CUSTODY AGREEMENT
This AGREEMENT, dated as of _________ 2000, by and between Kit Xxxx
Investment Trust (the "Trust"), a business trust organized under the laws of
Delaware and FIRSTAR BANK, N.A., a national banking association (the
"Custodian").
W I T N E S S E T H:
WHEREAS, the Trust is an open-end management investment company registered
under the Investment Company Act of 1940, as amended (the "1940 Act"); and
WHEREAS, the Trust is authorized to create separate series, each with its
own separate investment portfolio; and
WHEREAS, the Trust initially intends to offer shares in one series, the
Kit Xxxx Strategic Growth (such series, together with all other series
subsequently established by the Trust and made subject to this Agreement in
accordance with Section 14.9 herein, being herein referred to as the "Fund").
WHEREAS, the Trust desires that the Fund's Securities and cash be held and
administered by the Custodian pursuant to this Agreement;
WHEREAS, the Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act; and
NOW, THEREFORE, in consideration of the mutual agreements herein made, the
Trust and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
1.1 "AUTHORIZED PERSON" means any Officer or other person duly
authorized by resolution of the Board of Trustees to give Oral
Instructions and Written Instructions on behalf of the Fund
and named in Exhibit A hereto or in such resolutions of the
Board of Trustees, certified by an Officer, as may be received
by the Custodian from time to time.
1.2 "BOARD OF TRUSTEES" shall mean the Trustees from time to time
serving under the Trust's Agreement and Declaration of Trust,
as from time to time amended.
1.3 "BOOK-ENTRY SYSTEM" shall mean a federal book-entry system as
provided in Subpart O of Treasury Circular Xx. 000, 00 XXX
306, in Subpart B of 31 CFR Part 350, or in such book-entry
regulations of federal agencies as are substantially in the
form of such Subpart O.
1.4 "BUSINESS DAY" shall mean any day recognized as a settlement day
by The New York Stock Exchange, Inc. and any other day for which
the Trust computes the net asset value of Shares of the Fund.
1.5 "FUND CUSTODY ACCOUNT" shall mean any of the accounts in the name
of the Trust, which is provided for in Section 3.2 below.
1.6 "NASD" shall mean The National Association of Securities Dealers,
Inc.
1.7 "OFFICER" shall mean the Chairman, President, any Vice President,
any Assistant Vice President, the Secretary, any Assistant
Secretary, the Treasurer, or any Assistant Treasurer of the Trust.
1.8 "ORAL INSTRUCTIONS" shall mean instructions orally transmitted to
and accepted by the Custodian because such instructions are: (i)
reasonably believed by the Custodian to have been given by an
Authorized Person, (ii) recorded and kept among the records of the
Custodian made in the ordinary course of business and (iii) orally
confirmed by the Custodian. The Trust shall cause all Oral
Instructions to be confirmed by Written Instructions prior to the
end of the next Business Day. If such Written Instructions
confirming Oral Instructions are not received by the Custodian
prior to a transaction, it shall in no way affect the validity of
the transaction or the authorization thereof by the Trust. If
Oral Instructions vary from the Written Instructions which purport
to confirm them, the Custodian shall notify the trust of such
variance but such Oral Instructions will govern unless the
Custodian has not yet acted.
1.9 "PROPER INSTRUCTIONS" shall mean Oral Instructions or Written
Instructions. Proper Instructions may be continuing Written
Instructions when deemed appropriate by both parties.
1.10 "SECURITIES DEPOSITORY" shall mean The Depository Trust Company
and (provided that Custodian shall have received a copy of a
resolution of the Board Of Trustees, certified by an Officer,
specifically approving the use of such clearing agency as a
depository for the Fund) any other clearing agency registered with
the Securities and Exchange Commission under Section 17A of the
Securities and Exchange Act of 1934 as amended (the "1934 Act"),
which acts as a system for the central handling of Securities
where all Securities of any particular class or series of an
issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical
delivery of the Securities.
1.11 "SECURITIES" shall include, without limitation, common and
preferred stocks, bonds, call options, put options, debentures,
notes, bank certificates of deposit, bankers' acceptances,
mortgage-backed securities or other obligations, and any
certificates, receipts, warrants or other instruments or
documents representing rights to receive, purchase or subscribe
for the same, or evidencing or representing any other rights or
interests therein, or any similar property or assets that the
Custodian has the facilities to clear and to service.
1.12 "SHARES" shall mean, with respect to a Fund, the units of
beneficial interest issued by the trust on account of the Fund.
1.13 "SUB-CUSTODIAN" shall mean and include (i) any branch of a
"U.S. Bank," as that term is defined in Rule 17f-5 under the
1940 Act, (ii) any "Eligible Foreign Custodian," as that term
is defined in Rule 17f-5 under the 1940 Act, having a contract
with the Custodian which the Custodian has determined will
provide reasonable care of assets of the Fund based on the
standards specified in Section 3.3 below. Such contract shall
include provisions that provide: (i) for indemnification or
insurance arrangements (or any combination of the foregoing)
such that the Fund will be adequately protected against the
risk of loss of assets held in accordance with such contract;
(ii) that the Fund's assets will not be subject to any right,
charge, security interest, lien or claim of any kind in favor
of the Sub-Custodian or its creditors except a claim of payment
for their safe custody or administration, in the case of cash
deposits, liens or rights in favor of creditors of the
Sub-Custodian arising under bankruptcy, insolvency, or similar
laws; (iii) that beneficial ownership for the Fund's assets
will be freely transferable without the payment of money or
value other than for safe custody or administration; (iv) that
adequate records will be maintained identifying the assets as
belonging to the funds or as being held by a third party for
the benefit of the Fund; (v) that the Fund's independent public
accountants will be given access to those records or confirmation
of the contents of those records; and (vi) that the Fund will
receive periodic reports with respect to the safekeeping of the
Fund's assets, including, but not limited to, notification of any
transfer to or from a Fund's account or a third party account
containing assets held for the benefit of the Fund. Such contract
may contain, in lieu of any or all of the provisions specified
above, such other provisions that the Custodian determines will
provide, in their entirety, the same or a greater level of care
and protection for Fund assets as the specified provisions, in
their entirety.
