CUSTODY AGREEMENT
BETWEEN
THE HUNTINGTON NATIONAL BANK
AND
THE XXXXXXX FUNDS
TABLE OF CONTENTS
Definitions 1
ARTICLE II - Appointment; Acceptance; and Furnishing of Documents
II. A. Appointment of Custodian. 2
II. B. Acceptance of Custodian. 2
II. C. Documents to be Furnished. 2
II. D. Notice of Appointment of Dividend and Transfer Agent. 2
ARTICLE III - Receipt of Trust Assets
III. A. Delivery of Moneys. 2
III. B. Delivery of Securities. 2
III. C. Payments for Shares. 3
III. D. Duties Upon Receipt. 3
ARTICLE IV - Disbursement of Trust Assets
IV. A. Declaration of Dividends by Trust. 3
IV. B. Segregation of Redemption Proceeds. 3
IV. C. Disbursements of Custodian. 3
IV. D. Payment of Custodian Fees. 3
ARTICLE V - Custody of Trust Assets
V. A. Separate Accounts for Each Fund. 3
V. B. Segregation of Non-Cash Assets. 3
V. C. Securities in Bearer and Registered Form. 3
V. D. Duties of Custodian as to Securities. 3
V. E. Certain Actions Upon Written Instructions. 4
V. F. Custodian to Deliver Proxy Materials. 4
V. G. Custodian to Deliver Tender Offer Information. 4
V. H. Custodian to Deliver Security and Transaction Information. 4
ARTICLE VI - Purchase and Sale of Securities
VI. A. Purchase of Securities. 5
VI. B. Sale of Securities. 5
VI. C. Delivery Versus Payment for Purchases and Sales. 5
VI. D. Payment on Settlement Date. 5
VI. E. Segregated Accounts. 5
VI. F. Advances for Settlement. 6
ARTICLE VII - Trust Indebtedness
VII. A. Borrowings. 6
VII. B. Advances. 6
ARTICLE VIII - Concerning the Custodian
VIII. A. Limitations on Liability of Custodian. 6
VIII. B. Actions not Required by Custodian. 7
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer Agent. 7
VIII. D. No Enforcement Actions. 8
VIII. E. Authority to Use Agents and Sub-Custodians. 8
VIII. F. No Duty to Supervise Investments. 8
VIII. G. All Records Confidential. 8
VIII. H. Compensation of Custodian. 8
VIII. I. Reliance Upon Instructions. 8
VIII. J. Books and Records. 8
VIII. K. Internal Accounting Control Systems. 8
VIII. L. No Management of Assets by Custodian. 8
VIII. M. Assistance to Trust. 9
ARTICLE IX - Termination
IX. A. Termination. 9
IX. B. Failure to Designate Successor Custodian. 9
ARTICLE X - Force Majeure
ARTICLE XI - Miscellaneous
XI. A. Designation of Authorized Persons. 9
XI. B. Limitation of Personal Liability. 9
XI. C. Authorization By Board. 10
XI. D. Custodian's Consent to Use of Its Name. 10
XI. E. Notices to Custodian. 10
XI. F. Notices to Trust. 10
XI. G. Amendments In Writing. 10
XI. H. Successors and Assigns. 10
XI. I. Governing Law. 10
XI. J. Jurisdiction. 10
XI. K. Counterparts. 10
XI. L. Headings. 10
APPENDIX A
APPENDIX B
APPENDIX C
APPENDIX D
APPENDIX E
CUSTODY AGREEMENT
This agreement (the "Agreement") is entered into as of the ____ day of
November, 2001, by and between Xxxxxxx Funds, a Deleware business trust (the
"Trust") and The Huntington National Bank, (the "Custodian"), a national banking
association having its principal office at 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx
00000.
WHEREAS, the Trust and the Custodian desire to enter into this
Agreement to provide for the custody and safekeeping of the assets of the Trust
as required by the Act (as hereafter defined).
THEREFORE, in consideration of the mutual promises hereinafter set
forth, the Trust and the Custodian agree as follows:
Definitions
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The following words and phrases, when used in this Agreement, unless
the context otherwise requires, shall have the following meanings:
Act - the Investment Company Act of 1940, as amended.
---
1934 Act - the Securities and Exchange Act of 1934, as amended.
--------
Authorized Person - any person, whether or not any such person is an
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officer or employee of the Trust, who is duly authorized by the Board of
Trustees of the Trust to give Oral Instructions and Written Instructions on
behalf of the Trust or any Fund, and named in Appendix A attached hereto and as
amended from time to time by resolution of the Board of Trustees, certified by
an Officer, and received by the Custodian.
Board of Trustees - the Trustees from time to time serving under the
-----------------
Trust's Agreement and Declaration of Trust, as from time to time amended.
Book-Entry System - a federal book-entry system as provided in Subpart
-----------------
O of Treasury Circular Xx. 000, 00 XXX 306, in Subpart B of 31 CFT Part 350, or
in such book-entry regulations of federal agencies as are substantially in the
form of Subpart O.
Business Day - any day recognized as a settlement day by The New York
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Stock Exchange, Inc. and any other day for which the Trust computes the net
asset value of Shares of any fund.
Depository - The Depository Trust Company ("DTC"), a limited purpose
----------
trust company, its successor(s) and its nominee(s). Depository shall include any
other clearing agency registered with the SEC under Section 17A of the 1934 Act
which acts as a system for the central handling of Securities where all
Securities of any particular class or series of an issuer deposited within the
system are treated as fungible and may be transferred or pledged by bookkeeping
entry without physical delivery of the Securities provided that the Custodian
shall have received a copy of a resolution of the Board of Trustees, certified
by an Officer, specifically approving the use of such clearing agency as a
depository for the Funds.
Dividend and Transfer Agent - the dividend and transfer agent
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appointed, from time to time, pursuant to a written agreement between the
dividend and transfer agent and the Trust.
Foreign Securities - a) securities issued and sold primarily outside of
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the United States by a foreign government, a national of any foreign country, or
a trust or other organization incorporated or organized under the laws of any
foreign country or; b) securities issued or guaranteed by the government of the
United States, by any state, by any political subdivision or agency thereof, or
by any entity organized under the laws of the United States or of any state
thereof, which have been issued and sold primarily outside of the United States.
Fund - each series of the Trust listed in Appendix B and any additional
----
series added pursuant to Proper Instructions. A series is individually referred
to as a "Fund" and collectively referred to as the "Funds."
Money Market Security - debt obligations issued or guaranteed as to
---------------------
principal and/or interest by the government of the United States or agencies or
instrumentalities thereof, commercial paper, obligations (including certificates
of deposit, bankers' acceptances, repurchase agreements and reverse repurchase
agreements with respect to the same), and time deposits of domestic banks and
thrift institutions whose deposits are insured by the Federal Deposit Insurance
Corporation, and short-term corporate obligations where the purchase and sale of
such securities normally require settlement in federal funds or their equivalent
on the same day as such purchase and sale, all of which mature in not more than
thirteen (13) months.
NASD - the National Association of Securities Dealers, Inc.
----
Officer - the Chairman, President, Secretary, Treasurer, any Vice
-------
President, Assistant Secretary or Assistant Treasurer of the Trust.
Oral Instructions - instructions orally transmitted to and received by
-----------------
the Custodian from an Authorized Person (or from a person that the Custodian
reasonably believes in good faith to be an Authorized Person) and confirmed by
Written Instructions in such a manner that such Written Instructions are
received by the Custodian on the Business Day immediately following receipt of
such Oral Instructions.
Proper Instructions - Oral Instructions or Written Instructions. Proper
-------------------
Instructions may be continuing Written Instructions when deemed appropriate by
both parties.
Prospectus - With respect to each Fund, the Fund's then currently
----------
effective prospectus and Statement of Additional Information, as filed with and
declared effective from time to time by the Securities and Exchange Commission.
Security or Securities - Money Market Securities, common stock,
----------------------
preferred stock, options, financial futures, bonds, notes, debentures, corporate
debt securities, mortgages, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations and any certificates, receipts,
warrants, or other instruments or documents representing rights to receive,
purchase, or subscribe for the same or evidencing or representing any other
rights or interest therein, or any similar property or assets, including
securities of any registered investment company, that the Custodian has the
facilities to clear and to service.
SEC - the Securities and Exchange Commission of the United States of
---
America.
Shares - with respect to a Fund, the units of beneficial interest
------
issued by the Trust on account of such Fund.
