CUSTODY AGREEMENT
THIS CUSTODY AGREEMENT ("Agreement") is made and entered into as of
November 12, 1993, by and between the HUNTINGTON FUNDS, a Massachusetts business
trust (the "Trust"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
a banking association organized under the laws of the United States (the
"Custodian").
RECITALS
A. The Trust is an investment company registered under the Investment
Company Act of 1940, as amended (the "Investment Company Act") that invests
and reinvests, on behalf of its series, in Domestic Securities and Foreign
Securities.
B. The Custodian is, and has represented to the Trust that the
Custodian is, a "bank" as that term is defined in Section 2(a)(5) of the
Investment Company Act of 1940, as amended and is eligible to receive and
maintain custody of investment company assets pursuant to Section 17(f) and
Rule 17f-2 thereunder.
C. The Trust and the Custodian desire to provide for the retention of
the Custodian as a custodian of the assets of the Trust and such subsequent
series as the parties hereto may determine from time-to-time, on the terms
and subject to the provisions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. DEFINITIONS
For purposes of this Agreement, the following terms shall have the
respective meanings specified below:
"Agreement" shall mean this Custody Agreement.
"Board of Trustees" shall mean the Board of Trustees of the Trust.
"Business Day" with respect to any Domestic Security means any day,
other than a Saturday or Sunday, that is not a day on which banking
institutions are authorized or required by law to be closed in The City of
New York and, with respect to Foreign Securities, a London Business Day.
"London Business Day" shall mean any day on which dealings and deposits in
U.S. dollars are transacted in the London interbank market.
"Custodian" shall mean Bank of America National Trust and Savings
Association.
"Domestic Securities" shall have the meaning provided in Subsection
2.1 hereof.
"Executive Committee" shall mean the executive committee of the Board
of Trustees.
"Foreign Custodian" shall have the meaning provided in Section 4.1
hereof.
"Foreign Securities" shall have the meaning provided in Section 2.1
hereof.
"Foreign Securities Depository" shall have the meaning provided in
Section 4.1 hereof.
"Trust" shall mean the Huntington Funds and any separate series of the
Trust hereinafter organized.
"Investment Company Act" shall mean the Investment Company Act of
1940, as amended.
"Securities" shall have the meaning provided in Section 2.1 hereof.
"Securities System" shall have the meaning provided in Section 3.1
hereof.
"Securities System Account" shall have the meaning provided in
Subsection 3.8(a) hereof.
"Shares" shall mean shares of beneficial interest of the Trust.
"Subcustodian" shall have the meaning provided in Subsection 3.7
hereof, but shall not include any Foreign Custodian.
"Transfer Agent" shall mean the duly appointed and acting transfer
agent for the Trust.
"Writing" shall mean a communication in writing, a communication by
telex, the Custodian's Global Custody Instruction SystemTM, facsimile
transmission, bankwire or other teleprocess or electronic instruction
system acceptable to the Custodian.
Section 2. APPOINTMENT OF CUSTODIAN; DELIVERY OF ASSETS
2.1 Appointment of Custodian. The Trust hereby appoints and designates
the Custodian as a custodian of the assets of the Trust including cash,
securities the Trust desires to be held within the United States ("Domestic
Securities") and securities it desires to be held outside the United States
("Foreign Securities"). Domestic Securities and Foreign Securities are
sometimes referred to herein, collectively, as "Securities." The Custodian
hereby accepts such appointment and designation and agrees that it shall
maintain custody of the assets of the Trust delivered to it hereunder in
the manner provided for herein.
2.2 Delivery of Assets. The Trust agrees to deliver to the Custodian
Securities and cash owned by the Trust, payments of income, principal or
capital distributions received by the Trust with respect to Securities
owned by the Trust from time to time, and the consideration received by it
for such Shares or other securities of the Trust as may be issued and sold
from time to time. The Custodian shall have no responsibility whatsoever
for any property or assets of the Trust held or received by the Trust and
not delivered to the Custodian pursuant to and in accordance with the terms
hereof. All Securities accepted by the Custodian on behalf of the Trust
under the terms of this Agreement shall be in "street name" or other good
delivery form as determined by the Custodian.
2.3 Subcustodians. Upon receipt of Proper Instructions and a certified
copy of a resolution of the Board of Trustees or of the Executive Committee
certified by the Secretary or an Assistant Secretary of the Trust, the
Custodian may from time to time appoint one or more Subcustodians or
Foreign Custodians to hold assets of the Trust in accordance with the
provisions of this Agreement.
2.4 No Duty to Manage. The Custodian, a Subcustodian or a Foreign
Custodian shall not have any duty or responsibility to manage or recommend
investments of the assets of the Trust held by them or to initiate any
purchase, sale or other investment transaction in the absence of Proper
Instructions or except as otherwise specifically provided herein.
