<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
[ X ] Filed by the Registrant
[ ] Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, For Use of
the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
SEI TAX EXEMPT TRUST
------------------------------------------------
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
SEI TAX EXEMPT TRUST
------------------------------------------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF
OTHER THAN THE REGISTRANT )
Payment of Filing Fee (Check the appropriate box):
[ X ] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregated number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[ ] Fee paid previously preliminary materials:
-------------------------------------------------------------------------
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Dated Filed:
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<PAGE>
PENNSYLVANIA MUNICIPAL BOND FUND
----------------------------------------------------------------------
IMPORTANT SHAREHOLDER INFORMATION
--------------------------------------------------------------------------------
This document contains your proxy statement and proxy card. A proxy card is,
in essence, a ballot. When you vote your proxy, it tells us how to vote on
your behalf on important issues relating to your Fund. Each proxy card may be
completed by checking the appropriate box and voting for or against the
specific proposals relating to your Fund. If you simply sign the proxy without
specifying a vote, your shares will be voted in accordance with the
recommendations of the Board of Trustees.
Please spend a few minutes with the proxy statement, fill out your proxy card,
and return it to us. Voting your proxy, and doing so promptly, ensures that
the Fund will not need to conduct additional mailings. If shareholders do not
return their proxies in sufficient numbers, the Fund may have to incur the
expense of follow-up solicitations, which will cost your Fund money.
Please take a few moments to exercise your right to vote. Thank you.
--------------------------------------------------------------------------------
SEI TAX EXEMPT TRUST
<PAGE>
SEI TAX EXEMPT TRUST
PENNSYLVANIA MUNICIPAL BOND FUND
Dear Shareholder,
A shareholder meeting of the Pennsylvania Municipal Bond Fund (the "Fund") of
SEI Tax Exempt Trust (the "Trust") has been scheduled for August 29, 2000.
If you were a shareholder of record as of the close of business on June 30,
2000, you are entitled to vote at the meeting and any adjournment of the
meeting. While you are, of course, welcome to join us at the meeting, most
shareholders cast their votes by filling out and signing the enclosed proxy
card. It is important and in your interest for you to vote so that a quorum will
be present and a maximum number of shares may be voted. WHETHER OR NOT YOU PLAN
TO ATTEND THE MEETING, WE NEED YOUR VOTE. PLEASE MARK, SIGN, AND DATE THE
ENCLOSED PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE
SO THAT THE MAXIMUM NUMBER OF SHARES MAY BE VOTED.
The attached proxy statement is designed to give you information relating to
each of the proposals on which you are asked to vote. We encourage you to
support the Trustees' recommendations. The proposals described in the proxy
statement relate to the following matters:
1. Authorizing the Board of Trustees of the Trust to approve additional and
replacement sub-advisers for the Fund without shareholder approval of
such sub-advisers' contracts.
2. Approving the selection of SEI Investments Management Corporation
("SIMC") as investment adviser for the Fund and approval of a form of
investment advisory agreement between the Trust, on behalf of the Fund,
and SIMC.
3. Approving the selection of the current investment adviser, Deutsche
Asset Management, Inc. ("DeAM") as investment sub-adviser to the Fund and
approval of a form of sub-advisory agreement between SIMC and DeAM.
Your vote is important to us. Please do not hesitate to call 1-800-DIAL-SEI if
you have any questions about the proposals under consideration. Thank you for
taking the time to consider these important proposals and for your investment in
the SEI Funds.
Sincerely,
[LOGO]
Edward D. Loughlin
President and Chief Executive Officer
<PAGE>
IMPORTANT NOTICE
Although we recommend that you read the complete Proxy Statement, for your
convenience, we have provided a brief overview of the proposals.
QUESTIONS AND ANSWERS
Q. WHY AM I RECEIVING THIS PROXY STATEMENT?
A. The Board of Trustees is proposing the implementation of a "Manager of
Managers" structure for the Pennsylvania Municipal Bond Fund (the "Fund") of SEI
Tax Exempt Trust (the "Trust"). Under this structure, the Board of Trustees may
approve additional or replacement sub-advisers to the Fund without shareholder
approval. Most other funds in the SEI family operate as "Manager of Managers"
funds and the Board of Trustees has found that structure to be very efficient.
Using a "Manager of Managers" structure will permit the Board of Trustees to
hire new or additional sub-advisers without incurring the considerable expense
of shareholder meetings.
In addition, the Board of Trustees is seeking the approval of SEI Investments
Management Corporation ("SIMC") as the investment adviser for the Fund and the
Fund's current adviser, Deutsche Asset Management, Inc. ("DeAM") as the
sub-adviser to the Fund.
Q. WHY AM I BEING ASKED TO VOTE ON THE NEW INVESTMENT ADVISORY AND SUB-ADVISORY
AGREEMENTS?
A. The Investment Company Act of 1940, which regulates investment companies in
the United States such as the Fund, requires a shareholder vote to approve new
investment advisory agreements, including sub-advisory agreements. The
Securities and Exchange Commission has granted a partial exemption from this
requirement to allow the appointment of sub-advisers without shareholder
approval. However, before funds in the SEI family may take advantage of this
exemption, shareholders must approve the "Manager of Managers" structure and
select SIMC as the Fund's adviser.
Q. HOW WILL THIS AFFECT MY ACCOUNT?
A. The approval of SIMC as the investment adviser for the Fund will have no
effect on the nature or quality of services you will receive as a shareholder.
The terms of the proposed new investment advisory agreement are similar to the
terms of the Fund's current investment advisory agreement, except for the dates
of execution, identity of the investment adviser and provisions related to the
"Manager of Managers" structure. DeAM will manage the Fund's investments on a
daily basis, just as before.
While the level of compensation paid to SIMC by the Fund for advisory services
will be 0.15% higher than the fee paid to the current adviser, SEI Fund
Management will contractually reduce its administrative fee under its management
agreement by 0.15% for the Fund. Therefore, the total expenses for the Fund will
not be increased.
Q. WILL MY VOTE MAKE A DIFFERENCE?
A. Yes. Your vote is needed to ensure that the proposal can be acted upon.
Additionally, your immediate response on the enclosed proxy card will help save
the costs of any further solicitations for a shareholder vote. We encourage all
shareholders to participate in the governance of their Fund.
<PAGE>
Q. HOW DO THE TRUSTEES SUGGEST THAT I VOTE?
A. After careful consideration, the Trustees of your Fund, including the
independent Trustees who comprise a majority of each Fund's Board of Trustees,
unanimously recommend that you vote "FOR" the proposals.
Q. WHOM DO I CALL IF I HAVE QUESTIONS?
A. We will be happy to answer your questions about this proxy solicitation.
Please call us at 1-800-DIAL-SEI between 9:00 a.m. and 5:00 p.m., Eastern
Standard Time, Monday through Friday.
Q. WHERE DO I MAIL MY PROXY CARD?
A. You may use the enclosed postage-paid envelope to mail your proxy card.
2
<PAGE>
SEI TAX EXEMPT TRUST
101 FEDERAL STREET
BOSTON, MA 02110
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
AUGUST 29, 2000
Notice is hereby given that a Special Meeting of Shareholders (the
"Meeting") of the Pennsylvania Municipal Bond Fund (the "Fund") of SEI Tax
Exempt Trust (the "Trust") will be held at the offices of SEI Investments
Management Corporation ("SIMC"), One Freedom Valley Drive, Oaks, Pennsylvania
19456, on Tuesday, August 29, 2000, at 10:00 a.m.