Trust - the business trust organized under the laws of Delaware which
-----
is an open-end management investment company registered under the Act.
Written Instructions - communications in writing actually received by
--------------------
the Custodian from an Authorized Person. A communication in writing includes a
communication by facsimile, telex or between electro-mechanical or electronic
devices (where the use of such devices have been approved by resolution of the
Board of Trustees and the resolution is certified by an Officer and delivered to
the Custodian). All written communications shall be directed to the Custodian,
attention: Institutional Trust Custody Group.
ARTICLE II
Appointment; Acceptance; and Furnishing of Documents
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II. A. Appointment of Custodian. The Trust hereby constitutes and
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appoints the Custodian as custodian of all Securities and cash owned by each
Fund at any time during the term of this Agreement.
II. B. Acceptance of Custodian. The Custodian hereby accepts
-----------------------
appointment as such custodian and agrees to perform the duties thereof as
hereinafter set forth.
II. C. Documents to be Furnished. The following documents, including
-------------------------
any amendments thereto, will be provided contemporaneously with the execution of
the Agreement, to the Custodian by the Trust:
1.) A copy of the Declaration of Trust of the Trust
certified by the Secretary.
2.) A copy of the By-Laws of the Trust certified by the
Secretary.
3.) A copy of the resolution of the Board of Trustees of
the Trust appointing the Custodian, certified by the
Secretary.
4.) A copy of the then current Prospectuses.
5.) A Certificate of the President and Secretary of the
Trust setting forth the names and signatures of all
Authorized Persons.
II. D. Notice of Appointment of Dividend and Transfer Agent. The
----------------------------------------------------
Trust agrees to notify the Custodian in writing of the appointment, termination
or change in appointment of any Dividend and Transfer Agent.
ARTICLE III
Receipt of Trust Assets
-----------------------
III. A. Delivery of Moneys. During the term of this Agreement, the
-------------------
Trust will deliver or cause to be delivered to the Custodian all moneys to be
held by the Custodian for the account of any Fund. The Custodian shall be
entitled to reverse any deposits made on any Fund's behalf where such deposits
have been entered and moneys are not finally collected within 20 days of the
making of such entry.
III. B. Delivery of Securities. During the term of this Agreement, the
----------------------
Trust will deliver or cause to be delivered to the Custodian all Securities to
be held by the Custodian for the account of any Fund. The Custodian will not
have any duties or responsibilities with respect to such Securities until
actually received by the Custodian. The Custodian is hereby authorized by the
Trust, acting on behalf of a Fund, to actually deposit any assets of the Fund in
the Book-Entry System or in a Depository, provided, however, that the Custodian
shall always be accountable to the Trust for the assets of the Fund so
deposited. Assets deposited in the Book-Entry System or the Depository will be
represented in accounts which include only assets held by the Custodian for
customers, including but not limited to accounts in which the Custodian acts in
a fiduciary or representative capacity.
III. C. Payments for Shares. As and when received, the Custodian
-------------------
shall deposit to the account(s) of a Fund any and all payments for Shares of
that Fund issued or sold from time to time as they are received from the Trust's
distributor or Dividend and Transfer Agent or from the Trust itself.
III. D. Duties Upon Receipt. The Custodian shall not be responsible
--------------------
for any Securities, moneys or other assets of any Fund until actually received.
ARTICLE IV
Disbursement of Trust Assets
----------------------------
IV. A. Declaration of Dividends by Trust. The Trust shall furnish
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to the Custodian a copy of the resolution of the Board of Trustees of the Trust,
certified by the Trust's Secretary, either (i) setting forth the date of the
declaration of any dividend or distribution in respect of Shares of any Fund of
the Trust, the date of payment thereof, the record date as of which the Fund
shareholders entitled to payment shall be determined, the amount payable per
share to Fund shareholders of record as of that date, and the total amount to
be paid by the Dividend and Transfer Agent on the payment date, or (ii)
authorizing the declaration of dividends and distributions in respect of
Shares of a Fund on a daily basis and authorizing the Custodian to rely on
Written Instructions setting forth the date of the declaration of any such
dividend or distribution, the date of payment thereof, the record date as of
which the Fund shareholders entitled to payment shall be determined, the amount
payable per share to Fund shareholders of record as of that date, and the total
amount to be paid by the Dividend and Transfer Agent on the payment date.
On the payment date specified in the resolution or Written Instructions
described above, the Custodian shall segregate such amounts from moneys held for
the account of the Fund so that they are available for such payment.
IV. B. Segregation of Redemption Proceeds. Upon receipt of Proper
------------------------------------
Instructions so directing it, the Custodian shall segregate amounts necessary
for the payment of redemption proceeds to be made by the Dividend and Transfer
Agent from moneys held for the account of the Fund so that they are available
for such payment.
IV. C. Disbursements of Custodian. Upon receipt of a Written
--------------------------
Instruction directing payment and setting forth the name and address of the
person to whom such payment is to be made, the amount of such payment, the name
of the Fund from which payment is to be made, and the purpose for which payment
is to be made, the Custodian shall disburse amounts as and when directed from
the assets of that Fund. The Custodian is authorized to rely on such directions
and shall be under no obligation to inquire as to the propriety of such
directions.
IV. D. Payment of Custodian Fees. Upon receipt of Written
----------------------------
Instructions directing payment, the Custodian shall disburse moneys from the
assets of the Trust in payment of the Custodian's fees and expenses as provided
in Article VIII hereof.
ARTICLE V
Custody of Trust Assets
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V. A. Separate Accounts for Each Fund. As to each Fund, the Custodian
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shall open and maintain a separate bank account or accounts in the United States
in the name of the Trust coupled with the name of such Fund, subject only to
draft or order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold all cash received by it from or for the account of the Fund,
other than cash maintained by the Fund in a bank account established and used by
the Fund in accordance with Rule 17f-3 under the Act. Moneys held by the
Custodian on behalf of a Fund may be deposited by the Custodian to its credit as
Custodian in the banking department of the Custodian. Such moneys shall be
deposited by the Custodian in its capacity as such, and shall be withdrawable by
the Custodian only in such capacity.
V. B. Segregation of Non-Cash Assets. All Securities and non-cash
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property held by the Custodian for the account of a Fund (other than Securities
maintained in a Depository or Book-entry System) shall be physically segregated
from other Securities and non-cash property in the possession of the Custodian
(including the Securities and non-cash property of the other Funds) and shall be
identified as subject to this Agreement.
V. C. Securities in Bearer and Registered Form. All Securities held
-----------------------------------------
which are issued or issuable only in bearer form, shall be held by the Custodian
in that form; all other Securities held for a Fund may be registered in the name
of the Custodian, any sub-custodian appointed in accordance with this Agreement,
or the nominee of any of them. The Trust agrees to furnish to the Custodian
appropriate instruments to enable the Custodian to hold, or deliver in proper
form for transfer, any Securities that it may hold for the account of any Fund
and which may, from time to time, be registered in the name of a Fund.
V. D. Duties of Custodian as to Securities. Unless otherwise
-------------------------------------
instructed by the Trust, with respect to all Securities held for the Trust, the
Custodian shall on a timely basis (concerning items 1 and 2 below, as defined in
the Custodian's Mutual Fund Custody Model, as amended from time to time, annexed
hereto as Appendix D):
1.) Collect all income due and payable with respect to such
Securities;
2.) Present for payment and collect
amounts payable upon all Securities which may mature or
be called, redeemed, or retired, or otherwise become
payable;
3.) Surrender interim receipts or Securities in temporary
form for Securities in definitive form; and
4.) Execute, as Custodian, any necessary
declarations or certificates of ownership under the
Federal income tax laws or the laws or regulations of any
other taxing authority, including any foreign taxing
authority, now or hereafter in effect.
V. E. Certain Actions Upon Written Instructions. Upon receipt
---------------------------------------------
of a Written Instructions and not otherwise, the Custodian shall:
1.) Execute and deliver to such persons
as may be designated in such Written Instructions
proxies, consents, authorizations, and any other
instruments whereby the authority of the Trust as
beneficial owner of any Securities may be exercised;
2.) Deliver any Securities in exchange
for other Securities or cash issued or paid in
connection with the liquidation, reorganization,
refinancing, merger, consolidation, or recapitalization
of any corporation, or the exercise of any conversion
privilege;
3.) Deliver any Securities to any protective
committee, reorganization committee, or other person in
connection with the reorganization, refinancing, merger,
consolidation, recapitalization, or sale of assets of
any corporation, and receive and hold under the terms of
this Agreement such certificates of deposit, interim
receipts or other instruments or documents as may be
issued to it to evidence such delivery;
4.) Make such transfers or exchanges of the
assets of any Fund and take such other steps as shall be
stated in the Written Instructions to be for the purpose
of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or
recapitalization of the Trust; and
5.) Deliver any Securities held for any
Fund to the depository agent for tender or other similar
offers.