Section 3. DUTIES OF THE CUSTODIAN WITH RESPECT TO
ASSETS OF THE TRUST HELD BY THE CUSTODIAN
3.1 Holding Securities. The Custodian shall hold and physically
segregate from any property owned by the Custodian, for the account of the
Trust, all non-cash property delivered by the Trust to the Custodian
hereunder other than Securities which, pursuant to Subsection 3.8 hereof,
are held through a registered clearing agency, a registered securities
depository, the Federal Reserve's book-entry securities system (referred to
herein, individually, as a "Securities System"), or held by a Subcustodian,
Foreign Custodian or in a Foreign Securities Depository.
3.2 Delivery of Securities. Except as otherwise provided in Subsection
3.5 hereof, the Custodian, upon receipt of Proper Instructions, shall
release and deliver Securities owned by the Trust and held by the Custodian
in the following cases or as otherwise directed in Proper Instructions:
(a) except as otherwise provided herein, upon sale of such Securities
for the account of the Trust and receipt by the Custodian, a Subcustodian
or a Foreign Custodian of payment therefor;
(b) upon the receipt of payment by the Custodian, a Subcustodian or a
Foreign Custodian in connection with any repurchase agreement related to
such Securities entered into by the Trust;
(c) in the case of a sale effected through a Securities System, in
accordance with the provisions of Subsection 3.8 hereof;
(d) to a tender agent or other authorized agent in connection with (i)
a tender or other similar offer for Securities owned by the Trust, or (ii)
a tender offer or repurchase by the Trust of its own Shares;
(e) to the issuer thereof or its agent when such Securities are
called, redeemed, retired or otherwise become payable; provided, that in
any such case, the cash or other consideration is to be delivered to the
Custodian, a Subcustodian or a Foreign Custodian;
(f) to the issuer thereof, or its agent, for transfer into the name or
nominee name of the Trust, the name or nominee name of the Custodian, the
name or nominee name of any Subcustodian or Foreign Custodian; 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, a Subcustodian or Foreign Custodian;
(g) to the broker selling the same for examination in accordance with
the "street delivery" custom;
(h) for exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, or reorganization of the issuer of such
Securities, or pursuant to a conversion of such Securities; provided that,
in any such case, the new Securities and cash, if any, are to be delivered
to the Custodian or a Subcustodian;
(i) in the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such warrants, rights
or similar Securities or the surrender of interim receipts or temporary
Securities for definitive Securities; provided that, in any such case, the
new Securities and cash, if any, are to be delivered to the Custodian, a
subcustodian or a Foreign Custodian;
(j) for delivery in connection with any loans of Securities made by
the Trust, but only against receipt by the Custodian, a Subcustodian or a
Foreign Custodian of adequate collateral as determined by the Trust (and
identified in Proper Instructions communicated to the Custodian), which may
be in the form of cash or obligations issued by the United States
government, its agencies or instrumentalities, except that in connection
with any loans for which collateral is to be credited to the account of the
Custodian, a Subcustodian or a Foreign Custodian in the Federal Reserve's
book-entry securities system, the Custodian will not be held liable or
responsible for the delivery of Securities owned by the Trust prior to the
receipt of such collateral;
(k) for delivery as security in connection with any borrowings by the
Trust requiring a pledge of assets by the Trust, but only against receipt
by the Custodian, a Subcustodian or a Foreign Custodian of amounts
borrowed;
(l) for delivery in accordance with the provisions of any agreement
among the Trust, the Custodian, a Subcustodian or a Foreign Custodian and a
broker-dealer relating to compliance with the rules of registered clearing
corporations and of any registered national securities exchange, or of any
similar organization or organizations, regarding escrow or other
arrangements in connection with transactions by the Trust;
(m) for delivery in accordance with the provisions of any agreement
among the Trust, the Custodian, a Subcustodian or a Foreign Custodian and a
futures commission merchant, relating to compliance with the rules of the
Commodity Futures Trading Commission and/or any contract market, or any
similar organization or organizations, regarding account deposits in
connection with transactions by the Trust;
(n) upon the receipt of instructions from the Transfer Agent for
delivery to the Transfer 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
(o) for any other proper purpose, but only upon receipt of proper
Instructions, and a certified copy of a resolution of the Trustees or of
the Executive Committee certified by the Secretary or an Assistant
Secretary of the Trust, 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 purpose, and naming the person or persons to whom
delivery of such securities shall be made.
3.3 Registration of Securities. Securities held by the Custodian, a
Subcustodian or a Foreign Custodian (other than bearer Securities) shall be
registered in the name or nominee name of the Trust, in the name or nominee
name of the Custodian or in the name or nominee name of any Subcustodian or
Foreign Custodian. The Trust agrees to hold the Custodian, any such
nominee, Subcustodian or Foreign Custodian harmless from any liability as a
holder of record of such Securities.
