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Exhibit (g)(1)
CUSTODY AGREEMENT
THIS AGREEMENT made the 2nd day of February 1992, by and between
INVESTORS FIDUCIARY TRUST COMPANY, a trust company chartered under the laws of
the state of Missouri, having its trust office located at 000 Xxxx 00xx Xxxxxx,
Xxxxxx Xxxx, Xxxxxxxx 00000 ("Custodian"), and EMPIRE BUILDER TAX FREE BOND
FUND, a Massachusetts business trust, having its principal office and place of
business at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 ("Fund").
WITNESSETH:
WHEREAS, Fund desires to appoint Investors Fiduciary Trust Company as
Custodian of the securities and monies of Fund's investment portfolio; and
WHEREAS, Investors Fiduciary Trust Company is willing to accept such
appointment;
NOW, THEREFORE, for and in consideration of the mutual promises
contained herein, the parties hereto, intending to be legally bound, mutually
covenant and agree as follows:
1. APPOINTMENTS OF CUSTODIAN. Fund hereby constitutes and appoints
Custodian as custodian of the securities and monies at any time owned
by the Fund and delivered to the Custodian.
2. DELIVERY OF CORPORATE DOCUMENTS. Fund has delivered or will deliver
to Custodian prior to the effective date of this Agreement, copies of
the following documents and all amendments or supplements thereto,
properly certified or authenticated:
1. Resolutions of the governing Board of Fund appointing
Custodian as custodian hereunder and approving the form of
this Agreement; and
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2. Resolutions of the governing Board of Fund designating
certain persons to give instructions on behalf of Fund to
Custodian and authorizing Custodian to rely upon written
instructions over his/her/their signatures.
3. DUTIES AND RESPONSIBILITIES OF CUSTODIAN.
1. DELIVERY OF ASSETS
Fund will deliver or cause to be delivered to Custodian on
the effective date of this Agreement, or as soon
thereafter as practicable, and from time to time
thereafter, all portfolio securities acquired by it and
monies then owned by it except as permitted by the
Investment Company Act of 1940 or from time to time coming
into its possession during the time this Agreement shall
continue in effect. Custodian shall have no responsibility
or liability whatsoever for or on account of securities or
monies not so delivered. All securities so delivered to
Custodian (other than bearer securities) shall be
registered in the name of Fund or its nominee, or of a
nominee of Custodian, or shall be properly endorsed and in
form for transfer satisfactory to Custodian.
2. DELIVERY OF ACCOUNTS AND RECORDS
Fund shall turn over to Custodian all of the Fund's
relevant accounts and records previously maintained by it.
Custodian shall be entitled to rely conclusively on the
completeness and correctness of the accounts and records
turned over to it by Fund, and Fund shall indemnify and
hold Custodian harmless of and from any and all expenses,
damages and losses whatsoever arising out of or in
connection with any error, omission, inaccuracy or other
deficiency of such accounts and records or the
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failure of Fund to provide any portion of such or to
provide any information needed by the Custodian
knowledgeably to perform its function hereunder.
3. DELIVERY OF ASSETS TO THIRD PARTIES
Custodian will receive delivery of and keep safely the
assets of Fund delivered to it from time to time
segregated in a separate account. Custodian will not
deliver, assign, pledge or hypothecate any such assets to
any person except as permitted by the provisions of this
Agreement or any agreement executed by it according to the
terms of section 3.S. of this Agreement. Upon delivery of
any such assets to a subcustodian pursuant to Section 3.S.
of the agreement, Custodian will create and maintain
records identifying those assets which have been delivered
to the subcustodian as belonging to Fund. The Custodian is
responsible for the securities and monies of Fund only
until they have been transmitted to and received by other
persons as permitted under the terms of this Agreement,
except for securities and monies transmitted to United
Missouri Bank of Kansas City, N.A. (UMBKC) and United
Missouri Trust Company of New York (UMBNY) for which
Custodian remains responsible as defined in Section 5 of
this Agreement. Custodian shall be responsible for the
monies and securities of Fund held by eligible foreign
custodians under this Agreement to the extent the domestic
subcustodian with which the custodian contracts is
responsible to Custodian. Custodian may participate
directly or indirectly through a subcustodian in the
Depository Trust Company, Treasury/Federal Reserve Book
Entry System or Participant Trust Company (PTC) (as such
entities are defined at 17 CFR Section 270-17f-4(b)) or
other depository
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approved by the Fund and with which Custodian has a
satisfactory direct or indirect contractual relationship.
4. REGISTRATION OF SECURITIES
Custodian will hold stocks and other registerable
portfolio securities of Fund registered in the name of
Fund or in the name of any nominee of Custodian for which
fidelity and liability Custodian will be fully
responsible, or in street certificate form, so-called,
with or without any indication of fiduciary capacity.