V. F. Custodian to Deliver Proxy Materials. The Custodian shall
-------------------------------------
promptly deliver to the Trust all notices, proxy material and executed but
unvoted proxies pertaining to shareholder meetings of Securities held by any
Fund. The Custodian shall not vote or authorize the voting of any Securities or
give any consent, waiver or approval with respect thereto unless so directed by
Written Instructions.
V. G. Custodian to Deliver Tender Offer Information. The Custodian
---------------------------------------------
shall promptly deliver to the Trust all information received by the Custodian
and pertaining to Securities held by any Fund with respect to tender or exchange
offers, calls for redemption or purchase, or expiration of rights as described
in the Mutual Fund Custody Model attached as Appendix D. If the Trust desires to
take action with respect to any tender offer, exchange offer or other similar
transaction, the Trust shall notify the Custodian at least five Business Days
prior to the date on which the Custodian is to take such action. The Trust will
provide or cause to be provided to the Custodian all relevant information for
any Security which has unique put/option provisions at least five Business Days
prior to the beginning date of the tender period.
V. H. Custodian to Deliver Security and Transaction Information. On
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each Business Day that the Federal Reserve Bank is open, the Custodian shall
furnish the Trust with a detailed statement of monies held for the Fund under
this Agreement and with confirmations and a summary of all transfers to or from
the account of the Fund. At least monthly and from time to time, the Custodian
shall furnish the Trust with a detailed statement of the Securities held for the
Fund under this Agreement. Where Securities are transferred to the account of
the Fund without physical delivery, the Custodian shall also identify as
belonging to the Fund a quantity of Securities in a fungible bulk of Securities
registered in the name of the Custodian (or its nominee) or shown on the
Custodian's account on the books of the Book-Entry System or the Depository.
With respect to information provided by this section, it shall not be necessary
for the Custodian to provide notice as described by Article XI Section F.
Notices to Trust; it shall be sufficient to communicate by such means as shall
be mutually agreeable to the Trust and the Custodian.
ARTICLE VI
Purchase and Sale of Securities
-------------------------------
VI. A. Purchase of Securities. Promptly after each purchase of
-----------------------
Securities by the Trust, the Trust shall deliver to the Custodian (i) with
respect to each purchase of Securities which are not Money Market Securities,
Written Instructions, and (ii) with respect to each purchase of Money Market
Securities, Proper Instructions, specifying with respect to each such purchase
the;
1.) name of the issuer and the title of the Securities
2.) the number of shares, principal amount purchased
(and accrued interest, if any) or other units
purchased,
3.) date of purchase and settlement,
4.) purchase price per unit,
5.) total amount payable,
6.) name of the person from whom, or the broker through
which, the purchase was made,
7.) the name of the person to whom such amount is
payable, and
8.) the Fund for which the purchase was made
The Custodian shall, against receipt of Securities purchased by or for the
Trust, pay out of the moneys held for the account of such Fund the total amount
specified in the Written Instructions, or Oral Instructions, if applicable, to
the person named therein. The Custodian shall not be under any obligation to pay
out moneys to cover the cost of a purchase of Securities for a Fund, if in the
relevant Fund custody account there is insufficient cash available to the Fund
for which such purchase was made. With respect to any repurchase agreement
transaction for the Funds, the Custodian shall assure that the collateral
reflected on the transaction advice is received by the Custodian.
VI. B. Sale of Securities. Promptly after each sale of Securities
-------------------
by a Fund, the Trust shall deliver to the Custodian (i) with respect to each
sale of Securities which are not Money Market Securities, Written Instructions,
and (ii) with respect to each sale of Money Market Securities, Proper
Instructions, specifying with respect to each such sale the:
1.) name of the issuer and the title of the Securities
2.) number of shares, principal amount sold (and accrued
interest, if any) or other units sold,
3.) date of sale and settlement,
4.) sale price per unit,
5.) total amount receivable,
6.) name of the person to whom, or the broker through
which, the sale was made,
7.) name of the person to whom such Securities are to be
delivered, and
8.) Fund for which the sale was made
The Custodian shall deliver the Securities against receipt of the total amount
specified in the Written Instructions, or Oral Instructions, if applicable.
VI. C. Delivery Versus Payment for Purchases and Sales. Purchases
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and sales of Securities effected by the Custodian will be made on a delivery
versus payment basis. The Custodian may, in its sole discretion, upon receipt
of Written Instructions, elect to settle a purchase or sale transaction in some
other manner, but only upon receipt of acceptable indemnification from the Fund.
VI. D. Payment on Settlement Date. On contractual settlement date, the
--------------------------
account of the Fund will be charged for all purchased Securities settling on
that day, regardless of whether or not delivery is made. Likewise, on
contractual settlement date, proceeds from the sale of Securities settling that
day will be credited to the account of the Fund, irrespective of delivery.
Exceptions to contractual settlement on purchases and sales, that will continue
to settle delivery versus payment, include real estate, venture capital,
international trades, open-ended mutual funds, non standard depository
settlements and in-kind trades.
VI. E. Segregated Accounts. The Custodian shall, upon receipt of
--------------------
Proper Instructions so directing it, establish and maintain a segregated account
or accounts for and on behalf of a Fund. Cash and/or Securities may be
transferred into such account or accounts for specific purposes, to-wit:
1.) in accordance with the provision of any agreement among
the Trust, the Custodian, and a broker-dealer
registered under the 1934 Act, and also a member of the
NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to
compliance with the rules of the Options Clearing
Corporation and of any registered national securities
exchange, the Commodity Futures Trading Commission, any
registered contract market, or any similar organization
or organizations requiring escrow or other similar
arrangements in connection with transactions by the
Fund;
2.) for purposes of segregating cash or
Securities in connection with options purchased, sold,
or written by the Fund or commodity futures contracts
or options thereon purchased or sold by the Fund;
3.) for the purpose of compliance by the
Fund with the procedures required for reverse
repurchase agreements, firm commitment agreements,
standby commitment agreements, short sales, or any
other securities by Act Release No. 10666, or any
subsequent release or releases or rule of the SEC
relating to the maintenance of segregated accounts by
registered investment companies;
4.) for the purpose of segregating collateral for loans of
Securities made by the Fund; and
5.) for other proper corporate purposes,
but only upon receipt of, in addition to Proper
Instructions, a copy of a resolution of the Board of
Trustees, certified by an Officer, setting forth the
purposes of such segregated account.
Each segregated account established hereunder shall be established and
maintained for a single Fund only. All Proper Instructions relating to a
segregated account shall specify the Fund involved.
VI. F. Advances for Settlement. Except as otherwise may be agreed upon
-----------------------
by the parties hereto, the Custodian shall not be required to comply with any
Written Instructions to settle the purchase of any Securities on behalf of a
Fund unless there is sufficient cash in the account(s) pertaining to such Fund
at the time or to settle the sale of any Securities from such an account(s)
unless such Securities are in deliverable form. Notwithstanding the foregoing,
if the purchase price of such Securities exceeds the amount of cash in the
account(s) at the time of such purchase, the Custodian may, in its sole
discretion, advance the amount of the difference in order to settle the purchase
of such Securities. The amount of any such advance shall be deemed a loan from
the Custodian to the Trust payable on demand and bearing interest accruing from
the date such loan is made up to but not including the date such loan is repaid
at the rate per annum customarily charged by the Custodian on similar loans.
