Exhibit (g)
CUSTODIAN AGREEMENT
between
HUNTINGTON VA FUNDS
and
THE HUNTINGTON NATIONAL BANK
TABLE OF CONTENTS
Page
1. Employment of Custodian and Property to be Held by It.................................. 1
2. Duties of the Custodian With Respect to Property of the Funds Held
by the Custodian....................................................................... 1
2.1 Holding Securities................................................... 1
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2.2 Delivery of Securities............................................... 2
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2.3 Registration of Securities........................................... 4
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2.4 Bank Accounts........................................................ 4
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2.5 Payments for Shares.................................................. 5
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2.6 Availability of Federal Funds........................................ 5
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2.7 Collection of Income................................................. 5
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2.8 Payment of Fund Moneys............................................... 6
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2.9 Liability for Payment in Advance of Receipt of Securities
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Purchased............................................................ 7
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2.10 Payments for Repurchases or Redemptions of Shares of a
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Fund................................................................. 7
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2.11 Appointment of Agents................................................ 7
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2.12 Deposit of Fund Assets in Securities System.......................... 8
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2.13 Segregated Account................................................... 9
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2.14 Joint Repurchase Agreements.......................................... 10
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2.15 Ownership Certificates for Tax Purposes.............................. 10
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2.16 Proxies.............................................................. 10
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2.17 Communications Relating to Fund Portfolio Securities................. 10
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2.18 Proper Instructions.................................................. 11
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2.19 Actions Permitted Without Express Authority.......................... 11
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2.20 Evidence of Authority................................................ 11
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2.21 Notice to Trust by Custodian Regarding Cash Movement................. 12
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3. Duties of Custodian With Respect to the Books of Account and
Calculation of Net Asset Value and Net Income.......................................... 12
4. Records................................................................................ 12
5. Opinion of Trust's Independent Public Accountants...................................... 13
6. Reports to Trust by Independent Public Accountants..................................... 13
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7. Compensation of Custodian............................................ 13
8. Responsibility of Custodian.......................................... 13
9. Effective Period, Termination and Amendment.......................... 15
10. Successor Custodian.................................................. 15
11. Interpretive and Additional Provisions............................... 16
12. Ohio Law to Apply.................................................... 16
13. Notices.............................................................. 16
14. Counterparts......................................................... 16
15. Limitations of Liability............................................. 17
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CUSTODIAN AGREEMENT
THIS AGREEMENT is made as of the_____ day of __________________, 1999
between HUNTINGTON VA FUNDS (the "Trust"), a Massachusetts business trust, on
behalf of its portfolios (hereinafter collectively called the "Funds" and
individually referred to as a "Fund"), and THE HUNTINGTON NATIONAL BANK, a
national banking association (hereinafter called the "Custodian").
WITNESSETH: That in consideration of the mutual covenants and agreements
hereinafter contained, the parties hereto agree as follows:
1. Employment of Custodian and Property to be Held by It
The Trust hereby employs the Custodian as the custodian of the assets of
each of the Funds of the Trust. Except as otherwise expressly provided herein,
the securities and other assets of each of the Funds shall be segregated from
the assets of each of the other Funds and from all other persons and entities.
The Trust will deliver to the Custodian all securities and cash owned by the
Funds and all payments of income, payments of principal or capital distributions
received by them with respect to all securities owned by the Funds from time to
time, and the cash consideration received by them for shares of beneficial
interest ("Shares") of the Funds as may be issued or sold from time to time. The
Custodian shall not be responsible for any property of the Funds held or
received by the Funds and not delivered to the Custodian.
Upon receipt of "Proper Instructions" (within the meaning of Section 2.18),
the Custodian shall from time to time employ one or more sub-custodians upon the
terms specified in the Proper Instructions.
2. Duties of the Custodian With Respect to Property of the Funds Held by the
Custodian
2.1 Holding Securities. The Custodian shall hold and physically segregate
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for the account of each Fund all non-cash property, including all
securities owned by each Fund, other than securities which are
maintained pursuant to Section 2.12 in a Securities System (as defined
below), or securities which are subject to a joint repurchase
agreement with affiliated funds pursuant to Section 2.14. The
Custodian shall maintain records of all receipts,
deliveries and locations of such securities, together with a current
inventory thereof, and shall conduct periodic physical inspections of
certificates representing stocks, bonds and other securities held by
it under this Agreement in such manner as the Custodian shall
determine from time to time to be advisable in order to verify the
accuracy of such inventory. With respect to securities held by any
agent appointed pursuant to Section 2.11 hereof, and with respect to
securities held by any sub-custodian appointed pursuant to Section 1
hereof, the Custodian may rely upon certificates from such agent as to
the holdings of such agent and from such sub-custodian as to the
holdings of such sub-custodian, it being understood that such reliance
in no way relieves the Custodian of its responsibilities under this
Agreement. The Custodian will promptly report to the Trust the results
of such inspections, indicating any shortages or discrepancies
uncovered thereby, and take appropriate action to remedy any such
shortages or discrepancies.