At the Meeting, shareholders of the Fund (the "Shareholders") will be asked
to consider and act on a new management structure and new advisory and
sub-advisory agreements (the "Proposals"). The specifics of these Proposals,
which are more fully described in the attached Proxy Statement, are as follows:
1. To authorize the Board of Trustees to appoint additional or replacement
investment sub-advisers for the Fund without Shareholder approval of such
sub-advisers' contracts.
2. To approve the selection of SIMC as the investment adviser for the Fund,
and to approve the form of investment advisory agreement between the Trust, on
behalf of the Fund, and SIMC.
3. To approve the selection of Deutsche Asset Management, Inc. ("DeAM") as
an investment sub-adviser for the Fund, and to approve the form of investment
sub-advisory agreement between SIMC and DeAM.
Proposal 2 relates to the approval by Shareholders of the selection of SIMC
as investment adviser to the Fund and the approval of a form of investment
advisory agreement for this Fund, as described in the accompanying Proxy
Statement. A copy of the form of investment advisory agreement is attached as
Exhibit A to the Proxy Statement.
In connection with the approval of SIMC as investment adviser, Proposal 3
solicits Shareholder approval of the selection of the current investment adviser
for the Fund as investment sub-adviser for the Fund and of a form of investment
sub-advisory agreement for the Fund. A copy of the general form of investment
sub-advisory agreement is attached as Exhibit B to the Proxy Statement. If the
management structure discussed in Proposal 1 of the Proxy Statement is approved,
the Trustees would be able, without Shareholder approval, to replace the
sub-adviser and/or appoint additional or replacement sub-advisers and to approve
new investment sub-advisory agreements whose terms are different from those of
the investment sub-advisory agreement attached as Exhibit B to the Proxy
Statement.
In accordance with their own discretion, the proxies are authorized to vote
on such other business as may properly come before the Meeting or any adjourned
session thereof.
BY ORDER OF THE BOARD OF TRUSTEES
RICHARD W. GRANT, SECRETARY
All Shareholders are cordially invited to attend the Meeting. However, if
you are unable to be present at the Meeting, you are requested to mark, sign,
and date the enclosed Proxy and return it promptly in the enclosed envelope so
that the Meeting may be held and a maximum number of shares may be voted.
<PAGE>
Shares represented by duly executed proxies will be voted in accordance with
the instructions given. Proxies may be revoked at any time before they are
exercised by a written revocation received by the President of the Trust at One
Freedom Valley Drive, Oaks, Pennsylvania 19456, by properly executing a
later-dated proxy, or by attending the Meeting and voting in person.
Shareholders of record at the close of business on June 30, 2000 are
entitled to notice of and to vote at the Meeting or any adjournment thereof.
August 1, 2000
SEI TAX EXEMPT TRUST
101 FEDERAL STREET
BOSTON, MA 02110
2
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Trustees of SEI Tax Exempt Trust (the "Trust") for use
at the Special Meeting of Shareholders to be held on August 29, 2000 at
10:00 a.m. at the offices of SEI Investments Management Corporation ("SIMC"),
One Freedom Valley Drive, Oaks, Pennsylvania 19456, and at any adjourned session
thereof (such meeting and any adjournment thereof are hereinafter referred to as
the "Meeting"). Shareholders of the Pennsylvania Municipal Bond Fund (the
"Fund") of the Trust ("Shareholders") of record at the close of business on
June 30, 2000 are entitled to vote at the Meeting. As of June 30, 2000, the Fund
had 9,476,207 units of beneficial interest ("shares") issued and outstanding.
Each share is entitled to one vote and each fractional share is entitled to
a proportionate fractional vote on each matter as to which such shares to be
voted at the Meeting. Shareholders of each class of the Fund will vote together
on each Proposal.
In addition to the solicitation of proxies by mail, Trustees and officers of
the Trust and officers and employees of SIMC, the Shareholder Servicing Agent
for the Trust, and third parties hired for such purpose, may solicit proxies in
person or by telephone. Persons holding shares as nominees will, upon request,
be reimbursed for their reasonable expenses incurred in sending soliciting
materials to their principals. The cost of solicitation will be borne by the
Trust, except that SIMC will bear the cost of the portion of the Proxy Statement
relating to the approval of SIMC as investment adviser. The proxy card and this
Proxy Statement are being mailed to Shareholders on or about August 1, 2000.
Shares represented by duly executed proxies will be voted in accordance with
the instructions given. Proxies may be revoked at any time before they are
exercised by a written revocation received by the President of the Trust at One
Freedom Valley Drive, Oaks, Pennsylvania 19456, by properly executing a
later-dated proxy, or by attending the Meeting and voting in person.
INTRODUCTION
The Trust is organized as a Massachusetts business trust and is not required
to hold annual meetings of Shareholders. The Meeting is being called in order to
permit the Shareholders of the Fund to vote on a new management structure;
approval of a new investment adviser; and selection of the Fund's current
adviser as sub-adviser (the "Proposals").
The summary voting table below sets forth the action required by
Shareholders:
PROPOSAL
1. To authorize the Board of Trustees to appoint additional or replacement
investment sub-advisers without Shareholder approval of such
sub-advisers' contracts.
2. To authorize SIMC to act as investment adviser to the Fund and approve
the investment advisory agreement between the Fund and SIMC.
3. To approve the selection of Deutsche Asset Management, Inc. ("DeAM") as
an investment sub-adviser for the Fund, and to approve the form of
investment sub-advisory agreement between SIMC and DeAM.
The Proposals relate to implementation of a "Manager of Managers" structure
that has been approved by the Trust's Board of Trustees for the Fund. Under this
structure, SIMC would act as investment adviser to the Fund and would be
responsible for recommending to the Trustees additional or replacement
investment sub-advisers for the Fund. Apart from Shareholder approval, this
structure required an order of exemption from the Securities and Exchange
Commission (the "SEC"), which was
<PAGE>
granted on April 29, 1996. The "Manager of Managers" structure may enable the
Fund to achieve a higher degree of management efficiency and will reduce the
need for Shareholder meetings in the future. In connection with the "Manager of
Managers" structure, the Trustees have approved the selection of SIMC as
investment adviser to the Fund.
This Proxy Statement also seeks approval of the selection of the current
investment adviser to the Fund to serve as investment sub-adviser to the Fund.
If the "Manager of Managers" structure is implemented for the Fund, the Trustees
would be able, upon the recommendation of SIMC and without Shareholder approval,
to replace the sub-advisers and/or appoint additional sub-advisers to the Fund,
and to utilize investment sub-advisory agreements for the Fund.
1. AUTHORIZATION FOR THE BOARD OF TRUSTEES TO APPOINT INVESTMENT
SUB-ADVISERS FOR THE FUND WITHOUT SHAREHOLDER APPROVAL OF SUCH
SUB-ADVISERS' CONTRACTS.
Section 15(a) of the Investment Company Act of 1940 (the "1940 Act")
requires that all contracts pursuant to which persons serve as investment
advisers to investment companies be approved by shareholders. As interpreted,
this requirement would apply to appointment of sub-advisers to the Fund even if
SIMC were the investment adviser. The SEC has granted conditional exemptions
from the shareholder approval requirements. The Trust has received such an
exemption, and, if these Proposals are approved, the Board of Trustees would,
without Shareholder approval, be able to appoint additional or replacement
sub-advisers (each a "Manager" and, collectively, the "Managers"). The Board
would not, however, be able to replace SIMC as investment adviser to the Fund
without complying with the 1940 Act and applicable regulations governing
Shareholder approval of advisory contracts.