Unless otherwise instructed, Custodian will register all
such portfolio securities in the name of its authorized
nominee. All securities, and the ownership thereof by
Fund, which are held by Custodian hereunder, however,
shall at all times be identifiable on the records of the
Custodian. The Fund agrees to hold Custodian and its
nominees harmless for any liability arising solely from
Custodian or its nominees acting as a record holder or
securities held in custody.
5. EXCHANGE OF SECURITIES
Upon receipt of instructions as defined herein in Section
4.A. Custodian will exchange, or cause to be exchanged,
portfolio securities held by it for the account of Fund
for other securities or cash issued or paid in connection
with any reorganization, recapitalization, merger,
consolidation, split-up of shares, change of par value,
conversion or otherwise, and will deposit any such
securities in accordance with the terms of any
reorganization or protective plan. Without instructions,
Custodian is authorized to exchange securities held by it
in temporary form for securities in definitive form, to
effect an exchange of shares when the par value of
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the stock is changed, and upon receiving payment therefor,
to surrender bonds or other securities held by it at
maturity, or when advised of earlier call for redemption,
except that Custodian shall receive instructions prior to
surrendering any convertible security.
6. PURCHASES OF INVESTMENTS OF THE FUND
Fund will, on each business day on which a purchase of
securities shall be made by it, deliver to Custodian
instructions which shall specify with respect to each such
purchase:
1. The name of the portfolio of the Fund making
such purchase;
2. The name of the issuer and description of the
security;
3. The number of shares or the principal amount
purchased, and accrued interest, if any;
4. The trade date;
5. The settlement date;
6. The purchase price per unit and the brokerage
commission, taxes and other expenses payable in
connection with the purchase;
7. The total amount payable upon such purchase;
and
8. The name of the person from whom or the broker
or dealer through whom the purchase was made.
In accordance with such instructions, Custodian will pay
for out of monies held by the account of Fund, but only
insofar as monies are available therein for such purpose,
and receive the portfolio securities so purchased by or
for the account of
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Fund except that Custodian may in its sole discretion
advance funds to the Fund which may result in an overdraft
because the monies held by the Custodian on behalf of the
Fund are insufficient to pay the total amount payable upon
such purchase. Such payment will be made only upon receipt
by Custodian of the securities so purchased in form for
transfer satisfactory to Custodian.
7. SALES AND DELIVERIES OF INVESTMENTS OF THE FUND - OTHER
THAN OPTIONS AND FUTURES
Fund will, on each business day on which a sale of
investment securities of Fund has been made, deliver to
Custodian instructions specifying with respect to each
such sale:
1. The name of the portfolio of the Fund making
such sale;
2. The name of the issuer and description of the
securities;
3. The number of shares or principal amounts sold,
and accrued interest, if any;
4. The date on which the securities sold were
purchased or other information identifying the
securities sold and to be delivered;
5. The trade date;
6. The settlement date;
7. The sale price per unit and the brokerage
commission, taxes or other expenses payable in
connection with such sale;
8. The total amount to be received by Fund upon
such sale; and
9. The name and address of the broker or dealer
through whom or person to whom the sale was
made.
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In accordance with such instructions, Custodian will
deliver or cause to be delivered the securities thus
designated as sold for the account of Fund to the broker
or other person specified in the instructions relating to
such sale, such delivery to be made only upon receipt of
payment therefor in such form as is satisfactory to
Custodian, with the understanding that Custodian may
deliver or cause to be delivered securities for payment in
accordance with the customers prevailing among dealers in
securities.
8. PURCHASES OR SALES OF SECURITY OPTIONS, OPTIONS ON INDICES
AND SECURITY INDEX FUTURES CONTRACTS
Fund will, on each business day on which a purchase or
sale of the following options and/or futures shall be made
by it, deliver to Custodian instructions which shall
specify with respect to each such purchase or sale:
1. The name of the portfolio of the Fund making
such purchase or sale;
2. Security Options
1. The underlying security;
2. The price at which purchased or
sold;
3. The expiration date;
4. The number of contracts;
5. The exercise price;
6. Whether the transaction is an
opening, exercising, expiring or
closing transaction;
7. Whether the transaction involves a
put or call;
8. Whether the option is written or
purchased;
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9. Market on which option traded;
10. Name and address of the broker or
dealer through whom the sale or
purchase was made.
3. Options on Indices
1. The index;
2. The price at which purchased or
sold;
3. The exercise price;
4. The premium;
5. The multiple;
6. The expiration date;
7. Whether the transaction is an
opening, exercising, expiring or
closing transaction;
8. Whether the transaction involves a
put or call;
9. Whether the option is written or
purchased;
10. The name and address of the broker
or dealer through whom the sale or
purchase was made, or other
applicable settlement instructions.
4. Security Index Futures Contracts
1. The last trading date specified in
the contract and, when available,
the closing level, thereof;
2. The index level on the date the
contract is entered into;
3. The multiple;
4. Any margin requirements;
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5. The need for a segregated margin
account (in addition to
instructions, and if not already in
the possession of Custodian, Fund
shall deliver a substantially
complete and executed custodial
safekeeping account and procedural
agreement which shall be
incorporated by reference into this
Custody Agreement); and
6. The name and address of the futures
commission merchant through whom the
sale or purchase was made, or other
applicable settlement instructions.
5. Option on Index Future Contracts
1. The underlying index future
contract;
2. The premium;
3. The expiration date;
4. The number of options;
5. The exercise price;
6. Whether the transaction involves an
opening, exercising, expiring or
closing transaction;
7. Whether the transaction involves a
put or call;
8. Whether the option is written or
purchased; and
9. The market on which the option is
traded.
9. SECURITIES PLEDGED OR LOANED
If specifically allowed for in the prospectus of Fund:
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1. Upon receipt of instructions, Custodian will
release or cause to be released securities held
in custody to the pledgee designated in such
instructions by way of pledge or hypothecation
to secure any loan incurred by Fund; provided,
however, that the securities shall be released
only upon payment to Custodian of the monies
borrowed, except that in cases where additional
collateral is required to secure a borrowing
already made, further securities may be
released or caused to be released for that
purpose upon receipt of instructions. Upon
receipt of instructions, Custodian will pay,
but only from funds available for such purpose,
any such loan upon redelivery to it of the
securities pledged or hypothecated therefor and
upon surrender of the note or notes evidencing
such loan.
2. Upon receipt of instructions, Custodian will
release securities held in custody to the
borrower designated in such instructions;
provided, however, that the securities will be
released only upon deposit with Custodian of
full cash collateral as specified in such
instructions, and that Fund will retain the
right to any dividends, interest or
distribution on such loaned securities. Upon
receipt of instructions and the loaned
securities, Custodian will release the cash
collateral to the borrower.
10. ROUTINE MATTERS
Custodian will, in general, attend to all routine and
mechanical matters in connection with the sale, exchange,
substitution, purchase, transfer, or other dealings with
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securities or other property of Fund except as may be
otherwise provided in this Agreement or directed from time
to time by the governing Board of the Fund.
11. DEPOSIT ACCOUNT
Custodian will open and maintain a special purpose deposit
account or accounts in the name of Custodian ("Account"),
subject only to draft or order by Custodian upon receipts
of instructions. All monies received by Custodian from or
for the account of a portfolio shall be deposited in said
Account. Barring events not in the control of the
Custodian such as strikes, lockouts or labor disputes,
riots, war or equipment or transmission failure or damage,
fire, flood, earthquake or other natural disaster, action
or inaction of governmental authority or other causes
beyond its control, at 9:00 a.m., Kansas City time, on the
second business day after deposit of any check into Fund's
Account, Custodian agrees to make Fed Funds available to
the Fund in the amount of the check. Deposits made by
Federal Reserve wire will be available to the Fund
immediately and ACH wires will be available to the Fund on
the next business day. Income earned on the portfolio
securities will be credited to the applicable portfolio of
the Fund based on the schedule attached as Exhibit A. All
collected funds received on behalf of a Fund shall be
deposited, according to Custodian's usual practices, into
a Custody account on behalf of that Fund. The Custodian
will be entitled to reverse any credited amounts where
credits have been made and monies are finally collected.
If monies are collected after such reversal, the Custodian
will credit the applicable portfolio in that amount.
Custodian may open and maintain an Account in such other
banks or trust companies as may be
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designated by it and by properly authorized resolution of
the governing Board of the Fund, such Account, however; to
be in the name of Custodian and subject only to its draft
or order.
12. INCOME AND OTHER PAYMENTS TO FUND
Custodian will:
1. Collect, claim and receive and deposit for the
Account of Fund all income and other payments
which become due and payable on or after the
effective date of this Agreement with respect
to the securities deposited under this
Agreement, and credit the account of Fund in
accordance with the schedule attached hereto as
Exhibit A. If for any reason, the Fund is
credited with income that is not subsequently
collected, Custodian may reverse that credited
amount;
2. Execute ownership and other certificates and
affidavits for all federal, state and local tax
purposes in connection with the collection of
bond and note coupons; and
3. Take such other action as may be necessary or
proper in connection with:
1. the collection, receipt and deposit
of such income and other payments,
including but not limited to the
presentation for payment of:
1. all coupons and other
income items requiring
presentation; and
2. all other securities
which may mature or be
called, redeemed, retired
or otherwise become
payable and regarding
which the
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Custodian has actual
knowledge, or
notice of which is
contained in publications
of the type to which it
normally subscribes for
such purpose; and
2. the endorsement for collection, in
the name of Fund, of all checks,
drafts or other negotiable
instruments.
Custodian, however, will not be required to institute suit
or take other extraordinary action to enforce collection
except upon receipt of instructions and upon being
indemnified to its satisfaction against the costs and
expenses of such suit or other actions. Custodian will
receive, claim and collect all stock dividends, rights and
other similar items and will deal with the same pursuant
to instructions. Unless prior instructions have been
received to the contrary, Custodian will, without further
instructions, sell any rights held for the account of Fund
on the last trade date prior to the date of expiration of
such rights.
13. PAYMENT OF DIVIDENDS AND OTHER DISTRIBUTIONS
On the declaration of any dividend or other distribution
on the shares of the Fund ("Fund Shares") by the governing
Board of the Fund, Fund shall deliver to Custodian
instructions with respect thereto, including a copy of the
Resolution of said governing Board certified by the
Secretary or an Assistant Secretary of Fund wherein there
shall be set forth record date as of which shareholders
entitled to receive such dividend or other distribution
shall be determined, the date of payment of such dividend
or distribution, and the amount payable per share on such
dividend or distribution. Except if the ex-dividend date
and the reinvestment date of any
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dividend are the same, in which case funds shall remain in
the Custody Account, on the date specified in such
Resolution for the payment of such dividend or other
distribution, Custodian will pay out of the monies held
for the account of Fund, insofar as the same shall be
available for such purposes, and credit to the account of
the Dividend Disbursing Agent for Fund, such amount as may
be necessary to pay the amount per share payable in cash
on Fund Shares issued and outstanding on the record date
established by such Resolution.
14. SHARES OF FUND PURCHASED BY FUND
Whenever any Fund Shares are repurchased or redeemed by
Fund, Fund or its agent shall advise Custodian of the
aggregate dollar amount to be paid for such shares and
shall confirm such advice in writing. Upon receipt of such
advice, Custodian shall charge such aggregate dollar
amount to the Account of Fund and either deposit the same
in the account maintained for the purpose of paying for
the repurchase or redemption of Fund Shares or deliver the
same in accordance with such advice. Custodian shall not
have any duty or responsibility to determine that Fund
Shares have been removed from the proper shareholder
account or accounts or that the proper number of such
shares have been cancelled and removed from the
shareholder records.
15. SHARES OF FUND PURCHASED FROM FUND
Whenever Fund Shares are purchased from Fund, Fund will
deposit or cause to be deposited with Custodian the amount
received for such shares.
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Custodian shall not have any duty or responsibility to
determine that Fund Shares purchased from Fund have been
added to the proper shareholder account or accounts or
that the proper number of such shares have been added to
the shareholder records.
16. PROXIES AND NOTICES
Custodian will promptly deliver or mail or have delivered
or mailed to Fund all proxies properly signed, all notices
of meetings, all proxy statements and other notices,
requests or announcements affecting or relating to
securities held by Custodian for Fund and will, upon
receipt of instructions, execute and deliver or cause its
nominee to execute and deliver or mail or have delivered
or mailed such proxies or other authorizations as may be
required. Except as provided in this Agreement or pursuant
to instructions hereafter received by Custodian, neither
it nor its nominee will exercise any power inherent in any
such securities, including any power to vote the same, or
execute any proxy, power of attorney, or other similar
instrument voting any of such securities, or give any
consent, approval or waiver with respect thereto, or take
any other similar action.
17. DISBURSEMENTS
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Custodian will pay or cause to be paid insofar as funds
are available for the purpose, bills, statements and other
obligations of Fund (including but not limited to
obligations in connection with the conversion, exchange or
surrender of securities owned by Fund, interest charges,
dividend disbursements, taxes, management fees, custodian
fees, legal fees, auditors' fees, transfer agents' fees,
brokerage commissions, compensation to personnel, and
other operating expenses of Fund) pursuant to instructions
of Fund setting forth the name of the person to whom
payment is to be made, the amount of the payment, and the
purpose of the payment.
18. DAILY STATEMENT OF ACCOUNTS
Custodian will, within a reasonable time, render to Fund
as of the close of business on each day, a detailed
statement of the amounts received or paid and of
securities received or delivered for the account of Fund
during said day. Custodian will, from time to time, upon
request by Fund, render a detailed statement of the
securities and monies held for Fund under this Agreement,
and Custodian will maintain such books and records as are
necessary to enable it to do so and will permit such
persons as are authorized by Fund including Fund's
independent public accountants, access to such records or
confirmation of the contents of such records; and if
demanded, will permit federal and state regulatory
agencies to examine the securities, books and records.
Upon the written instructions of Fund or as demanded by
federal or state regulatory agencies, Custodian will
instruct any subcustodian to give such persons as are
authorized by Fund including Fund's independent public
accountants, access to such records or confirmation of the
contents of such records; and if demanded, to permit
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federal and state regulatory agencies to examine the
books, records and securities held by subcustodian which
relate to Fund.
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19. APPOINTMENT OF SUBCUSTODIANS
1. Notwithstanding any other provisions of this
Agreement, all or any of the monies or
securities of Fund may be held in Custodian's
own custody or in the custody of one or more
other banks or trust companies selected by
Custodian. Any such subcustodian must have the
qualifications required for custodian under the
Investment Company Act of 1940, as amended. The
subcustodian may participate directly or
indirectly in the Depository Trust Company,
Treasury/Federal Reserve Book Entry System,
Participant Trust Company (as such entities are
defined at 17 CFR Sec. 270.17f-4(b)), or other
depository approved by the Fund and with which
Custodian has a satisfactory direct or indirect
contractual relationship. Custodian will
appoint UMBKC and UMBNY as subcustodians and
Custodian shall be responsible for UMBKC and
UMBNY to the same extent it is responsible to
the Fund under Section 5 of this Agreement.
Custodian is not responsible for DTC, the
Treasury/Federal Reserve Book Entry System, and
PTC except to the extent such entities are
responsible to Custodian. Upon instruction of
the Fund, Custodian shall be willing to
contract with such entities as Bank of New York
(BONY), Xxxxxx Guaranty and Trust Company
(MGTC), Chemical Bank (CB), and Bankers Trust
Company (BT) for variable rate securities and
Custodian will be responsible to the Fund to
the same extent those entities are responsible
to Custodian. The Fund shall be entitled to
review Custodian's contracts with BONY, MGTC,
CB and BT.
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2. Notwithstanding any other provisions of this
Agreement, Fund's foreign securities (as
defined in Rule 17f-5(c)(1) under the
Investment Company Act of 1940) and Fund's cash
or cash equivalents in amounts reasonably
necessary to effect Fund's foreign securities
transactions, may be held in the custody of one
or more banks or trust companies acting as
subcustodians, according to Section 3.S.1; and
thereafter, pursuant to a written contract or
contracts as approved by Fund's governing
Board, may be transferred to an account
maintained by such subcustodian with an
eligible foreign custodian, as defined in Rule
17f-5(c)(2), provided that any such arrangement
involving a foreign custodian shall be in
accordance with the provisions of Rule 17f-5
under the Investment Company Act of 1040 as
that Rule may be amended from time to time. The
Fund shall be provided the contract with the
domestic subcustodian who shall contract with
the eligible foreign subcustodians. The
Custodian shall be responsible for the monies
and securities of Fund held by eligible foreign
subcustodians to the extent the domestic
subcustodian with which the Custodian contracts
is responsible to Custodian.
20. ADOPTION OF PROCEDURES
Custodian and Fund may from time to time adopt procedures
as they agree upon, and Custodian may conclusively assume
that no procedure approved by Fund, or directed by Fund,
conflicts with or violates any requirements of its
prospectus, or governing documents such as Articles of
Incorporation, Declaration of Trust, Bylaws, or any rule
or regulation of any regulatory body or governmental
agency. Fund will be
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responsible to notify Custodian of any changes in
statutes, regulations, rules or Fund policies not
specifically governing custodians or banks which might
necessitate changes in Custodian's responsibilities or
procedures.
21. OVERDRAFTS
If Custodian shall in its sole discretion advance funds to
the account of the Fund which results in an overdraft
because the monies held by Custodian on behalf of the Fund
are insufficient to pay the total amount payable upon a
purchase of securities as specified in Fund's instructions
or for some other reason, the amount of the overdraft
shall be payable by the Fund to Custodian upon demand and
shall bear an interest rate determined by Custodian from
the date advanced until the date of payment. Custodian
shall have a lien on the assets of the Fund in the amount
of any outstanding overdraft.
4. INSTRUCTIONS.
1. The term "instructions", as used herein, means written or
oral instructions to Custodian from a designated
representative of Fund. Certified copies of resolutions of
the governing Board of Fund naming one or more designated
representatives to give instructions in the name and on
behalf of Fund, may be received and accepted from time to
time by Custodian as conclusive evidence of the authority
of any designated representative to act for Fund and may
be considered to be in full force and effect (and
Custodian will be fully protected in acting in reliance
thereon) until receipt by Custodian of notice to the
contrary. Unless the resolution delegating authority to
any person to give instructions specifically requires that
the approval of
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anyone else will first have been obtained, Custodian will
be under no obligation to inquire into the right of the
person giving such instructions to do so. Notwithstanding
any of the foregoing provisions of this Section 4, no
authorizations or instructions received by Custodian from
Fund, will be deemed to authorize or permit any director,
trustee, officer, employee, or agent of Fund to withdraw
any of the securities or similar investments of Fund upon
the mere receipt of such authorization or instructions
from such director, trustee, officer, employee or agent.
Notwithstanding any other provision of this Agreement,
Custodian, upon receipt (and acknowledgment if required at
the discretion of Custodian) of the instructions of a
designated representative of Fund will undertake to
deliver for Fund's account monies, (provided such monies
are on hand or available) in connection with Fund's
transactions and to wire transfer such monies to such
broker, dealer, subcustodian, bank or other agent
specified in such instructions by a designated
representative of Fund.
2. No later than the next business day immediately following
each oral instruction, Fund will send Custodian written
confirmation of such oral instruction. At Custodian's sole
discretion, Custodian may record on tape, or otherwise,
any oral instruction whether given in person or via
telephone, each such recording identifying the parties,
the date and the time of the beginning and ending of such
oral instruction.
5. LIMITATION OF LIABILITY OF CUSTODIAN.
1. Custodian shall hold harmless and indemnify Fund from and
against any loss or liability arising out of Custodian's
negligence, willful misconduct, or bad faith.
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Custodian shall not be liable for consequential, special
or punitive damages. Custodian may request and obtain the
advice and opinion of counsel for Fund, or of its own
counsel with respect to questions or matters of law, and
it shall be without liability to Fund for any action taken
or omitted by it in good faith, in conformity with such
advice or opinion. If Custodian reasonably believes that
it could not prudently act according to the instructions
of the Fund or the Fund's counsel, it may in its
discretion, with notice to the Fund, not act according to
such instructions.
2. Custodian may rely upon the advice of Fund and upon
statements of Fund's accountants and other persons
believed by, it in good faith, to be expert in matters
upon which they are consulted, and Custodian shall not be
liable for any actions taken, in good faith, upon such
statements.
3. If Fund requires Custodian in any capacity to take, with
respect to any securities, any action which involves the
payment of money by it, or which in Custodian's opinion
might make it or its nominee liable for payment of monies
or in any other way, Custodian, upon notice to Fund given
prior to such actions, shall be and be kept indemnified by
Fund in an amount and form satisfactory to Custodian
against any liability.
4. Custodian shall be entitled to receive, and Fund agrees to
pay to Custodian, on demand, reimbursement for such cash
disbursements, costs and expenses as may be agreed upon
from time to time by Custodian and Fund.
5. Custodian shall be protected in acting as custodian
hereunder upon any instructions, advice, notice, request,
consent, certificate or other instrument or paper
reasonably
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appearing to it to be genuine and to have been properly
executed and shall, unless otherwise specifically provided
herein, be entitled to receive as conclusive proof of any
fact or matter required bo be ascertained from Fund
hereunder, a certificate signed by the Fund's President,
or other officer specifically authorized for such purpose.
6. Without limiting the generality of the foregoing,
Custodian shall be under no duty or obligation to inquire
into, and shall not be liable for:
1. The validity of the issue of any securities
purchased by or for Fund, the legality of the
purchase thereof or evidence of ownership
required by Fund to be received by Custodian,
or the propriety of the decision to purchase or
amount paid therefor;
2. The legality of the sale of any securities by
or for Fund, or the propriety of the amount for
which the same are sold;
3. The legality of the issue or sale of any shares
of the Capital Stock of Fund, or the
sufficiency of the amount to be received
therefor;
4. The legality of the repurchase or redemption of
any Fund Shares, or the propriety of the amount
to be paid therefor; or
5. The legality of the declaration of any dividend
by Fund, or the legality of the issue of any
Fund Shares in payment of any stock dividend.
7. Custodian shall not be liable for, or considered to be
Custodian of, any money represented by any check, draft,
wire transfer, clearing house funds, uncollected funds, or
instrument for the payment of money received by it on
behalf of Fund, until
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Custodian actually receives such money, provided only that
it shall advise Fund promptly if it fails to receive any
such money in the ordinary course of business, and use its
best efforts and cooperate with Fund toward the end that
such money shall be received.
8. Except for any subcustodians or eligible foreign custodian
appointed under section 3.S., Custodian shall not be
responsible for loss occasioned by the acts, neglects,
defaults or insolvency of any broker, bank, trust company,
or any other person with whom Custodian may deal in the
absence of negligence, or bad faith on the part of
Custodian.
9. Notwithstanding anything herein to the contrary, Custodian
may, and with respect to any foreign subcustodian
appointed under Section 3.S.2 must, provide Fund for its
approval, agreements with banks or trust companies which
will act as subcustodians for Fund pursuant to Section 3.S
of this Agreement.
6. COMPENSATION. Fund will pay to Custodian such compensation as is
stated in the Fee Schedule attached hereto as Exhibit B which may be
changed from time to time as agreed to in writing by Custodian and
Fund. Custodian may charge such compensation against monies held by
it for the account of Fund. Custodian will also be entitled,
notwithstanding the provisions of Sections 5.C. or 5.D. hereof, to
charge against any monies held by it for the account of Fund the
amount of any loss, damage, liability, advance, or expense for which
it shall be entitled to reimbursement under the provisions of this
Agreement including fees or expenses due to Custodian for other
services provided to the Fund by the Custodian.
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Custodian will not be entitled to reimbursement by Fund for any loss
or expenses of any subcustodian.
7. TERMINATION. Either party to this Agreement may terminate the same by
notice in writing, delivered or mailed, postage prepaid, to the other
party hereto and received not less than sixty (60) days prior to the
date upon which such termination will take effect. Upon termination
of this Agreement, Fund will pay to Custodian such compensation for
its reimbursable disbursements, costs and expenses paid or incurred
to such date and Fund will use its best efforts to obtain a successor
custodian. Unless the holders of a majority of the outstanding shares
of Fund vote to have the securities, funds and other properties held
under this Agreement delivered and paid over to some other person,
firm or corporation specified in the vote, having not less than Two
Million Dollars ($2,000,000) aggregate capital, surplus and undivided
profits, as shown by its last published report, and meeting such
other qualifications for custodian as set forth in the governing
documents of the Fund, the governing Board of Fund will, forthwith
upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian a bank or trust company having such
qualifications. Custodian will, upon termination of this Agreement,
deliver to the successor custodian so specified or appointed, at
Custodian's office, all securities then held by Custodian hereunder,
duly endorsed and in form for transfer, all funds and other
properties of Fund deposited with or held by Custodian hereunder, or
will co-operate in effecting changes in book-entries at the
Depository Trust Company or in the Treasury/Federal Reserve
Book-Entry System, DTC, or other depository. In the event no such
vote has been adopted by the shareholders of Fund and no written
order designating a successor custodian has been
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26
delivered to Custodian on or before the date when such termination
becomes effective, then Custodian will deliver the securities, funds
and properties of Fund to a bank or trust company at the selection of
Custodian and meeting the qualifications for custodian, if any, set
forth in the governing documents of the Fund and having not less than
Two Million Dollars ($2,000,000) aggregate capital, surplus and
undivided profits, as shown by its last published report. Upon either
such delivery to a successor custodian, Custodian will have no
further obligations or liabilities under this Agreement. Thereafter
such bank or trust company will be the successor custodian under this
Agreement and will be entitled to reasonable compensation for its
services. In the event that no such successor custodian can be found,
Fund will submit to its shareholders, before permitting delivery of
the cash and securities owned by Fund to anyone other than a
successor custodian, the question of whether Fund will be liquidated
or function without a custodian. Notwithstanding the foregoing
requirement as to delivery upon termination of this Agreement,
Custodian may make any other delivery of the securities, funds and
property of Fund which is permitted by the Investment Company Act of
1940, Fund's governing documents then in effect or apply to a court
of competent jurisdiction for the appointment of a successor
custodian.
8. NOTICES. Notices, requests, instructions and other writings received
by Fund at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other address as Fund may have designated to Custodian in writing,
will be deemed to have been properly given to Fund hereunder; and
notices, requests, instructions and other writings received by
Custodian at its offices at 000 Xxxx 00xx Xxxxxx, Xxxxxx Xxxx,
Xxxxxxxx 00000, or to such other address as it may have
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designated to Fund in writing, will be deemed to have been properly
given to Custodian hereunder.
9. MISCELLANEOUS.
1. This Agreement is executed and delivered in the State of
Missouri and shall be governed by the laws of said state.
2. All the terms and provisions of this Agreement shall be
binding upon, inure to the benefit of, and be enforceable
by the respective successor and assigns of the parties
hereto.
3. No provisions of the Agreement may be amended or modified,
in any manner except by a written agreement properly
authorized and executed by both parties hereto.
4. The captions in this Agreement are included for
convenience of reference only, and in no way define or
delimit any of the provisions hereof or otherwise affect
their construction or effect.
5. This Agreement may be executed simultaneously in two or
more counterparts, each of which will be deemed an
original but all of which together will constitute one and
the same instrument.
6. If any part, term or provision of this Agreement is by the
courts held to be illegal, in conflict with any law or
otherwise invalid, the remaining portion or portions shall
be considered severable and not be affected, and the
rights and obligations of the parties shall be construed
and enforced as if the Agreement did not contain the
particular part, term or provision held to be illegal or
invalid.
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28
7. Custodian will not release the identity of Fund to an
issuer which requests such information pursuant to the
Shareholder Communications Act of 1985 for the specific
purpose of direct communications between such issuer and
Fund unless the Fund directs the Custodian otherwise.
8. This Agreement may not be assigned by either party without
prior written consent of the other party.
9. If any provision of the Agreement, either in its present
form or as amended from time to time, limits, qualifies,
or conflicts with the Investment Company Act of 1940 and
the rules and regulations promulgated thereunder, such
statues, rules and regulations shall be deemed to control
and supersede such provision without nullifying or
terminating the remainder of the provisions of this
Agreement.
10. If the Fund is organized as a Massachusetts business
trust, a copy of the Declaration of Trust of the Fund is
on file with the Secretary of the Commonwealth of
Massachusetts and notice is hereby given that the
Agreement has been executed on behalf of Fund by the
undersigned officer of Fund in his/her capacity as an
officer of Fund. The obligations of this Agreement shall
only be binding upon the assets and property of Fund and
shall not be binding upon any Trustee, officer or
shareholder of Fund individually.
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29
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly respective authorized officers.
INVESTORS FIDUCIARY TRUST
COMPANY
By: /s/ illegible
------------------------------------
Title: S.V.P.
----------------------------------
ATTEST:
/s/ illegible
------------------------------
Title: Exec. V.p.
EMPIRE BUILDER TAX FREE
BOND FUND
By: /s/ illegible
------------------------------------
Title: Asst. Treasurer
---------------------------------
ATTEST:
/s/ Xxxx X. Xxxxx
------------------------------
Secretary
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EXHIBIT A
IFTC AVAILABILITY SCHEDULE BY TRANSACTION TYPE
TRANSACTION DTC PHYSICAL FED
----------- ---------------------------- ------------------------------- ----------------------------
TYPE CR DATE FDS TYPE CR DATE FDS TYPE CR DATE FDS TYPE
---- ------- -------- ------- -------- ------- --------
Calls Puts As Received C or F* As Received C or F*
Maturities As Received C or F* Mat. Date C or F* Mat. Date F
Tender Reorgs. As Received C As Received C N/A
Dividends Paydate C Paydate C N/A
Floating Rate Int. Paydate C Paydate C N/A
Floating Rate Int. (No N/A As Rate Received C N/A
Rate)
Mtg. Backed P&I Paydate C Paydate + 1 Bus. C Paydate F
Day
Fixed Rate Int. Paydate C Paydate C Paydate F
Euroclear N/A C Paydate C
Legend
------
C = Clearinghouse Funds
F = Fed Funds
N/A = Not Applicable
*Availability based on how received.
-30-
31
EMPIRE MUTUAL FUNDS
FEE SCHEDULE
1. SECURITY CUSTODY
A. DOMESTIC SECURITIES
Asset-Based Fees, per fund group
3/100 of 1% (3 basis points) on the first $100 million in assets
2/100 of 1% (2 basis points) on the next $100 million in assets
1/100 of 1% (1 basis point) on all assets in excess of $200 million
Transaction Fees, per transaction
Physical Delivery - $20.00
Depository Eligible - $10.00
GNMA Paydown - $10.00
Euro-Clear - $40.00
PTC - $12.00
PTC P&I - $7.00
PTC Other - $10.00
B. BALANCE CREDITS
IFTC will offset fees with balance credits calculated at 75%
of the bank credit rate which is equal to the T-xxxx rate
applied to average custody collected cash balances for the
month. Balance credits will be applied on a fund by fund basis
and can be used to offset custody fees. Any credits in excess
of fees will be carried forward from month to month through
the first quarter of the ensuing year. For calculation
purposes, IFTC uses an actual/accrual basis.
C. OVERDRAFT CHARGES
Fund overdrafts will be calculated at the Prime rate (as
published in the WALL STREET JOURNAL) and charged on a daily
basis.
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II. NOTES TO THE ABOVE FEE SCHEDULE
A. The above schedule does not include out-of-pocket expenses
that would be incurred by IFTC on the fund's behalf.
Examples of out-of-pocket expenses include forms, postage,
mailing services, and FDIC Insurance, etc. Out-of-pocket
expenses incurred by IFTC in planning and executing the
conversion will be passed on to the Fund. IFTC bills
out-of-pocket expenses separately from service fees.
B. The fees stated above are exclusive of terminal equipment
required in the client's location(s) and communication
line costs.
C. Any fees or out-of-pocket expenses not paid within 30 days
of the date of the original invoice will be charged a late
payment fee of 1% per month until payment of the fees are
received by IFTC.
D. The above fee schedule is predicated on the fact that IFTC
be allowed a minimum of 90 calendar days between
notification of hiring and when the selection is
effective, and that IFTC receive adequate cooperation from
the client during the implementation period.
E. The above fee schedule is applicable for selections made
and communicated within 30 days of the date of this
proposal. The fees are guaranteed for a one year period
commencing on the effective date of the service agreement
between IFTC and the client. All changes to the fee
schedule will be communicated in writing at least 60 days
prior to their effective date.
F. The fees and charges set forth hereto shall increase
annually upon each anniversary of this Agreement over the
fees and charges during the prior 12 months in an amount
not less than the annual percentage of change in the
Consumer Price Index in Kansas City,
Missouri-Kansas-Standard Metropolitan Statistical Area as
last reported by the U.S. Bureau of Labor Statistics. In
the event that this Agreement was not signed as of the
first day of the month, the fees and charges increase
shall be effective as of the first day of the month
immediately following the month during which the
anniversary occurred.
/s/ illegible /s/ illegible, Asst. Treasurer
------------------------------------- --------------------------------------
INVESTORS FIDUCIARY TRUST COMPANY EMPIRE MUTUAL FUNDS
2/4/92 3/16/92
------------------------------------- --------------------------------------
DATE DATE
11/27/91
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