EXHIBIT 8
CUSTODIAN AGREEMENT
This Agreement, dated as of the fifteenth day of July 1982 made by and
between TrustFunds Tax Exempt Trust (the Fund), a business trust operating as
an open-end investment company, duly organized under the laws of the
Commonwealth of Massachusetts and The Philadelphia National Bank, a national
bank;
WITNESSETH:
WHEREAS, the Fund desires to appoint The Philadelphia National Bank as custodian
of its portfolio securities and cash, and The Philadelphia National Bank is
willing to act in such capacity upon the terms and conditions herein set forth
and
WHEREAS, The Philadelphia National Bank in its capacity as custodian hereunder
will also collect and apply the dividends and interest on said securities in the
manner and to the extent herein set forth;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the parties hereto, intending to be legally bound, do hereby
agree as follows:
SECTION 1. The terms as defined in this Section 1, wherever used in this
Agreement, or in any amendment or supplement hereto, shall have the meanings
herein specified unless the context otherwise requires.
CUSTODIAN: The term "Custodian" shall mean The Philadelphia National Bank in
its capacity as custodian under this Agreement.
PROPER INSTRUCTIONS: For purposes of this Agreement, the Custodian shall be
deemed to have received Proper Instructions upon receipt of written, telephone
or telegraphic instructions from a person or persons reasonably believed by the
Custodian to be a person or persons authorized from time to time by the Trustees
of the Fund or by the Board of Directors of an investment adviser for the fund
to give the particular class of instructions. Telephone or telegraphic
instructions shall be confirmed in writing by such person or persons as said
Trustees or said Board of Directors shall have from time to time authorized to
give the particular class of instructions in question. The Custodian may act
upon telephone or telegraphic instructions without awaiting receipt of written
confirmation, and shall not be liable for the Fund's or such investment
adviser's failure to confirm such instructions in writing.
SECURITIES: The term "Securities" shall mean bonds, debentures, notes,
certificates of deposit, evidences of indebtedness, and other securities and
investments from time to time owned by the Fund.
SHAREHOLDERS: The term "Shareholders" shall mean the registered owners from
time to time of the Shares of the Fund in accordance with the registry records
maintained by the Fund or agents on its behalf.
SHARES: The term "Shares" of the Fund shall mean the shares of beneficial
interest of the Fund.
SECTION 2. The Fund shall from time to time file with the Custodian a
certified copy of each resolution of its Board of Trustees authorizing the
person or persons to give Proper Instructions and specifying the class of
instructions that may be given by each person to the Custodian under this
Agreement, together with certified signatures of such persons authorized to
sign, which shall constitute conclusive evidence of the authority of the
officers and signatories designated therein to act, and shall be considered
in full force and effect with the Custodian fully protected in acting in
reliance thereon until it receives written notice to the contrary; provided,
however, that if the certifying officer is authorized to give Proper
Instructions, the certification shall be also signed by a second officer of
the Fund.
SECTION 3. The Fund hereby appoints the Custodian as custodian of the
Securities of the Fund and cash from time to time on deposit hereunder, to be
held by the Custodian and applied as provided in this Agreement. The
Custodian hereby accepts such appointment subject to the terms and conditions
hereinafter provided. Such securities and cash shall, however, be segregated
from the assets of others and shall be and remain the sole property of the
Fund and the Custodian shall have only the bare custody thereof. The
Securities held by the Custodian shall, unless payable to bearer, be
registered in the name of the Custodian or in the name of its nominee.
Securities, excepting bearer securities, delivered from time to time to the
Custodian upon purchase or otherwise shall in all cases be in due form for
transfer or already registered as above provided.
SECTION 4. The Fund will initially deposit with the Custodian the Securities
owned by the Fund at the time this Agreement becomes effective. Thereafter the
Fund will cause to be deposited with the Custodian additional Securities as the
same are purchased or otherwise acquired from time to time.
The Fund will make an initial deposit of cash to be held and applied by the
Custodian hereunder. Thereafter the Fund will cause to be deposited with the
Custodian hereunder (i) the net proceeds of Securities sold from time to time
and (ii) the applicable net asset value of Shares sold from time to time
whether representing initial issue, other stock or reinvestments of dividends
and/or distributions payable to Shareholders.
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The Fund warrants that it shall keep all of its Securities, similar investments,
cash proceeds and other cash assets of the Fund in the custody of the Custodian,
except where permitted to otherwise keep, deposit, loan, pledge or otherwise
dispose of or maintain such assets in accordance with applicable law.
