THE ARBOR FUND
FORM OF INVESTMENT SUB-ADVISORY AGREEMENT
XXXXXXX BANK FAMILY OF FUNDS
AGREEMENT executed as of __________, 2000 by and between Xxxxxxx Bank,
a Mississippi bank (the "Adviser") and Xxxxx, Xxxx and Xxxxx, L.L.C., a Delaware
limited liability company and registered investment adviser (the "Sub-Adviser").
WHEREAS, the Adviser is the investment adviser for The Xxxxxxx Bank
Family of Funds, each a series of The Arbor Fund, an open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act") (the "Trust"); and
WHEREAS, the Adviser desires to retain the Sub-Adviser as its agent to
furnish investment advisory services for the Xxxxxxx Tax Exempt Money Market
Fund, an investment portfolio of the Trust (the "Fund").
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
1. Appointment. The Adviser hereby appoints the Sub-Adviser to provide
certain sub-investment advisory services to the Fund for the period and on the
terms set forth in this Agreement. The Sub-Adviser accepts such appointment and
agrees to furnish the services herein set forth for the compensation herein
provided.
2. Delivery of Documents. The Adviser has furnished the Sub-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 on
July 24, 1992, and all amendments thereto or restatements thereof (such
Declaration, as presently in effect and as it shall from time to time
be amended or restated, is herein called the "Declaration of Trust");
(b) The Trust's By-Laws and amendments thereto;
(c) Resolutions of the Trust's Board of Trustees authorizing
the appointment of the Sub-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
(the "SEC") and all amendments thereto;
(e) The Trust's Registration Statement on Form N-1A under the
Securities Act of 1933, as amended (the "1933 Act") (File No. 33-50718)
and under the 1940 Act as filed
with the SEC and all amendments thereto insofar as such Registration
Statement and such amendments relate to the Fund; and
(f) The Trust's most recent prospectus and Statement of
Additional Information for the Fund (such prospectus and Statement of
Additional Information, as presently in effect, and all amendments and
supplements thereto are herein collectively called the "Prospectus").
The Adviser will furnish the Sub-Adviser from time to time
with copies of all amendments of or supplements to the foregoing.
3. Management. Subject always to the supervision of the Trust's
Board of Trustees and the Adviser, the Sub-Adviser will furnish an investment
program in respect of, and make investment decisions for, all assets of the Fund
and place all orders for the purchase and sale of securities, all on behalf of
the Fund. In the performance of its duties, the Sub-Adviser will satisfy its
fiduciary duties to the Fund (as set forth in Section 8, below), and will
monitor the Fund's investments, and will comply with the provisions of the
Trust's Declaration of Trust and By-Laws, as amended from time to time, and the
stated investment objectives, policies and restrictions of the Fund. The
Sub-Adviser and the Adviser will each make its officers and employees available
to the other from time to time at reasonable times to review investment policies
of the Fund and to consult with each other regarding the investment affairs of
the Fund. The Sub-Adviser shall also make itself reasonably available to the
Board of Trustees at such times as the Board of Trustees shall request.
The Sub-Adviser represents and warrants that it is in compliance
with all applicable rules and regulations of the SEC pertaining to its
investment advisory activities and agrees that it:
(a) will use the same skill and care in providing such
services as it uses in providing services to fiduciary accounts for
which it has investment responsibilities;
(b) will conform with all applicable rules and regulations of
the SEC pertaining to its investment advisory activities;
(c) will place orders pursuant to its investment
determinations for the Fund either directly with the issuer or with any
broker or dealer. In placing orders with brokers or dealers, the
Sub-Adviser will attempt to obtain the best combination of prompt
execution of orders in an effective manner and at the most favorable
price. Consistent with this obligation, when the execution and price
offered by two or more brokers or dealers are comparable, the
Sub-Adviser may, in its discretion, purchase and sell portfolio
securities to and from brokers and dealers who provide the Sub-Adviser
with research advice and other services. In no instance will portfolio
securities be purchased from or sold to the Adviser, the Sub-Adviser,
SEI Investments Distribution Co. or any affiliated person of either the
Trust, the Adviser, SEI Investments Distribution Co. or the
Sub-Adviser, except as may be permitted under the 1940 Act;
(d) will report regularly to the Adviser and will make
appropriate persons available for the purpose of reviewing at
reasonable times with representatives of the Adviser and the Board of
Trustees the management of the Fund, including, without limitation,
review of the general investment strategy of the Fund, the performance
of the Fund in relation to standard industry indices, interest rate
considerations and general conditions affecting the marketplace and
will provide various other reports from time to time as reasonably
requested by the Adviser;
(e) will maintain books and records with respect to the
Trust's securities transactions and will furnish the Adviser and the
Trust's Board of Trustees such periodic and special reports as the
Board of Trustees or the Adviser may request;
(f) will act upon instructions from the Adviser not
inconsistent with the fiduciary duties hereunder; and
(g) will treat confidentially and as proprietary information
of the Trust all such records and other information relative to the
Trust maintained by the Sub-Adviser, 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 where the Sub-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.
The Sub-Adviser shall have the right to execute and deliver, or cause
its nominee to execute and deliver, all proxies and notices of meetings and
other notices affecting or relating to the securities of the Fund.
4. Books and Records. In compliance with the requirements of Rule 31a-3
under the 1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Fund, on behalf of 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 Sub-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.