2.2 Delivery of Securities. The Custodian shall release and deliver
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securities owned by a Fund held by the Custodian or in a Securities
System account of the Custodian only upon receipt of Proper
Instructions, which may be continuing instructions when deemed
appropriate by the parties, and only in the following cases:
(1) Upon sale of such securities for the account of a Fund and
receipt of payment therefor;
(2) Upon the receipt of payment in connection with any repurchase
agreement related to such securities entered into by the Trust;
(3) In the case of a sale effected through a Securities System, in
accordance with the provisions of Section 1 hereof;
(4) To the depository agent in connection with tender or other
similar offers for portfolio securities of a Fund, in accordance
with the provisions of Section 2.17 hereof;
(5) To the issuer thereof or its agent when such securities are
called, redeemed, retired or otherwise become payable;
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provided that, in any such case, the cash or other consideration
is to be delivered to the Custodian;
(6) To the issuer thereof, or its agent, for transfer into the name
of a Fund or into the name of any nominee or nominees of the
Custodian or into the name or nominee name of any agent appointed
pursuant to Section 2.11 or into the name or nominee name of any
sub-custodian appointed pursuant to Section 1; or for exchange
for a different number of bonds, certificates or other evidence
representing the same aggregate face amount or number of units;
provided that, in any such case, the new securities are to be
delivered to the Custodian;
(7) Upon the sale of such securities for the account of a Fund, to
the broker or its clearing agent, against a receipt, for
examination in accordance with "street delivery custom"; provided
that in any such case, the Custodian shall have no responsibility
or liability for any loss arising from the delivery of such
securities prior to receiving payment for such securities except
as may arise from the Custodian's own failure to act in
accordance with the standard of reasonable care or any higher
standard of care imposed upon the Custodian by any applicable law
or regulation if such above-stated standard of reasonable care
were not part of this Agreement;
(8) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion contained in such securities, or
pursuant to any deposit agreement; provided that, in any such
case, the new securities and cash, if any, are to be delivered to
the Custodian;
(9) In the case of warrants, rights or similar securities, the
surrender thereof in the exercise of such warrants, rights or
similar securities or the surrender of interim receipts or
temporary securities for definitive securities; provided that,
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in any such case, the new securities and cash, if any, are to be
delivered to the Custodian;
(10) For delivery in connection with any loans of portfolio securities
of a Fund, but only against receipt of adequate collateral in the
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form of (a) cash, in an amount specified by the Trust, (b)
certificated securities of a description specified by the Trust,
registered in the name of the Fund or in the name of a nominee of
the Custodian referred to in Section 2.3 hereof or in proper form
for transfer, or (c) securities of a description specified by the
Trust, transferred through a Securities System in accordance with
Section 2.12 hereof;
(11) For delivery as security in connection with any borrowings
requiring a pledge of assets by a Fund, but only against receipt
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of amounts borrowed, except that in cases where additional
collateral is required to secure a borrowing already made,
further securities may be released for the purpose;
(12) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian and a broker-dealer
registered under the Securities Exchange Act of 1934, as amended,
(the "Exchange Act") and a member of the National Association of
Securities Dealers, Inc. ("NASD"), relating to compliance with
the rules of the Options Clearing Corporation and of any
registered national securities exchange, or of any similar
organization or organizations, regarding escrow or other
arrangements in connection with transactions for a Fund;
(13) For delivery in accordance with the provisions of any agreement
among the Trust or a Fund, the Custodian, and a Futures
Commission Merchant registered under the Commodity Exchange Act,
relating to compliance with the rules of the Commodity Futures
Trading Commission or any similar organization or organizations,
regarding account deposits in connection with transaction for a
Fund;
(14) Upon receipt of instructions from the transfer agent ("Transfer
Agent") for a Fund, for delivery to such Transfer
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Agent or to the holders of shares in connection with
distributions in kind, in satisfaction of requests by holders of
Shares for repurchase or redemption; and
(15) For any other proper corporate purpose, but only upon receipt of,
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in addition to Proper Instructions, a certified copy of a
resolution of the Trustees of the Trust on behalf of a Fund
signed by an officer of the Trust and certified by its Secretary
or an Assistant Secretary, specifying the securities to be
delivered, setting forth the purpose for which such delivery is
to be made, declaring such purpose to be a proper corporate
purpose, and naming the person or persons to whom delivery of
such securities shall be made.