ARTICLE VII
Trust Indebtedness
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VII. A. Borrowings. In connection with any borrowings by the Trust, the
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Trust will cause to be delivered to the Custodian by a bank or broker requiring
Securities as collateral for such borrowings (including the Custodian if the
borrowing is from the Custodian), a notice or undertaking in the form currently
employed by such bank or broker setting forth the amount of collateral. The
Trust shall promptly deliver to the Custodian Written Instructions specifying
with respect to each such borrowing: (a) the name of the bank or broker, (b) the
amount and terms of the borrowing, which may be set forth by incorporating by
reference an attached promissory note duly endorsed by the Trust, or a loan
agreement, (c) the date, and time if known, on which the loan is to be entered
into, (d) the date on which the loan becomes due and payable, (e) the total
amount payable to the Trust on the borrowing date, and (f) the description of
the Securities securing the loan, including the name of the issuer, the title
and the number of shares or other units or the principal amount. The Custodian
shall deliver on the borrowing date specified in the Written Instructions the
required collateral against the lender's delivery of the total loan amount then
payable, provided that the same conforms to that which is described in the
Written Instructions. The Custodian shall deliver, in the manner directed by the
Trust, such Securities as additional collateral, as may be specified in Written
Instructions, to secure further any transaction described in this Article VII.
The Trust shall cause all Securities released from collateral status to be
returned directly to the Custodian and the Custodian shall receive from time to
time such return of collateral as may be tendered to it.
The Custodian may, at the option of the lender, keep such collateral in
its possession, subject to all rights therein given to the lender because of the
loan. The Custodian may require such reasonable conditions regarding such
collateral and its dealings with third-party lenders as it may deem appropriate.
VII. B. Advances. With respect to any advances of cash made by the
Custodian to or for the benefit of a Fund for any purpose which results in the
Fund incurring an overdraft at the end of any Business Day, such advance shall
be repayable immediately upon demand made by the Custodian at any time. The
Custodian may, in its sole discretion, charge interest accruing from the date of
such overdraft to but not including the date of such repayment at the rate per
annum customarily charged by the Custodian on similar overdrafts.
ARTICLE VIII
Concerning the Custodian
------------------------
VIII. A. Limitations on Liability of Custodian. Except as otherwise
-------------------------------------
provided herein, the Custodian shall not be liable for any loss or damage,
including counsel fees, resulting from its action or omission to act or
otherwise, except for any such loss or damage arising out of its negligence or
willful misconduct. The Trust, on behalf of the Fund and only from assets of the
Fund (or insurance purchased by the Trust with respect to its liabilities on
behalf of the Fund hereunder), shall defend, indemnify and hold harmless the
Custodian and its directors, officers, employees and agents with respect to any
loss, claim, liability or cost (including reasonable attorneys' fees) arising or
alleged to arise from or relating to the Trust's duties hereunder or any other
action or inaction of the Trust or its Trustees, officers, employees or agents,
except such as may arise from the negligent action, negligent omission, willful
misconduct or any breach of this Agreement by the Custodian, its directors,
officers, employees or agents.. The Custodian shall defend, indemnify and hold
harmless the Trust and its trustees, officers, employees or agents with respect
to any loss, claim, liability or cost (including reasonable attorneys' fees)
arising or alleged to arise from or relating to the Custodian's duties as
specifically set forth in this agreement with respect to the Fund hereunder or
any other action or inaction of the Custodian or its directors, officers,
employees, agents, nominees, or Sub-Custodians as to the Fund, except such as
may arise from the negligent action, omission or willful misconduct of the
Trust, its trustees, officers, employees, or agents. The Custodian may, with
respect to questions of law apply for and obtain the advice and opinion of
counsel to the Trust at the expense of the Fund, or of its own counsel at its
own expense, and shall be fully protected with respect to anything done or
omitted by it in good faith in conformity with the advice or opinion of counsel
to the Trust, and shall be similarly protected with respect to anything done or
omitted by it in good faith in conformity with advice or opinion of its counsel,
unless counsel to the Fund shall, within a reasonable time after being notified
of legal advice received by the Custodian, have a differing interpretation of
such question of law. The Custodian shall be liable to the Trust for any
proximate loss or damage resulting from the use of the Book-Entry System or any
Depository arising by reason of any negligence, misfeasance or misconduct on the
part of the Custodian or any of its employees, agents, nominees or
Sub-Custodians, but not for any special, incidental, consequential, or punitive
damages; provided, however, that nothing contained herein shall preclude
recovery by the Trust, on behalf of the Fund, of principal and of interest to
the date of recovery on Securities incorrectly omitted from the Fund's account
or penalties imposed on the Trust, in connection with the Fund, for any failures
to deliver Securities. In any case in which one party hereto may be asked to
indemnify the other or hold the other harmless, the party from whom
indemnification is sought (the "Indemnifying Party") shall be advised of all
pertinent facts concerning the situation in question, and the party claiming a
right to indemnification (the "Indemnified Party") will use reasonable care to
identify and notify the Indemnifying Party promptly concerning any situation
which presents or appears to present a claim for indemnification against the
Indemnifying Party. The Indemnifying Party shall have the option to defend the
Indemnified Party against any claim which may be the subject of the
indemnification, and in the event the Indemnifying Party so elects, such defense
shall be conducted by counsel chosen by the Indemnifying Party and satisfactory
to the Indemnified Party and the Indemnifying Party will so notify the
Indemnified Party and thereupon such Indemnifying Party shall take over the
complete defense of the claim and the Indemnifying Party shall sustain no
further legal or other expenses in such situation for which indemnification has
been sought under this paragraph, except the expenses of any additional counsel
retained by the Indemnified Party. In no case shall any party claiming the right
to indemnification confess any claim or make any compromise in any case in which
the other party has been asked to indemnify such party (unless such confession
or compromise is made with such other party's prior written consent. The
provisions of this section VIII. A. shall survive the termination of this
Agreement.
VIII. B. Actions not Required by Custodian. Without limiting the
----------------------------------
generality of the foregoing, the Custodian, acting in the capacity of Custodian
hereunder, shall be under no obligation to inquire into, and shall not be liable
for:
1.) The validity of the issue
of any Securities purchased by or for the account of
any Fund, the legality of the purchase thereof, or
the propriety of the amount paid therefor;
2.) The legality of the sale of
any Securities by or for the account of any Fund, or
the propriety of the amount for which the same are
sold;
3.) The legality of the issue
or sale of any Shares of any Fund, or the sufficiency
of the amount to be received therefor;
4.) The legality of the
redemption of any Shares of any Fund, or the
propriety of the amount to be paid therefor;
5.) The legality of the
declaration or payment of any dividend by the Trust
in respect of Shares of any Fund;
6.) The legality of any
borrowing by the Trust on behalf of the Trust or any
Fund, using Securities as collateral;
7.) Whether the Trust or a Fund is
in compliance with the 1940 Act, the regulations
thereunder, the provisions of the Trust's charter
documents or by-laws, or its investment objectives
and policies as then in effect.
VIII. C. No Duty to Collect Amounts Due From Dividend and Transfer
---------------------------------------------------------
Agent. The Custodian shall not be under any duty or obligation to take action
-----
to effect collection of any amount due to the Trust from any Dividend and
Transfer Agent of the Trust nor to take any action to effect payment or
distribution by any Dividend and Transfer Agent of the Trust of any amount paid
by the Custodian to any Dividend and Transfer Agent of the Trust in accordance
with this Agreement.
VIII. D. No Enforcement Actions. Notwithstanding Section D of
------------------------
Article V, the Custodian shall not be under any duty or obligation to take
action, by legal means or otherwise, to effect collection of any amount, if the
Securities upon which such amount is payable are in default, or if payment is
refused after due demand or presentation, unless and until (i) it shall be
directed to take such action by Written Instructions and (ii) it shall be
assured to its satisfaction (including prepayment thereof) of reimbursement of
its costs and expenses in connection with any such action.
VIII. E. Authority to Use Agents and Sub-Custodians. The Trust
------------------------------------------
acknowledges and hereby authorizes the Custodian to hold Securities through its
various agents described in Appendix C annexed hereto. In addition, the Trust
acknowledges that the Custodian may appoint one or more financial institutions,
as agent or agents or as sub-custodian or sub-custodians, including, but not
limited to, banking institutions located in foreign countries, for the purpose
of holding Securities and moneys at any time owned by the Fund. The Custodian
shall not be relieved of any obligation or liability under this Agreement in
connection with the appointment or activities of such agents or sub-custodians.
Any such agent or sub-custodian shall be qualified to serve as such for assets
of investment companies registered under the Act. The Funds shall reimburse the
Custodian for all costs incurred by the Custodian in connection with opening
accounts with any such agents or sub-custodians. Upon request, the Custodian
shall promptly forward to the Trust any documents it receives from any agent or
sub-custodian appointed hereunder which may assist trustees of registered
investment companies to fulfill their responsibilities under Rule 17f-5 of the
Act.