The Proposals contained in this Proxy Statement are intended to facilitate
the efficient operation of the "Manager of Managers" structure and afford the
Trust increased management flexibility. Assuming SIMC, which currently serves as
investment adviser and Manager of Managers for five of the other funds of the
Trust, is approved as investment adviser to the Fund under Proposal 2, it will
continuously monitor the performance of the Managers and may from time to time
recommend that the Board of Trustees replace one or more Managers or appoint
additional Managers, depending on SIMC's assessment of what combination of
Managers it believes will optimize the Fund's chances of achieving its
investment objective. Accordingly, while there is no way of knowing exactly how
often SIMC may recommend, and the Board approve, the selection of an additional
Manager, or the replacement of an existing Manager, both of which would
typically require a Shareholder meeting, it is not unlikely that the Manager of
Managers structure would result in more frequent Shareholder meetings than would
otherwise be the case. However, since the SEC has granted the exemption, the
Trustees will not be required to call a shareholder meeting each time a new
Manager is approved.
Shareholder meetings entail substantial costs which could reduce the hoped
for benefits of the Manager of Managers structure. These costs must be weighed
against the benefits of Shareholder scrutiny of proposed contracts with
additional or replacement Managers; however, even in the absence of Shareholder
approval, any proposal to add or replace Managers would receive careful review.
First, SIMC would assess the Fund's needs and, if it believed additional or
replacement Managers could benefit the Fund, would systematically search the
relevant universe of available investment Managers. Second, any recommendations
made by SIMC would have to be approved by a majority of the Trustees, including
a majority of the Trustees who are not "interested persons" within the meaning
of the 1940
2
<PAGE>
Act. Finally, any selection of additional or replacement Managers would have to
comply with conditions contained in the SEC exemption.
This Proposal will facilitate the appointment of additional and replacement
sub-advisers without a Shareholder vote if SIMC serves as "Manager of Managers"
for the Fund.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 1.
2. APPROVAL OF AN INVESTMENT ADVISER AND THE INVESTMENT ADVISORY AGREEMENT
FOR THE FUND
The Board of Trustees is recommending that Shareholders of the Fund approve
SIMC as the investment adviser of the Fund and approve the form of investment
advisory agreement (the "Investment Advisory Agreement") between the Trust and
SIMC relating to the Fund (which is attached as Exhibit A to this Proxy
Statement). The description of the Investment Advisory Agreement in this Proxy
Statement is qualified in its entirety by reference to Exhibit A. The Trustees
of the Trust, including all of the Trustees who are not "interested persons" of
the Trust, approved the Investment Advisory Agreement with respect to the Fund
at a meeting held June 19-20, 2000. SIMC already serves as investment adviser to
five of the other funds of the Trust pursuant to an investment advisory
agreement dated April 16, 1996, between SIMC and the Trust, on behalf of those
funds.
DESCRIPTION OF THE FUND. The Fund seeks to provide current income exempt
from Federal and Pennsylvania income taxes consistent with the preservation of
capital. Under normal circumstances, at least 80% of the Fund's assets will be
invested in investment grade municipal securities that generate income exempt
from Federal and Pennsylvania state income taxes.
TERMINATION OF THE CURRENT INVESTMENT ADVISORY AGREEMENT. Deutsche Asset
Management, Inc. ("DeAM"), formerly Morgan Grenfell Capital Management
Incorporated, currently serves as investment adviser to the Fund pursuant to an
investment advisory agreement dated July 3, 1995 ("Current Advisory Agreement").
The Current Advisory Agreement between DeAM and the Fund was approved by
Shareholders at a meeting of shareholders held on September 28, 1995. The Board
of Trustees voted on June 19, 2000, to terminate this agreement based upon the
Board's determination that the selection of SIMC to provide investment advisory
services as described herein will be in the best interests of the Fund. The
Board also approved SIMC as the new investment adviser, and DeAM as the new
sub-adviser, effective upon approval by Shareholders.
NEW INVESTMENT ADVISORY AGREEMENT. The terms of the Investment Advisory
Agreement are similar to the terms of the Current Advisory Agreement, except for
the identity of the investment adviser, the investment advisory fee, provisions
concerning the "Manager of Managers" structure, treatment of excess expenses and
provisions related to portfolio transaction. While the level of compensation
paid to SIMC by the Fund for advisory services will be 0.15% higher than that
paid to the current advisers, SEI Fund Management's ("SEI Management")
contractual management fee under its management agreement ("Management
Agreement") will be reduced by 0.15% for the Fund. As a result, the overall cost
to the Fund of advisory and management services will not be increased.
3
<PAGE>
The table below sets forth information about the proposed level of fees
payable to SIMC as investment adviser, SEI Management as administrator, and to
the Manager, assuming that the Shareholders approve the "Manager of Managers"
structure:
<TABLE>
<CAPTION>
CURRENT FEES PROPOSED FEES
------------ -------------
<S> <C> <C>
Investment Advisory Fees......................... 0.20% 0.35%
Distribution Fees................................ None None
Administrative Fees.............................. 0.35% 0.20%*
Other Expenses................................... 0.28% 0.28%
----- -----
Total Fund Operating Expenses................ 0.83% 0.83%
===== =====
</TABLE>
------------------------
* The contractual administrative fee payable to SEI Management for the Fund
will be lowered by 0.15% in order to compensate for the increased level of
advisory and sub-advisory fees payable under the "Manager of Managers"
structure. Therefore, the total level of fees payable to SIMC and SEI
Management, as well as overall level of expenses for the Fund, will remain
the same. The Management Agreement dated May 23, 1986 shall remain in effect
for periods of one year so long as such continuance thereafter is
specifically approved by the Board of Trustees. The administrative fee under
the Management Agreement may be changed without shareholder approval. While
the management fee can be increased, SEI Management has no intention to do
so.
The following examples for the current fees and proposed fees are intended
to help you compare the cost of investing in the Fund with the cost of investing
in other mutual funds. Although your actual costs and returns might be
different, your approximate costs of investing $10,000 in the Fund would be:*
<TABLE>
<CAPTION>
CURRENT FEES PROPOSED FEES
------------ -------------
<S> <C> <C>
One Year......................................... $ 85 $ 85
Three Years...................................... $ 265 $ 265
Five Years....................................... $ 460 $ 460
Ten Years........................................ $1,025 $1,025
</TABLE>
------------------------
* The examples above assume that you invest $10,000 in the Fund for the time
periods indicated and that you sell your shares at the end of the period.
The examples also assume that each year your investment has a 5% return,
Fund operating expenses remain the same and you invest all dividends and
distributions.
COMPENSATION. Under the proposed Investment Advisory Agreement, the Trust
would pay SIMC a fee, which is calculated daily and paid monthly, at an annual
rate of 0.35% of the average daily net assets of the Fund. As SIMC did not
previously serve as investment adviser to the Fund, the aggregate investment
advisory fee paid to SIMC during the last fiscal year was $0. For the fiscal
year ended August 31, 1999, the Fund paid DeAM advisory fees of $223,734 (net of
$0 waiver and/or reimbursement). If the proposed fee had been in place, the Fund
would have paid advisory fees of $391,535 for the fiscal year ended August 31,
1999, a difference of 75% from the advisory fee paid to DeAM for the same
period.