2.3 Registration of Securities. Securities held by the Custodian (other
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than bearer securities) shall be registered in the name of a
particular Fund or in the name of any nominee of the Fund or of any
nominee of the Custodian which nominee shall be assigned exclusively
to the Fund, unless the Trust has authorized in writing the
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appointment of a nominee to be used in common with other registered
investment companies affiliated with the Fund, or in the name or
nominee name of any agent appointed pursuant to Section 2.11 or in the
name or nominee name of any sub-custodian appointed pursuant to
Section 1. All securities accepted by the Custodian on behalf of a
Fund under the terms of this Agreement shall be in "street name" or
other good delivery form.
2.4 Bank Accounts. The Custodian shall open and maintain a separate bank
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account or accounts in the name of each Fund, subject only to draft or
order by the Custodian acting pursuant to the terms of this Agreement,
and shall hold in such account or accounts, subject to the provisions
hereof, all cash received by it from or for the account of each Fund,
other than cash maintained in a joint repurchase account with other
affiliated funds pursuant to Section 2.14 of this Agreement or by a
particular Fund in a bank account established and used in accordance
with Rule 17f-3 or any successor provision under the Investment
Company Act of 1940, as amended, (the "1940 Act"). Funds held by the
Custodian for a Fund may be deposited by it to its credit as Custodian
in the Banking Department of the Custodian or in such other banks or
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trust companies as it may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust company
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shall be qualified to act as a custodian under the 1940 Act and that
each such bank or trust company and the funds to be deposited with
each such bank or trust company shall be approved by vote of a
majority of the Board of Trustees ("Board") of the Trust. Such funds
shall be deposited by the Custodian in its capacity as Custodian for
the Fund and shall be withdrawable by the Custodian only in that
capacity. If requested by the Trust, the Custodian shall furnish the
Trust, not later than twenty (20) days after the last business day of
each month, an internal reconciliation of the closing balance as of
that day in all accounts described in this section to the balance
shown on the daily cash report for that day rendered to the Trust.
2.5 Payments for Shares. The Custodian shall make such arrangements with
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the Transfer Agent of each Fund as will enable the Custodian to
receive the cash consideration due to each Fund and will deposit into
each Fund's account such payments as are received from the Transfer
Agent. The Custodian will provide timely notification to the Trust and
the Transfer Agent of any receipt by it of payments for Shares of the
respective Fund.
2.6 Availability of Federal Funds. Upon mutual agreement between the Trust
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and the Custodian, the Custodian shall make federal funds available to
the Funds as of specified times agreed upon from time to time by the
Trust and the Custodian in the amount of checks, clearing house funds,
and other non-federal funds received in payment for Shares of the
Funds which are deposited into the Funds' accounts.
2.7 Collection of Income
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(1) The Custodian shall collect on a timely basis all income and
other payments with respect to registered securities held
hereunder to which each Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall collect
on a timely basis all income and other payments with respect to
bearer securities if, on the date of payment by the issuer, such
securities are held by the Custodian or its agent thereof and
shall credit such income, as collected, to each Fund's custodian
account. Without limiting the generality of the foregoing, the
Custodian shall detach and present for payment all coupons and
other income items requiring presentation as and when they become
due and shall collect interest when due on securities held
hereunder. The collection of income due the Funds on securities
loaned pursuant to the provisions of Section 3 shall be the
responsibility of the Trust. The Custodian will have no duty or
responsibility in connection therewith, other than to provide the
Trust with such information or data as may be necessary to assist
the Trust in arranging for the timely delivery to the Custodian
of the income to which each Fund is properly entitled.
(2) The Trust shall promptly notify the Custodian whenever income due
on securities is not collected in due course and will provide the
Custodian with monthly reports of the status of past due income.
The Trust will furnish the Custodian with a weekly report of
accrued/past due income for the Fund. Once an item is identified
as past due and the Trust has furnished the necessary claim
documentation to the Custodian, the Custodian will then initiate
a claim on behalf of the Trust. The Custodian will furnish the
Trust with a status report monthly unless the parties otherwise
agree.