3.4 Bank Accounts. The Custodian shall open and maintain a separate
bank account or accounts for the Trust, 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 hereunder from or for the account of the Trust, other
than cash maintained by the Trust in a bank account established and used in
accordance with Rule 17f-3 under the Investment Company Act. Funds held by
the Custodian for the Trust may be deposited by it to its credit as
Custodian in the banking departments of the Custodian, a Subcustodian or a
Foreign Custodian. It is understood and agreed by the Custodian and the
Trust that the rate of interest, if any, payable on such funds (including
foreign currency deposits) that are deposited with the Custodian may not be
a market rate of interest and that the rate of interest payable by the
Custodian to the Trust shall be agreed upon by the Custodian and the Trust
from time to time. Such funds shall be deposited by the Custodian in its
capacity as Custodian and shall be withdrawable by the Custodian only in
that capacity.
3.5 Collection of Income; Trade Settlement; Crediting of Accounts. The
Custodian shall collect income payable with respect to Securities owned by
the Trust, settle Securities trades for the account of the Trust and credit
and debit the Trust's account with the Custodian in connection therewith as
follows:
(a) Upon receipt of Proper Instructions, the Custodian shall effect
the purchase of a Security by charging the account of the Trust on the
contractual settlement date. The Custodian shall have no liability of any
kind to any person, including the Trust, if the Custodian effects payment
on behalf of the Trust as provided for herein or in Proper Instructions,
and the seller or selling broker fails to deliver the Securities purchased.
(b) Upon receipt of Proper Instructions, the Custodian shall effect
the sale of a Security by delivering a certificate or other indicia of
ownership, and shall credit the account of the Trust with the proceeds of
such sale on the contractual settlement date. The Custodian shall have no
liability of any kind to any person, including the Trust, if the Custodian
delivers such a certificate(s) or other indicia of ownership as provided
for herein or in Proper Instructions, and the purchaser or purchasing
broker fails to effect payment to the Trust within a reasonable time
period, as determined by the Custodian in its sole discretion. In such
event, the Custodian shall be entitled to reimbursement of the amount so
credited to the account of the Trust in connection with such sale.
(c) The Trust is responsible for ensuring that the Custodian receives
timely and accurate Proper Instructions to enable the Custodian to effect
settlement of any purchase or sale. If the Custodian does not receive such
instructions within the required time period, the Custodian shall have no
liability of any kind to any person, including the Trust, for failing to
effect settlement on the contractual settlement date. However, the
Custodian shall use its best reasonable efforts to effect settlement as
soon as possible after receipt of Proper Instructions.
(d) The Custodian shall credit the account of the Trust with interest
income payable on interest bearing Securities on payable date. Interest
income on cash balances will be credited monthly to the account of the
Trust on the first Business Day (on which the Custodian is open for
business) following the end of each month. Dividends and other amounts
payable with respect to Domestic Securities and Foreign Securities shall be
credited to the account of the Trust when received by the Custodian. The
Custodian shall not be required to commence suit or collection proceedings
or resort to any extraordinary means to collect such income and other
amounts payable with respect to Securities owned by the Trust. The
collection of income due the Trust on Domestic Securities loaned pursuant
to the provisions of Subsection 3.2(j) 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 the Trust is entitled. The
Custodian shall have no liability to any person, including the Trust, if
the Custodian credits the account of the Trust with such income or other
amounts payable with respect to Securities owned by the Trust (other than
Securities loaned by the Trust pursuant to Subsection 3.2(j) hereof) and
the Custodian subsequently is unable to collect such income or other
amounts from the payors thereof within a reasonable time period, as
determined by the Custodian in its sole discretion. In such event, the
Custodian shall be entitled to reimbursement of the amount so credited to
the account of the Trust.
3.6 Payment of Trust Monies. Upon receipt of Proper Instructions the
Custodian shall pay out monies of the Trust in the following cases or as
otherwise directed in Proper Instructions:
(a) upon the purchase of Securities, futures contracts or options on
futures contracts for the account of the Trust but only, except as
otherwise provided herein, (i) against the delivery of such securities, or
evidence of title to futures contracts or options on futures contracts, to
the Custodian or a Subcustodian registered pursuant to Subsection 3.3
hereof or in proper form for transfer; (ii) in the case of a purchase
effected through a Securities System, in accordance with the conditions set
forth in Subsection 3.8 hereof; or (iii) in the case of repurchase
agreements entered into between the Trust and the Custodian, another bank
or a broker-dealer (A) against delivery of the Securities either in
certificated form to the Custodian or a Subcustodian or through an entry
crediting the Custodian's account at the appropriate Federal Reserve Bank
with such Securities or (B) against delivery of the confirmation evidencing
purchase by the Trust of Securities owned by the Custodian or such
broker-dealer or other bank along with written evidence of the agreement by
the Custodian or such broker-dealer or other bank to repurchase such
Securities from the Trust;
(b) in connection with conversion, exchange or surrender of Securities
owned by the Trust as set forth in Subsection 3.2 hereof;
(c) for the redemption or repurchase of Shares issued by the Trust;
(d) for the payment of any expense or liability incurred by the Trust,
including but not limited to the following payments for the account of the
Trust: custodian fees, interest, taxes, management, accounting, transfer
agent and legal fees and operating expenses of the Trust whether or not
such expenses are to be in whole or part capitalized or treated as deferred
expenses; and
(e) for the payment of any dividends or distributions declared by the
Board of Trustees with respect to the Shares.
