FORM OF
INVESTMENT SUB-ADVISORY AGREEMENT
SEI LIQUID ASSET TRUST
AGREEMENT made this __ day of ________, 2002 between SEI Investments
Management Corporation (the "Adviser") and Banc of America Capital Management,
LLC (the "Sub-Adviser").
WHEREAS, SEI Liquid Asset 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 ____ __, 2002 (the "Advisory Agreement") with the Trust, pursuant to which
the Adviser acts as investment adviser to each series of the Trust set forth on
Schedule A attached hereto (each a "Fund," and collectively, the "Funds"), as
such Schedule may be amended by mutual agreement of the parties hereto; 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 Funds, 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 Funds entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the
Assets, in accordance with each Fund's investment objectives, policies
and restrictions as stated in the Funds' prospectuses and statement of
additional information, as currently in effect and as amended or
supplemented from time to time (referred to collectively as the
"Prospectuses"), 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 Funds, 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 Prospectuses 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, the Internal Revenue Code of 1986 (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 the Assets to be purchased or sold by
the Funds 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 Funds' Registration Statement (as
defined herein) and Prospectuses or as the Board of Trustees
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or the Adviser may direct from time to time, in conformity with all
federal securities laws. In executing Fund transactions and selecting
brokers or dealers, the Sub-Adviser will use its best efforts to seek
on behalf of the Funds 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 (the "Exchange Act")).
Consistent with any guidelines established by the Board of Trustees of
the Trust 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 Funds 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 Funds. 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 Funds' 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") and the 1940 Act.
(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 Funds 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 Funds are
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property of the Funds and the Sub-Adviser will surrender promptly to
the Funds any of such records upon the Funds' 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 Funds' custodian on each business day
with information relating to all transactions concerning the Funds'
Assets and shall provide the Adviser with such information upon request
of the Adviser.
(f) (i) 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.
(ii) 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. The
Adviser acknowledges and agrees that in some cases this procedure may
adversely affect the price paid or received by a Fund or the size of
the position obtainable for or disposed of by a Fund.
(iii) On occasions when the Sub-Adviser deems the purchase or sale
of a security to be in the best interest of a Fund 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
commissions, 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 a manner it considers to be
equitable and consistent with its fiduciary obligations to the Funds
and to such 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.
(h) The Sub-Adviser shall review all proxy solicitation materials and be
responsible for voting and handling all proxies in relation to the
securities held as Assets in the Funds. The Adviser shall instruct the
custodian and other parties providing services to the Funds 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 partners,
officers or employees.
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2. DUTIES OF THE ADVISER. The Adviser shall continue to have
responsibility for all services to be provided to the Funds 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 Prospectuses, the instructions and directions of the Board of
Trustees of the Trust, 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) 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"); and
(c) Prospectuses of the Funds.
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 B
which is attached hereto and made part of this Agreement. The fee will
be calculated based on the average daily 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 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.
6. NO REPRESENTATION OR WARRANTY AS TO PERFORMANCE. The Adviser
acknowledges and agrees that the Sub-Adviser makes no representation or
warranty, express or implied, that any level of performance or
investment results will be achieved by the Funds, or that the
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Funds will perform comparably with any standard or index, including
results achieved for other clients of the Sub-Adviser, whether public
or private.
7. 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) resulting from the Sub-Adviser's breach of fiduciary duty
with respect to the receipt of compensation for services, or from
willful misfeasance, bad faith or negligence on the part of the
Sub-Adviser in connection with the performance of the Sub-Adviser's
obligations under this Agreement, or from the Sub-Adviser's reckless
disregard of its obligations and duties under this Agreement; provided,
however, that the Sub-Adviser's obligation under this Paragraph 7 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 Paragraph 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.
8. DURATION AND TERMINATION. This Agreement shall become effective upon
approval by the Trust's Board of Trustees and its execution by the
parties hereto. Pursuant to the exemptive relief obtained in the SEC
Order dated April 29, 1996, Investment Company Act Release No. 21921,
approval of the Agreement by a majority of the outstanding voting
securities of the Fund is not required, and the Sub-Adviser
acknowledges that it and any other sub-adviser so selected and approved
shall be without the protection (if any) accorded by shareholder
approval of an investment adviser's receipt of compensation under
Section 36(b) of the 1940 Act.
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 Fund
(a) by the Fund 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 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 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 Advisory Agreement
with the Trust. As used in this Paragraph 8, 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.
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9. 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.
10. 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.
11. 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: Banc of America Capital Management, LLC
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Chief
Administrative Officer
12. NON-HIRE/NON-SOLICITATION. The Sub-Adviser hereby agrees that so long
as the Sub-Adviser provides services to the Adviser or the Trust and
for a period of one year following the date on which the Sub-Adviser
ceases to provide services to the Adviser and the Trust, the
Sub-Adviser shall not for any reason, directly or indirectly, on the
Sub-Adviser's own behalf or on behalf of others, hire any person
employed by the Adviser, who, to the Sub-Adviser's knowledge, is
associated with this engagement, whether or not such person is a
full-time employee or whether or not any person's employment is
pursuant to a written agreement or is at-will. The Sub-Adviser further
agrees that, to the extent that the Sub-Adviser breaches the covenant
described in this paragraph, the Adviser shall be entitled to pursue
all appropriate remedies in law or equity.
13. 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.
In the event the terms of this Agreement are applicable to more than
one portfolio of the Trust (for purposes of this Paragraph 13, each a
"Fund"), the Adviser is entering into this Agreement with the
Sub-Adviser on behalf of the respective Funds severally and not
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jointly, with the express intention that the provisions contained in
each numbered paragraph hereof shall be understood as applying
separately with respect to each Fund as if contained in separate
agreements between the Adviser and Sub-Adviser for each such Fund. In
the event that this Agreement is made applicable to any additional
Funds by way of a Schedule executed subsequent to the date first
indicated above, provisions of such Schedule shall be deemed to be
incorporated into this Agreement as it relates to such Fund so that,
for example, the execution date for purposes of Paragraph 8 of this
Agreement with respect to such Fund shall be the execution date of the
relevant Schedule.
14. 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 upon any of the
Trustees, officers or shareholders of the Fund 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 BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By: By:
-------------------------------------- ------------------------------------
Name: Name:
-------------------------------------- ------------------------------------
Title: Title:
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SCHEDULE A
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
BANC OF AMERICA CAPITAL MANAGEMENT, LLC
AS OF __________ __, 2002
SEI LIQUID ASSET TRUST
Treasury Securities Fund
Government Securities Fund
Prime Obligation Fund
Institutional Cash Fund
Money Market Fund
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SCHEDULE B
TO THE
SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
BANC OF AMERICA CAPITAL MANAGEMENT, LLC
AS OF _________ __, 2002
Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation at
an annual rate as follows:
SEI LIQUID ASSET TRUST
INITIAL ASSET ASSETS IN EXCESS
AMOUNT* OF INITIAL ASSET AMOUNT
------- -----------------------
Treasury Securities Fund X.XX% X.XX%
Government Securities Fund X.XX% X.XX%
Prime Obligation Fund X.XX% X.XX%
Institutional Cash Fund X.XX% X.XX%
Money Market Fund X.XX% X.XX%
* For purposes of this Schedule B, "Initial Asset Amount" means the U.S. dollar
value of the amount of Assets allocated to the Sub-Adviser by the Adviser which
constitutes the initial funding of Assets to the Sub-Adviser.
Agreed and Accepted:
SEI INVESTMENTS MANAGEMENT CORPORATION BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By: By:
-------------------------------------- ------------------------------------
Title: Title:
-------------------------------------- ------------------------------------
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