2.8 Payment of Fund Moneys. Upon receipt of Proper Instructions, which may
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be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of each Fund in the following cases
only:
(1) Upon the purchase of securities, futures contracts or options on
futures contracts for the account of a Fund but only (a) against
the delivery of such securities, or evidence of title to
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futures contracts, to the Custodian (or any bank, banking firm or
trust company doing business in the United States or abroad which
is qualified under the 1940 Act to act as a custodian and has
been designated by the Custodian as its agent for this purpose
pursuant to Section 2.11 hereof) registered in the name of the
Fund or in the name of a nominee of the Custodian referred to in
Section 2.3 hereof or in proper form for transfer, (b) in the
case of a purchase effected through a Securities System, in
accordance with the conditions set forth in Section 2.12 hereof
or (c) in the case of repurchase agreements entered into between
the Trust and any other party, (i) against delivery of the
securities either in certificate form or through an entry
crediting the Custodian's account at the Federal Reserve Bank
with such securities or (ii) against delivery of the receipt
evidencing purchase for the account of the Fund of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian to repurchase such securities from the
Fund;
(2) In connection with conversion, exchange or surrender of
securities owned by a Fund as set forth in Section 2.2 hereof;
(3) For the redemption or repurchase of Shares of a Fund issued by
the Trust as set forth in Section 2.10 hereof;
(4) For the payment of any expense or liability incurred by a fund,
including but not limited to the following payments for the
account of the fund: Interest; taxes; management, accounting,
transfer agent and legal fees; and operating expenses of the
Fund, whether or not such expenses are to be in whole or in part
capitalized or treated as deferred expenses;
(5) For the payment of any dividends on Shares of a Fund declared
pursuant to the governing documents of the Trust;
(6) For payment of the amount of dividends received in respect of
securities sold short;
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(7) For any other proper purpose, but only upon receipt of, in
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addition to Proper Instructions, a certified copy of a resolution
of the Board of Trustees of the Trust on behalf of a Fund signed
by an officer of the Trust and certified by its Secretary or an
Assistant Secretary, specifying the amount of such payment,
setting forth the purpose for which such payment is to be made,
declaring such purpose to be a proper purpose, and naming the
person or persons to whom such payment is to be made.
2.9 Liability for Payment in Advance of Receipt of Securities Purchased.
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In any and every case where payment for purchase of securities for the
account of a Fund is made by the Custodian in advance of receipt of
the securities purchased, in the absence of specific written
instructions from the Trust to so pay in advance, the Custodian shall
be absolutely liable to the Fund for such securities to the same
extent as if the securities had been received by the Custodian.
2.10 Payments for Repurchases or Redemptions of Shares of a Fund. From such
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funds as may be available for the purpose of repurchasing or redeeming
Shares of a Fund, but subject to the limitations of the Declaration of
Trust and any applicable votes of the Trustees of the Trust pursuant
thereto, the Custodian shall, upon receipt of instructions from the
Transfer Agent, make funds available for payment to holders of Shares
of such Fund who have delivered to the Transfer Agent a request for
redemption or repurchase of their Shares including without limitation
through bank drafts, automated clearinghouse facilities, or by other
means. In connection with the redemption or repurchase of Shares of
the Funds, the Custodian is authorized upon receipt of instructions
from the Transfer Agent to wire funds to or through a commercial bank
designated by the redeeming shareholders.
2.11 Appointment of Agents. The Custodian may at any time or times in its
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discretion appoint (and may at any time remove) any other bank or
trust company which is itself qualified under the 1940 Act and any
applicable state law or regulation, to act as a custodian, as its
agent to carry out such of the provisions of this Section 2 as the
Custodian may from time to time direct; provided, however,
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that the appointment of any agent shall not relieve the Custodian of
its responsibilities or liabilities hereunder.
2.12 Deposit of Fund Assets in Securities System. The Custodian may deposit
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and/or maintain securities owned by the Funds in a clearing agency
registered with the Securities and Exchange Commission ("SEC") under
Section 17A or any successor provision of the Exchange Act, which acts
as a securities depository, or in the book-entry system authorized by
the U.S. Department of the Treasury and certain federal agencies, each
referred to herein as "Securities System," in accordance with
applicable Federal Reserve Board and SEC rules and regulations, if
any, and subject to the following provisions:
(1) The Custodian may keep securities of each Fund in a Securities
System provided that such securities are represented in an
account ("Account") of the Custodian in the Securities System
which shall not include any assets of the Custodian other than
assets held as a fiduciary, custodian or otherwise for customers;
(2) The records of the Custodian with respect to securities of the
Funds which are maintained in a Securities System shall identify
by book-entry those securities belonging to each Fund;
(3) The Custodian shall pay for securities purchased for the account
of each Fund upon (i) receipt of advice from the Securities
System that such securities have been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian
to reflect such payment and transfer for the account of the Fund.
The Custodian shall transfer securities sold for the account of a
Fund upon (i) receipt of advice from the Securities System that
payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian
to reflect such transfer and payment for the account of the Fund.
