EXHIBIT 24.2.g.(ii)
INVESTMENT SUB-ADVISORY AGREEMENT
SEI OPPORTUNITY MASTER FUND, LP
AGREEMENT made this 23 day of July, 2003 between SEI Investments
Management Corporation (the "Adviser") and Pacific Alternative Asset Management
Company, LLC (the "Sub-Adviser").
WHEREAS, SEI Opportunity Master Fund, LP, a Delaware limited
partnership (the "Fund"), is registered as a closed-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 May 20, 2002 (the "Advisory Agreement") with the Fund, pursuant to which
the Adviser acts as investment adviser to the Fund; and
WHEREAS, the Adviser, with the approval of the Fund, desires to retain
the Sub-Adviser to provide investment advisory services to the Adviser in
connection with the management of the Fund, 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 Fund's Board of Directors, the Sub-Adviser shall provide investment
advice on all investments, securities and assets, on a continuous and
ongoing basis, at Sub-Adviser's expense, all of the securities and
other assets of the Fund entrusted to it by the Adviser (the "Assets"),
including the purchase, retention and disposition of the Assets, in
accordance with the Fund's investment objectives, policies and
restrictions as provided in writing from time to time by the Adviser to
the Sub-Adviser, and subject to the following:
(a) The Sub-Adviser shall, in consultation with and subject to the
direction of the Adviser and in compliance with the procedures
described below in this subparagraph (a), recommend from time to time
what Assets will be purchased, retained or sold by the Fund, and what
portion of the Assets will be invested or held uninvested in cash. The
Sub-Adviser acknowledges that the Fund will seek to achieve its
investment objectives by investing and reinvesting the Assets primarily
in a portfolio of equity interests issued by limited partnerships,
limited liability companies, business trusts and similar business
vehicles whose primary business is investing in securities and other
financial instruments but that are not registered or required to
register as investment companies under the 1940 Act. Monthly, the
Sub-Adviser shall deliver (by facsimile or as otherwise directed) to
the Adviser a list of the transactions that the Sub-Adviser recommends
the Fund engage in, together with appropriate supporting information.
The Sub-Adviser will deliver this list sufficiently in advance of the
proposed date for execution of such recommended transactions so as to
allow the Adviser a reasonable period of time during which to evaluate
such recommended transactions. The Sub-Adviser acknowledges that the
Adviser has retained the right to determine whether the Fund shall
enter into any such recommended transactions, and in this regard, the
Sub-Adviser agrees not to implement any such transaction if, prior to
the proposed date of such transaction, the Adviser notifies
the Sub-Adviser (including by telephone) that it vetoes such
transaction ("Veto"). The Sub-Adviser agrees to implement those
transactions that it recommends pursuant to this subparagraph (a) and
that are not timely vetoed by the Adviser.
(b) In the performance of its duties and obligations under this Agreement,
the Sub-Adviser shall act in conformity with the Fund's Operating
Agreement (as defined herein) and with the instructions and directions
of the Adviser and of the Board of Directors of the Fund and will
conform to and comply with the requirements of the 1940 Act, the
Internal Revenue Code of 1986, as amended (the "Code"), and all other
applicable federal and state laws and regulations, as each is amended
from time to time.
(c) The Sub-Adviser shall determine, subject to the Veto procedures in
paragraph 1(a), the Assets to be purchased or sold by the Fund as
provided in subparagraph (a) and will place orders with or through such
persons, brokers or dealers to carry out the Fund's policy with respect
to brokerage as determined by the Board of Directors or the Adviser
from time to time, in conformity with all applicable laws. In executing
Fund transactions and selecting brokers or dealers, the Sub-Adviser
will use its best efforts to seek on behalf of the Fund 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, as amended (the "Exchange Act")). Consistent with
any guidelines established by the Board of Directors of the Fund and
Section 28(e) of the Exchange Act, 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 Fund 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 clients, including the Fund. 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 Fund's principal
underwriter) and to take into account the sale of shares of the Fund 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 Fund's Assets be purchased
from or sold to the Adviser, the Fund's principal underwriter, or any
affiliated person of either the Fund, Adviser, or the principal
underwriter, acting as principal in the transaction, except to the
extent permitted by the 0000 Xxx. The Sub-Adviser shall not be
responsible for any acts or omissions by any broker or dealer, unless
the Sub-Adviser is negligent in the selection of any such broker or
dealer.
