Exhibit 23(d)(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. X-X
XXXXXXXXXX FUNDS
INVESTMENT ADVISORY AGREEMENT
This Agreement is made as of the 30th day of October, 2002 by and
between the Huntington Funds, a business trust organized under the laws of
the Commonwealth of Massachusetts (herein called the "Trust"), and Huntington
Asset Advisors, Inc. (herein called the "Investment Adviser").
WHEREAS, the Trust is registered as an open-end, diversified,
management investment company under the Investment Company Act of 1940; and
WHEREAS, the Trust desires to retain the Investment Adviser to
render investment advisory and other services to the investment portfolios of
the Trust identified on Schedule A hereto (each a "Fund" and collectively the
"Funds"), and the Investment Adviser is willing to render such services as a
discretionary investment adviser on the terms and conditions hereinafter set
forth;
WITNESSETH: That in consideration of the promises and mutual
covenants hereinafter contained, the parties hereto agree as follows:
1. Appointment. The Trust being duly authorized hereby
appoints the Investment Adviser to act as discretionary investment adviser to
the Trust for the Funds for the period and on the terms set forth in this
Agreement. The Investment Adviser accepts such appointment and agrees to
render the services herein set forth for the compensation herein provided.
2. Management. Subject to the supervision of the Board of
Trustees of the Trust (the "Trustees"), the Investment Adviser will provide a
continuous investment program for each of the Funds, including, investment
research and management with respect to all securities, investments, cash and
cash equivalents in the Funds. The Investment Adviser will determine from
time to time what securities and other instruments will be purchased,
retained or sold by the Trust for the Funds. The Investment Adviser will
provide the services rendered by it hereunder in accordance with the Funds'
respective investment objectives and policies as stated in the Prospectus
which is a part of the Trust's effective Registration Statement as amended
from time to time. The Investment Adviser agrees that it:
(a) will conform with all applicable Rules and Regulations of
the Securities and Exchange Commission (herein called the "Rules") and with
the Securities Act of 1933, the Securities Exchange Act of 1934, the
Investment Company Act of 1940 and the Investment Advisers Act of 1940, all
as amended, and will in addition conduct its activities under this Agreement
in accordance with all applicable Rules and Regulations of the Comptroller of
the Currency pertaining to the investment advisory activities of national
banks;
(b) will place orders pursuant to its investment determinations
for each of the Funds either directly with the issuer of the instrument to be
purchased or with any broker or dealer selected by it. In placing orders
with brokers and dealers, the Investment Adviser will use its reasonable best
efforts to obtain the best net price and execution of its orders, after
taking into account 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. However, this responsibility shall not be deemed
to obligate the Investment Adviser to solicit competitive bids for each
transaction. Consistent with its obligation, the Investment Adviser may, to
the extent permitted by law, purchase and sell portfolio securities to and
from brokers and dealers who provide brokerage and research services (as
those terms are defined in Section 28(e) of the Securities Exchange Act of
1934), statistical quotations, specifically the quotations necessary to
determine a Fund's net asset value, and other information provided to the
applicable Fund or to the Investment Adviser or its affiliates to or for the
benefit of any Fund and/or other accounts over which the Investment Adviser
or any of its affiliates exercises investment discretion. Subject to the
review of the Trustees from time to time with respect to the extent and
continuation of the policy, the Investment Adviser is authorized to pay a
broker or dealer who provides such brokerage and research services a
commission for effecting a securities transaction for any Fund which is in
excess of the amount of commission another broker or dealer would have
charged for effecting the transaction if the Investment 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 either that particular transaction or the overall
responsibilities of the Investment Adviser with respect to the accounts as to
which it or its affiliates exercise investment discretion;
(c) will maintain books and records with respect to the
securities transactions of each Fund and will render to the Trustees such
periodic and special reports as the Trustees may reasonably request; and
(d) will treat confidentially and as proprietary information of the
Trust all records and other information relative to the Trust and prior,
present, or potential shareholders of the Trust learned by, or disclosed to,
the Investment Adviser in the course of its performance of its
responsibilities and duties under this Agreement, 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 Investment Adviser may be exposed
to civil, regulatory, or criminal sanctions for failure to comply when
requested to divulge such information by duly constituted authorities, or
when so requested by the Trust.
3. Services Not Exclusive. The investment management services
rendered by the Investment Adviser hereunder are not to be deemed exclusive,
and the Investment Adviser shall be free to render similar services to others
so long as its services under this Agreement are not impaired thereby. The
Investment Adviser shall provide fair and equitable treatment to the Funds in
the selection of portfolio instruments and the allocation of investment
opportunities; the Investment Adviser is not required to give the Funds
preferential treatment.
4. Books and Records. In compliance with the requirements of
Rule 31a-3 promulgated under the Investment Company Act of 1940, as amended,
the Investment Adviser hereby agrees that all records which it maintains for
the Funds are the property of the Trust and further agrees to surrender
promptly to the Trust any of such records up on the Trust's request. The
Investment Adviser further agrees to preserve for the periods prescribed by
Rule 31a-2 the records required to be maintained by Rule 31a-1 and to comply
in full with the requirements of Rule 204-2 under the Investment Advisers Act
of 1940 pertaining to the maintenance of books and records.