VIII. F. No Duty to Supervise Investments. The Custodian shall not
---------------------------------
be under any duty or obligation to ascertain whether any Securities at any time
delivered to or held by it for the account of the Trust are such as properly may
be held by the Trust under the provisions of the Declaration of Trust and the
Trust's By-Laws.
VIII. G. All Records Confidential. The Custodian shall treat all
--------------------------
records and other information relating to the Trust and the assets of all Funds
as confidential and shall not disclose any such records or information to any
other person unless (i) the Trust shall have consented thereto in writing or
(ii) such disclosure is compelled by law.
VIII. H. Compensation of Custodian. The Custodian shall be entitled to
-------------------------
receive and the Trust agrees to pay to the Custodian, for the Fund's account
from the Fund's assets only, such compensation as shall be determined pursuant
to Appendix E attached hereto, or as shall be determined pursuant to amendments
to Appendix E as approved by the Custodian and the Trust. The Custodian shall be
entitled to charge against any money held by it for the accounts of the Fund the
amount of any loss, damage, liability or expense, including counsel fees, for
which it shall be entitled to reimbursement under the provisions of this
Agreement as determined by agreement of the Custodian and the Trust or by the
final order of any court or arbitrator having jurisdiction and as to which all
rights of appeal shall have expired. The expenses which the Custodian may charge
against the account of a Fund include, but are not limited to, the expenses of
agents or Sub-Custodians incurred in settling transactions involving the
purchase and sale of Securities of the Fund.
VIII. I. Reliance Upon Instructions. The Custodian shall be entitled to
--------------------------
rely upon any Proper Instructions if such reliance is made in good faith. The
Trust agrees to forward to the Custodian Written Instructions confirming Oral
Instructions in such a manner so that such Written Instructions are received by
the Custodian, whether by hand delivery, telex, facsimile or otherwise, on the
same Business Day on which such Oral Instructions were given. The Trust agrees
that the failure of the Custodian to receive such confirming instructions shall
in no way affect the validity of the transactions or enforceability of the
transactions hereby authorized by the Trust. The Trust agrees that the Custodian
shall incur no liability to the Trust for acting upon Oral Instructions given to
the Custodian hereunder concerning such transactions.
VIII. J. Books and Records. The Custodian will (i) set up and maintain
-----------------
proper books of account and complete records of all transactions in the accounts
maintained by the Custodian hereunder in such manner as will meet the
obligations of the Fund under the Act, with particular attention to Section 31
thereof and Rules 3la-1 and 3la-2 thereunder and those records are the property
of the Trust, and (ii) preserve for the periods prescribed by applicable Federal
statute or regulation all records required to be so preserved. All such books
and records shall be the property of the Trust, and shall be available, upon
request, for inspection by duly authorized officers, employees or agents of the
Trust and employees of the SEC.
VIII. K. Internal Accounting Control Systems. The Custodian shall
-----------------------------------
send to the Trust any report received on the systems of internal accounting
control of the Custodian, or its agents or sub-custodians, as the Trust may
reasonably request from time to time.
VIII. L. No Management of Assets by Custodian. The Custodian performs
------------------------------------
only the services of a custodian and shall have no responsibility for the
management, investment or reinvestment of the Securities or other assets from
time to time owned by any Fund. The Custodian is not a selling agent for Shares
of any Fund and performance of its duties as custodian shall not be deemed to be
a recommendation to any Fund's depositors or others of Shares of the Fund as an
investment. The Custodian shall have no duties or obligations whatsoever except
such duties and obligations as are specifically set forth in this Agreement, and
no covenant or obligation shall be implied in this Agreement against the
Custodian.
VIII. M. Assistance to Trust. The Custodian shall take all reasonable
-------------------
action, that the Trust may from time to time request, to assist the Trust in
obtaining favorable opinions from the Trust's independent accountants, with
respect to the Custodian's activities hereunder, in connection with the
preparation of the Fund's Form N- IA, Form N-SAR, or other annual reports to the
SEC.
ARTICLE IX
Termination
-----------
IX. A. Termination. Either party hereto may terminate this Agreement
-----------
for any reason by giving to the other party a notice in writing specifying the
date of such termination, which shall be not less than ninety (90) days after
the date of giving of such notice. If such notice is given by the Trust, it
shall be accompanied by a copy of a resolution of the Board of Trustees of the
Trust, certified by the Secretary of the Trust, electing to terminate this
Agreement and designating a successor custodian or custodians each of which
shall be a bank or trust company having not less than $100,000,000 aggregate
capital, surplus, and undivided profits. In the event such notice is given by
the Custodian, the Trust shall, on or before the termination date, deliver to
the Custodian a copy of a resolution of the Board of Trustees of the Trust,
certified by the Secretary, designating a successor custodian or custodians to
act on behalf of the Trust. In the absence of such designation by the Trust, the
Custodian may designate a successor custodian which shall be a bank or trust
company having not less than $100,000,000 aggregate capital, surplus, and
undivided profits. Upon the date set forth in such notice this Agreement shall
terminate, and the Custodian, provided that it has received a notice of
acceptance by the successor custodian, shall deliver, on that date, directly to
the successor custodian all Securities and monies then owned by the Fund and
held by it as Custodian. Upon termination of this Agreement, the Trust shall pay
to the Custodian on behalf of the Trust such compensation as may be due as of
the date of such termination. The Trust agrees on behalf of the Trust that the
Custodian shall be reimbursed for its reasonable costs in connection with the
termination of this Agreement.
IX. B. Failure to Designate Successor Custodian. If a successor
------------------------------------------
custodian is not designated by the Trust, or by the Custodian in accordance with
the preceding paragraph, or the designated successor cannot or will not serve,
the Trust shall, upon the delivery by the Custodian to the Trust of all
Securities (other than Securities held in the Book-Entry System which cannot be
delivered to the Trust) and moneys then owned by the Trust, be deemed to be the
custodian for the Trust, and the Custodian shall thereby be relieved of all
duties and responsibilities pursuant to this Agreement, other than the duty with
respect to Securities held in the Book-Entry System, which cannot be delivered
to the Trust, which shall be held by the Custodian in accordance with this
Agreement.
ARTICLE X
Force Majeure
-------------
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; labor
disputes; acts of civil or military authority; governmental actions; or
inability to obtain labor, material, equipment or transportation; provided,
however, that the Custodian, in the event of a failure or delay, shall use its
best efforts to ameliorate the effects of any such failure or delay.
ARTICLE XI
Miscellaneous
-------------
XI. A. Designation of Authorized Persons. Appendix A sets forth the
---------------------------------
names and the signatures of all Authorized Persons as of this date, as certified
by the Secretary of the Trust. The Trust agrees to furnish to the Custodian a
new Appendix A in form similar to the attached Appendix A, if any present
Authorized Person ceases to be an Authorized Person or if any other or
additional Authorized Persons are elected or appointed. Until such new Appendix
A shall be received, the Custodian shall be fully protected in acting under the
provisions of this Agreement upon Oral Instructions or signatures of the then
current Authorized Persons as set forth in the last delivered Appendix A.
XI. B. Limitation of Personal Liability. No recourse under any
---------------------------------
obligation of this Agreement or for any claim based thereon shall be had against
any organizer, shareholder, officer, trustee, past, present or future as such,
of the Trust or of any predecessor or successor, either directly or through the
Trust or any such predecessor or successor, whether by virtue of any
constitution, statute or rule of law or equity, or by the enforcement of any
assessment or penalty or otherwise; it being expressly agreed and understood
that this Agreement and the obligations thereunder are enforceable solely
against the assets of the Trust, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the organizers, shareholders,
officers, or trustees of the Trust or of any predecessor or successor, or any
of them as such, because of the obligations contained in this Agreement or
implied therefrom and that any and all such liability is hereby expressly
waived and released by the Custodian as a condition of, and as a consideration
for, the execution of this Agreement.
XI. C. Authorization By Board. The obligations set forth in this
----------------------
Agreement as having been made by the Trust have been made by the Board of
Trustees, acting as such Trustees for and on behalf of the Trust, pursuant to
the authority vested in them under the laws of the State of Ohio, the
Declaration of Trust and the By-Laws of the Trust. This Agreement has been
executed by Officers of the Trust as officers, and not individually, and the
obligations contained herein are not binding upon any of the Trustees, Officers,
agents or holders of shares, personally, but bind only the Trust and then only
to the extent of the assets of the Trust.