DUTIES UNDER THE INVESTMENT ADVISORY AGREEMENT. Under the Investment
Advisory Agreement, SIMC will serve as investment adviser to the Fund and will
provide its proprietary investment adviser selection, monitoring, and asset
allocation services to the Fund. Subject to Board approval, SIMC, in
4
<PAGE>
turn, will enter into investment sub-advisory agreements with one or more
Managers to exercise investment discretion over the assets (or a portion of the
assets) of the Fund. Consistent with its goal of using multiple Managers to
carry out the Fund's investment objective and policies, SIMC in the future may
provide specific portfolio security advice with respect to all or some portion
of the Fund's assets.
SIMC will perform internal due diligence on prospective Managers for the
Fund and monitor Manager performance using its proprietary investment adviser
selection and monitoring process. SIMC will be responsible for communicating
performance targets and evaluations to Managers, supervising each Manager's
compliance with the Fund's fundamental investment objectives and policies,
authorizing Managers to engage in certain investment techniques for the Fund,
and recommending to the Board of Trustees whether sub-advisory agreements should
be renewed, modified or terminated. SIMC also will recommend to the Board the
addition of new Managers as it deems appropriate.
For its services, SIMC will receive an advisory fee from the Fund based on
the Fund's assets. SIMC will then pay the Managers out of this fee.
Under this structure, the Trust will be operated in a manner that is
distinctly different from almost all other investment companies. Most investment
companies operate under a structure in which a single related group of companies
provide investment advisory, administrative, and distribution services.
Typically, the investment company pays the advisory fee to its investment
adviser which, in turn, compensates internal portfolio managers who make
specific securities selections. In contrast, the Fund will offer investors an
opportunity to access, on a pooled investment basis, the core elements of SIMC
investment adviser selection, monitoring, and asset allocation services. Under
this "Manager of Managers" approach, SIMC will recommend and, if the Trustees
approve the recommendation, monitor for the Fund one or more Managers using a
range of investment styles.
DURATION AND TERMINATION. Unless terminated earlier, the Investment
Advisory Agreement shall continue in effect as to the Fund until on or about
September 2002, and thereafter, for periods of one year for so long as such
continuance is specifically approved with respect to the Fund at least annually
(i) by the vote of the holders of a majority of the outstanding shares of the
Fund or by the Trustees of the Trust, and (ii) by the vote of a majority of
those Trustees of the Trust who are not parties to the Investment Advisory
Agreement or "interested persons" (as that term is defined in the 1940 Act) of
any party thereto, cast in person at a meeting called for the purpose of voting
on such approval. The Investment Advisory Agreement will terminate automatically
in the event of its assignment. It is terminable at any time without penalty by
the Trustees of the Trust or with respect to the Fund by a vote of a majority of
the outstanding shares of the Fund on not less than 30 days' nor more than 60
days' written notice to SIMC. In addition, it is terminable by SIMC upon 90
days' written notice to the Trust.
SIMC will discharge its responsibilities subject to the supervision of, and
policies set by, the Trustees of the Trust. The Investment Advisory Agreement
provides that SIMC shall not be liable for any error of judgement or mistake of
law or for any loss arising out of any investment or for any act or omission in
carrying out its duties thereunder, except a loss resulting from willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
by reason of reckless disregard by SIMC of its obligations or duties thereunder.
5
<PAGE>
DESCRIPTION OF THE INVESTMENT ADVISER. SIMC is a wholly-owned subsidiary of
SEI Investments Company ("SEI Investments"), a financial services company
located at Oaks, Pennsylvania 19456. SEI was founded in 1968 and is a leading
provider of investment solutions to banks, institutional investors, investment
advisers, and insurance companies. Affiliates of SEI have provided consulting
advice to institutional investors for more than 20 years, including advice
regarding selection and evaluation of investment advisers. As of May 31, 2000,
SIMC acted in a similar "manager of managers" role with respect to $1.2 billion
of client assets, including five other funds of the Trust.
SIMC currently serves as investment adviser to more than 7 investment
companies, including more than 37 funds, which investment companies had more
than $30.8 billion in assets as of May 31, 2000.
Listed below are the names and principal occupations of each of the
directors and the principal executive officers of SIMC. The principal business
address of each director and the principal executive officers, as it relates to
their duties at SIMC, is One Freedom Valley Drive, Oaks, Pennsylvania 19456.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
Alfred P. West, Jr. Director, Chairman and Chief Executive Officer
Carmen V. Romeo Director, Executive Vice President
Richard B. Lieb Director, Executive Vice President
Edward D. Loughlin Executive Vice President
Dennis J. McGonigle Executive Vice President
Todd B. Cipperman Senior Vice President, General Counsel & Secretary
Cynthia M. Parrish Vice President and Assistant Secretary
</TABLE>
DESCRIPTION OF THE ADMINISTRATOR. SEI Management serves as administrator of
the Trust pursuant to the Management Agreement dated May 23, 1986. In connection
with its role as administrator, SEI Management provides the Trust with overall
management services, regulatory reporting, all necessary office space,
equipment, personnel, and facilities, and acts as transfer agent, dividend
disbursing agent, and shareholder servicing agent.
For its management services under the current management arrangement, SEI
Management is entitled to a fee which is calculated daily and paid monthly at an
annual rate of 0.35% of the average daily net assets of the Fund.
For the fiscal year ended August 31, 1999, the Fund paid to SEI Management
$391,463 in administration fees. In addition, SEI Management reimbursed expenses
of $101,203.
Once the "Manager of Managers" structure is in place, SEI Management's
management fee will be reduced by 0.15% for the Fund operating under that
structure in order to compensate for the increased advisory and sub-advisory
fees payable under that structure.
TRUSTEES' CONSIDERATIONS. At a meeting held June 19-20, 2000, the Board of
Trustees reviewed SIMC's qualifications to act as investment adviser for the
Fund, placing particular emphasis on its proposed role in recommending,
monitoring and terminating Managers, subject to Board of Trustees oversight, and
its performance as investment adviser to other funds in the SEI Family. The
Trustees received written and oral information regarding SIMC's key personnel,
its experience in selection and evaluation of investment Managers and research
performed by SIMC and others that had led SIMC to recommend a "Manager of
Managers" structure (i.e., one in which SIMC would act as the investment adviser
and one or more Managers would assume substantial day-to-day investment
responsibilities). In
6
<PAGE>
recommending that the Shareholders approve the Investment Advisory Agreement,
the Trustees carefully evaluated the experience of SIMC's key personnel in
institutional investing and the quality of services SIMC is expected to provide
to the Fund, including, but not limited to: (1) the fee and expense ratios of
comparable mutual funds; (2) the performance of the Fund since commencement of
operations; (3) the nature and quality of the services expected to be rendered
to the Fund by SIMC; (4) the distinct investment objective and policies of the
Fund; (5) that the total compensation payable to SIMC by the Fund under the
Investment Advisory Agreement and SEI Management under the Management Agreement
will be at the same rate as the compensation payable to SEI Management and the
proposed sub-advisers under the Management Agreement and the Current Advisory
Agreement; (6) the history, reputation, qualification and background of SIMC as
well as the qualifications of its personnel and its financial condition;
(7) its performance record; (8) the benefits expected to be realized as a result
of the "Manager of Managers" structure; and (9) other factors deemed relevant.
The Trustees also reviewed the fees to be paid to SIMC in comparison to those
being charged in the relevant segment of the mutual fund business.
