EXHIBIT 8
CUSTODY AGREEMENT
(Mutual Funds)
THIS AGREEMENT is made as of __________________, 199__, by and between XXXXXXXX
INVESTMENT TRUST (the "Trust"), a Massachusetts business trust, with respect to
its existing series as of the date of this Agreement, and such other series as
shall be designated from time to time by the Trust (the "Fund" or "Funds"), and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA, a national banking association (the
"Custodian").
The Trust desires that its securities and funds shall be hereafter held and
administered by the Custodian pursuant to the terms of this Agreement, and,
pursuant to a separate agreement, The Nottingham Company, Inc., a North Carolina
corporation ("Nottingham"), has agreed to perform the duties of Accounting
Services Agent and Administrator for the Fund, and NC Shareholder Services, LLC,
a North Carolina limited liability company ("NCSS"), has agreed to perform the
duties of Transfer Agent and Dividend Disbursing Agent for the Fund.
In consideration of the mutual agreements herein, the Trust and the Custodian
agree as follows:
1. DEFINITIONS.
As used herein, the following words and phrases shall have the meanings
shown in this Section 1:
"Securities" includes stocks, shares, bonds, debentures, bills, notes,
mortgages, certificates of deposit, bank time deposits, bankers'
acceptances, commercial paper, scrip, warrants, participation
certificates, evidences of indebtedness, or other obligations and any
certificates, receipts, warrants or other instruments representing
rights to receive, purchase, or subscribe for the same, or evidencing
or representing any other rights or interests therein, or in any
property or assets.
"Oral Instructions" shall mean an authorization, instruction, approval,
item or set of data, or information of any kind transmitted to the
Custodian in person or by telephone, telegram, telecopy or other
mechanical or documentary means lacking original signature, by an
officer or employee of the Trust or an employee of Nottingham in its
capacity as Accounting Services Agent and Administrator, or employee of
NCSS in its capacity as Transfer Agent and Dividend Disbursing Agent,
who has been authorized by a resolution of the Board of Trustees of the
Trust or the Board of Directors of Nottingham or NCSS, as the case may
be, to give Written Instructions on behalf of the Trust.
"Written Instructions" shall mean an authorization, instruction,
approval, item or set of data, or information of any kind transmitted
to the Custodian containing original signatures or a copy of such
document transmitted by telecopy including transmission of such
signature, reasonably believed by the Custodian to be the signature of
an officer or employee of the Trust or an employee of Nottingham in its
capacity as Accounting Services Agent and Administrator, or an employee
of NCSS in its capacity as Transfer Agent and Dividend Disbursing
Agent, who has been authorized by a resolution of the Board of Trustees
of the Trust or Board of Directors of Nottingham or NCSS, as the case
may be, to give Written Instructions on behalf of the Trust.
"Securities Depository" shall mean a system for the central handling of
securities where all securities of any particular class or series of
any issuer deposited within the system are treated as fungible and may
be transferred or pledged by bookkeeping entry without physical
delivery of securities.
"Officers' Certificate" shall mean a direction, instruction or
certification in writing signed in the name of the Trust by the
President, Secretary or Assistant Secretary, or the Treasurer or
Assistant Treasurer of the Trust, or any other persons duly authorized
to sign by the Board of Trustees or the Executive Committee of the
Trust.
"Book-Entry Securities" shall mean securities issued by the Treasury of
the United States of America and federal agencies of the United States
of America which are maintained in the book-entry system as provided in
Subpart O of Treasury Circular Xx. 000, 00 XXX 000, Xxxxxxx X of 31 CFR
Part 350, and the book-entry regulations of federal agencies
substantially in the form of Subpart O, and the term Book-Entry Account
shall mean an account maintained by a Federal Reserve Bank in
accordance with the aforesaid Circular and regulations.
2. DOCUMENTS TO BE FILED BY TRUST.
The Trust shall from time to time file with the Custodian a certified
copy of each resolution of its Board of Trustees authorizing execution
of Written Instructions and the number of signatories required,
together with certified signatures of the officers and other
signatories authorized to sign, which shall constitute conclusive
evidence of the authority of the officers and other signatories
designated therein to act, and shall be considered in full force and
effect and the Custodian shall be fully protected in acting in reliance
thereon until it receives a new certified copy of a resolution adding
or deleting a person or persons with authority to give Written
Instructions. If the certifying officer is authorized to sign Written
Instructions, the certification shall also be signed by a second
officer of the Trust. The Trust also agrees that the Custodian may rely
on Written Instructions received from Nottingham and/or NCSS, as agent
for the Trust, if those Written Instructions are given by persons
having authority pursuant to resolutions of the Board of Trustees of
the Trust.
The Trust shall from time to time file with the Custodian a certified
copy of each resolution of the Board of Trustees authorizing the
transmittal of Oral Instructions and specifying the person or persons
authorized to give Oral Instructions in accordance with this Agreement.