1.14 "WRITTEN INSTRUCTIONS" shall mean (i) written communications
actually received by the Custodian and signed by an Authorized
Person, or (ii) communications by telex or any other such
system from one or more persons reasonably believed by the
Custodian to be Authorized Persons, or (iii) communications
between electro-mechanical or electronic devices provided that
the use of such devices and the procedures for the use thereof
shall have been approved by resolutions of the Board Of Trustees,
a copy of which, certified by an Officer, shall have been
delivered to the Custodian.
ARTICLE II
APPOINTMENT OF CUSTODIAN
2.1 APPOINTMENT. The Trust hereby constitutes and appoints the
Custodian as custodian of all Securities and cash owned by or in
the possession of the Fund at any time during the period of this
Agreement.
2.2 ACCEPTANCE. The Custodian hereby accepts appointment as such
custodian and agrees to perform the duties thereof as hereinafter
set forth.
2.3 DOCUMENTS TO BE FURNISHED. The following documents, including
any amendments thereto, will be provided contemporaneously with
the execution of the Agreement to the Custodian by the Trust:
a. A copy of the Agreement and Declaration of Trust
certified by the Secretary;
b. A copy of the Bylaws of the Trust certified by the
Secretary;
c. A copy of the resolution of the Board Of Trustees of the
Trust appointing the Custodian, certified by the
Secretary;
d. A copy of the then current Prospectus of the Fund; and
e. A certification of the Chairman and Secretary of the Trust
setting forth the names and signatures of the current
Officers of the Trust and other Authorized Persons.
2.4 NOTICE OF APPOINTMENT OF DIVIDEND AND TRANSFER AGENT. The Trust
agrees to notify the Custodian in writing of the appointment,
termination or change in appointment of any Dividend and Transfer
Agent of the Fund.
ARTICLE III
CUSTODY OF CASH AND SECURITIES
3.1 SEGREGATION. All Securities and non-cash property held by the
Custodian for the account of the Fund (other than Securities
maintained in a Securities Depository or Book-Entry System)shall be
physically segregated from other Securities and non-cash property
in the possession of the Custodian (including the Securities and
non-cash property of the other series of the Trust) and shall be
identified as subject to this Agreement.
3.2 FUND CUSTODY ACCOUNTS. The Custodian shall open and maintain in its
trust department a custody account in the name of the Trust coupled
with the name of the Fund, subject only to draft or order of the
Custodian, in which the Custodian shall enter and carry all
Securities, cash and other assets of such Fund which are delivered
to it.
3.3 APPOINTMENT OF AGENTS. (a) In its discretion, the Custodian may
appoint one or more Sub-Custodians to act as Securities
Depositories or as sub-custodians to hold Securities and cash of
the Fund and to carry out such other provisions of this Agreement
as it may determine, provided, however, that the appointment of any
such agents and maintenance of any Securities and cash of the Fund
shall be at the Custodian's expense and shall not relieve the
Custodian of any of its obligations or liabilities under this
Agreement.
(b)If, after the initial approval of Sub-Custodians by the Board of
Trustees in connection with this Agreement, the Custodian wishes to
appoint other Sub-Custodians to hold property of the Fund, it will
so notify the Trust and provide it with information reasonably
necessary to determine any such new Sub-Custodian's eligibility
under Rule 17f-5 under the 1940 Act, including a copy of the
proposed agreement with such Sub-Custodian. The Trust shall at the
meeting of the Board of Trustees next following receipt of such
notice and information give a written approval or disapproval of
the proposed action.
(c)The Agreement between the Custodian and each Sub-Custodian acting
hereunder shall contain the required provisions set forth in Rule
17f-5(a)(1)(iii).
(d)At the end of each calendar quarter, the Custodian shall provide
written reports notifying the Board of Trustees of the placement of
the Securities and cash of the Funds with a particular
Sub-Custodian and of any material changes in the Funds'
arrangements. The Custodian shall promptly take such steps as may
be required to withdraw assets of the Funds from any Sub-Custodian
that has ceased to meet the requirements of Rule 17f-5 under the
1940 Act.
(e)With respect to its responsibilities under this Section 3.3, the
Custodian hereby warrants to the Trust that it agrees to exercise
reasonable care, prudence and diligence such as a person having
responsibility for the safekeeping of property of the Fund. The
Custodian further warrants that a Fund's assets will be subject to
reasonable care, based on the standards applicable to custodians in
the relevant market, if maintained with each Sub-Custodian, after
considering all factors relevant to the safekeeping of such assets,
including, without limitation: (i) the Sub-Custodian's practices,
procedures, and internal controls, for certificated securities (if
applicable), the method of keeping custodial records, and the
security and data protection practices; (ii) whether the
Sub-Custodian has the requisite financial strength to provide
reasonable care for Fund assets; (iii) the Sub-Custodian's genera
reputation and standing and, in the case of a Securities
Depository, the Securities Depository's operating history and
number of participants; and (iv) whether the Fund will have
jurisdiction over and be able to enforce judgments against the
Sub-Custodian, such as by virtue of the existence of any offices
of the Sub-Custodian in the United States or the Sub-Custodian's
consent to service of process in the United States.