SECTION 5. The Custodian will collect from time to time the dividends and
interest on the Securities held by it hereunder and will deposit the same in the
Fund's account. The Custodian is authorized to advance or pay out of said
account accrued interest on bonds purchased and dividends on securities sold and
like items. In the event that any dividends or interest payments are received
by the Fund, the Fund will endorse to the Custodian, or cause to be endorsed,
dividend and interest checks and will issue appropriate orders to the issuers of
the Securities to pay dividends and interest to the Custodian. Subject to
proper reserves for interest owing on Securities sold and like items, the
Custodian will disburse the money from time to time on deposit in the account to
or upon the order of the Fund as it may from time to time direct in accordance
with this Agreement.
SECTION 6. The Custodian is hereby authorized and directed to disburse cash
from time to time as follows:
(a) to pay the proper compensation and expenses of the Custodian upon
receipt of Proper Instructions;
(b) to transfer to the Transfer Agent or other dividend disbursing agent
to pay dividends and/or distributions which may be authorized by the Fund
upon receipt of Proper Instructions;
(c) to pay, or provide the Fund with money to pay, if any, taxes upon
receipt of Proper Instructions;
(d) for the purpose of completing the purchase of Securities purchased by
the Fund, upon receipt of (i) Proper Instructions specifying the Securities and
stating the purchase price, and the name of the broker, investment banker or
other party to or upon whose order the purchase price is to be paid; and (ii)
upon receipt of such Securities by the Custodian or, in the case of a purchase
effected through a Securities System, in accordance with Section 8 hereof;
(e) for the purpose of redeeming or purchasing Shares upon receipt of
Proper Instructions stating the applicable redemption amounts payable, to the
Transfer Agent or other appropriate party;
(f) for the purpose of paying over to the Transfer Agent or dividend
disbursing agent such amounts as may be stated in Proper Instructions,
representing proceeds of the sale of warrants, rights, stock dividends,
profit and increases in values of the Securities, as the Fund may determine
to include in dividends and/or distributions on the Shares;
(g) for the purpose of paying in whole or in part any loan of the Fund
upon receipt of Proper Instructions directing payment and stating the
Securities, if any, to be received against payment;
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(h) to pay interest, investment advisory or supervisory fees,
administration, dividend and transfer agency fees and costs, compensation of
personnel, or operating expenses (including, without limitation, fees for
legal purposes). Before making any such payment or disbursement, however,
the Custodian shall receive (and may conclusively rely upon) Proper
Instructions requesting such payment or disbursement and stating that it is
for one or more of the purposes hereinabove enumerated, provided that if the
disbursement is for any other purposes, the instructions shall be in writing
and shall state that the disbursement was authorized by resolution of the
Board of Trustees of the Fund (a copy of which resolution shall be attached)
and is for a proper purpose.
SECTIONS 7. The Custodian is hereby authorized and directed to deliver
Securities from time to time as follows:
(a) for the purpose of completing sales of Securities sold by the Fund,
upon receipt of (i) the net proceeds of sale and (ii) Proper Instructions
specifying the Securities sold and stating the amount to be received and the
broker, investment banker or other party to or upon whose order the Securities
are to be delivered;
(b) for the purpose of exchanging Securities for other Securities and/or
cash upon timely receipt of (i) Proper Instructions stating Securities to be
delivered and the Securities and/or cash to be received in exchange and the
manner in which the exchange is to be made, and (ii) against receipt of the
other Securities and/or cash as specified in the Proper Instructions;
(c) for the purpose of exchanging or converting Securities pursuant to
their terms of pursuant to any plan of conversion, consolidation,
recapitalization, reorganization, readjustment or otherwise, upon timely receipt
of (i) Proper Instructions authorizing such exchange or conversion and stating
the manner in which such exchange or conversion is to be made, and (ii) against
receipt of the Securities, Certificates of deposit, interim receipts, and/or
cash to be received as specified in the Proper Instructions;
(d) for the purpose of presenting Securities for payment which have
matured or have been called for redemption upon receipt of appropriate Proper
Instructions and provided that the cash or other consideration is to be paid to
the Custodian;
(e) for the purpose of delivery of Securities upon redemption of Shares in
kind, upon receipt of appropriate Proper Instructions; or
(f) for the purpose of depositing with the lender Securities to be held as
collateral of a loan to the Fund upon receipt of Proper Instructions directing
delivery to the lender and upon receipt of the proceeds of the loan.
SECTION 8. The Custodian may deposit and/or maintain Securities owned by the
Fund in a clearing agency registered with the Securities and Exchange Commission
under Section 17A of the Securities Exchange Act of 1934, which acts as a
securities depository, or in the book-entry system authorized by the U.S.