XI. D. Custodian's Consent to Use of Its Name. The Trust shall obtain
---------------------------------------
the Custodian's consent prior to the publication and/or dissemination or
distribution, of the Prospectus and any other documents (including advertising
material) specifically mentioning the Custodian (other than merely by name and
address).
XI. E. Notices to Custodian. Any notice or other instrument in
---------------------
writing, authorized or required by this Agreement to be given to the Custodian,
shall be sufficiently given if addressed to the Custodian and mailed or
delivered to it at its offices at The Huntington National Bank, Easton Business
Service Center, 0 Xxxxxx Xxxx XX0X00, Xxxxxxxx, Xxxx, 00000, attention Director
Institutional Trust Custody, or at such other place as the Custodian may from
time to time designate in writing.
XI. F. Notices to Trust. Any notice or other instrument in writing,
----------------
authorized or required by this Agreement to be given to the Trust shall be
sufficiently given when delivered to the Trust or on the second Business Day
following the time such notice is deposited in the U.S. mail postage prepaid and
addressed to the Trust at its office at 0000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxx, Xxxxxxxxx 00000 or at such other place as the Trust may from time to time
designate in writing.
XI. G. Amendments In Writing. This Agreement, with the exception of
---------------------
the Appendices, may not be amended or modified in any manner except by a written
agreement executed by both parties with the same formality as this Agreement,
and authorized and approved by a resolution of the Board of Trustees of the
Trust.
XI. H. Successors and Assigns. This Agreement shall extend to and
----------------------
shall be binding upon the parties hereto, and their respective successors and
assigns; provided, however, that this Agreement shall not be assignable by the
Trust or by the Custodian, and no attempted assignment by the Trust or the
Custodian shall be effective without the written consent of the other party
hereto.
XI. I. Governing Law. This Agreement shall be construed in
--------------
accordance with the laws of the State of Ohio.
XI. J. Jurisdiction. Any legal action, suit or proceeding to be
------------
instituted by either party with respect to this Agreement shall be brought by
such party exclusively in the courts of the State of Ohio or in the courts of
the United States for the Southern District of Ohio, and each party, by its
execution of this Agreement, irrevocably (i) submits to such jurisdiction and
(ii) consents to the service of any process or pleadings by first class U.S.
mail, postage prepaid and return receipt requested, or by any other means from
time to time authorized by the laws of such jurisdiction.
XI. K. 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.
XI. L. Headings. The headings of paragraphs in this Agreement are
--------
for convenience of reference only and shall not affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective Officers, thereunto duly authorized as of the day
and year first above written.
WITNESS: TRUST:
Xxxxxxx Funds
__/s/_____________________ By:______/s/____________________________
Title:__CIO and Trustee_____________________
WITNESS: CUSTODIAN:
The Huntington National Bank
___/s/_____________________ By:___/s/_______________________________
Title:___Vice President_____________________
APPENDIX A
Authorized Persons Specimen Signatures
------------------ -------------------
Chairman: _Theodore Toso_________ ______/s/___________________
President: __Theodore Toso________ _______/s/__________________
Secretary: ___Arthur B. Carlson___ _________/s/_________________
Treasurer: ___Arthur B. Carlson__ ___________/s/_______________
Senior Vice
President: ______________________ _____________________________
Assistant
Secretary: _Dennis Reiter________ ___________/s/_______________
Assistant
Treasurer: __Sara Hemmesch_______ _____________/s/_____________
Adviser Employees: __Sara Hemmesch_______ ______________/s/____________
__Arthur B. Carlson___ _____________/s/_____________
Transfer Agent/Fund Accountant
Employees: _Paul Henning_________ _______________/s/___________
__Kathy Lain__________ _______________/s/___________
__Michael Durham______ _____________/s/_____________
___Keith Pence________ _____________/s/_____________
* Authority restricted; does not include: ______________________________________
APPENDIX A-1
Unified Fund Services, Inc. as agent for:
Xxxxxxx Funds
Transfer Agent/Fund Accountant/
Cash Management Employees:
Authorized Persons Specimen Signatures
__Matthew J. Miller__________________ ____/s/______________________
__Melissa K. Gallagher_______________ ____/s/______________________
__Angela Shillings___________________ ___/s/_______________________
__Christine Bardsley_________________ ____/s/______________________
___Crystal Cherry____________________ _______/s/___________________
____Stacey Stone_____________________ __________/s/________________
_____________________________________ _____________________________
_____________________________________ _____________________________
APPENDIX B
Series of the Trust
Xxxxxxx Growth Fund
APPENDIX C
Agents of the Custodian
The following agents are employed currently by The Huntington National
Bank for securities processing and control ...
The Depository Trust Company (New York)
0 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
The Federal Reserve Bank
Cincinnati and Cleveland Branches
Bank of New York
0 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(For Foreign Securities and certain non-DTC eligible Securities)
APPENDIX D
Mutual Fund Custody Model
Mutual Fund Custody Model document is attached.
APPENDIX E
Mutual Fund Custody Fees
Mutual Fund Custody Pricing document is attached.
Mutual Fund Custody Model
Overview of Mutual Fund Custody Model
The Xxxxxxx Funds will contract to The Huntington National Bank (HNB), the
custodian bank, all responsibility to maintain detailed custodial records for
the Fund identified on page 3 under the heading "Account Name and Number
Matrix". The Fund and/or Unified Fund Services will receive and review all
reporting to ensure that adequate accountability controls are maintained.
The custodian responsibilities include:
>> Maintain detail accounting of all investment transactions and balances on
internal accounting system for all mutual fund company assets.
>> Provide reporting to the Fund and/or Unified Fund Services for completion
of daily activity reconciliation with the accounting system.
>> Ensure all trade transactions settle within the mutual fund company
guidelines.
>> Maintain accurate records containing all electronic and hard copy
instructions required that satisfy the mutual fund company's audit
requirements and record retention requirements of 7 years.
>> Provide summary and detail for transaction and position information to Fund
and/or Unified Fund Services for updates into Fund and/or Unified Fund
Services accounting system.
The Fund and/or Unified Fund Services will maintain accounting records and will
balance to HNB's trust accounting records. HNB will provide daily reporting to
the Fund and/or Unified Fund Services.
References to specific times and deadlines contained herein are based on the
time in Columbus, Ohio.
Mutual Fund Account Structure
Account Structure
HNB must maintain trust accounts corresponding to the Fund structure.
The Fund and/or Unified Fund Services will maintain a separate set of
accounts for each individual mutual fund. A control environment will be
established by allowing Fund and/or Unified Fund Services to reconcile
total cash and book value in the mutual fund accounts to cash and book
value at HNB.
Special Account Characteristics
HNB will establish accounts and use FIFO lots for sales. The Fund will
establish DDA accounts for movement of cash. Unless indicated
otherwise, idle cash in the HNB custody account will be invested in
Huntington Money Market Fund.
Sweep Account Structure
Huntington Money Market Fund will be utilized as the sweep vehicle for
the mutual fund accounts unless indicated otherwise. The Fund will
instruct HNB via e-mail of instructions to move cash to and from the
HNB custody account and the HNB DDA account
Securities Lending
In the event the Fund has entered into a securities lending agreement
with the Huntington, the Fund will notify the Securities Lending
department at HNB via e-mail of all known sales traded but not settled
at the end of each business day. The e-mail address this information
should be sent to is:
xxxxxxxxxx.xxxxxxx@xxxxxxxxxx.xxx
Cost Process
Individual lots are maintained based on acquisition date. For all
accounts cost for lots sold is determined using the FIFO method.
Account Name and Number Matrix
HNB Account Number Fund Number
Mutual Fund Account Name
_____________ Xxxxxxx Growth Fund _____
Daily Activity Reconciliation
Activity Reconciliation Process
The Fund and/or Unified Fund Service will balance Fund activity with
HNB activity on a daily basis.
HNB will receive from the Fund and/or Unified Fund Services an
electronic copy of the Fund accounting report detailing all cash and
security trades to be executed for that day by 8:00 a.m. The report
will detail all cash and securities transactions segregated by Fund.
The information will be sent electronically (flat file), or on an
emergency basis in hard copy form. Any trades received after the
cut-off time will be handled by HNB on a "best efforts" basis. Daily
overnights will be available by 9:00 a.m.
HNB will provide to the Fund and/or Unified Fund Services a copy of
their projected activity report by 9:00 a.m. for that day's activity.
The report will detail all cash and securities transactions segregated
by individual Fund account.