(f)The Custodian shall establish a system to monitor the
appropriateness of maintaining the Fund's assets with a
particular Sub-Custodian and the contract governing the Fund's
arrangements with such Sub-Custodian.
3.4 DELIVERY OF ASSETS TO CUSTODIAN. The Trust shall deliver, or cause
to be delivered, to the Custodian all of the Fund's Securities,
cash and other assets, including (a) all payments of income,
payments of principal and capital distributions received by the
Fund with respect to such Securities, cash or other assets owned by
the Fund at any time during the period of this Agreement, and (b)
all cash received by the Fund for the issuance, at any time during
such period, of Shares. The Custodian shall not be responsible for
such Securities, cash or other assets until actually received by
it.
3.5 SECURITIES DEPOSITORIES AND BOOK-ENTRY SYSTEMS. The Custodian
may deposit and/or maintain Securities of the Fund in a
Securities Depository or in a Book-Entry System, subject to the
following provisions:
(a)Prior to a deposit of Securities of the Fund in any Securities
Depository or Book-Entry System, the Trust shall deliver to the
Custodian a resolution of the Board of Trustees, certified by an
Officer, authorizing and instructing the Custodian on an on-going
basis to deposit in such Securities Depository or Book-Entry System
all Securities eligible for deposit therein and to make use of such
Securities Depository or Book-Entry System to the extent possible
and practical in connection with its performance hereunder,
including, without limitation, in connection with settlements of
purchases and sales of Securities, loans of Securities, and
deliveries and returns of collateral consisting of Securities.
(b)Securities of the Fund kept in a Book-Entry System or Securities
Depository shall be kept in an account ("Depository Account") of
the Custodian in such Book-Entry System or Securities Depository
which includes only assets held by the Custodian as a fiduciary,
custodian or otherwise for customers.
(c)The records of the Custodian with respect to Securities of the
Fund maintained in a Book-Entry System or Securities Depository
shall, by book-entry, identify such Securities as belonging to such
Fund.
(d)If Securities purchased by the Fund are to be held in a Book-Entry
System or Securities Depository, the Custodian shall pay for such
Securities upon (i) receipt of advice from the Book-Entry System
or Securities Depository that such Securities have been transferred
to the Depository Account, and (ii) the making of an entry on the
records of the Custodian to reflect such payment and transfer for
the account of such Fund. If Securities sold by the Fund are held
in a Book-Entry System or Securities Depository, the Custodian
shall transfer such Securities upon (i) receipt of advice from the
Book-Entry System or Securities Depository that payment for such
Securities has been transferred to the Depository 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.
(e)The Custodian shall provide the Trust with copies of any report
(obtained by the Custodian from a Book-Entry System or Securities
Depository in which Securities of the Fund are kept) on the
internal accounting controls and procedures for safeguarding
Securities deposited in such Book-Entry System or Securities
Depository.
(f)Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Trust for any loss or damage to
the Fund resulting (i) from the use of a Book-Entry System or
Securities Depository by reason of any negligence or willful
misconduct on the part of Custodian or any Sub-Custodian appointed
pursuant to Section 3.3 above or any of its or their employees, or
(ii) from failure of Custodian or any such Sub-Custodian to enforce
effectively such rights as it may have against a Book-Entry System
or Securities Depository. At its election, the Trust shall be
subrogated to the rights of the Custodian with respect to any
claim against a Book-Entry System or Securities Depository or any
other person from any loss or damage to the Fund arising from the
use of such Book-Entry System or Securities Depository, if and to
the extent that the Fund has not been made whole for any such loss
or damage.
3.6 DISBURSEMENT OF MONEYS FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall disburse moneys from the
Fund Custody Account but only in the following cases:
(a)For the purchase of Securities for the Fund but only in accordance
with Section 4.1 of this Agreement and only (i) in the case of
Securities (other than options on Securities, futures contracts and
options on futures contracts), against the delivery to the
Custodian (or any Sub-Custodian appointed pursuant to Section 3.3
above) of such Securities registered as provided in Section 3.9
below or in proper form for transfer, or if the purchase of such
Securities is effected through a Book-Entry System or Securities
Depository, in accordance with the conditions set forth in Section
3.5 above; (ii) in the case of options on Securities, against
delivery to the Custodian (or such Sub-Custodian) of such receipts
as are required by the customs prevailing among dealers in such
options; (iii) in the case of futures contracts and options on
futures contracts, against delivery to the Custodian (or such
Sub-Custodian) of evidence of title thereto in favor of the Fund or
any nominee referred to in Section 3.9 below; and (iv) in the case
of repurchase or reverse repurchase agreements entered into between
the Trust and a bank which is a member of the Federal Reserve
System or between the Trust and a primary dealer in U.S. Government
securities, against delivery of the purchased Securities either in
certificate form or through an entry crediting the Custodian's
account at a Book-Entry System or Securities Depository with such
Securities;
(b)In connection with the conversion, exchange or surrender, as set
forth in Section 3.7(f) below, of Securities owned by the Fund;
(c)For the payment of any dividends or capital gain distributions
declared by the Fund;
(d)In payment of the redemption price of Shares as provided in Section
5.1 below;
(e)For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the account
of the Fund: interest; taxes; administration, investment advisory,
accounting, auditing, transfer agent, custodian, trustee and legal
fees; and other operating expenses of the Fund; in all cases,
whether or not such expenses are to be in whole or in part
capitalized or treated as deferred expenses;
(f)For transfer in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under
the 1934 Act and a member of the NASD, relating to compliance with
rules of The Options Clearing Corporation and of any registered
national securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in connection
with transactions by the Fund;
(g)For transfer in accordance with the provision of any agreement
among the Trust, the Custodian, and a futures commission merchant
registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission and/or
any contract market (or any similar organization or organizations)
regarding account deposits in connection with transactions by the
Fund;
(h)For the funding of any uncertificated time deposit or other
interest-bearing account with any banking institution (including
the Custodian), which deposit or account has a term of one year or
less; and
(i)For any other proper purpose, but only upon receipt, in addition to
Proper Instructions, of a copy of a resolution of the Board Of
Trustees, certified by an Officer, specifying the amount and
purpose of such payment, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom such
payment is to be made.