Department of the Treasury and certain Federal agencies, collectively referred
to herein as "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:
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1. The Custodian may keep Securities of the Fund in a Securities System
provided that such Securities are represented in an account ("Account") of
the Custodian in the Securities System which shall not include any assets
of the Custodian other than assets held as a fiduciary, custodian, or
otherwise for customers.
2. The records of the Custodian with respect to Securities of the Fund which
are maintained in a Securities System shall identify by book-entry those
Securities belonging to the Fund.
3. The Custodian shall pay for securities purchased for the account of the
Fund upon (i) receipt of advice from the Securities System that such
Securities have been transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such payment and transfer
for the account of the Fund. The Custodian shall transfer Securities sold
for the account of the Fund upon (i) receipt of advice from the Securities
System that payment for such Securities has been transferred to the
Account, and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Fund. Copies of
all advices from the Securities System of transfers of Securities for the
account of the Fund shall identify the Fund, be maintained for the Fund by
the Custodian and be provided to the Fund at its request. The Custodian
shall furnish the Fund confirmation of each transfer to or from the account
of the Fund in the form of a written advice or notice and shall furnish to
the Fund copies of daily transaction sheets reflecting each day's
transaction for the account of the Fund on the next business day.
4. The Custodian shall provide the Fund with any report obtained by the
Custodian on the Securities System's internal accounting control and
procedures for safeguarding securities deposited in the Securities System.
5. The Custodian shall have received an initial certificate of the Secretary
or an Assistant Secretary that the Trustees of the Fund have approved the
initial use of a particular Securities System and the Custodian shall
receive an annual certificate of the Secretary or an Assistant Secretary
that the Trustees have reviewed the use by the fund of such Securities
System, as required in each case by Rule 17f-4 under the Investment Company
Act of 1940, as amended.
6. Anything to the contrary in this Agreement notwithstanding, the Custodian
shall be liable to the Fund for any loss or damage to the Fund resulting
from use of the Securities System by reason of any negligence, misfeasance
or misconduct of the Custodian or any of its agents or of any of its or
their employees or from any failure of the Custodian or any such agent to
enforce effectively such rights as it may have against the Securities
System; at the election of the Fund, it shall be entitled to be subrogated
to the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may have as a
consequence of any such loss or damage if and to the extent that the Fund
has not been made whole for any such loss or damage.
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SECTION 9. The Custodian's compensation shall be as set forth in Schedule A
hereto attached, or as shall be set forth in amendments to such schedule
approved by the Fund and the Custodian.
SECTION 10. The Custodian shall forward to the Fund proxies, proxy statements,
annual reports, conversions notice, call notices, or other notices or written
materials sent to the registered owners of securities and actually received by
the Custodian (hereafter referred to as "notices and materials"), exluding only
certificates representing securities and dividend and interest payments.
Responsibility for taking action thereon is the sole responsibility of the Fund
and its investment advisor, and not the responsibility of the Custodian. Upon
actual receipt by the Custodian of warrants or rights issued in connection with
the assets of the Fund, the Custodian shall enter on its ledgers appropriate
notations, indicating such receipt and shall forward notice thereof to the Fund,
but shall have no obligation whatsoever to take any action of any kind with
respect to such warrants or rights except upon receipt of Proper Instructions
authorizing the exercise or sale of such warrants or rights. The Custodian
shall make a best effort to notify the Fund with regards to call notices of
bearer bonds published in the principal trade journals but shall not be liable
for any failure in respect thereof.
SECTION 11. The Custodian assumes only the usual duties or obligations normally
performed by custodians of mutual funds. It specifically assumes no
responsibility for the management, investment or reinvestment of the Securities
from time to time owned by the Fund whether or not on deposit hereunder, it
being understood that the responsibility for the proper and timely management,
investment and reinvestment of said Securities shall be that of the Fund and its
investment advisors.
In connection with its functions under this Agreement, the Custodian shall:
(a) obtain a "due xxxx" for dividends, interest or other distributions of
the issuer, due the purchaser in connection with Securities delivered to the
Custodian;
(b) render to the Fund a daily report of all monies received or paid on
behalf of the Fund and such listings of Securities held by the Custodian for the
account of the Fund as may from time to time be requested by the Fund.
(c) execute ownership and other certificates and affidavits for all
Federal and State tax purposes in connection with the collection of bond and
note coupons;
(d) present for payment on the date of payment all coupons and other
periodic income items requiring presentation;
(e) monitor and record the collection of funds in accounts maintained by
the Custodian, in the name of the Fund on the same day as received;
(f) in accordance with the manager's directions as to allocation of the
securities to separate portfolios designated by the Fund, the Custodian shall
maintain records showing the respective securities comprising each such
portfolio.