3.7 Appointment of Subcustodians. The Custodian may, upon receipt of
Proper Instructions, appoint another bank or trust company, which is itself
qualified under the Investment Company Act to act as a custodian (a
"Subcustodian"), as the agent of the Custodian to carry out such of the
duties of the Custodian hereunder as a Custodian may from time to time
direct; provided, however, that the appointment of any Subcustodian shall
not relieve the Custodian of its responsibilities or liabilities hereunder.
3.8 Deposit of Securities in Securities Systems. The Custodian may
deposit and/or maintain Domestic Securities owned by the Trust in a
Securities System in accordance with applicable Federal Reserve Board and
Securities and Exchange Commission rules and regulations, if any, and
subject to the following provisions:
(a) the Custodian may hold Domestic Securities of the Trust in the
Depository Trust Company or the Federal Reserve's book entry system or,
upon receipt of Proper Instructions, in another Securities System provided
that such securities are held in an account of the Custodian in the
Securities System ("Securities System Account") which shall not include any
assets of the Custodian other than assets held as a fiduciary, custodian or
otherwise for customers;
(b) the records of the Custodian with respect to Domestic Securities
of the Trust which are maintained in a Securities System shall identify by
book-entry those Domestic Securities belonging to the Trust;
(c) the Custodian shall pay for Domestic Securities purchased for the
account of the Trust upon (i) receipt of advice from the Securities System
that such securities have been transferred to the Securities System
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 Trust. The
Custodian shall transfer Domestic Securities sold for the account of the
Trust upon (A) receipt of advice from the Securities System that payment
for such securities has been transferred to the Securities System Account,
and (B) the making of an entry on the records of the Custodian to reflect
such transfer and payment for the account of the Trust. Copies of all
advices from the Securities System of transfers of Domestic Securities for
the account of the Trust shall be maintained for the Trust by the Custodian
and be provided to the Trust at its request. Upon request, the Custodian
shall furnish the Trust confirmation of each transfer to or from the
account of the Trust in the form of a written advice or notice; and
(d) upon request, 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
domestic securities deposited in the Securities System.
3.9 Segregated Account. The Custodian shall upon receipt of Proper
Instructions establish and maintain a segregated account or accounts for
and on behalf of the Trust, into which account or accounts may be
transferred cash and/or Securities, including Securities maintained in an
account by the Custodian pursuant to Section 3.8 hereof, (i) in accordance
with the provisions of any agreement among the Trust, the Custodian and a
broker-dealer or futures commission merchant, relating to compliance with
the rules of registered clearing corporations and of any 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 by the Trust, (ii) for purposes of segregating cash or
securities in connection with options purchased, sold or written by the
Trust or commodity futures contracts or options thereon purchased or sold
by the Trust and (iii) for other proper corporate purposes, but only, in
the case of this clause (iii), upon receipt of, in addition to Proper
Instructions, a certified copy of a resolution of the Board of Trustees or
of the Executive Committee 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.
3.10 Ownership Certificates for Tax Purposes. The Custodian shall
execute 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 domestic securities of the Trust held by it and in
connection with transfers of such securities.
3.11 Proxies. The Custodian shall, with respect to the Securities held
hereunder, promptly deliver to the Trust all proxies, all proxy soliciting
materials and all notices relating to such Securities. If the Securities
are registered otherwise than in the name of the Trust or a nominee of the
Trust, the Custodian shall use its best reasonable efforts, consistent with
applicable law, to cause all proxies to be promptly executed by the
registered holder of such Securities in accordance with Proper
Instructions.
3.12 Communications Relating to Trust Portfolio Securities. The
Custodian shall transmit promptly to 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 put and call options written by the Trust and the maturity of
futures contracts purchased or sold by the Trust) received by the Custodian
from issuers of Securities being held for the Trust. With respect to tender
or exchange offers, the Custodian shall transmit promptly to 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 its
agents) making the tender or exchange offer. If 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 at least three
Business Days prior to the date of which the Custodian is to take such
action.