5. Expenses. During the term of this Agreement, the Sub-Adviser will
pay all expenses incurred by it in connection with its activities under this
Agreement.
6. Compensation. 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
paid out of the advisory fee, at an annual rate of .085% on the first $50
million of the of the Fund's average daily net assets; .075% on the next $50
million to $150 million of the of the Fund's average daily net assets, .05% on
the next $150 to $500 million of the Fund's average daily net assets, .04% for
the next $500 million to $1 billion of the Fund's average daily net assets, and
.03% of the Fund's average daily net
assets over $1 billion. The minimum fee is $25,000. This fee will be computed
daily and paid to the Sub-Adviser monthly.
7. Services to Others. The Adviser understands, and has advised the
Trust's Board of Trustees, that the Sub-Adviser now acts, and may in the future
act, as an investment adviser to fiduciary and other managed accounts, and as
investment adviser, sub-investment adviser, and/or administrator to other
investment companies. The Adviser has no objection to the Sub-Adviser's acting
in such capacities, provided that whenever the Fund and one or more other
investment companies advised by the Sub-Adviser have available funds for
investment, investments suitable and appropriate for each will be allocated in
accordance with a formula believed by the Sub-Adviser to be equitable to each
company. The Adviser recognizes, and has advised the Trust's Board of Trustees,
that in some cases this procedure may adversely affect the size of the position
that the Fund may obtain in a particular security. In addition, the Adviser
understands, and has advised the Trust's Board of Trustees, that the persons
employed by the Sub-Adviser to assist in the Sub-Adviser's duties under this
Agreement will not devote their full time to such service and nothing contained
in this Agreement will be deemed to limit or restrict the right of the
Sub-Adviser or any of its affiliates to engage in and devote time and attention
to other businesses or to render services of whatever kind or nature.
8. Standard of Care. Each of the Adviser and Sub-Adviser shall
discharge its duties under this Agreement with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent person acting
in a like capacity and familiar with such matters would use in the conduct of an
enterprise of a like character and with like aims. The parties recognize that
the opinions, recommendations and actions of Sub-Adviser will be based on advice
and information deemed to be reliable but not guaranteed by or to Sub-Adviser.
The federal securities laws impose liabilities under certain circumstances on
persons who act in good faith, and therefore nothing herein shall in any way
constitute a waiver or limitation of any rights which the Adviser may have
against Sub-Adviser under any federal securities laws based on negligence and
which cannot be modified in advance by contract.
9. Indemnification. Each of the Adviser and Sub-Advisor agrees to
indemnify each other against any claim, loss or liability (including reasonable
attorney's fees) arising as a result of the failure to meet the standard of care
set forth in the first sentence of Paragraph 8 hereof.
10. Duration and Termination. This Agreement will become effective as
of the date hereof provided that it has been approved by vote of a majority of
the outstanding voting securities of the Fund in accordance with the
requirements under the 1940 Act, and, unless sooner terminated as provided
herein, will continue in effect for two years.
Thereafter, if not terminated, this Agreement will continue in
effect for the Fund for successive periods of 12 months, each ending on the day
preceding the anniversary of the Agreement's effective date of each year,
provided that such continuation 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 the Trust, the Sub-Adviser, or the Adviser, cast
in person at a meeting called for the purpose of voting on such approval, and
(b) by the vote of a majority of the Trust's Board of Trustees or by the vote of
a majority of all votes attributable to the
outstanding shares of the Fund. Notwithstanding the foregoing, this Agreement
may be terminated as to the Fund at any time, without the payment of any
penalty, on sixty (60) days' written notice by the Adviser or by the
Sub-Adviser. 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" have the same meaning
of such terms in the 1940 Act.)
This Agreement will terminate automatically if the investment
advisory agreement between the Trust and the Adviser is terminated.
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.
12. Multiple Originals. This Agreement may be executed in two or more
counterparts, each of which when so executed shall be deemed to be an original,
but such counterparts shall together constitute but one and the same document.
13. Custody. All securities and other assets of the Fund shall be
maintained with a custodian designated by the Adviser. The Sub-Adviser shall
have no responsibility or liability with respect to any custodial function.
14. Miscellaneous. 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 is held or made invalid by a court decision,
statute, rule or otherwise, the remainder of this Agreement will not be affected
thereby. This Agreement will be binding upon and shall inure to the benefit of
the parties hereto and will be governed by the laws of the state of Mississippi.
The Sub-Adviser shall notify the Adviser of any changes in its partners within a
reasonable time.
The names "The Arbor Fund" and "Trustees of The Arbor Fund" refer
respectively to the Trust created by, and the Trustees, as trustees but not
individually or personally, acting from time to time under, the Declaration of
Trust, to which reference is hereby made and a copy of which is on file at the
office of the Secretary of State of the Commonwealth of Massachusetts and
elsewhere as required by law, and to any and all amendments thereto so filed or
hereafter filed. The obligations of "The Arbor Fund" entered in the name or on
behalf thereof by any of the Trustees, representatives or agents are made not
individually but only in such capacities and are not binding upon any of the
Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the Trust. Persons dealing with the Fund must look solely to the
assets of the Trust belonging to the Fund for the enforcement of any claims
against the Trust.
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.
XXXXXXX BANK
By:________________________________
Name:
Title:
XXXXX, XXXX & XXXXX, L.L.C.
By:
Name:
Title:
