INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 28th day of January, 1993, by and between The Arbor
Fund, a Massachusetts business trust (the "Trust"), and Citizens Commercial &
Savings Bank (the "Adviser").
WHEREAS, the Trust is an open-end, diversified management investment
company registered under the Investment Company Act of 1940, as amended,
consisting of several series of shares, each having its own investment policies;
and
WHEREAS, the Trust has retained SEI Financial Management Corporation (the
"Administrator") to provide administration of the Trust's operations, subject to
the control of the Board of Trustees;
WHEREAS, the Trust desires to retain the Adviser to render investment
management services with respect to its Diversified Growth, Intermediate-Term
Income, Michigan Tax Free Bond and Prime Obligation Money Market Portfolios and
such other portfolios as the Trust and the Adviser may agree upon (the
"Portfolios"), 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 ADVISER. The Trust hereby appoints the Adviser to act as
investment advisor to the Trust's Diversified Growth, Intermediate-
Term Income, Michigan Tax Free Bond and Prime Obligation Money Market
Portfolios and such other Portfolios as may be offered by the Trust
and agreed to by the Adviser for the period and on the terms set forth
in this Agreement. The Trust employs the Adviser to manage the
investment and reinvestment of the assets, and to continuously review,
supervise, and administer the investment program of the Portfolios, to
determine in its discretion 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 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 Portfolio set forth in the
Trust's prospectus and statement of additional information as amended from
time to time, and applicable laws and regulations.
The Adviser accepts such employment and agrees, to render the services and
at its own expense to provide the office space, furnishings and equipment
and the personnel required by it to perform the services on the terms and
for the compensation provided herein.
2. PORTFOLIO TRANSACTIONS. The Adviser is authorized to select the brokers or
dealers that will execute the purchases and sales of portfolio securities
for the Portfolios and is directed to use its best efforts to obtain the
best net results as described in the Trust's prospectus and statement of
additional information from time to time. The Adviser will promptly
communicate to the Administrator and to the officers and the Trustees of
the Trust such information relating to portfolio transactions as they may
reasonably request.
It is understood that the Adviser will not be deemed to have acted
unlawfully, or to have breached a fiduciary duty to the Trust or be in
breach of any obligation owing to the Trust under this Agreement, or
otherwise, solely by reason of its having directed a securities transaction
on behalf of the Trust to a broker-dealer in compliance with the provisions
of Section 28(e) of the Securities Exchange Act of 1934.
3. 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 rate 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. The fee shall be
based on the average daily net assets for the month involved. In the event
of termination of this Agreement, the fee provided in this Section shall be
computed on the basis of the period ending on the last business day on
which this Agreement is in effect.
All rights of compensation under this Agreement for services performed as
of the termination date shall survive the termination of this Agreement.
4. OTHER EXPENSES. The Adviser shall pay all expenses of preparing (including
typesetting), printing and mailing reports, prospectuses, statements of
additional information, and sales literature to prospective clients of the
Fund to the extent these expenses are not borne by the Trust under a
distribution plan adopted pursuant to Rule 12b-1.
5. EXCESS EXPENSES. If the expenses, as described in Section 4, for any
Portfolio 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 Portfolio
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 reduction in
the fee payable to the Adviser for such month pursuant to Section 3 and, if
such reduction shall be insufficient to offset such expenses, by
reimbursing the Trust. However, prior to the reduction in the fee payable
or reimbursement of fees, the Trust will provide to the Adviser a detailed
list of each such excess expense.
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.
7. STATUS OF 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.
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 Investment Company Act of 1940 which are prepared or maintained by the
Adviser on behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust on request, provided, however, that the
Adviser shall retain a copy of such records.
9. LIMITATION OF LIABILITY OF 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 to the Trust or any shareholder of the Trust or to any
other person for any error of judgment or mistake of law or any other act
or omission in the course
of, or connected with, rendering services hereunder including, without
limitation, for any loss arising out of any purchase, holding, redemption,
exchange or sale of any security or the failure to do any of the foregoing
on behalf of any Portfolio of the Trust, except a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the
Adviser in the performance of its duties, or by reason of reckless
disregard by the Adviser 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 Paragraph 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, shareholders or otherwise; and the
Adviser (or any successor) is or may be interested in the Trust as a
shareholder or otherwise. The effect and limitations of any such inter-
relationships shall be governed by the provisions of the Investment Company
Act of 1940. In addition, brokerage transactions for the Trust may be
effected through affiliates of the 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 Portfolio; provided, however, that if the
shareholders of any Portfolio 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 Investment Company Act of 1940 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 Investment Company Act of 1940 and the
rules and regulations thereunder.
This Agreement may be terminated as to any Portfolio 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
Portfolio 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. Any notice under this Agreement
shall be given in writing, addressed and delivered, or mailed postpaid, to
the other party at any office of such party.
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 Investment Company Act of 1940 and
the rules and regulations thereunder; subject to such exemptions as may be
granted by the Securities and Exchange Commission under said Act.
12. NOTICE. Any notice required or permitted to be given by either party to
the other shall be deemed sufficient if sent by registered or certified
mail, postage prepaid, addressed by the party giving notice to the other
party at the last address furnished by the other party to the party giving
notice: if to the Trust, at 000 Xxxx Xxxxxxxxxx Xxxx, Xxxxx, XX 00000 and
if to the Adviser at Xxx Xxxxxxxx Xxxxxxx Xxxxxx, Xxxxx, XX 00000,
Attention: Legal Department.
13. 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.
14. AMENDMENT OF AGREEMENT. The terms or provisions of this Agreement may be
amended, modified or waived in writing if such amendment, modification or
waiver is approved by the affirmative vote or action by written consent of
the Board of Trustees of the Trust and by the Adviser in accordance with
the Investment Company Act of 1940; provided, that an amendment,
modification or waiver shall also be approved by the shareholders of the
Trust if shareholder approval is required by the Investment Company Act of
1940 and the rules and regulations thereunder.
15. APPLICABLE LAW. This Agreement shall be construed in accordance with the
laws of the Commonwealth of Massachusetts and the applicable provisions of
the 1940 Act. To the extent that the applicable laws of the Commonwealth
of Massachusetts, or any of the provisions herein, conflict with the
applicable provisions of the 1940 Act, the latter shall control.
16. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but such
counterparts shall, together, constitute only one instrument.
A copy of the Declaration of Trust of the Trust is on file with the Secretary 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
are 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.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
as of the day and year first written above.
THE ARBOR FUND CITIZENS COMMERCIAL & SAVINGS BANK
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
--------------------------- ----------------------------
Attest: /s/ Xxxxx X. Xxxxxxx Attest: /s/ Xxxxxx X. Xxxxxxxxx
----------------------- ------------------------
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
THE ARBOR FUND
AND
CITIZENS COMMERCIAL & SAVINGS BANK
Pursuant to Article 3, the Trust shall pay the Adviser compensation at an annual
rate as follows:
Portfolio Fee (in basis points)
Diversified Growth Portfolio 74
Intermediate-Term Income Portfolio 50
Michigan Tax Free Bond Portfolio 50
Prime Obligation Money Market Fund 30