3.13 Reports by Custodian. Custodian shall each business day furnish
the Trust with a statement summarizing all transactions and entries for the
account of the Fund for the preceding day. At the end of every month
Custodian shall furnish the Trust with a list of the portfolio securities
showing the quantity of each issue owned, the cost of each issue and the
market value of each issue at the end of each month. Such monthly report
shall also contain separate listings of (a) unsettled trades and (b)
when-issued securities. Custodian shall furnish such other reports as may
be mutually agreed upon from time-to-time.
Section 4. CERTAIN DUTIES OF THE CUSTODIAN WITH RESPECT TO ASSETS OF THE TRUST
HELD OUTSIDE THE UNITED STATES
4.1 Custody outside the United States. The Trust authorizes the
Custodian to hold Foreign Securities and cash in custody accounts which
have been established by the Custodian with (i) its foreign branches, (ii)
foreign banking institutions, foreign branches of United States banks and
subsidiaries of United States banks or bank holding companies (each a
"Foreign Custodian") and (iii) Foreign Securities depositories or clearing
agencies (each a "Foreign Securities Depository"); provided, however, that
the Board of Trustees or the Executive Committee has approved in advance
the use of each such Foreign Custodian and Foreign Securities Depository
and the contract between the Custodian and each Foreign Custodian and that
such approval is set forth in Proper Instructions and a certified copy of a
resolution of the Board of Trustees or of the Executive Committee certified
by the Secretary or an Assistant Secretary of the Trust. Unless expressly
provided to the contrary in this Section 4, custody of Foreign Securities
and assets held outside the United States by the Custodian, a Foreign
Custodian or through a Foreign Securities Depository shall be governed by
Section 3 hereof.
4.2 Assets to be Held. The Custodian shall limit the securities and
other assets maintained in the custody of its foreign branches, Foreign
Custodians and Foreign Securities Depositories to: (i) "foreign
securities", as defined in paragraph (c) (1) of Rule 17f-5 under the
Investment Company Act, and (ii) cash and cash equivalents in such amounts
as the Custodian or the Trust may determine to be reasonably necessary to
effect the Trust's Foreign Securities transactions.
4.3 Foreign Securities Depositories. Except as may otherwise be agreed
upon in writing by the Custodian and the Trust, assets of the Trust shall
be maintained in Foreign Securities Depositories only through arrangements
implemented by the Custodian or Foreign Custodians pursuant to the terms
hereof.
4.4 Segregation of Securities. The Custodian shall identify on its
books and records as belonging to the Trust, the Foreign Securities of the
Trust held by each Foreign Custodian.
4.5 Agreements with Foreign Custodians. Each agreement with a Foreign
Custodian shall provide generally that: (a) the Trust's assets will not be
subject to any right, charge, security interest, lien or claim of any kind
in favor of the Foreign Custodian or its creditors, except a claim of
payment for their safe custody or administration; (b) beneficial ownership
for the Trust's assets will be freely transferable without the payment of
money or value other than for custody or administration; (c) adequate
records will be maintained identifying the assets as belonging to the
Trust; (d) the independent public accountants for the Trust, will be given
access to the records of the Foreign Custodian relating to the assets of
the Trust or confirmation of the contents of those records; (e) the
disposition of assets of the Trust held by the Foreign Custodian will be
subject only to the instructions of the Custodian or its agents; (f) the
Foreign Custodian shall indemnify and hold harmless the Custodian and the
Trust from and against any loss, damage, cost, expense, liability or claim
arising out of or in connection with the Foreign Custodian's performance of
its obligations under such agreement; (g) to the extent practicable, the
Trust's assets will be adequately insured in the event of loss; and (h) the
Custodian will receive periodic reports with respect to the safekeeping of
the Trust's assets, including notification of any transfer to or from the
Trust's account.
4.6 Access of Independent Accountants of the Trust. Upon request of
the Trust, the Custodian will use its best reasonable efforts to arrange
for the independent accountants of the Trust to be afforded access to the
books and records of any Foreign Custodian insofar as such books and
records relate to the custody by any such Foreign Custodian of assets of
the Trust.
4.7 Transactions in Foreign Custody Accounts. Upon receipt of Proper
Instructions, the Custodian shall instruct the appropriate Foreign
Custodian to transfer, exchange or deliver Foreign Securities owned by the
Trust, but, except to the extent explicitly provided herein, only in any of
the cases specified in Subsection 3.2. Upon receipt of Proper Instructions,
the Custodian shall pay out or instruct the appropriate Foreign Custodian
to pay out monies of the Trust in any of the cases specified in Subsection
3.6. Notwithstanding anything herein to the contrary, settlement and
payment for Foreign Securities received for the account of the Trust and
delivery of Foreign Securities maintained for the account of the Trust may
be effected in accordance with the customary or established securities
trading or securities processing practices and procedures in the
jurisdiction or market in which the transaction occurs, including, without
limitation, delivering securities to the purchaser thereof or to a dealer
therefor (or an agent for such purchaser or dealer) against a receipt with
the expectation of receiving later payment for such securities from such
purchaser or dealer. Foreign Securities maintained in the custody of a
Foreign Custodian may be maintained in the name of such entity or its
nominee name to the same extent as set forth in Section 3.3 of this
Agreement and the Trust agrees to hold any Foreign Custodian and its
nominee harmless from any liability as a holder of record of such
securities.