3.7 DELIVERY OF SECURITIES FROM FUND CUSTODY ACCOUNT. Upon receipt of
Proper Instructions, the Custodian shall release and deliver
Securities from the Fund Custody Account but only in the following
cases:
(a)Upon the sale of Securities for the account of the Fund but only
against receipt of payment therefor in cash, by certified or
cashiers check or bank credit;
(b)In the case of a sale effected through a Book-Entry System or
Securities Depository, in accordance with the provisions of Section
3.5 above;
(c)To an offeror's depository agent in connection with tender or other
similar offers for Securities of the Fund; provided that, in any
such case, the cash or other consideration is to be delivered to
the Custodian;
(d)To the issuer thereof or its agent (i) for transfer into the name
of the Fund, the Custodian or any Sub-Custodian appointed pursuant
to Section 3.3 above, or of any nominee or nominees of any of the
foregoing, or (ii) for exchange for a different number of
certificates or other evidence representing the same aggregate fac
amount or number of units; provided that, in any such case, the new
Securities are to be delivered to the Custodian;
(e)To the broker selling Securities, for examination in accordance
with the "street delivery" custom;
(f)For exchange or conversion pursuant to any plan or merger,
consolidation, recapitalization, reorganization or readjustment of
the issuer of such Securities, or pursuant to provisions for
conversion contained in such Securities, or pursuant to any
deposit agreement, including surrender or receipt of underlying
Securities in connection with the issuance or cancellation of
depository receipts; provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the Custodian;
(g)Upon receipt of payment therefor pursuant to any repurchase or
reverse repurchase agreement entered into by the Fund;
(h)In the case of warrants, rights or similar Securities, upon the
exercise thereof, provided that, in any such case, the new
Securities and cash, if any, are to be delivered to the Custodian;
(i)For delivery in connection with any loans of Securities of the
Fund, but only against receipt of such collateral as the Trust
shall have specified to the Custodian in Proper Instructions;
(j)For delivery as security in connection with any borrowings by the
Fund requiring a pledge of assets by the Trust, but only against
receipt by the Custodian of the amounts borrowed;
(k)Pursuant to any authorized plan of liquidation, reorganization,
merger, consolidation or recapitalization of the Trust;
(l)For delivery in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer registered under
the 1934 Act and a member of the NASD, relating to compliance with
the rules of The Options Clearing Corporation and of any registered
national securities exchange (or of any similar organization or
organizations) regarding escrow or other arrangements in connection
with transactions by the Fund;
(m)For delivery in accordance with the provisions of any agreement
among the Trust, the Custodian, and a futures commission merchant
registered under the Commodity Exchange Act, relating to compliance
with the rules of the Commodity Futures Trading Commission and/or
any contract market (or any similar organization or organizations)
regarding account deposits in connection with transactions by the
Fund; or
(n)For any other proper corporate purpose, but only upon receipt, in
addition to Proper Instructions, of a copy of a resolution of the
Board Of Trustees, certified by an Officer, specifying the
Securities to be delivered, setting forth the purpose for which
such delivery is to be made, declaring such purpose to be a proper
corporate purpose, and naming the person or persons to whom
delivery of such Securities shall be made.
3.8 ACTIONS NOT REQUIRING PROPER INSTRUCTIONS. Unless otherwise
instructed by the Trust, the Custodian shall with respect to all
Securities held for the Fund:
(a)Subject to Section 7.4 below, collect on a timely basis all income
and other payments to which the Fund is entitled either by law or
pursuant to custom in the securities business;
(b)Present for payment and, subject to Section 7.4 below, collect on a
timely basis the amount payable upon all Securities which may
mature or be called, redeemed, or retired, or otherwise become
payable;
(c)Endorse for collection, in the name of the Fund, checks, drafts and
other negotiable instruments;
(d)Surrender interim receipts or Securities in temporary form for
Securities in definitive form;
(e)Execute, as custodian, any necessary declarations or certificates
of ownership under the federal income tax laws or the laws or
regulations of any other taxing authority now or hereafter in
effect, and prepare and submit reports to the Internal Revenue
Service ("IRS") and to the Trust at such time, in such manner and
containing such information as is prescribed by the IRS;
(f)Hold for the Fund, either directly or, with respect to Securities
held therein, through a Book-Entry System or Securities Depository,
all rights and similar securities issued with respect to Securities
of the Fund; and
(g)In general, and except as otherwise directed in Proper
Instructions, attend to all non-discretionary details in connection
with the sale, exchange, substitution, purchase, transfer and other
dealings with Securities and assets of the Fund.
3.9 REGISTRATION AND TRANSFER OF SECURITIES. All Securities held
for the Fund that are issued or issuable only in bearer form
shall be held by the Custodian in that form, provided that any
such Securities shall be held in a Book-Entry System if eligible
therefor. All other Securities held for the Fund may be registered
in the name of the Fund, the Custodian, or any Sub-Custodian
appointed pursuant to Section 3.3 above, or in the name of any
nominee of any of them, or in the name of a Book-Entry System,
Securities Depository or any nominee of either thereof. The Trust
shall furnish to the Custodian appropriate instruments to enable
the Custodian to hold or deliver in proper form for transfer, or to
register in the name of any of the nominees hereinabove referred to
or in the name of a Book-Entry System or Securities Depository, any
Securities registered in the name of the Fund.