(g) create, maintain and retain all records relating to its activities and
obligations under this Agreement in such manner as will meet the obligations of
the Fund with respect to said Custodian's activities in accordance with
generally
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accepted accounting principles. All records maintained by the Custodian in
connection with the performance of its duties under this Agreement will remain
the property of the Fund and in the event of termination of this Agreement will
be relinquished to the Fund.
If the Custodian does not receive payment for items due under subsection (a),
(d) or (e) within a reasonable time after it has made proper demands for the
same, it shall so notify the Fund in writing, including copies of all demand
letters, any written responses thereto, and memoranda of all oral responses
thereto and to telephonic demands, and await Proper Instructions; the Custodian
shall not be obliged to take legal action for collection except by its consent
and unless and until reasonably indemnified to its satisfaction. The Custodian
shall also notify the Fund as soon as reasonably practicable whenever income due
on Securities is not collected in due course.
The Custodian shall not be liable for any taxes, assessments, or governmental
charges which may be levied or assessed upon the Securities held by it
hereunder, or upon the income therefrom or otherwise whatsoever. The Custodian
may pay any such tax, assessment or charge and reimburse itself out of the
monies of the Fund or out of the Securities held hereunder.
SECTION 12. No liability of any kind shall be attached to or incurred by the
Custodian by reason of its custody of the funds, assets, or shares held by it
from time to time under this Agreement, or otherwise by reason of its position
as custodian hereunder except only for its own negligence, bad faith, or willful
misconduct in the performance of its duties as specifically set forth in the
Agreement. Without limiting the generality of the foregoing sentence, the
Custodian:
(a) may rely upon the advice of counsel, who may be counsel for the Fund
or for the Custodian, and upon statements of accountants, brokers and other
persons believed by it in good faith to be expert in the matters upon which they
are consulted; and for any action taken or suffered in good faith based upon
such advice or statements the Custodian shall not be liable to anyone;
(b) shall not be liable for anything done or suffered to be done in good
faith in accordance with any request or advice of, or based upon information
furnished by, the Fund or its authorized officers or agents;
(c) is authorized to accept a certificate of the Secretary or Assistant
Secretary of the Fund, or Proper Instructions, to the effect that a resolution
in the form submitted has been duly adopted by its Board of Trustees or by the
Shareholders, as conclusive evidence that such resolution has been duly adopted
and is in full force and effect;
(d) may rely and shall be protected in acting upon any signature, written
(including telegraph or other mechanical) instructions, request, letter of
transmittal, certificate, opinion of counsel, statement, instrument, report,
notice, consent, order, or other paper or document reasonably believed by it to
be genuine and to have been signed, forwarded or presented by the purchaser,
Fund or other proper party or parties.
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SECTION 13. The Fund, its successors and assigns hereby indemnify and hold
harmless the Custodian, its successors and assigns, of and from any and all
liability whatsoever arising out of or in connection with the Custodian's
status, acts, or omissions under this Agreement, except only for liability
arising out of the Custodian's own negligence, bad faith, or willful misconduct
in the performance of its duties specifically set forth in this Agreement.
Without limiting the generality of the foregoing, the Fund, its successors and
assigns do hereby fully indemnify and hold harmless the Custodian its successors
and assigns, from any and all loss, liability, claims, demand, actions, suits
and expenses of any nature as the same may arise from the failure of the Fund to
comply with any law, rule, regulation or order of the United States, any State
or any other jurisdiction, governmental authority, body, or board relating to
the sale, registration, qualification of shares of beneficial interest in the
Fund, or from the failure of the Fund to perform any duty or obligation under
this Agreement.
Upon written request of the Custodian, the Fund shall assume the entire defense
of any claim subject to the foregoing indemnity, or the joint defense with the
Custodian of such claim, as the Custodian shall request. The indemnities and
defense provisions of this SECTION 13 shall indefinitely survive termination of
this Agreement.
SECTION 14. The Custodian shall provide the Fund, at such times as the Fund
may reasonably require, with accountants' reports on the accounting system,
internal accounting control and procedures for safeguarding securities,
including securities deposited and/or maintained in a Securities System,
relating to the services provided by the Custodian under this Agreement; such
reports, which shall be of sufficient scope and in sufficient detail to
provide reasonable assurance that any material inadequacies would be
disclosed, shall state in detail material inadequacies disclosed by such
examination, and, if there are no such inadequacies, shall so state.
