INVESTMENT SUB-ADVISORY AGREEMENT
SEI TAX EXEMPT TRUST
AGREEMENT made this 31 day of July, 2001 between SEI Investments
Management Corporation (the "Adviser") and Xxxxxxxx Xxxxxx Asset Management
Company LLC (the "Sub-Adviser").
WHEREAS, SEI Tax Exempt 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 April 16, 1996 (the "Advisory Agreement") with the Trust, pursuant to
which the Adviser acts as investment adviser to the Intermediate-Term Municipal,
New York Municipal Bond, and Massachusetts Municipal Bond Funds (each a
"Portfolio" and collectively, the "Portfolios"), each of 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 in connection with the
management of the Portfolios, 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 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 Trust's
Declaration of Trust (as defined herein) and the Prospectus and with
the 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, Subchapter M of the Internal Revenue
Code of 1986, and all other applicable federal and state laws and
regulations, as each is amended from time to time.
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(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 to carry out
the policy with respect to brokerage set forth in the Portfolio's
Prospectus delivered to the Sub-Adviser or as the Board of Trustees
or the Adviser may in writing direct from time to time, in
conformity with all 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 provided (as those terms are
defined in Section 28(e) of the Securities Exchange Act of 1934).
Consistent with the policies of the Trust, as disclosed in the
Prospectus, 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 its discretionary clients,
including the Portfolio. In addition, the Sub-Adviser is authorized
to allocate purchase and sale orders for securities to brokers or
dealers (including brokers and dealers that are affiliated with the
Adviser, Sub-Adviser or the Trust's principal underwriter) and to
take into account the sale of shares of the Trust if 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 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, Adviser, the
Sub-Adviser or the principal underwriter, acting as principal in the
transaction, except to the extent permitted by the Securities and
Exchange Commission ("SEC"), the Investment Advisers Act of 1940, as
amended, and the 1940 Act, and the rules and regulations thereunder.
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 clients, the Sub-Adviser, to the extent permitted by
applicable laws and regulations, may aggregate the securities to be
sold or purchased in order to obtain the best execution and/or a
lower brokerage commission, if any. In such event, allocation of the
securities so purchased or sold, as well as the expenses incurred in
the transaction, will be made by the Sub-Adviser in the manner it
considers to be the most equitable and consistent with its fiduciary
obligations to the Portfolio and to such clients.
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(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. The Sub-Adviser shall provide to the Adviser or the
Board of Trustees such periodic and special reports, balance sheets
or financial information, and such other information with regard to
its affairs as the Adviser or 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 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 Portfolio's 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 others, as long as such
services do not impair the services rendered to the Adviser or the
Trust. In addition, nothing in this agreement will in any way
restrict the Sub-Adviser, its officers, board members or employees
from trading in securities for its or their own accounts as
permitted by the 1940 Act and the Sub-Adviser's Code of Ethics,
provided that the Sub-Adviser's Code of Ethics materially complies
with the then current Code of Ethics recommendations of the
Investment Company Institute.
(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.
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(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
Assets. The Adviser shall instruct the custodian and other parties
providing services to the Portfolio to promptly forward misdirected
proxies to the Sub-Adviser.
Services to be furnished by the Sub-Adviser under this Agreement may
be furnished through the medium of any of the Sub-Adviser's
directors, 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 the Trust's
Declaration of Trust (as defined herein), the Prospectus, the written
instructions and directions of the Board of Trustees of the Trust, the
requirements of the 1940 Act, Subchapter M of 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) the Prospectus;
(d) any order issued by the SEC or other regulatory authority applicable
to the Trust, the Portfolio or the Adviser; and
(e) any other written instructions, directions or policies of the
Adviser or the Trust's Board of Trustees applicable to the
Sub-Adviser's duties hereunder.
The Adviser will promptly furnish to the Sub-Adviser any and all
amendments or other changes to the documents specified in this
Section 3, and the Sub-Adviser shall not be charged with complying
with any such document or amendment not so delivered to the
Sub-Adviser, unless the Sub-Adviser reasonably should have known the
terms of such document or amendment.
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4. COMPENSATION TO THE SUB-ADVISER; EXPENSES. 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.
The Sub-Adviser shall be responsible for its own expenses in performing
its duties hereunder but shall not be responsible for the expenses of the
Trust or the Portfolio. Without limiting the generality of the foregoing,
the Sub-Adviser shall not be responsible for brokerage commissions,
transfer taxes or fees or custody fees of the Portfolio.
5. INDEMNIFICATION. The Sub-Adviser shall indemnify and hold harmless the
Adviser 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 the performance of the
Sub-Adviser's obligations under this Agreement; provided, however, that
the Sub-Adviser's obligation under this Section 5 shall be reduced to the
extent that the claim against, or the loss, liability or damage
experienced by the Adviser, is caused by or is otherwise directly related
to the Adviser's own willful misfeasance, bad faith or negligence, or to
the reckless disregard of its duties under this Agreement.
The Adviser shall indemnify and hold harmless the Sub-Adviser 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 the performance of the Adviser's obligations
under this Agreement; provided, however, that the Adviser's obligation
under this Section 5 shall be reduced to the extent that the claim
against, or the loss, liability or damage experienced by the Sub-Adviser,
is caused by or is otherwise directly related to the Sub-Adviser's own
willful misfeasance, bad faith or negligence, or to the reckless disregard
of its duties under this Agreement.
Neither party shall be responsible for payment of any amounts in
settlement of a claim by the other unless the indemnifying part has
consented to such settlement, which consent shall not be unreasonably
withheld.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Portfolio. This Agreement shall
continue in effect for a period of more than two years from the date
hereof only so long as continuance is specifically approved at least
annually in conformance with the 1940 Act; 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, on not more
than 60 days' nor less than 30 days' written notice to the Sub-Adviser, by
the vote of a majority of Trustees of the Trust or by the vote of a
majority of the outstanding voting securities of the 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-
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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 6, 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.
7. 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.
8. 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.
9. 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 Investments Management Corporation
Xxx Xxxxxxx Xxxxxx Xxxx
Xxxx, XX 00000
Attention: Legal Department
To the Sub-Adviser at: Xxxxxxxx Mellon Asset Management
Company LLC
Xxx Xxxxxxxxx Xxxxxx, Xxxxx 00
Xxxxxx, XX 00000
Attention: President
10. 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.
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11. MISCELLANEOUS.
(a) A copy of the Declaration of Trust is on file with the Secretary of
State of the Commonwealth of Massachusetts, and notice is hereby
given that the obligations of this instrument are not binding
personally upon any of the Trustees, officers or shareholders of the
Portfolios or the Trust.
(b) Where the effect of a requirement of the 1940 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 INVESTMENTS MANAGEMENT CORPORATION XXXXXXXX XXXXXX ASSET MANAGEMENT
COMPANY LLC
By: /s/ Xxxx Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------------------- ------------------------------
Name: Xxxx Xxxxxxxxx Name: Xxxx X. Xxxxxxx
--------------------------------- ------------------------------
Title: Vice President Title: Treasurer
--------------------------------- ------------------------------
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SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
XXXXXXXX MELLON ASSET MANAGEMENT COMPANY LLC
Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at
an annual rate as follows:
SEI TAX EXEMPT TRUST
EFFECTIVE JULY 31, 2001 TO DECEMBER 31, 2001:
Intermediate-Term Municipal Fund 0.13%
New York Municipal Bond Fund 0.13%
Massachusetts Municipal Bond Fund 0.13%
EFFECTIVE JANUARY 1, 2002:
Intermediate-Term Municipal Fund 0.12%
New York Municipal Bond Fund 0.12%
Massachusetts Municipal Bond Fund 0.12%
Agreed and Accepted:
SEI INVESTMENTS MANAGEMENT CORPORATION XXXXXXXX XXXXXX ASSET MANAGEMENT
COMPANY LLC
By: /s/ Xxxx Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxx
--------------------------------- -----------------------------
Title: Xxxx Xxxxxxxxx Title: Treasurer
--------------------------------- -----------------------------
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