3.10 RECORDS.
(a)The Custodian shall maintain, for the Fund, complete and accurate
records with respect to Securities, cash or other property held for
the Fund, including (i) journals or other records of original entry
containing an itemized daily record in detail of all receipts and
deliveries of Securities and all receipts and disbursements of
cash; (ii) ledgers (or other records) reflecting (A) Securities in
transfer, (B) Securities in physical possession, (C) monies and
Securities borrowed and monies and Securities loaned (together with
a record of the collateral therefor and substitutions of such
collateral), (D) dividends and interest received, and (E) dividends
receivable and interest receivable; and (iii) canceled checks and
bank records related thereto. The Custodian shall keep such other
books and records of the Fund as the Trust shall reasonably
request, or as may be required by the 1940 Act, including, but not
limited to, Section 31 of the 1940 Act and Rule 31a-2 promulgated
thereunder.
(b)All such books and records maintained by the Custodian shall (i) be
maintained in a form acceptable to the Trust and in compliance with
rules and regulations of the Securities and Exchange Commission,
(ii) be the property of the Trust and at all times during the
regular business hours of the Custodian be made available upon
request for inspection by duly authorized officers, employees or
agents of the Trust and employees or agents of the Securities and
Exchange Commission, and (iii) if required to be maintained by Rule
31a-1 under the 1940 Act, be preserved for the periods prescribed
in Rule 31a-2 under the 1940 Act.
3.11 FUND REPORTS BY CUSTODIAN. The Custodian shall furnish the Trust
with a daily activity statement and a summary of all transfers to
or from the Fund Custody Account on the day following such
transfers. At least monthly and from time to time, the Custodian
shall furnish the Trust with a detailed statement of the Securities
and moneys held by the Custodian and the Sub-Custodians for the
Fund under this Agreement.
3.12 OTHER REPORTS BY CUSTODIAN. The Custodian shall provide the Trust
with such reports, as the Trust may reasonably request from time to
time, on the internal accounting controls and procedures for
safeguarding Securities, which are employed by the Custodian or
any Sub-Custodian appointed pursuant to Section 3.3 above.
3.13 PROXIES AND OTHER MATERIALS. The Custodian shall cause all proxies
relating to Securities which are not registered in the name of the
Fund, to be promptly executed by the registered holder of such
Securities, without indication of the manner in which such proxies
are to be voted, and shall promptly deliver to the Trust such
proxies, all proxy soliciting materials and all notices relating to
such Securities.
3.14 INFORMATION ON CORPORATE ACTIONS. The Custodian shall promptly
deliver to the Trust all information received by the Custodian
and pertaining to Securities being held by the Fund with respect to
optional tender or exchange offers, calls for redemption or
purchase, or expiration of rights as described in the Standards of
Service Guide attached as Exhibit B. If the Trust desires to take
action with respect to any tender offer, exchange offer or other
similar transaction, the Trust shall notify the Custodian at least
five Business Days prior to the date on which the Custodian is to
take such action. The Trust will provide or cause to be provided to
the Custodian all relevant information for any Security which has
unique put/option provisions at least five Business Days prior to
the beginning date of the tender period.
ARTICLE IV
PURCHASE AND SALE OF INVESTMENTS OF THE FUND
4.1 PURCHASE OF SECURITIES. Promptly upon each purchase of Securities
for the Fund, Written Instructions shall be delivered to the
Custodian, specifying (a) the name of the issuer or writer of such
Securities, and the title or other description thereof, (b) the
number of shares, principal amount (and accrued interest, if any)
or other units purchased, (c) the date of purchase and settlement,
(d) the purchase price per unit, (e) the total amount payable upon
such purchase, and (f) the name of the person to whom such amount
is payable. The Custodian shall upon receipt of such Securities
purchased by the Fund pay out of the moneys held for the account of
the Fund the total amount specified in such Written Instructions to
the person named therein. The Custodian shall not be under any
obligation to pay out moneys to cover the cost of a purchase of
Securities for the Fund, if in the Fund Custody Account there is
insufficient cash available to the Fund for which such purchase was
made.
4.2 LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED. In any and every case where payment for the purchase of
Securities for the Fund is made by the Custodian in advance of
receipt of the Securities purchased but in the absence of specified
Written Instructions to so pay in advance, the Custodian shall be
liable to the Fund for such Securities to the same extent as if the
Securities had been received by the Custodian.
4.3 SALE OF SECURITIES. Promptly upon each sale of Securities by the
Fund, Written Instructions shall be delivered to the Custodian,
specifying (a) the name of the issuer or writer of such Securities,
and the title or other description thereof, (b) the number of
shares, principal amount (and accrued interest, if any), or other
units sold, (c) the date of sale and settlement, (d) the sale price
per unit, (e) the total amount payable upon such sale, and (f) the
person to whom such Securities are to be delivered. Upon receipt
of the total amount payable to the Fund as specified in such
Written Instructions, the Custodian shall deliver such Securities
to the person specified in such Written Instructions. Subject to
the foregoing, the Custodian may accept payment in such form as
shall be satisfactory to it, and may deliver Securities and arrange
for payment in accordance with the customs prevailing among dealers
in Securities.