Copies of all advices from the Securities System of transfers of
securities for the account of a Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be provided to the
Trust at its request. Upon request, the Custodian
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shall furnish the Trust confirmation of each transfer to or from
the account of a Fund in the form of a written advice or notice
and shall furnish to the Trust copies of daily transaction sheets
reflecting each day's transactions in the Securities System for
the account of a Fund;
(4) The Custodian shall provide the Trust with any report obtained by
the Custodian on the Securities System's accounting system,
internal accounting control and procedures for safeguarding
securities deposited in the Securities System;
(5) The Custodian shall have received the initial certificate,
required by Section 9 hereof;
(6) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to
a Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or of any of its or their employees or from failure
of the Custodian or any such agent to enforce effectively such
rights as it may have against the Securities System; at the
election of the Trust, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that a Fund has not been made whole for any such loss or
damage; and
(7) The authorization contained in this Section 2.12 shall not
relieve the Custodian from using reasonable care and diligence in
making use of any Securities System.
2.13 Segregated Account. The Custodian shall upon receipt of Proper
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Instructions establish and maintain a segregated account or accounts
for and on behalf of each Fund, into which account or accounts may be
transferred cash and/or securities, including securities maintained in
an account by the Custodian pursuant to Section 2.12 hereof, (i) in
accordance with the provisions of any agreement among the Trust, the
Custodian and a broker-dealer
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registered under the Exchange Act and 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 (or the
Commodity Futures Trading Commission or any registered contract
market), or of any similar organization or organizations, regarding
escrow or other arrangements in connection with transactions for a
Fund, (ii) for purpose of segregating cash or government securities in
connection with options purchased, sold or written for a Fund or
commodity futures contracts or options thereon purchased or sold for a
Fund, (iii) for the purpose of compliance by the Trust or a Fund with
the procedures required by any release or releases of the SEC relating
to the maintenance of segregated accounts by registered investment
companies and (iv) for other proper corporate purposes, but only, in
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the case of clause (iv), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Trustees signed
by an officer of the Trust and certified by the Secretary or an
Assistant Secretary, setting forth the purpose or purposes of such
segregated account. and declaring such purposes to be proper corporate
purposes.
2.14 Joint Repurchase Agreements. Upon the receipt of Proper Instructions,
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the Custodian shall deposit and/or maintain any assets of a Fund and
any affiliated funds which are subject to joint repurchase
transactions in an account established solely for such transactions
for the Fund and its affiliated funds. For purposes of this Section
2.14, "affiliated funds" shall include all investment companies and
their portfolios for which subsidiaries or affiliates of The
Huntington National Bank serve as investment advisers, distributors or
administrators in accordance with applicable exemptive orders from the
SEC. The requirements of segregation set forth in Section 2.1 shall be
deemed to be waived with respect to such assets.
2.15 Ownership Certificates for Tax Purposes. The Custodian shall execute
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ownership and other certificates and affidavits for all federal and
state tax purposes in connection with receipt of income or other
payments with respect to securities of a Fund held by it and in
connection with transfers of securities.
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2.16 Proxies. The Custodian shall, with respect to the securities held
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hereunder, cause to be promptly executed by the registered holder of
such securities, if the securities are registered otherwise than in
the name of a Fund or a nominee of a Fund, all proxies, without
indication of the manner in which such proxies are to be voted, and
shall promptly deliver to the Trust such proxies, all proxy soliciting
materials and all notices relating to such securities.
2.17 Communications Relating to Fund Portfolio Securities. The Custodian
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shall transmit promptly to the Trust and the investment adviser of the
Trust all written information (including, without limitation, pendency
of calls and maturities of securities and expirations of rights in
connection therewith and notices of exercise of call and put options
written by the Fund and the maturity of futures contracts purchased or
sold by the Fund) received by the Custodian from issuers of the
securities being held for the Trust. With respect to tender or
exchange offers, the Custodian shall transmit promptly to the Trust
and the investment adviser of the Trust all written information
received by the Custodian from issuers of the securities whose tender
or exchange is sought and from the party (or his agents) making the
tender or exchange offer. If the Trust or the investment adviser of
the Trust desires to take action with respect to any tender offer,
exchange offer or any other similar transaction, the Trust shall
notify the Custodian in writing at least three business days prior to
the date on which the Custodian is to take such action. However, the
Custodian shall nevertheless exercise its best efforts to take such
action in the event that notification is received three business days
or less prior to the date on which action is required. For securities
which are not held in nominee name, the Custodian will act as a
secondary source of information and will not be responsible for
providing corporate action notification to the Trust.