In the event Shareholders of the Fund do not approve the selection of SIMC
as investment adviser and the Investment Advisory Agreement between the Trust,
on behalf of the Fund, and SIMC, or if the Shareholders of the Fund do not
approve the "Manager of Managers" structure discussed in Proposal 1 of the Proxy
Statement, at the Meeting to which this Proxy Statement relates, or any
adjournment thereof, the Trustees will consider the appropriate course of
action.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 2.
3. APPROVAL OF AN INVESTMENT SUB-ADVISER AND THE INVESTMENT SUB-ADVISORY
AGREEMENT FOR THE FUND
The Board of Trustees is recommending that Shareholders of the Fund approve
DeAM as investment sub-adviser of the Fund and approve the form of investment
sub-advisory agreement (the "Investment Sub-Advisory Agreement") between SIMC
and DeAM which is attached as Exhibit B to this Proxy Statement. The description
of the Investment Sub-Advisory Agreement in this Proxy Statement is qualified in
its entirety by reference to Exhibit B.
Under the "Manager of Managers" structure, SIMC will have general oversight
responsibility for the investment advisory services provided to the Fund,
including formulating the Fund's investment policies and analyzing economic
trends affecting the Fund. SIMC will be responsible for directing and evaluating
the investment services provided by the Manager, including their adherence to
the Fund's investment objectives and policies and the Fund's investment
performance. In accordance with the Fund's investment objectives and policies,
and under the supervision of SIMC and the Trust's Board of Trustees, DeAM will
be responsible for the day-to-day investment management of all or a discrete
portion of the assets of the Fund. DeAM will be authorized to make investment
decisions for the Fund and place orders on behalf of the Fund to effect the
investment decisions made.
SIMC has obtained an exemptive relief from the SEC that permits SIMC, with
the approval of the Trust's Board of Trustees, to retain Managers for the Fund
without submitting the accompanying sub-advisory agreement to a vote of the
Fund's shareholders. The exemptive relief permits the non-disclosure of amounts
payable by SIMC under such sub-advisory agreements. The Trust will notify
Shareholders in the event of any change in the identity of the Manager for the
Fund.
7
<PAGE>
DUTIES UNDER THE INVESTMENT SUB-ADVISORY AGREEMENT. Under the Investment
Sub-Advisory Agreement, DeAM makes the investment decisions for the assets of
the Fund allocated to it by SIMC and continuously reviews, supervises, and
administers the Fund's investment program with respect to these assets. DeAM is
independent of SIMC and discharges its responsibilities subject to the
supervision of SIMC and the Trustees of the Trust and in a manner consistent
with the Fund's investment objectives, policies and limitations.
DURATION AND TERMINATION. Unless terminated earlier, the Investment
Sub-Advisory Agreement shall continue in effect through September 2002, and
thereafter, for periods of one year for so long as such continuance is
specifically approved at least annually (i) by the vote of the holders of a
majority of the outstanding shares of the Fund or by the Trustees of the Trust,
and (ii) by the vote of a majority of those Trustees of the Trust who are not
parties to the Investment Advisory Agreement or Investment Sub-Advisory
Agreement or who are not "interested persons" (as that term is defined in the
1940 Act) of any party thereto, cast in person at a meeting called for the
purpose of voting on such approval. If the "Manager of Managers" structure is
approved by the Shareholders of the Fund, the Trustees may add and replace
Managers without Shareholder approval. This structure required an order of
exemption from the SEC before becoming operative. Since SIMC has received
exemptive relief from the SEC permitting it to engage a Manager without first
obtaining approval of its investment sub-advisory agreement from a majority of
the outstanding voting securities of the fund(s) involved, the Investment
Sub-Advisory Agreement shall become effective upon its approval by the Trust's
Board of Trustees. Any Manager so selected and approved shall be without the
protection accorded by shareholder approval of an investment adviser's receipt
of compensation under Section 36(b) of the 1940 Act.
The Investment Sub-Advisory Agreement will terminate automatically in the
event of its assignment or in the event that SIMC's Investment Advisory
Agreement is terminated. The Investment Sub-Advisory Agreement is terminable at
any time without penalty by the Trustees of the Trust, or, with respect to the
Fund, by a vote of a majority of the outstanding shares of the Fund on not less
than 30 days' nor more than 60 days' written notice to the Fund's Manager. In
addition, the Fund's Investment Sub-Advisory Agreement is terminable by the
Fund's Sub-Adviser upon 90 days' written notice to the Trust or SIMC.
DeAM will discharge its duties subject to the supervision of, and policies
set by, the Board of Trustees and SIMC. The Investment Sub-Advisory Agreement
provides that DeAM shall not be liable for any error of judgment or mistake of
law or for any loss arising out of any investment or for any act or omission in
carrying out its duties hereunder, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in the performance of its
obligations or duties, or from reckless disregard of its obligations or duties,
under this Agreement, except as may otherwise be provided under provisions of
applicable state law to the extent such provisions cannot be waived or modified
hereby.
COMPENSATION. Under the Investment Sub-Advisory Agreement, SIMC will pay
DeAM a fee, which is calculated and paid monthly, based on an annual percentage
rate of the month-end market value of assets of the Fund managed by DeAM. This
rate is set at 0.20% of the average monthly market value of the assets of the
Fund. For the fiscal year ended August 31, 1999, the Fund paid advisory fees of
0.20% of its average daily net assets.
DESCRIPTION OF DEAM. DeAM currently acts as the adviser for the Fund. DeAM
is a corporation formed in 1985 under the laws of the State of Delaware, to
provide investment supervisory services.
8
<PAGE>
DeAM is wholly owned by Deutsche Asset Management Holdings, BV ("DeAM Holdings")
and an indirect subsidiary of Deutsche Asset Management Limited ("DeAM
Limited"). DeAM Limited is a wholly owned subsidiary of Deutsche Morgan Grenfell
Group plc ("Morgan Grenfell Group") which is a wholly owned subsidiary of
Deutsche Bank, AG. The principal address of DeAM Holdings, DeAM Limited and
Morgan Grenfell Group is 1 Appold Street, London EC2A2VV. The principle place of
business of Deutsche Bank, AG is Aktiengesellschaft, Taunusanlage 12, D-602305
Frankfurt am Main Federal Republic of Germany. As of March 31, 2000, DeAM
managed over $19 billion in client assets.
Listed below are the names and principal occupations of each of the
directors and the principal executive officers of DeAM. The principal business
address of DeAM and of each director and principal executive officer, as it
relates to their duties at DeAM, is 885 Third Avenue, New York, New York 10022.
<TABLE>
<CAPTION>
NAME TITLE
---- -----
<S> <C>
Joshua A. Winreich Director and Chairman
Dean Barr President and Chief Investment Officer
David W. Baldt Director and Executive Vice President
Audrey M. Jones Director and Executive Vice President
Steven Schneider Director and Vice President
</TABLE>
David W. Baldt, Director and Executive Vice President of DeAM has been the
senior fund manager of the Fund since 1989. He has more than 28 years of
investment experience.