4.4 DELIVERY OF SECURITIES SOLD. Notwithstanding Section 4.3 above or
any other provision of this Agreement, the Custodian, when
instructed to deliver Securities against payment, shall be
entitled, if in accordance with generally accepted market practice,
to deliver such Securities prior to actual receipt of final payment
therefor. In any such case, the Fund shall bear the risk that
final payment for such Securities may not be made or that such
Securities may be returned or otherwise held or disposed of by or
through the person to whom they were delivered, and the Custodian
shall have no liability for any for the foregoing.
4.5 PAYMENT FOR SECURITIES SOLD, ETC. In its sole discretion and from
time to time, the Custodian may credit the Fund Custody Account,
prior to actual receipt of final payment thereof, with (i) proceeds
from the sale of Securities which it has been instructed to deliver
against payment, (ii) proceeds from the redemption of Securities or
other assets of the Fund, and (iii) income from cash, Securities or
other assets of the Fund. Any such credit shall be conditional
upon actual receipt by Custodian of final payment and may be
reversed if final payment is not actually received in full. The
Custodian may, in its sole discretion and from time to time, permit
the Fund to use funds so credited to the Fund Custody Account in
anticipation of actual receipt of final payment. Any such funds
shall be repayable immediately upon demand made by the Custodian at
any time prior to the actual receipt of all final payments in
anticipation of which funds were credited to the Fund Custody
Account.
4.6 ADVANCES BY CUSTODIAN FOR SETTLEMENT. The Custodian may, in its
sole discretion and from time to time, advance funds to the Trust
to facilitate the settlement of a Fund's transactions in the Fund
Custody Account. Any such advance shall be repayable immediately
upon demand made by Custodian.
ARTICLE V
REDEMPTION OF FUND SHARES
5.1 TRANSFER OF FUNDS. From such funds as may be available for the
purpose in the relevant Fund Custody Account, and upon receipt
of Proper Instructions specifying that the Fund is required to
redeem Shares of the Fund, the Custodian shall wire each amount
specified in such Proper Instructions to or through such bank as
the Trust may designate with respect to such amount in such Proper
Instructions.
5.2 NO DUTY REGARDING PAYING BANKS. The Custodian shall not be under
any obligation to effect payment or distribution by any bank
designated in Proper Instructions given pursuant to Section 5.1
above of any amount paid by the Custodian to such bank in
accordance with such Proper Instructions.
ARTICLE VI
SEGREGATED ACCOUNTS
Upon receipt of Proper Instructions, the Custodian shall establish and
maintain a segregated account or accounts for and on behalf of the Fund, into
which account or accounts may be transferred cash and/or Securities, including
Securities maintained in a Depository Account,
(a)in accordance with the provisions of any agreement among the Trust,
the Custodian and a broker-dealer registered under the 1934 Act and
a member of the NASD (or any futures commission merchant registered
under the Commodity Exchange Act), relating to compliance with the
rules of The Options Clearing Trust and of any registered national
securities exchange (or the Commodity Futures Trading Commission
or any registered contract market), or of any similar organization
or organizations, regarding escrow or other arrangements in
connection with transactions by the Fund,
(b)for purposes of segregating cash or Securities in connection with
securities options purchased or written by the Fund or in
connection with financial futures contracts (or options thereon)
purchased or sold by the Fund,
(c)which constitute collateral for loans of Securities made by the
Fund,
(d)for purposes of compliance by the Fund with requirements under the
1940 Act for the maintenance of segregated accounts by registered
investment companies in connection with reverse repurchase
agreements and when-issued, delayed delivery and firm commitment
transactions, and
(e)for other proper corporate purposes, but only upon receipt of, in
addition to Proper Instructions, a certified copy of a resolution
of the Board Of Trustees, certified by an Officer, setting forth
the purpose or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
Each segregated account established under this Article VI shall be
established and maintained for the Fund only. All Proper Instructions relating
to a segregated account shall specify the Fund.
ARTICLE VII
CONCERNING THE CUSTODIAN
7.1 STANDARD OF CARE. The Custodian shall be held to the exercise of
reasonable care in carrying out its obligations under this
Agreement, and shall be without liability to the Trust or the Fund
for any loss, damage, cost, expense (including attorneys' fees and
disbursements), liability or claim unless such loss, damage, cost,
expense, liability or claim arises from negligence, bad faith or
willful misconduct on its part or on the part of any Sub-Custodian
appointed pursuant to Section 3.3 above. The Custodian shall be
entitled to rely on and may act upon advice of counsel on all
matters, and shall be without liability for any action reasonably
taken or omitted pursuant to such advice. The Custodian shall
promptly notify the Trust of any action taken or omitted by the
Custodian pursuant to advice of counsel. The Custodian shall not
be under any obligation at any time to ascertain whether the Trust
or the Fund is in compliance with the 1940 Act, the regulations
thereunder, the provisions of the Trust's charter documents or
by-laws, or its investment objectives and policies as then in
effect.
7.2 ACTUAL COLLECTION REQUIRED. The Custodian shall not be liable for,
or considered to be the custodian of, any cash belonging to the
Fund or any money represented by a check, draft or other instrument
for the payment of money, until the Custodian or its agents
actually receive such cash or collect on such instrument.
7.3 NO RESPONSIBILITY FOR TITLE, ETC. So long as and to the extent
that it is in the exercise of reasonable care, the Custodian
shall not be responsible for the title, validity or genuineness of
any property or evidence of title thereto received or delivered by
it pursuant to this Agreement.
7.4 LIMITATION ON DUTY TO COLLECT. Custodian shall not be required to
enforce collection, by legal means or otherwise, of any money or
property due and payable with respect to Securities held for the
Fund if such Securities are in default or payment is not made after
due demand or presentation.