4.8 Liability of Foreign Custodian. Each agreement between the
Custodian and a Foreign Custodian shall require the Foreign Custodian to
exercise reasonable care in the performance of its duties and to indemnify
and hold harmless the Custodian and the Trust from and against any loss,
damage, cost, expense, liability or claim arising out of or in connection
with the Foreign Custodian's performance of such obligations. At the
election of the Trust, it shall be entitled to be subrogated to the rights
of the Custodian with respect to any claims against a Foreign Custodian as
a consequence of any such loss, damage, cost, expense, liability or claim
if and to the extent that the Trust has not been made whole for any such
loss, damage, cost, expense, liability or claim.
4.9 Monitoring Responsibilities.
(a) The Custodian will promptly inform the Trust in the event that the
Custodian learns of a material adverse change in the financial condition of
a Foreign Custodian or is notified by (i) a foreign banking institution
employed as a Foreign Custodian that there appears to be a substantial
likelihood that its shareholders' equity will decline below $200 million or
that its shareholders' equity has declined below $200 million (in each case
computed in accordance with generally accepted United States accounting
principles) and denominated in U.S. dollars, or (ii) a subsidiary of a
United States bank or bank holding company acting as a Foreign Custodian
that there appears to be a substantial likelihood that its shareholders'
equity will decline below $100 million or that its shareholders' equity has
declined below $100 million (in each case computed in accordance with
generally accepted United States accounting principles) and denominated in
U.S. dollars.
(b) The custodian will furnish such information as may be reasonably
necessary to assist the Trust's Board of Trustees in its annual review and
approval of the continuance of all contracts or arrangements with Foreign
Subcustodians.
Section 5. PROPER INSTRUCTIONS
As used in this Agreement, the term "Proper Instructions" means
instructions of the Trust received by the Custodian via telephone or in Writing
which the Custodian believes in good faith to have been given by Authorized
Persons (as defined below) or which are transmitted with proper testing or
authentication pursuant to terms and conditions which the Custodian may specify.
Any Proper Instructions delivered to the Custodian by telephone shall promptly
thereafter be confirmed in Writing by an Authorized Person, but the Trust will
hold the Custodian harmless for its failure to send such confirmation in
writing, the failure of such confirmation to conform to the telephone
instructions received or the Custodian's failure to produce such confirmation at
any subsequent time. Unless otherwise expressly provided, all Proper
Instructions shall continue in full force and effect until cancelled or
superseded. If the Custodian requires test arrangements, authentication methods
or other security devices to be used with respect to Proper Instructions, any
Proper Instructions given by the Trust thereafter shall be given and processed
in accordance with such terms and conditions for the use of such arrangements,
methods or devices as the Custodian may put into effect and modify from time to
time. The Trust shall safeguard any testkeys, identification codes or other
security devices which the Custodian shall make available to it. The Custodian
may electronically record any Proper Instructions given by telephone, and any
other telephone discussions, with respect to its activities hereunder. As used
in this Agreement, the term "Authorized Persons" means such officers or such
agents of the Trust as have been designated by a resolution of the Board of
trustees or of the Executive Committee, a certified copy of which has been
provided to the Custodian, to act on behalf of the Trust under this Agreement.
Each of such persons shall continue to be an Authorized Person until such time
as the Custodian receives Proper Instructions that any such officer or agent is
no longer an Authorized Person.
Section 6. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY
The Custodian may in its discretion, without express authority from the
Trust:
(a) 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;
(b) endorse for collection, in the name of the Trust, checks, drafts
and other negotiable instruments; and
(c) 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 the Trust except as otherwise
provided in Proper Instructions.
Section 7. EVIDENCE OF AUTHORITY
The Custodian shall be protected in acting upon any instructions (conveyed
by telephone or in Writing), notice, request, consent, certificate or other
instrument or paper believed by it to be genuine and to have been properly given
or executed by or on behalf of the Trust. The Custodian may receive and accept a
certified copy of a resolution of the Board of Trustees or Executive Committee
as conclusive evidence (a) of the authority of any person to act in accordance
with such resolution or (b) of any determination or of any action by the Board
of Trustees or Executive Committee as described in such resolution, and such
resolution may be considered as in full force and effect until receipt by the
Custodian of written notice by an Authorized Person to the contrary.
Section 8. DUTY OF CUSTODIAN TO SUPPLY INFORMATION
The Custodian shall cooperate with and supply necessary information in its
possession (to the extent permissible under applicable law) to the entity or
entities appointed by the Board of Trustees to keep the books of account of the
Trust and/or compute the net asset value per Share of the outstanding Shares of
the Trust.