2.18 Proper Instructions. Proper Instructions as used throughout this
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Section 2 means a writing signed or initialed by one or more person or
persons as the Trustees shall have from time to time authorized. Each
such writing shall set forth the specific transaction or type of
transaction involved. Oral instructions will be considered Proper
Instructions if the Custodian reasonably believes them to have been
given by a person previously authorized in Proper Instructions to give
such instructions with respect to the
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transaction involved. The Trust shall cause all oral instructions to
be confirmed in writing. Upon receipt of a certificate of the
Secretary or an Assistant Secretary as to the authorization by the
Trustees accompanied by a detailed description of procedures approved
by the Trustees, Proper Instructions may include communications
effected directly between electromechanical or electronic devices
provided that the Trustees and the Custodian are satisfied that such
procedures afford adequate safeguards for a Fund's assets.
2.19 Actions Permitted Without Express Authority. The Custodian may in its
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discretion, without express authority from the Trust:
(1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Agreement, provided that all such payments shall be
accounted for to the Trust in such form that it may be allocated
to the affected Fund;
(2) surrender securities in temporary form for securities in
definitive form;
(3) endorse for collection, in the name of a Fund, checks, drafts and
other negotiable instruments; and
(4) in general, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of each Fund
except as otherwise directed by the Trust.
2.20 Evidence of Authority. The Custodian shall be protected in acting upon
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any instructions, notice, request, consent, certificate or other
instrument or paper reasonably believed by it to be genuine and to
have been properly executed on behalf of a Fund. The Custodian may
receive and accept a certified copy of a vote of the Trustees of the
Trust as conclusive evidence (a) of the authority of any person to act
in accordance with such vote or (b) of any determination of or any
action by the Trustees pursuant to the Declaration of Trust as
described in such vote, and such vote may be considered as in full
force and effect until receipt by the Custodian of written notice to
the contrary.
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2.21 Notice to Trust by Custodian Regarding Cash Movement. The Custodian
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will provide timely notification to the Trust of any receipt of cash,
income or payments to the Trust and the release of cash or payment by
the Trust.
3. Duties of Custodian With Respect to the Books of Account and Calculation of
Net Asset Value and Net Income
The Custodian shall cooperate with and supply necessary information to the
entity or entities appointed by the Trustees of the Trust to keep the books of
account of each Fund and/or compute the net asset value per share of the
outstanding Shares of each Fund or, if directed in writing to do so by the
Trust, shall itself keep such books of account and/or compute such net asset
value per share. If so directed, the Custodian shall also calculate daily the
net income of a Fund as described in the Fund's currently effective prospectus
and Statement of Additional Information ("Prospectus") and shall advise the
Trust and the Transfer Agent daily of the total amounts of such net income and,
if instructed in writing by an officer of the Trust to do so, shall advise the
Transfer Agent periodically of the division of such net income among its various
components. The calculations of the net asset value per share and the daily
income of a Fund shall be made at the time or times described from time to time
in the Fund's currently effective Prospectus.
4. Records
The Custodian shall create and maintain all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Trust and the Funds under the 1940 Act, with particular
attention to Section 31 thereof and Rules 31a-l and 31a-2 thereunder or any
successor provisions, and specifically including identified cost records used
for tax purposes. All such records shall be the property of the Trust and shall
at all times during the regular business hours of the Custodian be open for
inspection by duly authorized officers, employees or agents of the Trust and
upon notice to the Trust, employees and agents of the SEC. In the event of
termination of this Agreement, the Custodian will deliver all such records to
the Trust to a successor Custodian, or to such other person as the Trust may
direct. The Custodian shall supply daily to the Trust a tabulation of
securities owned by a Fund and held by the Custodian and shall, when requested
to do so by the Trust and for such compensation as shall be agreed upon between
the Trust and the Custodian, include certificate numbers in such tabulations.
15
In addition, the Custodian shall electronically transmit daily to the Trust
information pertaining to security trading and other investment activity and all
other cash activity of a Fund.
5. Opinion of Trust's Independent Public Accountants
The Custodian shall take all reasonable action to obtain from year to year
favorable opinions from independent public accountants with respect to its
activities hereunder in connection with the preparation of the Trust's
registration statement, periodic reports, or any other reports to the SEC and
with respect to any other requirements of the SEC.
6. Reports to Trust by Independent Public Accountants
The Custodian shall provide the Trust, at such times as the Trust may
reasonably require, with reports by independent public accountants for each Fund
on the accounting system, internal accounting control and procedures for
safeguarding securities, futures contracts and options on futures contracts,
including securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian for the Trust under this
Agreement; such reports shall be of sufficient scope and in sufficient detail,
as may reasonably be required by the Trust, to provide reasonable assurance that
any material inadequacies would be disclosed by such examination and, if there
are no such inadequacies, the reports shall so state.
7. Compensation of Custodian
The Custodian shall be entitled to reasonable compensation for its services
and expenses as Custodian, as agreed upon from time to time between the Trust
and the Custodian, and as reflected on Schedule A attached hereto.