7.5 RELIANCE UPON DOCUMENTS AND INSTRUCTIONS. The Custodian shall be
entitled to rely upon any certificate, notice or other instrument
in writing received by it and reasonably believed by it to be
genuine. The Custodian shall be entitled to rely upon any Oral
Instructions and any Written Instructions actually received by it
pursuant to this Agreement.
7.6 EXPRESS DUTIES ONLY. The Custodian shall have no duties or
obligations whatsoever except such duties and obligations as are
specifically set forth in this Agreement, and no covenant or
obligation shall be implied in this Agreement against the
Custodian.
7.7 CO-OPERATION. The Custodian shall cooperate with and supply
necessary information to the entity or entities appointed by the
Trust to keep the books of account of the Fund and/or compute the
value of the assets of the Fund. The Custodian shall take all such
reasonable actions as the Trust may from time to time request to
enable the Trust to obtain, from year to year, favorable opinions
from the Trust's independent accountants with respect to the
Custodian's activities hereunder in connection with (a) the
preparation of the Trust's reports on Form N-1A and Form N-SAR and
any other reports required by the Securities and Exchange
Commission, and (b) the fulfillment by the Trust of any other
requirements of the Securities and Exchange Commission.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY TRUST. The Trust shall indemnify and hold
harmless the Custodian and any Sub-Custodian appointed pursuant to
Section 3.3 above, and any nominee of the Custodian or of such
Sub-Custodian, from and against any loss, damage, cost, expense
(including attorneys' fees and disbursements), liability
(including, without limitation, liability arising under the
Securities Act of 1933, the 1934 Act, the 1940 Act, and any state
or foreign securities and/or banking laws) or claim arising
directly or indirectly (a) from the fact that Securities are
registered in the name of any such nominee, or (b) from any action
or inaction by the Custodian or such Sub-Custodian (i) at the
request or direction of or in reliance on the advice of the Trust,
or (ii) upon Proper Instructions, or (c) generally, from the
performance of its obligations under this Agreement or any
sub-custody agreement with a Sub-Custodian appointed pursuant
to Section 3.3 above, provided that neither the Custodian nor any
such Sub-Custodian shall be indemnified and held harmless from and
against any such loss, damage, cost, expense, liability or claim
arising from the Custodian's or such Sub-Custodian's negligence,
bad faith or willful misconduct.
8.2 INDEMNIFICATION BY CUSTODIAN. The Custodian shall indemnify and
hold harmless the Trust from and against any loss, damage, cost,
expense (including attorneys' fees and disbursements), liability
(including without limitation, liability arising under the
Securities Act of 1933, the 1934 Act, the 1940 Act, and any state
or foreign securities and/or banking laws) or claim arising from
the negligence, bad faith or willful misconduct of the Custodian or
any Sub-Custodian appointed pursuant to Section 3.3 above, or any
nominee of the Custodian or of such Sub-Custodian.
8.3 INDEMNITY TO BE PROVIDED. If the Trust requests the Custodian to
take any action with respect to Securities, which may, in the
opinion of the Custodian, result in the Custodian or its nominee
becoming liable for the payment of money or incurring liability of
some other form, the Custodian shall not be required to take such
action until the Trust shall have provided indemnity therefor to
the Custodian in an amount and form satisfactory to the Custodian.
8.4 SECURITY. If the Custodian advances cash or Securities to the Fund
for any purpose, either at the Trust's request or as otherwise
contemplated in this Agreement, or in the event that the Custodian
or its nominee incurs, in connection with its performance under
this Agreement, any loss, damage, cost, expense (including
attorneys' fees and disbursements), liability or claim (except such
as may arise from its or its nominee's negligence, bad faith or
willful misconduct), then, in any such event, any property at any
time held for the account of such Fund shall be security therefor,
and should the Fund fail promptly to repay or indemnify the
Custodian, the Custodian shall be entitled to utilize available
cash of such Fund and to dispose of other assets of such Fund to
the extent necessary to obtain reimbursement or indemnification.
ARTICLE IX
FORCE MAJEURE
Neither the Custodian nor the Trust shall be liable for any failure or
delay in performance of its obligations under this Agreement arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including, without limitation, acts of God; earthquakes; fires; floods; wars;
civil or military disturbances; sabotage; strikes; epidemics; riots; power
failures; computer failure and any such circumstances beyond its reasonable
control as may cause interruption, loss or malfunction of utility,
transportation, computer (hardware or software) or telephone communication
service; accidents; labor disputes; acts of civil or military authority;
governmental actions; or inability to obtain labor, material, equipment or
transportation; provided, however, that the Custodian in the event of a failure
or delay (i) shall not discriminate against the Fund in favor of any other
customer of the Custodian in making computer time and personnel available to
input or process the transactions contemplated by this Agreement and (ii) shall
use its best efforts to ameliorate the effects of any such failure or delay.
ARTICLE X
EFFECTIVE PERIOD; TERMINATION
10.1 EFFECTIVE PERIOD. This Agreement shall become effective as of its
execution and shall continue in full force and effect until
terminated as hereinafter provided.
