ARMADA FUNDS
ADVISORY AGREEMENT
AGREEMENT made as of June __, 2000 between ARMADA FUNDS, a Massachusetts
business trust, located in Oaks, Pennsylvania (the "Trust") and NATIONAL CITY
INVESTMENT MANAGEMENT COMPANY, located in Cleveland, Ohio (the "Adviser").
WHEREAS, the Trust is registered as an open-end, management investment
company under the Investment Company Act of 1940, as amended ("1940 Act"); and
WHEREAS, the Trust desires to retain the Adviser as investment adviser to
the Mid Cap Growth, Large Cap Ultra, U.S. Government Income, Michigan Municipal
Bond and Treasury Plus Money Market Funds (individually, a "Fund" and
collectively, the "Funds");
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is agreed among the parties hereto as follows:
1. DELIVERY OF DOCUMENTS. The Adviser acknowledges that it has
received copies of each of the following:
(a) The Trust's Declaration of Trust, as filed with the State
Secretary of the Commonwealth of Massachusetts on January
29, 1986 and all amendments thereto (such 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) The Trust's Code of Regulations, and amendments thereto
(such Code of Regulations, as presently in effect and as
it shall from time to time be amended, is herein called
the "Code of Regulations");
(c) Resolutions of the Trust's Board of Trustees authorizing
the appointment of the Adviser and approving this
Agreement;
(d) The Trust's Notification of Registration on Form N-8A
under the 1940 Act as filed with the Securities and
Exchange Commission ("SEC") on September 26, 1985 and all
amendments thereto;
(e) The Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended ("1933 Act") (File No.
33-488) and under the 1940 Act as filed with the SEC on
September 26, 1985 and all amendments thereto; and
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(f) The Trust's most recent prospectuses and statements of
additional information with respect to the Funds (such
prospectuses and statements of additional information, as
presently in effect and all amendments and supplements
thereto are herein called individually, a "Prospectus",
and collectively, the "Prospectuses").
The Trust will furnish the Adviser from time to time with
execution copies of all amendments of or supplements to the foregoing.
2. SERVICES. The Trust hereby appoints the Adviser to act as
investment adviser to the Funds for the period and on the terms set forth
in this Agreement. Intending to be legally bound, the Adviser accepts
such appointment and agrees to furnish the services required herein to
the Funds for the compensation hereinafter provided.
Subject to the supervision of the Trust's Board of Trustees, the
Adviser will provide a continuous investment program for each Fund,
including investment research and management with respect to all
securities and investments and cash equivalents in each Fund. The Adviser
will determine from time to time what securities and other investments
will be purchased, retained or sold by each Fund. The Adviser will
provide the services under this Agreement in accordance with each Fund's
investment objective, policies, and restrictions as stated in the
Prospectus and resolutions of the Trust's Board of Trustees applicable to
such Fund.
3. SUBCONTRACTORS. It is understood that the Adviser may from time
to time employ or associate with itself such person or persons as the
Adviser may believe to be particularly fitted to assist in the
performance of this Agreement; provided, however, that the compensation
of such person or persons shall be paid by the Adviser and that the
Adviser shall be as fully responsible to the Trust for the acts and
omissions of any subcontractor as it is for its own acts and omissions.
Without limiting the generality of the foregoing, it is agreed that
investment advisory service to any Fund may be provided by a
subcontractor agreeable to the Adviser and approved in accordance with
the provisions of the 1940 Act. Any such sub-advisers are hereinafter
referred to as the "Sub-Advisers." In the event that any Sub-Adviser
appointed hereunder is terminated, the Adviser may provide investment
advisory services pursuant to this Agreement to the Fund involved without
further shareholder approval. Notwithstanding the employment of any
Sub-Adviser, the Adviser shall in all events: (a) establish and monitor
general investment criteria and policies for each Fund; (b) review
investments in each Fund on a periodic basis for compliance with its
investment objective, policies and restrictions as stated in the
Prospectus; (c) review periodically any Sub-Adviser's policies with
respect to the placement of orders for the purchase and sale of portfolio
securities; (d) review, monitor, analyze and report to the Board of
Trustees on the performance of any Sub-Adviser; (e) furnish to the Board
of Trustees or any Sub-Adviser, reports, statistics and economic
information as may be reasonably requested; and (f) recommend, either in
its sole discretion or in conjunction with any Sub-Adviser, potential
changes in investment policy.