5. Expenses. During the term of this Agreement, the
Investment 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 and taxes, if any) or other investment
instruments purchased for the Funds.
In addition, if the expenses borne by any Fund other than the
Huntington Florida Tax-Free Money Fund (including fees payable pursuant to
this Agreement and the Administration Agreement but excluding interest,
taxes, brokerage and, if permitted by the relevant state securities
commissions, extraordinary expenses) in any fiscal year of such Fund exceed
the applicable expense limitations imposed by the securities regulations of
any state in which the shares of any such Fund are registered or qualified
for sale to the public, the Investment Adviser shall reimburse such Fund
monthly for a portion of any such excess in an amount equal to the proportion
that the fees otherwise payable to the Investment Adviser bear to the total
amount of investment advisory and administration fees otherwise payable to
the Investment Adviser during such fiscal year pursuant to paragraph 6 hereof.
6. Compensation. For the services provided and the expenses assumed
pursuant to this Agreement with respect to each Fund, the Trust will pay the
Investment Adviser, and the Investment Adviser will accept as full
compensation therefore, a fee representing the percentage of the average
daily net asset value of such Fund, computed daily and payable monthly at the
annual rate set forth on Schedule A hereto.
7. Limitation of Liability of the Investment Adviser;
Indemnification.
(a) The Investment 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 matters to which this Agreement relates, 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 Investment Adviser in the
performance of its duties or from reckless disregard by it of its obligations
and duties under this Agreement.
(b) Subject to the limitations contained in Section 7(c) below:
(i) the Trust shall indemnify and hold harmless the
Investment Adviser, its directors, officers and employees and each person who
controls the Investment Adviser (hereinafter referred to as "Covered
Persons") to the fullest extent permitted by law, against any and all claims,
demands and liabilities (and all reasonable expenses in connection therewith)
to which the Investment Adviser or any of its directors, officers, employees
or controlling persons may become subject by virtue of the Investment Adviser
being or having been the Investment Adviser of the Trust;
(ii) the words "claims," "actions," "suits," or
"proceedings" shall apply to all claims, actions, suits or proceedings
(civil, criminal or other, including appeals), actual or threatened while in
office or thereafter, and the words "liabilities" and "expenses" shall
include, without limitation, attorneys' fees and expenses, costs, judgments,
amounts paid in settlement, fines, penalties and other liabilities.
(c) No indemnification shall be provided hereunder to a Covered
Person:
(i) who shall have been adjudicated by a court or body
before which the proceedings was brought (A) to be liable to the Trust or its
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of its office or (B)
not to have acted in good faith in the reasonable belief that its action was
in the best interest of the Trust; or
(ii) in the event of a settlement, unless there has been a
determination that such Covered Person did not engage in willful misfeasance,
bad faith, gross negligence or reckless disregard of the duties involved in
the conduct of his office;
(A) by the court or other body approving the
settlement; or
(B) by at least a majority of those Trustees who are
neither Interested Persons of the Trust (as defined in the Investment Company
Act of 1940, as amended) nor are parties to the matter, based upon a review
of readily available facts (as opposed to a full trial-type inquiry); or
(C) by written opinion of independent legal counsel
based upon a review of readily available facts (as opposed to a full
trial-type inquiry).
(d) The rights of indemnification herein provided may be
insured against by policies maintained by the Trust, shall be severable,
shall not be exclusive of or affect any other rights to which any Covered
Person shall insure to the benefit of the personal representatives,
successors and assigns of each such person. Nothing contained herein shall
affect any rights to indemnification to which Trust personnel and any other
persons, other than a Covered Person, may be entitled by contract or
otherwise under law.
(e) Expenses in connection with the investigation, preparation
and presentation of a defense to any claim, suit or proceeding of the
character described in subsection (b) of this Section 7 shall be paid by the
Trust or any Fund from time to time prior to final disposition thereof, upon
receipt of an undertaking by or on behalf of such Covered Person that such
amount will be paid over by him to the Trust or any such Fund if its is
ultimately determined that he is not entitled to indemnification under this
Section 7; provided however, that either (i) such Covered Person shall have
provided appropriate security for such undertaking, (ii) the Trust shall be
insured again losses arising out of any such advance payments, or (iii)
either a majority of the Trustees who are neither Interested Persons of the
Trust nor parties to the matter, or independent legal counsel in a written
opinion, shall have determined, based upon a review of readily available
facts (as opposed to a trial-type inquiry), that there is reason to believe
that such Covered Person will be entitled to indemnification under this
Section 7.