By 11:00 a.m. or one half hour after receipt of the Fund file if
received after 1:00 p.m., the Fund and/or Unified Fund Services will
reconcile their Fund account projected activity to the Fund transaction
activity report and detail any discrepancies to HNB.
HNB will observe a cut off time of 9:30 p.m. for corrections (dividend,
interest and principle payments) to the accounts. After 1:00 p.m.,
corrections will not be processed until the next day's business unless
there is expressed approval from Fund and/or Unified Fund Services.
Corrections received after 1:00 p.m. on a particular day may be
credited to the accounts the same day.
HNB will provide daily activity transaction reports utilizing the
following categories:
Trades: CUSIP/SEDOL Number
Principal amount
Net settlement amount
Income: Interest
Dividends
Cusip
Principal: Principal paydown
Principal payups (excluding TIPS)
Maturity proceeds
Cusip
Corporate Actions: All corporate action activity affecting cost,
cash, and units
Fund Transfers: Movement of securities between trust accounts
Money Market: Daily net money market transaction
Other DDA Other DDA transactions, such as movement of
Transactions: funds between the accounts, lockbox deposits
and checks issued, will need to be considered
when determining the balance available for
short-term investment.
Fund and/or Unified Fund Services will log all unresolved cash and
security activity discrepancies on a daily basis.
If HNB and Fund and/or Unified Fund Services do not agree on cash
activity, every effort will be made to resolve the discrepancy same day
(prior to money market deadlines). In cases where research will not be
completed same day, HNB will post transactions to the individual trust
account based on depository and internal records and will not be
obligated to post client figures until research has demonstrated the
posting is incorrect.
Both HNB and Fund and/or Unified Fund Services will be responsible for
researching the exceptions and following up to ensure timely
resolution.
Once HNB and Fund and/or Unified Fund Services have agreed on the daily
activity and the list of any exceptions, HNB will sweep residual cash
to the money market investment unless otherwise indicated.
During the overnight hours after a day's activity, HNB will cause its
system to generate an electronic file (a CHR) which details the settled
activity for that day. HNB's system will automatically e-mail this
report to the Fund before the opening of business (8:00 a.m.) the
following day.
Control Reporting
HNB and Fund and/or Unified Fund Services will generate a daily Master
Outage Summary Report spreadsheet to report cash activity outages.
HNB and Fund and/or Unified Fund Services are jointly responsible for
timely research and resolution of activity discrepancies.
The Master Outage Summary Report will detail the following categories:
o Fund name and number
o Outage date
o Transaction type
o Dollar amount
o Custodian dollar amount
o Cusip/SEDOL number
o Asset description
o Net difference
o Status comments
The Fund and/or Unified Fund Services and HNB will monitor the
confirmed reconciliation report and ensure timely resolution of
outages. Outages outstanding over thirty days will require Sr.
management intervention to ensure contractual compliance.
Lines of Communication
Short Term Operating Cash
All transfers to and from the DDA(s) will be run in the Fund Custody
Account. All disbursements will be made from the Fund Custody Account.
Per the daily activity reconciliation process, the HNB administrator
and the Fund and/or Unified Fund Services representative will agree on
the preliminary available cash by 11:00 a.m.
Corporate Actions
HNB and Fund will post all corporate actions utilizing the posting
policies as listed below:
Stock Splits: Stock splits are paid on Ex-Date instead of the Payable
Date. On splits (stock dividends which are greater than 10%) the
Ex-Date is usually the first business day after the payable date. This
protects the value of the client's shares up through the payable date.
On the Ex-Date the share value is reduced in the market place by the
amount of the split. However at that same time, the shareholder should
be receiving his split shares. This keeps the shareholder's investment
valuation the same as prior to the split, barring any other market
fluctuations. By paying a split on the Ex-Date, this allows for the
fact that an asset can be sold (trade date) on the Payable Date and not
be entitled to receive the split shares. This practice is industry
standard.
Stock Dividends: Stock Dividends are paid on the Payable Date. Stock
Dividends (10% or less) do not usually have a late Ex-Date.
Spin-Off : Spin-Offs are paid on the Ex-Date.
Reverse Splits: Reverse Splits are paid when HNB is given credit for
the split by DTC, which is usually, but not always, on the Ex-Date.
Mergers: Mergers are adjusted to accounts when HNB is given credit for
the merger by DTC, or in the case of a certificate, when HNB receives
the new certificate from the transfer agent.
Tender Offers: Tender Offers are adjusted to accounts when HNB is given
credit by DTC. As with the case of a Merger, the Effective Date is
usually meaningless as a Tender Offer often times is extended. Some
Tender Offers are also "pro-rated" meaning that not all of the tendered
shares will be accepted, only a portion of those shares.
Optional Dividends: Optional Dividends are paid on the date that HNB
receives credit from DTC.
Full and Partial Calls: Calls are also paid on the date that HNB
receives credit from DTC.
Class Actions: Class Actions can take years to be finalized by the
court system. As such, credit to eligible accounts is not paid until
HNB has actually received the proceeds from the courts.
HNB will generate all mandatory equity and fixed income Corporate
Action notifications by sending a report via e-mail to Unified Fund
Services Advisor.
HNB will generate a courtesy copy of all corporate voluntary action
notifications requiring a response by a stated deadline to Fund
Investment Managers. Notification will be by e-mail with receipt-reply
verification.
The Fund Investment Managers will send a response via e-mail with
receipt-reply verification to HNB as currently listed:
xxxxx.xxxxx@xxxxxxxxxx.xxx
xxxxx.xxxxxxxx@xxxxxxxxxx.xxx
xxxxx.xxxxxxx@xxxxxxxxxx.xxx
No response from the Fund Investment Managers will mean that no action
will be taken by HNB, and any stated default actions will automatically
occur.
HNB will be responsible for sending via e-mail a copy of all voluntary
corporate action responses that affect holdings and/or cash flows to
Unified Fund Services Advisor.
Class Action Lawsuits
HNB will notify the Unified Fund Services Advisor when they have filed
on the Fund's behalf for Class Action lawsuits.
Daily Pricing
Equity securities will be priced daily by HNB subject to the available
daily rates provided by IDSI (Xxxxxx).
Asset Accounting Position Reconciliation
Reconciliation Process
HNB will provide a weekly electronic file each Monday or Tuesday if
Monday is a holiday to the Fund and/or Unified Fund Services detailing
all holdings information by 8:00 a.m.
Fund and/or Unified Fund Services will be responsible for reconciling
positions on a weekly basis.
Fund and/or Unified Fund Services, on a weekly basis, will identify,
log, and research all asset outages between the Fund and HNB by
individual trust account. Should additional research be needed they
will fax outstanding issues log to HNB complete with comments by noon.
HNB will review, log, and research all asset outages between HNB and
Fund by individual fund. HNB will fax their status comments on the
issues log to the Fund and/or Unified Fund Services on a daily basis by
11:00 a.m.
Fund and/or Unified Fund Services will track and monitor all
outstanding asset outages on an ongoing summary report.
The summary report will include the following:
o Fund name and number
o Outage date
o Retirement system units
o Custodian units
o Cusip/SEDOL number
o Asset description
o Share difference
o Status comments
HNB and Fund and/or Unified Fund Services are jointly responsible for
timely research and resolution of position discrepancies. Bloomberg
will be considered the benchmark for resolving pay down issues. On a
per asset basis, a difference of one dollar or less will not be viewed
as material.
Trade Processing
The Fund will send to both HNB and Unified Fund Services a listing of all
Portfolio Managers, both internal and external, authorized by the Fund to
execute trades on its behalf. This list will be updated for the termination of a
Manager, or for the addition of a Manager prior to the effective date of the
addition.
In addition, the Fund will send to HNB and Unified Fund Services a list of all
persons approved by the Fund to authorize the purchase or sale of investments.
This list will be updated when there is any change in authorization.
Trade Execution
Trade Date
----------
Fund Portfolio Managers write up a trade ticket and give to their
brokers who, in turn, execute the trade.
Trade Date + 1
--------------
Fund Portfolio Managers affirm trades confirmed by their chosen brokers
through the DTC ID System. Unified Fund Services downloads affirmed
trades automatically into their accounting system by specific fund.
Portfolio Managers, who do not affirm trades, will forward copies of
trade tickets to the Fund and/or Unified Fund Services who will
manually verify trades against DTC Confirmations entered by the
brokers. Upon trade verification the Fund and/or Unified Fund Services
will instruct HNB to affirm the DTC ID Confirm using electronic file
from advisors, designated by Fund.