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4. COVENANTS BY ADVISER. The Adviser agrees with respect to the
services provided to each Fund that it:
(a) will comply with all applicable Rules and Regulations of
the SEC and will in addition conduct its activities under
this Agreement in accordance with other applicable law;
(b) will use the same skill and care in providing such
services as it uses in providing services to similar
fiduciary accounts for which it has investment
responsibilities;
(c) will not make loans to any person to purchase or carry
shares in the Funds, or make interest-bearing loans to the
Trust or the Funds;
(d) will maintain a policy and practice of conducting its
investment management activities independently of the
Commercial Departments of all banking affiliates. In
making investment recommendations for the Funds, personnel
will not inquire or take into consideration whether the
issuers (or related supporting institutions) of securities
proposed for purchase or sale for the Funds' accounts are
customers of the Commercial Department. In dealing with
commercial customers, the Commercial Department will not
inquire or take into consideration whether securities of
those customers are held by the Funds;
(e) will place orders pursuant to its investment
determinations for the Funds either directly with the
issuer or with any broker or dealer. In selecting brokers
or dealers for executing portfolio transactions, the
Adviser will use its best efforts to seek on behalf of the
Trust and each Fund the best overall terms available. In
assessing the best overall terms available for any
transaction the Adviser shall consider all factors 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 or 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, as
amended) provided to any Fund and/or other accounts over
which the Adviser or any affiliate of the Adviser
exercises investment discretion. The Adviser is
authorized, subject to the prior approval of the Board, to
negotiate and pay to a broker or dealer who provides such
brokerage and research services a commission for executing
a portfolio transaction for any 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 Adviser determines in good faith that such
commission was reasonable in relation to the value of the
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brokerage and research services provided by such broker or
dealer viewed in terms of that particular transaction or
in terms of the overall responsibilities of the Adviser
with respect to the accounts as to which it exercises
investment discretion. In no instance will fund securities
be purchased from or sold to the Adviser, any Sub-Adviser,
SEI Investments Distribution Co. ("SEI") (or any other
principal underwriter to the Trust) or an affiliated
person of either the Trust, the Adviser, Sub-Adviser, or
SEI (or such other principal underwriter) unless permitted
by an order of the SEC or applicable rules. In executing
portfolio transactions for any Fund, the Adviser may, but
shall not be obligated to, to the extent permitted by
applicable laws and regulations, aggregate the securities
to be sold or purchased with those of other Funds and its
other clients where such aggregation is not inconsistent
with the policies set forth in the Trust's registration
statement. In such event, the Adviser will allocate the
securities so purchased or sold, and the expenses incurred
in the transaction, in the manner it considers to be the
most equitable and consistent with its fiduciary
obligations to the Funds and such other clients;
(f) will maintain all books and records with respect to the
securities transactions for the Funds and furnish the
Trust's Board of Trustees such periodic and special
reports as the Board may request; and
(g) will treat confidentially and as proprietary information
of the Trust all records and other information relative to
the Funds and prior, present or potential shareholders,
and will not use such records and information for any
purpose other than performance of its responsibilities and
duties hereunder (except after prior notification to and
approval in writing by the Trust, which approval shall not
be unreasonably withheld and may not be withheld and will
be deemed granted where the Adviser may be exposed to
civil or criminal contempt proceedings for failure to
comply, when requested to divulge such information by duly
constituted authorities, or when so requested by the
Trust).
5. SERVICES NOT EXCLUSIVE. The services furnished by the Adviser
hereunder are deemed not to be exclusive, and the Adviser shall be free
to furnish similar services to others so long as its services under this
Agreement are not impaired thereby.