(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
Directors 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 Directors 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 Fund 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 Fund with the Securities and Exchange
Commission (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 Fund obtains from the SEC. The
Sub-Adviser agrees that all records that it maintains on behalf of the
Fund are property of the Fund and the Sub-Adviser will surrender
promptly to the Fund any of such records upon the Fund'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 Fund's custodian on a monthly basis
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 others, as long as such services
do not impair the services rendered to the Adviser or the Fund.
(g) The Sub-Adviser shall promptly notify the Adviser (i) of any business
or financial condition that is likely to impair the Sub-Adviser's
ability to fulfill its commitments under this Agreement, (ii) if the
Sub-Adviser shall fail to be registered as an investment adviser under
the Investment Advisers Act of 1940, as amended, and under the laws of
any jurisdiction in which Sub-Adviser is required to be registered as
an investment adviser in order to perform its obligations under this
Agreement or any other agreement concerning the provision of investment
advisory services to the Fund, (iii) if the Sub-Adviser shall fail to
be registered as a commodity pool operator or commodity trading advisor
under the Commodity Exchange Act, as amended, or shall fail to maintain
any similar type of registration under the laws of any jurisdiction in
which the Sub-Adviser is required to be so registered in order to
perform its obligations under this Agreement or any other agreement
concerning the provision of investment advisory services to the
Fund, or (iv) if the Sub-Adviser shall have been served or otherwise
have notice of any action, suit, proceeding, inquiry or investigation,
at law or in equity, before or by any court, public board or body,
involving the affairs of the Fund.
(h) The Sub-Adviser shall review all proxy and consent solicitation
materials and be responsible for voting and handling all proxies and
consents in relation to the securities held as Assets in the Fund
consistent with the economic interest of the Fund. The Adviser shall
instruct the custodian and other parties providing services to the Fund
to promptly forward misdirected proxies or consents to the Sub-Adviser.
(i) The Sub-Adviser shall be deemed to be an independent contractor and,
except as otherwise provided herein, the Sub-Adviser shall not have
authority to act for, represent or bind in any way, and shall not
otherwise be deemed to be an agent of, the Fund or the Adviser. Nothing
contained herein (other than the Adviser's or the Sub-Adviser's
ownership of a membership interest in the Fund) shall create or
constitute the Sub-Adviser or any person in which the Fund is invested
and the Fund or the Adviser as members of any partnership, limited
liability company, joint venture, association, syndicate,
unincorporated business or other separate entity, and nothing contained
herein shall be deemed to confer on any of them any express, implied or
apparent authority to incur any obligation or liability on behalf of
any other such entity (other than as set forth in this Section 1(i)).
The Adviser hereby, pursuant to authority granted to it by the Fund,
constitutes and appoints the Sub-Adviser as the Fund's true and lawful
representative and attorney-in-fact, in the Adviser's name, place and
stead, to make, execute, sign and acknowledge all subscription
agreements and similar contracts on behalf of the Fund as in the
Sub-Adviser's judgment are necessary or desirable for the Sub-Adviser
to implement the investment policies of the Fund by purchasing, selling
and redeeming Assets and placing orders for such purchases and sales
(provided that the Sub-Adviser will not take any such actions in
respect of transactions that the Adviser, pursuant to the procedures
set forth in Section 1.1(a), has vetoed). The foregoing power of
attorney is revocable, and will terminate in any event upon the
termination of this Agreement.
2. DUTIES OF THE ADVISER. The Adviser shall oversee and review the
Sub-Adviser's performance of its duties under this Agreement (including
by exercising its discretion over recommended investments pursuant to
the procedures set forth in Section 1.1(a)); 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 Fund's Operating Agreement (as defined herein), the
instructions and directions of the Board of Directors of the Fund or of
the Adviser, the requirements of the 1940 Act, the Code, 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) Operating Agreement of the Fund (such Operating Agreement, as in effect
on the date of this Agreement and as amended from time to time, herein
called the "Operating Agreement"); and
(b) By-Laws of the Fund (such By-Laws, as in effect on the date of this
Agreement and as amended from time to time, herein called the
"By-Laws").