8. Duration and Termination. This Agreement shall be
effective as of the date of hereof, and unless sooner terminated as provided
herein, shall continue in effect as to any particular Fund for successive
periods of 12 months each, provided such continuance is specifically approved
at least annually (a) by the vote of a majority of those Trustees 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 or, with respect to any Fund, by vote of a majority of
the outstanding voting securities of such Fund; provided, however that this
Agreement may be terminated by the Trust as to any Fund or all the Funds at
any time, without the payment of any penalty, by the Trustees or, with
respect to any Fund, by a vote of a majority of the outstanding voting
securities of such Fund on 60 days' written notice to the Investment Adviser,
or by the Investment Adviser as to any Fund at any time, without payment of
any penalty, on 90 days' written notice to the Trust. This Agreement will
immediately terminate in the event of its assignment by either party hereto
or by operation of law. (As used in this Agreement, the terms "majority of
the outstanding voting securities," "interested person" and "assignment"
shall have the same meanings as such terms have in the Investment Company Act
of 1940, as amended).
9. 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, and no amendment of
this Agreement shall be effective with respect to any Fund until approved by
vote of a majority of the Fund's outstanding voting securities.
10. (A) Representations and Warranties. The Investment Adviser
hereby represents and warrants as follows:
(1) The Investment Adviser is registered under the Investment
Advisers Act of 1940, as amended;
(2) The Investment Adviser has all requisite authority to enter
into, execute, deliver and perform its obligations under
this Agreement;
(3) This Agreement is the legal, valid and binding obligation
of the Investment Adviser, and is enforceable in accordance
with its terms; and
(4) The performance by the Investment Adviser of its
obligations under this Agreement does not conflict with any
law or regulation to which it is subject.
(B) Covenants. The Investment Adviser hereby covenants and
agrees that, so long as this Agreement shall remain in effect:
(1) The Investment Adviser shall maintain its registration
under the Investment Advisers Act of 1940; and
(2) The performance by the Investment Adviser of its
obligations under this Agreement shall not conflict with
any law to which it is then subject.
(C) The Trust hereby covenants and agrees that, so long as this
Agreement shall remain in effect, it shall furnish the Investment Adviser
from time to time with copies of the following documents, if and when
effective, pertaining to the Trust or the Funds and all amendments and
supplements thereto: Declaration of Trust, By-Laws, Registration Statement
(including Prospectus and Statement of Additional Information), Custodial
Agreement, Transfer Agency Agreement, Administration Agreement, Distribution
Agreement, Rule 12b-1 Service Plan, Proxy Statement and any other documents
filed with the Securities and Exchange Commission, State securities law
administrators or other governmental agencies, and any other documents the
Investment Adviser may reasonably request.
11. Notices. Any notice required to be given pursuant to this
Agreement shall be deemed duly given if delivered or mailed by registered
mail, postage prepaid, (1) to the Investment Adviser at 00 Xxxxx Xxxx Xxxxxx,
Xxxxxxxx, Xxxx 00000, or (2) to the Trust at 0000 Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, Attn.: Secretary.
12. Waiver. With full knowledge of the circumstances and the
effect of its action, the Investment Adviser hereby waives any and all rights
which it may acquire in the future against the property of any shareholder of
the Trust, other than shares of the Trust at their net asset value; which
arise out of any action or inaction of the Trust under this Agreement.
13. Captions. 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.
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. Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective
successors.
16. Governing Law. This Agreement is executed in the state of
Ohio and shall be governed by the laws of such State, without reference to
conflict of laws principles.
IN WITNESS WHEREOF, each of the parties hereto has caused this
instrument to be executed in its name and on its behalf by its duly
authorized representative and its seal to be hereunder affixed as of the date
first above written.
THE HUNTINGTON FUNDS
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
HUNTINGTON ASSET ADVISORS, INC.
By: /s/ B. R. Xxxxxxx
Name: B. R. Xxxxxxx
Title: President
SCHEDULE A
TO THE
INVESTMENT ADVISORY AGREEMENT
BETWEEN
I. The Huntington Funds
and
Huntington Asset Advisors, Inc.
dated as of October 30, 2002
Pursuant to Section 6, the Trust shall pay the Adviser compensation at an
annual rate as follows:
II. Portfolio III. Fee
(as a percentage of
average daily net assets)
Huntington U.S. Treasury Money Market Fun.20%
Huntington Growth Fund .60%
Huntington Income Equity Fund .60%
Huntington Fixed Income Securities Fund .50%
Huntington Short/Intermediate .50%
Fixed Income Securities Fund
Huntington Money Market Fund .30% on assets up to $500M
.25% on assets from $500M to $1B
.20% on assets in excess of $1B
Huntington Ohio Municipal Money Market .30% on assets up to $500M
Fund
.25% on assets from $500M to $1B
.20% on assets in excess of $1B
Huntington Ohio Tax-Free Fund .50%
Huntington Michigan Tax Free Fund .50%
Huntington Mortgage Securities Fund .50%
Huntington Florida Tax-Free Money Fund .30% on assets up to $500M
.25% on assets from $500M to $1B
.20% on assets in excess of $1B
Huntington Intermediate Government Income.50%
Fund