Section 9. RECORDS
The Custodian shall create and maintain all records relating to its
activities under this Agreement which are required with respect to such
activities under Section 31 of the Investment Company Act and Rules 31a-1 and
31a-2 thereunder. 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
employees and agents of the Securities and Exchange Commission. The Custodian
shall, at the Trust's request, supply the Trust with a tabulation of Securities
owned by the Trust 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.
Section 10. 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.
Section 11. RESPONSIBILITY OF CUSTODIAN
The Custodian shall be responsible for the performance of only such duties
as are set forth herein or contained in Proper Instructions and shall use
reasonable care in carrying out such duties. The Custodian shall be liable to
the Trust for any loss which shall occur as the result of the failure of a
Foreign Custodian or a Foreign Securities Depository engaged by such Foreign
Custodian or the Custodian to exercise reasonable care with respect to the
safekeeping of securities and other assets of the Trust to the same extent that
the Custodian would be liable to the Trust if the Custodian itself were holding
such securities and other assets. In the event of any loss to the Trust by
reason of the failure of the Custodian, a Foreign Custodian or a Foreign
Securities Depository engaged by such Foreign Custodian or the Custodian to
utilize reasonable care, the Custodian shall be liable to the Trust to the
extent of the Trust's damages, to be determined based on the market value of the
property which is the subject of the loss at the date of discovery of such loss
and without reference to any special conditions or circumstances. The Custodian
shall be held to the exercise of reasonable care in carrying out this Agreement.
The Trust agrees to indemnify and hold harmless the Custodian and its nominees
from all taxes, charges, expenses, assessments, claims and liabilities
(including legal fees and expenses) incurred by any of them in connection with
the performance of this Agreement, except such as may arise from any negligent
action, negligent failure to act or willful misconduct on the part of the
indemnified entity or any Foreign Custodian or Foreign Securities Depository.
The Custodian shall be entitled to rely, and may act, on 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. The Custodian
need not maintain any insurance for the benefit of the Trust.
All collections of funds or other property paid or distributed in respect
of Securities held by the Custodian, agent, Subcustodian or Foreign Custodian
hereunder shall be made at the risk of the Trust. The Custodian shall have no
liability for any loss occasioned by delay in the actual receipt of notice by
the Custodian, agent, Subcustodian or by a Foreign Custodian of any payment,
redemption or other transaction regarding securities in respect of which the
Custodian has agreed to take action as provided in Section 3 hereof. The
Custodian shall not be liable for any action taken in good faith upon Proper
Instructions or upon any certified copy of any resolution of the Board of
Trustees and may rely on the genuineness of any such documents which it may in
good faith believe to be validly executed. The Custodian shall not be liable for
any loss resulting from, or caused by, the direction of the Trust to maintain
custody of any Securities or cash in a foreign country including, but not
limited to, losses resulting from nationalization, expropriation, currency
restrictions, civil disturbance, acts of war or terrorism, insurrection,
revolution, nuclear fusion, fission or radiation or other similar occurrences or
events beyond the control of the Custodian. Finally, the Custodian shall not be
liable for any taxes, including interest and penalties with respect thereto,
that may be levied or assessed upon or in respect of any assets of the Trust
held by the Custodian.
Section 12. LIMITED LIABILITY OF THE TRUST
The Custodian acknowledges that it has received notice of and accepts the
limitations of the Trust's liability as set forth in its Agreement and
Declaration of Trust. The Custodian agrees that the Trust's obligation hereunder
shall be limited to the assets of the Trust, and that the Custodian shall not
seek satisfaction of any such obligation from the shareholders of the Trust nor
from any Trustee, officer, employee, or agent of the Trust.
Section 13. EFFECTIVE PERIOD; TERMINATION
This Agreement shall become effective as of the date of its execution and
shall continue in full force and effect until terminated as hereinafter
provided. This Agreement may be terminated by the Trust or the Custodian by 60
days notice in Writing to the other provided that any termination by the Trust
shall be authorized by a resolution of the Board of Trustees, a certified copy
of which shall accompany such notice of termination, and provided further, that
such resolution shall specify the names of the persons to whom the Custodian
shall deliver the assets of the Trust held by it. If notice of termination is
given by the Custodian, the Trust shall, within 60 days following the giving of
such notice, deliver to the Custodian a certified copy of a resolution of the
Board of Trustees specifying the names of the persons to whom the Custodian
shall deliver assets of the Trust held by it. In either case the Custodian will
deliver such assets to the persons so specified, after deducting therefrom any
amounts which the Custodian determines to be owed to it hereunder (including all
costs and expenses of delivery or transfer of Trust assets to the persons so
specified). If within 60 days following the giving of a notice of termination by
the Custodian, the Custodian does not receive from the Trust a certified copy of
a resolution of the Board of Trustees specifying the names of the persons to
whom the Custodian shall deliver the assets of the Trust held by it, the
Custodian, at its election, may deliver such assets to a bank or trust company
doing business in the State of California to be held and disposed of pursuant to
the provisions of this Agreement or may continue to hold such assets until a
certified copy of one or more resolutions as aforesaid is delivered to the
Custodian. The obligations of the parties hereto regarding the use of reasonable
care, indemnities and payment of fees and expenses shall survive the termination
of this Agreement.