4. COMPENSATION TO THE SUB-ADVISER. The Adviser, out of the fee it
receives from the Fund under the Advisory Agreement, will pay to the
Sub-Adviser as compensation for the Sub-Adviser's services rendered and
for the facilities furnished and for the expenses borne by the
Sub-Adviser a fee in accordance with Schedule A of this Agreement.
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 Paragraph 5 shall
be reduced to the extent that the claim against the Adviser, 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; and provided further, however, the Sub-Adviser
shall assume no responsibility in connection with the performance of
its duties under this Agreement for errors of judgment or other actions
taken or omitted to be taken absent the Sub-Adviser's negligence or
misconduct.
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 Paragraph 5 shall be reduced to the extent that
the claim against the Sub-Adviser, 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.
6. DURATION AND TERMINATION. This Agreement shall become effective upon
approval by the Fund's Board of Directors and its execution by the
parties hereto.
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 and the
rules and regulations thereunder; provided, however, that this
Agreement may be terminated:
(a) by the Fund at any time, without the payment of any penalty, by the
vote of a majority of Directors of the Fund or by the vote of a
majority of the outstanding voting securities of the Fund;
(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
30 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
Advisory Agreement with the Fund. As used in this Paragraph 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 or no-action positions as may be granted by the SEC or its
staff under the 1940 Act.
In the event that this Agreement is terminated, the Sub-Adviser agrees
to cooperate with the Adviser and any successor sub-adviser to the
Sub-Adviser and provide the Fund's books and records or take such other
action as may be reasonably requested by the Adviser in order to ensure
that continuous, high quality services are provided to the Fund.
7. GOVERNING LAW. This Agreement shall be governed by the internal laws of
the State of Delaware, 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: Pacific Alternative Asset Management
Company, LLC
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Operating Officer
10. COUNTERPARTS. 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.
11. MISCELLANEOUS. 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.
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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 PACIFIC ALTERNATIVE ASSET MANAGEMENT
COMPANY, LLC
By: ___________________________________ By: _________________________________
Name: _________________________________ Name: _______________________________
Title: ________________________________ Title: ______________________________
SCHEDULE A
1. For purposes of calculating the fee to be paid to the
Sub-Adviser under this Agreement:
"Fund Assets" shall mean the net assets of the Fund;
"Other Assets" shall mean the net assets of the portion of
assets managed by the Sub-Adviser, excluding the Fund, and
managed or advised by the Adviser for which the Sub-Adviser
has been appointed sub-adviser by the Adviser, without
duplication in the case of any multi-tier structure;
"Combined Assets" shall mean the sum of Fund Assets and Other
Assets; and
"Average Quarterly Net Assets" shall mean the average of the
net asset value of the Fund Assets, Other Assets or Combined
Assets, as the case may be, as of the last business day of
each month in the calendar quarter.
1. The Sub-Adviser fee shall be paid in arrears (within 14 days
of receipt by the Adviser of an invoice from the Sub-Adviser) based upon the
Average Quarterly Net Assets of the Combined Assets during the preceding
calendar quarter. The fee payable for the calendar quarter shall be calculated
by applying the annual rate, as set forth below, to the Average Quarterly Net
Assets of the Combined Assets, and dividing by four. The portion of the
quarterly fee to be paid by the Adviser to the Sub-Adviser with respect to this
Agreement shall be prorated based upon the Average Quarterly Net Assets of the
Fund Assets as compared to the Average Quarterly Net Assets of the Combined
Assets. For a calendar quarter in which this Agreement becomes effective or
terminates, the portion of the Sub-Adviser fee due hereunder shall be prorated
on the basis of the number of days that the Agreement is in effect during the
calendar quarter.
3. The annual rate payable hereunder shall not exceed .80%.
