement by the
Adviser; (d) the execution, delivery and performance of this Agreement by
the Adviser will not violate or result in any default under the Adviser's
certificate of incorporation or by-laws (or equivalent constituent
documents), any contract or other agreement to which the Adviser is a party
or by which its assets may be bound or any statute or any rule, regulation
or order of any government agency or body; (e) the Assets of the Portfolio
do not and will not constitute assets of any employee benefit plan within
the meaning of Section 3(3) of the Employee Retirement Security Act of 1974
or Section 4975(e) of the Internal Revenue Code of 1986 and this Agreement
and the transactions contemplated hereby will not constitute an investment
by a "benefit plan investor" within the meaning of DOL Reg. Section 2510.3
-101; and (f) the Adviser has received a copy of Part II of the
Sub-Adviser's Form ADV as most recently filed with the SEC.
11. DIRECTIONS TO SUB-ADVISER. All directions by or on behalf of the Adviser to
the Sub-Adviser shall be in writing signed either (a) by a director or
officer of the Adviser, or (b) by a duly authorized agent of the Adviser.
The Sub-Adviser shall be fully protected in relying upon any direction
signed in the appropriate manner with respect to any instruction, direction
or approval of the Adviser. The Sub-Adviser shall also be fully protected
when acting upon any instrument, certificate or paper the Sub-Adviser
reasonably believes to be genuine and to be signed or presented by the
proper person or persons. The Sub-Adviser shall be under no duty to make
any investigation or inquiry as to any statement contained in any such
writing and may accept the same as conclusive evidence of the truth and
accuracy of the statements therein contained.
12. PROXIES, TENDER OFFERS, CLASS ACTIONS, ETC. Subject to any other written
instructions of the Adviser, the Sub-Adviser is hereby appointed the
Adviser's agent and attorney-in-fact on behalf of the Portfolio in its
discretion to vote, tender or convert any of the Assets; to execute proxies,
waivers, consents, account documentation, agreements, contracts, and other
instruments with respect to the Assets; to endorse, transfer or deliver the
Assets and to participate in or consent to any class action, plan of
reorganization, merger, combination, consolidation, liquidation or similar
plan with reference to the Assets; and the Sub-Adviser shall not incur any
liability to the Adviser or the Portfolio by reason of any exercise of, or
failure to exercise, any such discretion. Notwithstanding the provisions of
this Section 12, if the Sub-Adviser determines that it, or any of its
affiliates, has an adverse or potentially adverse interest with respect to
the vote or other requested action, the Sub-Adviser shall so inform the
Adviser, which shall thereupon become responsible for the determination on
such vote or other action.
13. INDEMNIFICATION. (a) The Adviser shall indemnify and hold harmless the
Sub-Adviser, its officers, directors, employees, agents and each person, if
any, who controls the Sub-Adviser within the meaning of Section 15 of the
Securities Act of 1933 (the "1933 Act") (any and all such persons shall be
referred to as "Sub-Adviser Indemnified Party"), against any and all
claims, losses, liabilities or damages (including reasonable attorney's
fees and other related expenses) howsoever arising from or in connection
with this Agreement or the performance by the Adviser of its duties
hereunder; provided, however, that the Adviser shall not be required to
indemnify or otherwise hold any particular Sub-Adviser Indemnified Party
harmless under this Section 13 where the claim against, or the loss,
liability or damage experienced by the Sub-Adviser Indemnified Party is
caused by or is otherwise directly related to such Sub-Adviser Indemnified
Party's own willful misfeasance, bad faith or negligence, or to the
reckless disregard of its duties under this Agreement.
(b) The Sub-Adviser shall indemnify and hold harmless the Adviser, its
officers, directors, employees, agents and each person, if any, who
controls the Adviser within the meaning of Section 15 of the 1933 Act (any
and all such persons shall be referred to as "Adviser Indemnified Party")
from and against any and all claims, losses, liabilities or damages
(including reasonable attorney's fees and other related expenses) howsoever
arising from or in connection with this Agreement or the performance by the
Sub-Adviser of its duties hereunder; provided, however, that the
Sub-Adviser shall not be required to indemnify or otherwise hold any
particular Adviser Indemnified Party harmless under this Section 13 where
the claim against, or the loss, liability or damage experienced by the
Adviser Indemnified Party, is caused by or is otherwise directly related to
such Adviser Indemnified Party's own willful misfeasance, bad faith or
negligence, or to the reckless disregard of its duties under this
Agreement.
14. DURATION AND TERMINATION. This Agreement shall become effective as of the
date hereof.
This Agreement shall continue in effect until the earlier of (i) a period
two years from the date hereof only so long as continuance is specifically
approved at least annually in conformance with the 1940 Act or (ii) the
approval by a majority of the outstanding voting securities of the
Portfolio of an Investment Sub-Advisory Agreement with substantially the
same terms and conditions except with respect to compensation to the
Sub-Adviser; provided, however, that this Agreement may be terminated with
respect to the Portfolio (a) by the Portfolio at any time, without the
payment of any penalty, by the vote of a majority of Trustees of the Trust
or by the vote of a majority of the outstanding voting securities of such
Portfolio, (b) by the Adviser at any time, without the payment of any
penalty, on not more than 60 days' nor less than 30 days' written notice to
the Sub-Adviser, or (c) by the Sub-Adviser at any time, without the payment
of any penalty, on 90 days' written notice to the Adviser. This Agreement
shall terminate automatically and immediately in the event of its
assignment, or in the event of a termination of the Adviser's agreement with
the Trust. As used in this Section 14, the terms "assignment" and "vote of a
majority of the outstanding voting securities" shall have the respective
meanings set forth in the 1940 Act and the rules and regulations thereunder,
subject to such exceptions as may be granted by the SEC under the 1940 Act.
15. GOVERNING LAW. This Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflict of law
principles; provided, however, that nothing herein shall be construed as
being inconsistent with the 1940 Act.
16. SEVERABILITY. Should any part of this Agreement be held 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.
17. NOTICE. Any notice, advice or report to be given pursuant to this Agreement
shall be deemed sufficient if delivered or mailed by registered, certified
or overnight mail, postage prepaid addressed by the party giving notice to
the other party at the last address furnished by the other party:
To the Adviser at: SEI Financial Management Corporation
000 Xxxx Xxxxxxxxxx Xxxx
Xxxxx, XX 00000
Attention: Legal Department
To the Sub-Adviser at: BEA Associates
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attn.: President
18. ENTIRE AGREEMENT. This Agreement embodies the entire agreement and
understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to this Agreement's subject matter.
This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but such counterparts shall, together,
constitute only one instrument.
Where the effect of a requirement of the l940 Act reflected in any provision of
this Agreement is altered by a rule, regulation or order of the SEC, whether of
special or general application, such provision shall be deemed to incorporate
the effect of such rule, regulation or order.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers designated below as of the day and year first written
above.
SEI Financial Management Corporation BEA Associates
By: By:
/s/ Xxxxx Xxxxxx /s/ Signature Appears Here
----------------------------------- ----------------------------------
Name: Xxxxx Xxxxxx Name:
----------------------------------- ----------------------------------
Title: S.V.P. Title: Legal Counsel
----------------------------------- ----------------------------------
SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI FINANCIAL MANAGEMENT
CORPORATION
AND
BEA ASSOCIATES
Pursuant to Article 4, the Adviser shall pay the Sub-Adviser compensation at an
annual rate as follows:
High Yield Bond Portfolio %
