EXHIBIT 5(II)
THE MONITOR FUNDS
INVESTMENT ADVISORY AGREEMENT
This Agreement is made this 25th day of April, 1989 by and between The
Monitor Funds, a business trust organized under the laws of the Commonwealth of
Massachusetts (herein called the "Trust"), and The Huntington Trust Company,
Inc., N.A., a national banking association limited to trust powers (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 has retained the Investment Adviser to render
investment advisory and other services to the Trust for its Money Market Fund,
U.S. Government Money Market Funds Tax-Free Money Market Fund and Ohio Tax-Free
Fund portfolios pursuant to a separate investment advisory agreement dated
September 15, 1998; and
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WHEREAS, the Trust desires to retain the Investment Adviser to render
investment advisory and other services to the Trust for its U.S. Treasury Money
Market Fund, Growth Fund, Income Equity Fund, Fixed Income Securities Fund and
Short/Intermediate Fixed Income Securities Fund (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 convenants
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
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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 advisery 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
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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 this 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 to a broker or dealer
who provides such brokerage and research services a commission for effecting a
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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; and
(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.
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.
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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 upon 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 (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
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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 advisery 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 opposite each such Fund's name below:
U.S. Treasury Money Market Fund .20 of 1%
Growth Fund .60 of 1%
Income Equity Fund .60 of 1%
Fixed Income Securities Fund .50 of 1%
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Short/Intermediate Fixed .50 of 1%
Income Securities Fund
The Investment Adviser hereby waives such fee with respect to the U.S.
Treasury Fund until such Fund's net assets equal or exceed $50,000,000.
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:
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(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:
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(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).
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(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 may now or
hereafter be entitled, shall continue as to a person who has ceased to be a
Covered Person and shall inure 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 it 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
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against 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 on which the Trust commences operations and, unless sooner terminated as
provided herein, shall continue until September 1, 1990. Thereafter, if not
terminated, this Agreement shall continue in effect as to a 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 of the Funds at
any time, without the payment of any penalty, by the Trustees or, with respect
to
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any Fund, by 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 such
Fund's outstanding voting securities.
10. (A) Representations and Warranties. The Investment Adviser hereby
represents and warrants as follows:
(1) The Investment Adviser is exempt from registration under the
Investment Advisers Act of 1940, as amended;
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(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 remain exempt from registration
or shall become registered under the Investment Advisers Act
of 1940; and
(2) the performance by the Investment Adviser of its obligations
under this Agreement shall not
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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 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxx
00000.
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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.
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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.
Attest: THE MONITOR FUNDS
By: /s/ [Illegible]
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Attest: THE HUNTINGTON TRUST COMPANY,
INC., NA.
By: /s/ [Illegible]
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