TRUSTEES' CONSIDERATIONS. The Trustees of the Trust, including all of the
Trustees who are not "interested persons" of the Trust, approved the general
form of the Investment Sub-Advisory Agreement with respect to the Fund on
June 19, 2000. The Trustees also have received written and oral information from
both SIMC and DeAM. SIMC recommended the selection of DeAM and reviewed the
considerations that had led to the recommendation. The Trustees considered
information about key personnel, investment philosophy and process and
performance track record, among other factors. In recommending that the
Shareholders approve the proposed Investment Sub-Advisory Agreement, the
Trustees carefully evaluated the investing experience of DeAM's key personnel
and the quality of services DeAM can be expected to provide to the Fund,
including, but not limited to: (1) the fee and expense ratios of comparable
mutual funds; (2) the performance of the Fund since commencement of operations;
(3) the nature and quality of the services rendered as adviser and expected to
be rendered as sub-adviser to the Fund; (4) the distinct investment objective
and policies of the Fund; (5) the fact that the compensation payable to DeAM by
the Fund under the proposed Investment Sub-Advisory Agreement will be at the
same rate as the compensation payable to DeAM under the Current Advisory
Agreement; (6) the history, reputation, qualification and background of DeAM, as
well as the qualifications of its personnel and its financial condition;
(7) its performance records; (8) the benefits expected to be realized as a
result of the "Manager of Managers" structure; and (9) other factors deemed
relevant. The Trustees also reviewed the fees to be paid to DeAM in comparison
to those being charged in the relevant segment of the mutual fund business.
The Board of Trustees is recommending that Shareholders of the Fund approve
DeAM as a sub-adviser to the Fund and approve the form of Investment
Sub-Advisory Agreement between SIMC and DeAM. Proposal 3 below will become
effective as of approval of Proposals 1 and 2.
THE TRUSTEES RECOMMEND THAT THE SHAREHOLDERS VOTE "FOR" PROPOSAL 3.
9
<PAGE>
GENERAL INFORMATION ABOUT THE TRUST AND OTHER MATTERS
TRUSTEES AND OFFICERS. Information is set forth below about the Trust's
current Trustees and principal executive officers, including their names,
positions with the Trust, and association with SIMC.
<TABLE>
<CAPTION>
NAME POSITION WITH THE FUND POSITION WITH SIMC
---- --------------------------------- ------------------------------
<S> <C> <C>
Robert A. Nesher* Chairman of the Board of Trustees None
William M. Doran**+ Trustee None
F. Wendell Gooch Trustee None
Rosemarie B. Greco Trustee None
James M. Storey Trustee None
George J. Sullivan, Jr. Trustee None
Edward D. Loughlin President and CEO Executive Vice President
Todd B. Cipperman Vice President and Asst. Sec. Senior Vice President, General
Counsel and Asst. Sec.
Timothy D. Barto Vice President and Asst. Sec. Vice President and Asst. Sec.
James R. Foggo Vice President and Asst. Sec. Vice President and Asst. Sec.
Lydia A. Gavalis Vice President and Asst. Sec. Vice President and Asst. Sec.
Robert S. Ludwig Vice President and Asst. Sec. Senior Vice President and
Chief Investment Officer
Christine M. McCullough Vice President and Asst. Sec. Vice President and Asst. Sec.
Cynthia M. Parrish Vice President and Asst. Sec. Vice President and Asst. Sec.
Richard W. Grant+ Secretary None
Mark E. Nagle Controller and CFO None
</TABLE>
------------------------
* Mr. Nesher performs various services on behalf of SEI Investments.
** Mr. Doran serves as a Director and Secretary to SEI Investments.
+ Messrs. Doran and Grant are Partners at the law firm of Morgan, Lewis &
Bockius LLP, counsel to the Trust, SIMC, SEI Management and SEI Investments
Distribution Co.
DISTRIBUTION. SEI Investments Distribution Co. ("SIDCo."), Oaks,
Pennsylvania 19456, a wholly-owned subsidiary of SEI Investments, acts as the
distributor of the Trust's shares pursuant to the Distribution Agreement dated
December 3, 1982 between the Trust and SIDCo.
10
<PAGE>
5% SHAREHOLDERS. As of June 30, 2000, the following persons were the only
persons who were record owners or, to the knowledge of the Trust, were
beneficial owners of 5% or more of shares of the Fund. The Trust believes that
most of the shares referred to above were held by the below persons in accounts
for their fiduciary, agency, or custodial customers.
<TABLE>
<CAPTION>
NAME AND ADDRESS OF SHAREHOLDER NUMBER OF SHARES PERCENT OF FUND
------------------------------- ---------------- ---------------
<S> <C> <C>
Pennsylvania Municipal Bond Fund--Class A
SEI Trust Company........................................... 3,672,134 94.58%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456
SEI Trust Company........................................... 199,141 5.13%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456
Pennsylvania Municipal Bond Fund--Class B
Meg and Co.................................................. 463,546 6.02%
c/o United States National Bank
P.O. Box 520
Johnstown, PA 15907-0520
Sheldon & Co................................................ 4,685,392 60.83%
c/o National City Bank
P.O. Box 94984
Cleveland, OH 44101-4984
SEI Trust Company........................................... 455,994 5.92%
Attn: Jacqueline Esposito
One Freedom Valley Drive
Oaks, PA 19456
</TABLE>
The Trust's Trustees and officers own less than 1% of the outstanding shares
of the Trust.
ADJOURNMENT. In the event that sufficient votes in favor of a Proposal set
forth in the Notice of the Special Meeting are not received by the time
scheduled for the meeting, the persons named as proxies may propose one or more
adjournments of the meeting for a period or periods of not more than 60 days in
the aggregate to permit further solicitation of proxies with respect to any of
such Proposal. Any such adjournment will require the affirmative vote of a
majority of the votes cast on the question in person or by proxy at the session
of the meeting to be adjourned. The persons named as proxies will vote in favor
of such adjournment those proxies which they are entitled to vote in favor of
such Proposals. They will vote against any such adjournment those proxies
required to be voted against any such Proposals. The costs of any such
additional solicitation and of any adjourned session will be borne by the Trust.
11
<PAGE>
REQUIRED VOTE. Approval of the Proposals with respect to the Fund requires
the affirmative vote of a majority of the outstanding shares of the Fund. As
defined in the 1940 Act, "majority of the outstanding shares" means the vote of
(i) 67% or more of the Fund's or the Trust's outstanding shares present at a
meeting, if the holders of more than 50% of the outstanding shares of the Fund
or the Trust are present or represented by proxy, or (ii) more than 50% of the
Fund's or the Trust's outstanding shares, whichever is less.
Abstentions and "broker non-votes" will not be counted for or against any
Proposal to which it relates, but will be counted for purposes of determining
whether a quorum is present. Abstentions will be counted as votes present for
purposes of determining a "majority of the outstanding voting securities"
present at the Meeting and will therefore have the effect of counting against
the Proposal to which it relates.
SHAREHOLDER PROPOSALS. The Trust does not hold annual Shareholder Meetings.
Shareholders wishing to submit proposals for inclusion in a proxy statement for
a subsequent meeting should send their written proposals to the Secretary of the
Trust c/o SEI Investment Management Company, One Freedom Valley Drive, Oaks,
Pennsylvania 19456.
REPORTS TO SHAREHOLDERS. The Trust will furnish, without charge, a copy of
the most recent Annual Report to Shareholders of the Trust and the most recent
Semi-Annual Report succeeding such Annual Report, if any, upon request. Requests
should be directed to the Trust at One Freedom Valley Drive, Oaks, Pennsylvania
19456, or by calling 1-800-DIAL-SEI.
OTHER MATTERS. The Trustees know of no other business to be brought before
the meeting. However, if any other matters properly come before the meeting, it
is their intention that proxies which do not contain specific restrictions to
the contrary will be voted on such matters in accordance with the judgment of
the persons named in the enclosed form of proxy.