10.2 TERMINATION. Either party hereto may terminate this Agreement by
giving to the other party a notice in writing specifying the date
of such termination, which shall be not less than sixty (60) days
after the date of the giving of such notice. If a successor
custodian shall have been appointed by the Board of Trustees, the
Custodian shall, upon receipt of a notice of acceptance by the
successor custodian, on such specified date of termination (a)
deliver directly to the successor custodian all Securities (other
than Securities held in a Book-Entry System or Securities
Depository) and cash then owned by the Fund and held by the
Custodian as custodian, and (b) transfer any Securities held in a
Book-Entry System or Securities Depository to an account of or for
the benefit of the Fund at the successor custodian, provided that
the Trust shall have paid to the Custodian all fees, expenses and
other amounts to the payment or reimbursement of which it shall
then be entitled. Upon such delivery and transfer, the Custodian
shall be relieved of all obligations under this Agreement. The
Trust may at any time immediately terminate this Agreement in the
event of the appointment of a conservator or receiver for the
Custodian by regulatory authorities or upon the happening of a like
event at the direction of an appropriate regulatory agency or court
of competent jurisdiction.
10.3 FAILURE TO APPOINT SUCCESSOR CUSTODIAN. If a successor custodian
is not designated by the Trust on or before the date of termination
specified pursuant to Section 10.1 above, then the Custodian shall
have the right to deliver to a bank or corporation company of its
own selection, which (a) is a "bank" as defined in the 1940 Act and
(b) has aggregate capital, surplus and undivided profits as shown
on its then most recent published report of not less than $25
million, all Securities, cash and other property held by Custodian
under this Agreement and to transfer to an account of or for the
Fund at such bank or trust company all Securities of the Fund held
in a Book-Entry System or Securities Depository. Upon such
delivery and transfer, such bank or trust company shall be the
successor custodian under this Agreement and the Custodian shall be
relieved of all obligations under this Agreement.
ARTICLE XI
COMPENSATION OF CUSTODIAN
The Custodian shall be entitled to compensation as agreed upon from time to
time by the Trust and the Custodian. The fees and other charges in effect on the
date hereof and applicable to the Fund are set forth in Exhibit C attached
hereto.
ARTICLE XII
LIMITATION OF LIABILITY
It is expressly agreed that the obligations of the Trust hereunder shall
not be binding upon any of the Trustees, shareholders, nominees, officers,
agents or employees of the Trust personally, but shall bind only the property of
the Trust as provided in the Trust's Agreement and Declaration of Trust, as from
time to time amended. The execution and delivery of this Agreement have been
authorized by the Trustees, and this Agreement has been signed and delivered by
an authorized officer of the Trust, acting as such, and neither such
authorization by the Trustees nor such execution and delivery by such officer
shall be deemed to have been made by any of them individually or to impose any
liability on any of them personally, but shall bind only the property of the
Trust as provided in the above-mentioned Agreement and Declaration of Trust.
ARTICLE XIII
NOTICES
Unless otherwise specified herein, all demands, notices, instructions, and
other communications to be given hereunder shall be in writing and shall be
sent or delivered to the recipient at the address set forth after its name
hereinbelow:
TO THE TRUST:
Kit Xxxx Investment Trust
Attn: Kit Xxxx
000 Xxxxx Xxxxxx
Xxx Xxxxxx, XX 00000
TO CUSTODIAN:
Firstar Bank, N.A.
000 Xxxxxx Xxxxxx, X.X. XX-XX-00XX
Xxxxxxxxxx, Xxxx 00000
Attention: Mutual Fund Custody Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as either party shall have provided to the other by
notice given in accordance with this Article XIII. Writing shall include
transmissions by or through teletype, facsimile, central processing unit
connection, on-line terminal and magnetic tape.
ARTICLE XIV
MISCELLANEOUS
14.1 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Ohio.
14.2 REFERENCES TO CUSTODIAN. The Trust shall not circulate any printed
matter which contains any reference to Custodian without the prior
written approval of Custodian, excepting printed matter contained
in the prospectus or statement of additional information for the
Fund and such other printed matter as merely identifies Custodian
as custodian for the Fund. The Trust shall submit printed matter
requiring approval to Custodian in draft form, allowing sufficient
time for review by Custodian and its counsel prior to any deadline
for printing.
14.3 NO WAIVER. No failure by either party hereto to exercise, and no
delay by such party in exercising, any right hereunder shall
operate as a waiver thereof. The exercise by either party hereto of
any right hereunder shall not preclude the exercise of any other
right, and the remedies provided herein are cumulative and not
exclusive of any remedies provided at law or in equity.
14.4 AMENDMENTS. This Agreement cannot be changed orally and no
amendment to this Agreement shall be effective unless evidenced by
an instrument in writing executed by the parties hereto.
14.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the parties hereto on separate counterparts,
each of which shall be deemed an original but all of which together
shall constitute but one and the same instrument.
14.6 SEVERABILITY. If any provision of this Agreement shall be invalid,
illegal or unenforceable in any respect under any applicable law,
the validity, legality and enforceability of the remaining
provisions shall not be affected or impaired thereby.
14.7 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; provided, however, that this
Agreement shall not be assignable by either party hereto without
the written consent of the other party hereto.
14.8 HEADINGS. The headings of sections in this Agreement are for
convenience of reference only and shall not affect the meaning or
construction of any provision of this Agreement.
14.9 ADDITIONAL FUNDS. In the event that the Trust establishes one or
more series in addition to the Kit Xxxx Strategic Growth Fund with
respect to which it desires to have the Custodian render services
as Custodian under this Agreement, it shall so notify the Custodian
in writing, and if the Custodian agrees in writing to provide such
services, such series shall become a Fund hereunder. Thereafter,
the Custodian shall treat the assets of each such series as a
separate Fund and any references to the "Fund" shall refer to the
applicable series of the Trust as the context shall require.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed and delivered in its name and on its behalf by its representatives
thereunto duly authorized, all as of the day and year first above written.
ATTEST: KIT XXXX INVESTMENT TRUST
______________________________ By:_____________________________
ATTEST: FIRSTAR BANK, N.A.
______________________________ By:____________________________