In this latter case, if a trade discrepancy is found, the Fund and/or
Unified Fund Services will contact the trader to get a corrected trade
ticket or await a cancel and rebill.
A report from the Fund and/or Unified Fund Services accounting system
is compared to the DTC affirmed trades listing or the trade tickets by
9:00 a.m. to ensure no importing or data entry errors have occurred.
An authorized person for the Fund will send HNB a listing of all
approved transactions via e-mail. The e-mail will contain the following
language: "The attached listing contains transactions authorized by the
`Fund'." Any necessary files will be attached. HNB will provide an
electronic receipt of the transmission. HNB will also provide a method
of storing these communications for not less than seven years.
Trade Communication:
HNB and Fund will adhere to NYSE Rule 387, which states in part that "That
client or its agent shall utilize the facilities of securities depository
for confirmation, acknowledgment, and book entry settlement of all
depository eligible transactions."
>> All eligible trades that are affirmed by the industry deadlines will
automatically load into the Custodial Bank's system and settle through
the appropriate depository as required by NYSE Rule 387.
>> NYSE Rule 387 dictates that custodial Banks not accept physical
delivery of depository eligible issues presented by member brokers.
>> When a clearing broker/agent is used to settle a trade, all brokers
must ensure that a trade confirmation is coded to indicate the
originating broker.
This represents current NYSE operating procedure.
The Fund will work with its investment managers to have all transactions
placed through member brokers on the DTC confirmation system (or other
industry-accepted confirmation methods) by no later than the industry
standard of noon on trade date plus one (T+1). Additionally, the Fund will
facilitate the affirmation of depository eligible and non-eligible
transactions by no later than noon on the later of settlement minus one
(S-1) or trade date plus two (T+2). The Fund will notify HNB of all T+1
transactions as soon as possible after trade notification is received from
the investment manager. HNB will not be responsible for compensation
interest due if notification is received after noon on S-1.
HNB will accept DTC affirmed confirmation as authorized instruction to
settle trades. HNB will accept electronic or hard copy resolutions from the
Fund for non-standard trade settlement.
Non-standard settlements, i.e. exceptions to the use of the DTC ID system,
include, but are not limited to:
>> Same day cash trading, e.g. commercial paper
>> Real estate/venture capital
>> Trades not affirmed on the DTC confirmation system
>> Physical trade settlement
>> Financial Futures
>> Call Options
>> Commingled portfolios
All pre-settlement trade communication will be between the Fund and HNB.
HNB will be authorized to receive and act on trade instructions directly
from the Fund.
Trade Settlement:
HNB will ensure all domestic trades will settle within industry accepted
standards (contractual basis). However, the following trades will settle
delivery versus payment:
>> Real estate/venture capital
>> Certain international trade settlement
>> Trades in open-ended mutual funds
>> Non standard depository settlement, e.g. late commercial paper
settlement
>> In-kind trades
>> Securities Lending transactions (if applicable)
HNB will maintain a report detailing all failing trades and be responsible
for providing the failed trade information to the Fund or Unified Fund
Services by noon on the first business day after the fail. Any trade
failing for over thirty days will be considered an exception and require
the Fund intervention. HNB will report weekly the following information for
failed trades:
o Account number
o Account name
o Trade date
o Settlement date
o CUSIP/SEDOL number
o Asset description
o Shares/Par Value
o Dollar amount
o Delivering broker
o Status comment
If no trade is in failing status and none has failed during the week, HNB
will provide a negative report stating such.
Daily Procedures
Purchases and Sales
------------------
HNB will rely on the Fund to provide purchase and sale instructions via
a hard copy trade resolution. The trade resolution must indicate the
following information:
Bank account number
Asset name
Units affected
Trade settlement date
Wiring instructions
Capital Income & Realized Gain/Loss
After HNB and the Fund complete the daily cash balancing process, HNB
will process the wire transfer through the HNB trust wire account into
the appropriate advisor account. HNB will report problems receiving or
delivering settlement wires to the Fund and/or Unified Fund Services.
Structural Changes
The Fund will notify HNB and Unified Fund Services in the event of any
structural changes. Examples of structural changes are:
o Addition/Termination of a portfolio manager or bank account
o Change in accounting method
o Addition/Termination of an investment instrument
The Fund must notify HNB and Unified Fund Services of the structural
changes planned at least three business days prior to the effective
date via letter, memo or electronic notification.
The notification must contain all pertinent information such as
effective date, portfolio managers and bank accounts involved, and a
contact name for questions.
HNB will notify Unified Fund Services of new account numbers prior to
initial activity.
Daily Cash Flow Transactions (Other Than Trades)
Unified Fund Services will receive notification of any transactions not
related to trades. Examples of these types of transactions are:
o Sweep Transfer Letters
o Accrued Sweep Interest
o Manager/Bank Fees
Securities Lending Income
HNB will be responsible for notifying the Fund and Unified Fund
Services of any securities lending income that is posted to their
account as part of the Activity Reconciliation Process described
earlier.
Reporting to Unified Fund Services
HNB will provide Unified Fund Services custodial information on a daily
basis that includes position and transaction information both on a
summary and detailed level.
Daily Position Report - Detail
The report details end of day positions by individual Fund investment
portfolios and pertinent investment data. The Daily Position Report
will include the following investment information.
Bank Field
----------
Statement date
Bank trust account number
Bank short account name
Asset Name
Asset Cusip/SEDOL number
Security interest rate
Security maturity date
Security payment frequency
Security acquisition date
Shares / Par value
Original Cost
Book Value**
Purchase Accrued Interest
**Contains Trust Cash and Money Market investment values
Daily Position Report - Summary
The report summarizes end of day positions by individual Fund
investment portfolios and pertinent investment data. The Daily Position
Report will include the following investment information.
Bank Field
----------
Statement date
Bank trust account number
Bank short account name
Shares / Par value
Original Cost
Book Value**
Purchase Accrued Interest
**Contains Trust Cash and Money Market investment values
Daily Transaction Report - Detail
The report details all investment-related transactions posting to the
Fund investment funds. The Daily Transaction Report is sorted by each
individual trust account and will have subtotals by transaction
activity type.
The Daily Transaction Report will include the following investment
transaction information.
Bank Field
----------
Statement date
Bank trust account number
Bank short account name
Transaction type code
Transaction type name
Div/Int flag
Cusip/SEDOL number
Asset description
Shares/Par
Price
Settlement Amount Purchased
Accrued interest
Cost/Principal
Interest/Dividend Income
Gain/Loss
Bank Transaction Number
Daily Transaction Report - Summary
The report summarizes all investment-related transactions posting to
the Fund investment funds. The Daily Transaction Report is sorted by
each individual trust account and shows subtotals by transaction
activity type.
The Daily Transaction Report will include the following investment
transaction information:
Bank Field
----------
Statement date
Bank trust account number
Bank short account name
Transaction type code
Transaction type name
Div/Int flag
Shares/Par
Settlement Amount Purchased
Accrued Interest
Cost/Principal
Interest/Dividend Income
Gain/Loss
Cash Transfers
The Fund will be responsible for initiating outbound wire transfers
(wires, ACH, transfers between Fund DDA accounts) with HNB's wire room.
The Fund will be responsible for notifying HNB with the appropriate
wire transfer amounts and transfers instructions on an authorized funds
transfer request.
Custody Fee Schedule
Xxxxxxx Funds
October 30, 2001
MARKET VALUE FEE
3 Basis Points.......................First $20 million of Market Value
2 Basis Points......................On Next $30 million of Market Value
1.5 Basis Points...............In Excess of $50 million of Market Value
TRANSACTION FEE
DTC & Fed. Eligible Items......................................$9.00/Transaction
Non-DTC & Fed. Eligible Items.................................$22.00/Transaction
Mortgage Backed Securities & Private Placements...............$20.00/Transaction
Mortgage Backed Securities & Private Placement Payments...........$ 5.00/Payment
Foreign Securities (depending on country)................$15-200.00/Transaction*
Options.......................................................$15.00/Transaction
MONTHLY MINIMUM FEE
Minimum Fee Per Fund Account.................................$250.00/Account
*Bank Of New York is our agent for clearing and pricing of global securities.
The transaction and holding costs vary with each country.
Other Fees may be assessed for special handling and other miscellaneous
services.