------------------------
SHAREHOLDERS ARE URGED TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD
AND RETURN IT PROMPTLY.
12
<PAGE>
EXHIBIT A
FORM OF INVESTMENT ADVISORY AGREEMENT
SEI TAX EXEMPT TRUST
AGREEMENT made this day of , 2000, by and between SEI Tax Exempt
Trust, a Massachusetts business trust (the "Trust"), and SEI Investments
Management Corporation, (the "Adviser").
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"),
consisting of several funds of shares, each having its own investment policies;
and
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Pennsylvania Municipal Bond Fund and
such other funds as the Trust and the Adviser may agree upon (individually the
"Fund" and collectively the "Funds"), and the Adviser is willing to render such
services:
NOW, THEREFORE, in consideration of mutual covenants herein contained, the
parties hereto agree as follows:
1. DUTIES OF THE ADVISER. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, to hire (subject to the approval
of the Trust's Board of Trustees and, except as otherwise permitted under
the terms of any exemptive relief obtained by the Adviser from the
Securities and Exchange Commission, or by rule or regulation, a majority of
the outstanding voting securities of any affected Fund(s)) and thereafter
supervise the investment activities of one or more sub-advisers deemed
necessary to carry out the investment program of any Funds of the Trust, and
to continuously review, supervise and (where appropriate) administer the
investment program of the Funds, to determine in its discretion (where
appropriate) the securities to be purchased or sold, to provide the
Administrator and the Trust with records concerning the Adviser's activities
which the Trust is required to maintain, and to render regular reports to
the Administrator and to the Trust's officers and Trustees concerning the
Adviser's discharge of the foregoing responsibilities. The retention of a
sub-adviser by the Adviser shall not relieve the Adviser of its
responsibilities under this Agreement.
The Adviser shall discharge the foregoing responsibilities subject to the
control of the Board of Trustees of the Trust and in compliance with such
policies as the Trustees may from time to time establish, and in compliance
with the objectives, policies, and limitations for each such Fund set forth
in the Trust's prospectus and statement of additional information, as
amended from time to time (referred to collectively as the "Prospectus"),
and applicable laws and regulations. The Trust will furnish the Adviser from
time to time with copies of all amendments or supplements to the Prospectus,
if any.
The Adviser accepts such employment and agrees, at its own expense, to
render the services and to provide the office space, furnishings and
equipment and the personnel (including any sub-advisers) required by it to
perform the services on the terms and for the compensation provided herein.
The Adviser will not, however, pay for the cost of securities, commodities,
and other investments (including brokerage commissions and other transaction
charges, if any) purchased or sold for the Trust.
A-1
<PAGE>
2. DELIVERY OF DOCUMENTS. The Trust has furnished the Adviser with copies
properly certified or authenticated of each of the following:
(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 presently in effect and as it shall from
time to time be amended, is 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 Fund(s).
3. OTHER COVENANTS. The Adviser agrees that it:
(a) will comply with all applicable Rules and Regulations of the Securities
and Exchange Commission and will in addition conduct its activities under
this Agreement in accordance with other applicable law;
(b) will place orders pursuant to its investment determinations for the
Funds either directly with the issuer or with any broker or dealer. In
executing Fund transactions and selecting brokers or dealers, the 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 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 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
Fund and/or other accounts over which the Adviser or an affiliate of the
Adviser may exercise investment discretion. The Adviser is authorized,
subject to the prior approval of the Trust's Board of Trustees, to pay to
a broker or dealer who provides such brokerage and research services a
commission for executing a Fund transaction for any of 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 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 terms
of the overall responsibilities of the Adviser to the Fund. In addition,
the Adviser is authorized to allocate purchase and sale orders for Fund
securities to brokers or dealers (including brokers and dealers that are
affiliated with the Adviser or the Trust's principal underwriter) to take
into account the sale of shares of the Trust if the 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
any Fund's securities be purchased from or sold to the Adviser, any
sub-adviser engaged with respect to that Fund, the Trust's principal
underwriter, or any affiliated person of either the Trust, the Adviser,
and 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.
4. COMPENSATION OF THE ADVISER. For the services to be rendered by the Adviser
as provided in Sections 1 and 2 of this Agreement, the Trust shall pay to
the Adviser compensation at the
A-2
<PAGE>
rate(s) specified in the Schedule(s) which are attached hereto and made a
part of this Agreement. Such compensation shall be paid to the Adviser at
the end of each month, and calculated by applying a daily rate, based on the
annual percentage rates as specified in the attached Schedule(s), to the
assets of the Fund. The fee shall be based on the average daily net assets
for the month involved. The Adviser may, in its discretion and from time to
time, waive a portion of its fee.
All rights of compensation under this Agreement for services performed as of
the termination date shall survive the termination of this Agreement.
5. EXCESS EXPENSES. If the expenses for any Fund for any fiscal year (including
fees and other amounts payable to the Adviser, but excluding interest,
taxes, brokerage costs, litigation, and other extraordinary costs) as
calculated every business day would exceed the expense limitations imposed
on investment companies by any applicable statute or regulatory authority of
any jurisdiction in which shares are qualified for offer and sale, the
Adviser shall bear such excess cost.
However, the Adviser will not bear expenses of the Trust or any Fund which
would result in the Trust's inability to qualify as a regulated investment
company under provisions of the Internal Revenue Code. Payment of expenses
by the Adviser pursuant to this Section 5 shall be settled on a monthly
basis (subject to fiscal year end reconciliation) by a waiver of the
Adviser's fees provided for hereunder, and such waiver shall be treated as a
reduction in the purchase price of the Adviser's services.
6. REPORTS. The Trust and the Adviser agree to furnish to each other, if
applicable, current prospectuses, proxy statements, reports to shareholders,
certified copies of their financial statements, and such other information
with regard to their affairs as each may reasonably request. The Adviser
further agrees to furnish to the Trust, if applicable, the same such
documents and information pertaining to any sub-adviser as the Trust may
reasonably request.
7. STATUS OF THE ADVISER. The services of the Adviser to the Trust are not to
be deemed exclusive, and the Adviser shall be free to render similar
services to others so long as its services to the Trust are not impaired
thereby. The Adviser shall be deemed to be an independent contractor and
shall, unless otherwise expressly provided or authorized, have no authority
to act for or represent the Trust in any way or otherwise be deemed an agent
of the Trust. To the extent that the purchase or sale of securities or other
investments of any issuer may be deemed by the Adviser to be suitable for
two or more accounts managed by the Adviser, the available securities or
investments may be allocated in a manner believed by the Adviser to be
equitable to each account. It is recognized that in some cases this may
adversely affect the price paid or received by the Trust or the size or
position obtainable for or disposed by the Trust or any Fund.
8. CERTAIN RECORDS. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated under
the 1940 Act which are prepared or maintained by the Adviser (or any
sub-adviser) on behalf of the Trust are the property of the Trust and will
be surrendered promptly to the Trust on request. The Adviser further agrees
to preserve for the periods prescribed in Rule 31a-2 under the 1940 Act the
records required to be maintained under Rule 31a-1 under the 1940 Act.
