INVESTMENT SUB-ADVISORY AGREEMENT
SEI DAILY INCOME TRUST
AGREEMENT made this 17th day of March, 2003 between SEI Investments
Management Corporation (the "Adviser") and Banc of America Capital Management,
LLC (the "Sub-Adviser").
WHEREAS, SEI Daily Income 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 March 17, 2003 (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 or the Adviser may
direct from time to time, in conformity with all federal securities
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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 property of the Funds
and the Sub-Adviser will surrender promptly to the Funds any of
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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.
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
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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 Funds will perform comparably
with any standard or index, including results achieved for other clients of
the Sub-Adviser, whether public or private.
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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 7 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 jointly, with the express
intention that the provisions contained in each numbered
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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: /s/ Xxxx Xxxxxxxxx By: /s/ Xxxxxx Xxxxxx
---------------------------------- ------------------------------------
Name: Xxxx Xxxxxxxxx Name: Xxxxxx Xxxxxx
-------------------------------- ----------------------------------
Title: Vice President Title: Managing Director/Chief
------------------------------- Administrative Officer
---------------------------------
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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 MARCH 17, 2003
SEI DAILY INCOME TRUST
Money Market Fund
Prime Obligation Fund
Government Fund
Government II Fund
Treasury Fund
Treasury II Fund
Federal Securities 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 MARCH 17, 2003
Pursuant to Paragraph 4, the Adviser shall pay the Sub-Adviser compensation for
each Fund at an annual rate as follows:
SEI DAILY INCOME TRUST
XXX
Agreed and Accepted:
SEI INVESTMENTS MANAGEMENT CORPORATION BANC OF AMERICA CAPITAL MANAGEMENT, LLC
By: By:
---------------------------------- ------------------------------------
Title: Title:
------------------------------- ---------------------------------
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