8. Responsibility of Custodian
The Custodian shall be held to a standard of reasonable care in carrying
out the provisions of this Agreement; provided, however, that the Custodian
shall be held to any higher standard of care which would be imposed upon the
Custodian by any applicable law or regulation if such above stated standard of
reasonable care was not part of this Agreement. The Custodian shall be entitled
to rely on and may act upon advice of counsel (who may be counsel for the Trust)
on all matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice, provided that such
16
action is not in violation of applicable federal or state laws or regulations,
and is in good faith and without negligence. Subject to the limitations set
forth in Section 15 hereof, the Custodian shall be kept indemnified by the Trust
but only from the assets of the Fund involved in the issue at hand and be
without liability for any action taken or thing done by it that is reasonably
related to its responsibility to carry out the terms and provisions of this
Agreement in accordance with the above standards.
In order that the indemnification provisions contained in this Section 8
shall apply, however, it is understood that if in any case the Trust may be
asked to indemnify or save the Custodian harmless, the Trust shall be fully and
promptly advised of all pertinent facts concerning the situation in question,
and it is further understood that the Custodian will use all reasonable care to
identify and notify the Trust promptly concerning any situation which presents
or appears likely to present the probability of such a claim for
indemnification. The Trust shall have the option to defend the Custodian
against any claim which may be the subject of this indemnification, and in the
event that the Trust so elects it will so notify the Custodian and thereupon the
Trust shall take over complete defense of the claim, and the Custodian shall in
such situation initiate no further legal or other expenses for which it shall
seek indemnification under this Section. The Custodian shall in no case confess
any claim or make any compromise in any case in which the Trust will be asked to
indemnify the Custodian except with the Trust's prior written consent.
Notwithstanding the foregoing, the responsibility of the Custodian with
respect to redemptions effected by check shall be in accordance with a separate
Agreement entered into between the Custodian and the Trust.
If the Trust requires the Custodian to take any action with respect to
securities, which action involves the payment of money or which action may, in
the reasonable opinion of the Custodian, result in the Custodian or its nominee
assigned to a Fund being liable for the payment of money or incurring liability
of some other form, the Custodian may request the Trust, as a prerequisite to
requiring the Custodian to take such action, to provide indemnity to the
Custodian in an amount and form satisfactory to the Custodian.
Subject to the limitations set forth in Section 15 hereof, the Trust agrees
to indemnify and hold harmless the Custodian and its nominee from and against
all taxes, charges, expenses, assessments, claims and liabilities (including
reasonable counsel fees) (referred to herein as authorized charges)
17
incurred or assessed against it or its nominee in connection with the
performance of this Agreement, except such as may arise from it or its nominee's
own failure to act in accordance with the standard of care set forth herein or
any higher standard of care which would be imposed upon the Custodian by any
applicable law or regulation if such above-stated standard of care were not part
of this Agreement. To secure any authorized charges and any advances of cash or
securities 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
or for extraordinary or emergency purposes during any business day, the Trust
hereby grants to the Custodian a security interest in and pledges to the
Custodian securities held for the Fund by the Custodian in an amount not to
exceed 10 percent of the Fund's gross assets, the specific securities to be
designated in writing from time to time by the Trust or the Fund's investment
adviser. Should the Trust fail to make such designation, or should it instruct
the Custodian to make advances exceeding the percentage amount set forth above
and should the Custodian do so, the Trust hereby agrees that the Custodian shall
have a security interest in all securities or other property purchased for a
Fund with the advances by the Custodian, which securities or property shall be
deemed to be pledged to the Custodian, and the written instructions of the Trust
instructing their purchase shall be considered the requisite description and
designation of the property so pledged for purposes of the requirements of the
Uniform Commercial Code. Should the Trust fail to cause a Fund to repay promptly
any authorized charges or advances of cash or securities, subject to the
provision of the second paragraph of this Section 8 regarding indemnification,
the Custodian shall be entitled to use available cash and to dispose of pledged
securities and property as is necessary to repay any such advances.
18
9. Effective Period, Termination and Amendment
This Agreement shall become effective as of its execution, shall continue
in full force and effect until terminated as hereinafter provided, may be
amended at any time by mutual agreement of the parties hereto and may be
terminated by either party by an instrument in writing delivered or mailed,
postage prepaid, to the other party, such termination to take effect not sooner
than sixty (60) days after the date of such delivery or mailing; provided,
--------
however that the Custodian shall not act under Section 2.12 hereof in the
absence of receipt of an initial certificate of the Secretary or an Assistant
Secretary that the Trustees of the Trust have approved this Agreement; provided
--------
further, however, that the Trust shall not amend or terminate this Agreement in
-------
contravention of any applicable federal or state regulations, or any provision
of the Declaration of Trust, and further provided, that the Trust may at any
time by action of its Board (i) substitute another bank or trust company for the
Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the Comptroller of the Currency or
upon the happening of a like event at the direction of an appropriate regulatory
agency or court of competent jurisdiction.