Notwithstanding the foregoing the Custodian shall not be required by the
provision of this Section 14 to have such a report, which is not required for
other purposes, prepared by independent public accountants, unless the Fund
agrees to reimburse the Custodian for the reasonable charges of such
independent public accountants for preparing such report.
SECTION 15. This agreement may be amended from time to time without notice to
or approval of the Shareholders by a supplemental agreement executed by the Fund
and the Custodian and amending and supplementing this Agreement in the manner
mutually agreed.
SECTION 16. Either the Fund or the Custodian may give one hundred twenty (120)
days written notice to the other of the termination of this Agreement, such
termination to take effect at the time specified in the notice. In case such
notice of termination is given either by the Fund or by the Custodian, the
Trustees of the Fund shall, by resolution duly adopted, promptly appoint a
Successor Custodian which Successor Custodian shall be a bank, trust company or
a bank and trust company in good standing, with legal capacity to accept custody
of the securities of a mutual fund. Upon receipt of written notice from the
Fund of the appointment of such successor and upon receipt of Proper
Instructions, the Custodian shall deliver such Securities and cash as it may
then be holding hereunder directly and only to the Successor Custodian. Unless
or until a Successor Custodian has been appointed as above provided, the
Custodian then acting shall continue to act as Custodian under this Agreement.
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Every Successor Custodian appointed hereunder shall execute and deliver an
appropriate written acceptance of its appointment and shall thereupon become
vested with the rights, powers, obligations and custody of its predecessor
Custodian. The Custodian ceasing to act shall nevertheless, upon request of the
Fund and the Successor Custodian and upon payment of its charges and
disbursements, execute an instrument in form approved by its counsel
transferring to the Successor Custodian all the predecessor Custodian's rights,
duties obligations and custody.
In case the Custodian shall consolidate with or merge into any other
corporation, the corporation remaining after or resulting from such
consolidation or merger shall ipso facto, without the execution of filing of any
papers or other documents, succeed to and be substituted for the Custodian
with like effect as though originally named as such.
SECTION 17. This Agreement shall take effect when assets of the Fund are
first delivered to the Custodian.
SECTION 18. This Agreement may be executed in two or more counterparts, each of
which when so executed shall be deemed to be an original, but such counterparts
shall together constitute but one and the same instrument.
SECTION 19. The Custodian may, at any time or times appoint (and may at any
time remove) and other bank or trust company which is itself qualified under the
Investment Company Act of 1940, as amended, to act as a custodian, as its agent
to carry out such of the provisions of this Agreement as the Custodian may from
time to time direct, provided, however, that the appointment of such agent shall
not relieve the Custodian of any of its responsibilities under this Agreement.
SECTION 19A. Whenever authorized by resolution of the Board of Trustees of the
Fund, the Custodian may employ one or more Sub-Custodians, provided that the
Custodian shall have no more responsibility or liability to the Fund on account
of any actions or omissions of any Sub-Custodian so employed than any such
Sub-Custodian has to the Custodian.
SECTION 20. 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 this instrument is executed on behalf of the Trustees of the Fund
as Trustees and not individually and that the obligations of this instrument
are not binding upon any of the Trustees, officers or shareholders of the
Fund individually, but binding only upon the assets and property of the Fund.
SECTION 21. The Custodian shall create and maintain all records relating to
its activities and obligations under this Agreement in such manner as will meet
the obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable Federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund.
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Subject to security requirements of the Custodian applicable to its own
employees having access to similar records within the Custodian and such
regulations as to the conduct of such monitors as may be reasonably imposed by
the Custodian after prior consultation with an officer of the Fund the Books and
records of the Custodian pertaining to its actions under this Agreement shall be
open to inspection and audit at any reasonable time by officers of, attorneys
for, and auditors employed by, the Fund.
SECTION 22. Nothing contained in the Agreement is intended to or shall require
the Custodian in any capacity hereunder to perform any functions or duties on
any holiday or other day of special observance on which the Custodian is closed.
Functions or duties normally scheduled to be performed on such days shall be
performed on, and as of, the next business day the Custodian is open.
SECTION 23. This Agreement shall extend to and shall be binding upon the
parties hereto and their respective successors and assigns; provided, however,
that this Agreement shall not be assignable by the Fund without the written
consent of the Custodian, or by the Custodian without the written consent of the
Fund, authorized or approved by a resolution of its Board of Trustees.
IN WITNESS WHEREOF, the Fund and the Custodian have caused this Agreement to be
signed by their respective officers as of the day and year first above written.
TRUSTFUNDS TAX EXEMPT TRUST
By: "Signature Illegible"
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President
THE PHILADELPHIA NATIONAL BANK
By: "Signature Illegible"
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Vice President
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