Section 14. MISCELLANEOUS
14.1 Relationship. Nothing contained in this Agreement shall (i)
create any fiduciary, joint venture or partnership relationship between the
Custodian and the Trust or (ii) be construed as or constitute a prohibition
against the provision by the Custodian or any of its affiliates to the
Trust of investment banking, securities dealing or brokerages services or
any other banking or financial services.
14.2 Further Assurances. Each party hereto shall furnish to the other
party hereto such instruments and other documents as such other party may
reasonably request for the purpose of carrying out or evidencing the
transactions contemplated by this Agreement.
14.3 Attorneys' Fees. If any lawsuit or other action or proceeding
relating to this Agreement is brought by a party hereto against the other
party hereto, the prevailing party shall be entitled to recover reasonable
attorneys' fees, costs and disbursements (including allocated costs and
disbursements of in-house counsel), in addition to any other relief to
which the prevailing party may be entitled.
14.4 Notices. Except as otherwise specified herein, each notice or
other communication hereunder shall be in Writing and shall be delivered to
the intended recipient at the following address (or at such other address
as the intended recipient shall have specified in a written notice given to
the other parties hereto):
if to the Trust:
Huntington Funds
c/o Franklin Resources, Inc.
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
Attention: Trust Manager
if to the Custodian:
Bank of America NT & SA
0000 Xxxxxx Xxxxxx
00xx Xxxxx, Xxxx. 5014
Xxx Xxxxxxxxx, XX 00000
14.5 Headings. The underlined headings contained herein are for
convenience of reference only, shall not be deemed to be a part of this
Agreement and shall not be referred to in connection with the
interpretation hereof.
14.6 Counterparts. This Agreement may be executed in counterparts,
each of which shall constitute an original and both of which, when taken
together, shall constitute one agreement.
14.7 Governing Law. This Agreement shall be construed in accordance
with, and governed in all respects by, the laws of the State of California
(without giving effect to principles of conflict of laws).
14.8 Force Majeure. Subject to the provisions of Section 11 hereof
regarding the Custodian's general standard of care, no failure, delay or
default in performance of any obligation hereunder shall constitute an
event of default or a breach of this agreement, or give rise to any
liability whatsoever on the part of one party hereto to the other, to the
extent that such failure to perform, delay or default arises out of a cause
beyond the control and without negligence of the party otherwise chargeable
with failure, delay or default; including, but not limited to: action or
inaction of governmental, civil or military authority; fire; strike;
lockout or other labor dispute; flood; war; riot; theft; earthquake;
natural disaster; breakdown of public or common carrier communications
facilities; computer malfunction; or act, negligence or default of the
other party. This paragraph shall in no way limit the right of either party
to this Agreement to make any claim against third parties for any damages
suffered due to such causes.
14.9 Successors and Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, the parties hereto and their respective
successors and assigns, if any.
14.10 Waiver. No failure on the part of any person to exercise any
power, right, privilege or remedy hereunder, and no delay on the part of
any person in the exercise of any power, right, privilege or remedy
hereunder, shall operate as a waiver thereof; and no single or partial
exercise of any such power, right, privilege or remedy shall preclude any
other or further exercise thereof or of any other power, right, privilege
or remedy.
14.11 Amendments. This Agreement may not be amended, modified, altered
or supplemented other than by means of an agreement or instrument executed
on behalf of each of the parties hereto.
14.12 Severability. In the event that any provision of this Agreement,
or the application of any such provision to any person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to persons or circumstances other than those
as to which it is determined to be invalid, unlawful, void or
unenforceable, shall not be impaired or otherwise affected and shall
continue to be valid and enforceable to the fullest extent permitted by
law.
14.13 Parties in Interest. None of the provisions of this Agreement is
intended to provide any rights or remedies to any person other than the
Trust and the Custodian and their respective successors and assigns, if
any.
14.14 Entire Agreement. This Agreement sets forth the entire
understanding of the parties hereto and supersedes all prior agreements and
understandings between the parties hereto relating to the subject matter
hereof.
14.15 Variations of Pronouns. Whenever required by the context hereof,
the singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; and the neuter gender
shall include the masculine and feminine genders.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
"Custodian": BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Xxxxxx X. Vision
Its Vice President
"Trust": HUNTINGTON FUNDS
By /s/ Xxxxxx X. Xxxxx
Its President