6. BOOKS AND RECORDS. In compliance with the requirements of
Rule 31a-3 under the 1940 Act, the Adviser hereby agrees that all records
which it maintains for the Trust are the property of the Trust and
further agrees to surrender promptly to the Trust any of such records
upon the Trust's request. The Adviser further agrees to preserve for the
periods prescribed by Rule 31a-2 under the 1940 Act the records required
to be maintained by Rule 31a-1 under the 1940 Act.
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7. EXPENSES. During the term of this Agreement, the Adviser will
pay all expenses incurred by it in connection with its activities under
this Agreement other than the cost of securities (including brokerage
commissions, if any) purchased for the Funds.
8. COMPENSATION. For the services provided and the expenses
assumed pursuant to this Agreement, the Trust will pay the Adviser from
the assets belonging to the Funds and the Adviser will accept as full
compensation therefor fees, computed daily and paid monthly, at the
following annual rates: 1.00% of the average daily net assets of the Mid
Cap Growth Fund; 0.75% of the average daily net assets of the Large Cap
Ultra Fund; 0.55% of the average daily net assets of the U.S. Government
Income Fund; 0.55% of the average daily net assets of the Michigan
Municipal Bond Fund; and 0.30% of the average daily net assets of the
Treasury Plus Money Market Fund.
The fee attributable to each Fund shall be the several (and not
joint or joint and several) obligation of each Fund.
9. LIMITATION OF LIABILITY. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the
Trust in connection with the performance of this Agreement, except a loss
resulting from a breach of fiduciary duty with respect to the receipt of
compensation for services or a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Adviser in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
10. DURATION AND TERMINATION. This Agreement will become effective
with respect to each Fund upon approval of this Agreement by vote of a
majority of the outstanding voting securities of each such Fund, and,
unless sooner terminated as provided herein, shall continue in effect
until September 30, 2000. Thereafter, if not terminated, this Agreement
shall continue in effect with respect to a particular Fund for successive
twelve month periods ending on September 30, PROVIDED such continuance is
specifically approved at least annually (a) by the vote of a majority of
those members of the Trust's Board of Trustees who are not interested
persons of any party to this Agreement, cast in person at a meeting
called for the purpose of voting on such approval, and (b) by the Trust's
Board of Trustees or by vote of a majority of the outstanding voting
securities of the Fund. Notwithstanding the foregoing, this Agreement may
be terminated as to any Fund at any time, without the payment of any
penalty, by the Trust (by the Trust's Board of Trustees or by vote of a
majority of the outstanding voting securities of the particular Fund), or
by the Adviser on 60 days' written notice. This Agreement will
immediately terminate in the event of its assignment. (As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"interested persons" and "assignment" shall have the same meaning of such
terms in the 1940 Act.)
11. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought. No amendment of
this Agreement shall be effective with respect to a Fund until approved
by vote of a majority of the outstanding voting securities of that Fund.
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12. MISCELLANEOUS. The Adviser expressly agrees that notwithstanding
the termination of or failure to continue this Agreement with respect to
a particular Fund, the Adviser shall continue to be legally bound to
provide the services required herein for the other Funds for the period
and on the terms set forth in this Agreement. The captions in this
Agreement are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect. 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. This Agreement
shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and shall be governed by Delaware
law.
13. NAMES. The names "ARMADA FUNDS" and "Trustees of ARMADA FUNDS"
refer respectively to the Trust created and the Trustees, as trustees but
not individually or personally, acting from time to time under a
Declaration of Trust dated January 28, 1986 which is hereby referred to
and a copy of which is on file at the office of the State Secretary of
the Commonwealth of Massachusetts and the principal office of the Trust.
The obligations of "ARMADA FUNDS" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders, or representatives of the Trust personally, but
bind only the Trust property, and all persons dealing with any class of
shares of the Trust must look solely to the Trust property belonging to
such class for the enforcement of any claims against the Trust.
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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
ARMADA FUNDS
By:
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Title:
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NATIONAL CITY INVESTMENT
MANAGEMENT COMPANY
By:
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Title:
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