Upon termination of the Agreement, the Trust shall pay to the Custodian
such compensation as may be due as of the date of such termination and shall
likewise reimburse the Custodian for its reasonable costs, expenses and
disbursements incurred in connection with its performance of this agreement
through the date of termination.
10. Successor Custodian
If a successor custodian shall be appointed by the Trustees of the Trust,
the Custodian shall, upon termination, deliver to such successor custodian at
the office of the Custodian, duly endorsed and in the form for transfer, all
securities then held by it hereunder for each Fund and shall transfer to
separate accounts of the successor custodian all of each Fund's securities held
in a Securities System.
If no such successor custodian shall be appointed, the Custodian shall, in
like manner, upon receipt of a certified copy of a vote of the Trustees of the
Trust, deliver at the office of the Custodian and transfer such securities,
funds and other properties in accordance with such vote.
19
In the event that no written order designating a successor custodian or
certified copy of a vote of the Trustees shall have been delivered to the
Custodian on or before the date when such termination shall become effective,
then the Custodian shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the 1940 Act, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $100,000,000, all securities, funds and other
properties held by the Custodian and all instruments held by the Custodian
relative thereto and all other property held by it under this Agreement for each
Fund and to transfer to separate accounts of such successor custodian all of
each Fund's securities held in any Securities System. Thereafter, such bank or
trust company shall be the successor of the Custodian under this Agreement.
In the event that securities, funds and other properties remain in the
possession of the Custodian after the date of termination hereof owing to
failure of the Trust to procure the certified copy of the vote referred to or of
the Trustees to appoint a successor custodian, the Custodian shall be entitled
to fair compensation for its services during such period as the Custodian
retains possession of such securities, funds and other properties and the
provisions of this Agreement relating to the duties and obligations of the
Custodian shall remain in full force and effect.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and the
Trust may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
--------
shall contravene any applicable federal or state regulations or any provision of
the Declaration of Trust. No interpretive or additional provisions made as
provided in the preceding sentence shall be deemed to be an amendment of this
Agreement.
12. Ohio Law to Apply
This Agreement shall be construed and the provisions thereof interpreted
under and in accordance with laws of the state of Ohio.
13. Notices
20
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Trust or to the Custodian at
Huntington Center, 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000, or to such other
address as the Trust or the Custodian may hereafter specify, shall be deemed to
have been properly delivered or given hereunder to the respective address.
14. Counterparts
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
15. Limitations of Liability
The Custodian is expressly put on notice of the limitation of liability as
set forth in Article IV of the Declaration of Trust and agrees that the
obligations and liabilities assumed by the Trust and any Fund pursuant to this
Agreement, including, without limitation, any obligation or liability to
indemnify the Custodian pursuant to Section 8 hereof, shall be limited in any
case to the relevant Fund and its assets and that the Custodian shall not seek
satisfaction of any such obligation from the shareholders of the relevant Fund,
from any other Fund or its shareholders or from the Trustees, Officers,
employees or agents of the Trust, or any of them. In addition, in connection
with the discharge and satisfaction of any claim made by the Custodian against
the Trust, for whatever reasons, involving more than one Fund, the Trust shall
have the exclusive right to determine the appropriate allocations of liability
for any such claim between or among the Funds.
IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed in its name and behalf by its duly authorized representative and its
seal to be hereunder affixed as of the _____ day of ________________, 1999.
HUNTINGTON VA FUNDS
By:____________________________________
21
THE HUNTINGTON NATIONAL BANK
By:____________________________________
22
SCHEDULE A
to the
Custodian Agreement
dated as of __________________, 1999
between
Huntington VA Funds
and
The Huntington National Bank
For its services under the Custodian and Recordkeeping Agreement, the
Custodian will receive an annual fee as follows:
For Custody Services:
--------------------
0.026% of the average daily net assets of each of the following Huntington
Variable Annuity Funds:
Huntington VA Growth Fund
Huntington VA Income Equity Fund
For Recordkeeping Services:
--------------------------
0.030% of the average daily net assets of each of the following Huntington
Variable Annuity Funds:
Huntington VA Growth Fund
Huntington VA Income Equity Fund
All fees are to be accrued daily and paid monthly.
HUNTINGTON VA FUNDS
By:____________________________________
THE HUNTINGTON NATIONAL BANK
By:____________________________________