9. LIMITATION OF LIABILITY OF THE ADVISER. The duties of the Adviser shall be
confined to those expressly set forth herein, and no implied duties are
assumed by or may be asserted against the Adviser hereunder. The Adviser
shall not be liable for any error of judgment or mistake of law or
A-3
<PAGE>
for any loss arising out of any investment or for any act or omission in
carrying out its duties hereunder, except a loss resulting from willful
misfeasance, bad faith or gross negligence in the performance of its duties,
or by reason of reckless disregard of its obligations and duties hereunder,
except as may otherwise be provided under provisions of applicable state law
which cannot be waived or modified hereby. (As used in this Section 9, the
term "Adviser" shall include directors, officers, employees and other
corporate agents of the Adviser as well as that corporation itself).
10. PERMISSIBLE INTERESTS. Trustees, agents, and shareholders of the Trust are
or may be interested in the Adviser (or any successor thereof) as directors,
partners, officers, or shareholders, or otherwise; directors, partners,
officers, agents, and shareholders of the Adviser are or may be interested
in the Trust as Trustees, officers, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the Trust as a
shareholder or otherwise subject to the provisions of applicable law. All
such interests shall be fully disclosed between the parties on an ongoing
basis and in the Trust's Prospectus as required by law. In addition,
brokerage transactions for the Trust may be effected through affiliates of
the Adviser or any sub-adviser if approved by the Board of Trustees, subject
to the rules and regulations of the Securities and Exchange Commission.
11. DURATION AND TERMINATION. This Agreement, unless sooner terminated as
provided herein, shall remain in effect until two years from date of
execution, and thereafter, for periods of one year so long as such
continuance thereafter is specifically approved at least annually (a) by the
vote of a majority of those Trustees of the Trust who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval, and (b) by the
Trustees of the Trust or by vote of a majority of the outstanding voting
securities of each Fund; provided, however, that if the shareholders of any
Fund fail to approve the Agreement as provided herein, the Adviser may
continue to serve hereunder in the manner and to the extent permitted by the
1940 Act and rules and regulations thereunder. The foregoing requirement
that continuance of this Agreement be "specifically approved at least
annually" shall be construed in a manner consistent with the 1940 Act and
the rules and regulations thereunder.
This Agreement may be terminated as to any Fund at any time, without the
payment of any penalty by vote of a majority of the Trustees of the Trust or
by vote of a majority of the outstanding voting securities of the Fund on
not less than 30 days nor more than 60 days written notice to the Adviser,
or by the Adviser at any time without the payment of any penalty, on 90 days
written notice to the Trust. This Agreement will automatically and
immediately terminate in the event of its assignment.
As used in this Section 11, the terms "assignment", "interested persons",
and a "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 exemptions as may be granted by the
Securities and Exchange Commission.
12. 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.
13. 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
A-4
<PAGE>
addressed by the party giving notice to the other party at the last address
furnished by the other party:
<TABLE>
<S> <C>
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attn: Legal Department
To the Trust at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attn: Legal Department
</TABLE>
14. SEVERABILITY. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the remainder of
this Agreement shall not be affected thereby.
15. 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.
A copy of the Declaration of Trust of the Trust is on file with the
Secretary of State of the Commonwealth of Massachusetts, and notice is hereby
given that this instrument is executed on behalf of the Trustees of the Trust as
Trustees, and is not binding upon any of the Trustees, officers, or shareholders
of the Trust individually but binding only upon the assets and property of the
Trust.
No Fund of the Trust shall be liable for the obligations of any other Fund
of the Trust. Without limiting the generality of the foregoing, the Adviser
shall look only to the assets of a particular Fund for payment of fees for
services rendered to that Fund.
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 Commission,
whether of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order.
A-5
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the day and year first written above.
<TABLE>
<S> <C> <C>
SEI TAX EXEMPT TRUST
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Attest:
--------------------------------------
SEI INVESTMENTS MANAGEMENT CORPORATION
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Attest:
--------------------------------------
</TABLE>
A-6
<PAGE>
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
SEI TAX EXEMPT TRUST
AND
SEI INVESTMENTS MANAGEMENT CORPORATION
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
<TABLE>
<S> <C>
Pennsylvania Municipal Bond Fund......................... 0.35%
</TABLE>
<PAGE>
EXHIBIT B
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
SEI TAX EXEMPT TRUST
AGREEMENT made this day of , 2000, between SEI Investments Management
Corporation, (the "Adviser") and Deutsche Asset Management, Inc. (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
[ ] (the "Advisory Agreement") with the Trust, pursuant to which the
Adviser will act as investment adviser to the Pennsylvania Municipal Bond Fund
(the "Fund"), 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 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
Trust's Board of Trustees, the Sub-Adviser shall manage all of the
securities and other assets of the Fund entrusted to it hereunder (the
"Assets"), including the purchase, retention and disposition of the Assets,
in accordance with the Fund's investment objectives, policies and
restrictions as stated in the Fund'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 Fund, 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 written
instructions and directions of the Adviser and of the Board of Trustees
of the Trust delivered to the Sub-Adviser and will conform to and comply
with the applicable 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.
(c) The Sub-Adviser shall determine 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 policy with
respect to brokerage set forth in the Fund'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 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 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
B-1
<PAGE>
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 Fund 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 terms of the
overall responsibilities of the Sub-Adviser to its discretionary 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 Trust's principal underwriter) 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
Fund'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 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 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 Fund and to such
clients.
(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 Fund required by Rule 31a-1 under the
1940 Act. The Sub-Adviser shall also furnish to the Adviser any other
information within the possession or control of the Sub-Adviser 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
B-2
<PAGE>
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-advisor, to the Adviser).
(e) The Sub-Adviser shall provide the Fund's custodian on each business day
with information relating to all transactions concerning the Fund'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, directors 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.
(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 Fund to forward promptly all such 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 Fund 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-3
<PAGE>
(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, herein called the "By-Laws");
(c) the Prospectus;
(d) any order issued by the SEC or other regulatory authority applicable to
the Trust, the Fund 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.
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 Fund. 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 Fund.
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 attorneys' 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 attorneys' 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.
B-4
<PAGE>
6. DURATION AND TERMINATION. This Agreement shall become effective upon its
approval by the Trust's Board of Trustees and by the vote of a majority of
the outstanding voting securities of the Fund. 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, 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 Fund; (b) by the Adviser at any time, without the payment of any
penalty, on no 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 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:
<TABLE>
<S> <C>
To the Adviser at: SEI Investments Management Corporation
One Freedom Valley Drive
Oaks, PA 19456
Attention: Legal Department
To the Sub-Adviser at: Deutsche Asset Management, Inc.
31 West 52nd Street
New York, NY 10019-6160
Attention: President
</TABLE>
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.
B-5
<PAGE>
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 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 effects 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 above written.
<TABLE>
<S> <C> <C>
SEI INVESTMENTS MANAGEMENT CORPORATION
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Attest:
--------------------------------------
DEUTSCHE ASSET MANAGEMENT, INC.
By:
--------------------------------------
Name:
--------------------------------------
Title:
--------------------------------------
Attest:
--------------------------------------
</TABLE>
B-6
<PAGE>
SCHEDULE A
TO THE
INVESTMENT SUB-ADVISORY AGREEMENT
BETWEEN
SEI INVESTMENTS MANAGEMENT CORPORATION
AND
DEUTSCHE ASSET MANAGEMENT, INC.
Pursuant to Article 4, the Trust shall pay the Adviser compensation at an annual
rate as follows:
SEI TAX EXEMPT TRUST
<TABLE>
<S> <C>
Pennsylvania Municipal Bond Fund......................... 0.20%
</TABLE>