The Trust agrees that the Custodian may rely on Oral Instructions
received from Nottingham and/or NCSS, as agent for the Trust, if those
instructions are given by persons reasonably believed by the Custodian
to have such authority. Any resolution so filed with the Custodian
shall be considered in full force and effect and the Custodian shall be
fully protected in acting in reliance thereon until it actually
receives a new certified copy of a resolution adding or deleting a
person or persons with authority to give Oral Instructions. If the
certifying officer is authorized to give Oral Instructions, the
certification shall also be signed by a second officer of the Trust.
3. RECEIPT AND DISBURSEMENT OF FUNDS.
(a) The Custodian shall open and maintain a separate account or
accounts in the name of each Fund of the Trust, subject only
to draft or order by the Custodian acting pursuant to the
terms of this Agreement. The Custodian shall hold in
safekeeping in such account or accounts, subject to the
provisions hereof, all funds received by it from or for the
account of the Trust. The Trust will deliver or cause to be
delivered to the Custodian all funds owned by the Trust,
including cash received for the issuance of its shares during
the period of this Agreement. The Custodian shall make
payments of funds to, or for the account of, the Trust from
such funds only:
(i)for the purchase of securities for the portfolio of the
Trust upon the delivery of such securities to the Custodian
(or to any bank, banking firm or trust company doing
business in the United States and designated by the
Custodian as its sub-custodian or agent for this purpose or
any foreign bank qualified under Rule 17f-5 of the
Investment Company Actof 1940 and acting as sub-custodian),
registered (if registerable) in the name of the Trust or of
the nominee of the Custodian referred to in Section 8 or in
proper form for transfer, or, in the case of repurchase
agreements entered into between the Trust and the Custodian
or other bank or broker dealer (A) against delivery of the
securities either in certificate form or through an entity
crediting the Custodian's account at the Federal Reserve
Bank with such securities or (B) upon delivery of the
receipt evidencing purchase by the Trust of securities
owned by the Custodian along with written evidence of the
agreement by the Custodian bank to repurchase such
securities from the Trust;
(ii) for the payment of interest, dividends, taxes, management
or supervisory fees, or operating expenses (including,
without limitation, Board of Trustees' fees and expenses,
and fees for legal, accounting and auditing services)
and for redemption or repurchase of shares of the Trust;
(iii) for payments in connection with the conversion, exchange
or surrender of securities owned or subscribed to by the
Trust held by or to be delivered to the Custodian;
(iv) for the payment to any bank of interest on all or any
portion of the principal of any loan made by such bank to
the Trust;
(v) for the payment to any person, firm or corporation who
has borrowed the Trust's portfolio securities the amount
deposited with the Custodian as collateral for such
borrowing upon the delivery of such securities to the
Custodian, registered (if registerable) in the name of the
Trust or of the nominee of the Custodian referred to in
Section 8 or in proper form for transfer; or
(vi) for other proper purposes of the Trust.
Before making any such payment the Custodian shall receive
(and may rely upon) Written Instructions or Oral Instructions
directing such payment and stating that it is for a purpose
permitted under the terms of this subsection (a). In respect
of item (vi), the Custodian will take such action only upon
receipt of an Officers' Certificate and a certified copy of a
resolution of the Board of Trustees or the Executive Committee
of the Trust signed by an officer of the Trust and certified
by the Secretary or an Assistant Secretary, specifying the
amount of such payment, setting forth the purpose for which
such payment is to be made. In respect of item (v), the
Custodian shall make payment to the borrower of securities
loaned by the Trust of part of the collateral deposited with
the Custodian upon receipt of Written Instructions from the
Trust or Nottingham stating that the market value of the
securities loaned has declined and specifying the amount to be
paid by the Custodian without receipt or return of any of the
securities loaned by the Trust. In respect of item (i), in the
case of repurchase agreements entered into with a bank which
is a member of the Federal Reserve System, the Custodian may
transfer funds to the account of such bank, which may be
itself, prior to receipt of written evidence that the
securities subject to such repurchase agreement have been
transferred by book-entry to the Custodian's non-proprietary
account at the Federal Reserve Bank, or in the case of
repurchase agreements entered into with the Custodian, of the
safekeeping receipt and repurchase agreement, provided that
such securities have in fact been so transferred by
book-entry, or in the case of repurchase agreements entered
into with the Custodian, the safekeeping receipt is received
prior to the close of business on the same day.
(b) Notwithstanding anything herein to the contrary, the Custodian
may at any time or times with the written approval of the
Board of Trustees, appoint (and may at any time remove without
the written approval of the Trust) any other bank or trust
company as its sub-custodian or agent to carry out such of the
provisions of Subsection (a) of this Section 3 as instructions
from the Trust may from time to time request; provided,
however, that the appointment of such sub-custodian or agent
shall not relieve the Custodian of any of its responsibilities
hereunder; and provided, further, that the Custodian shall not
enter into any arrangement with any subcustodian unless such
sub-custodian meets the requirements of Section 26 of the
Investment Company Act of 1940 and Rule 17f-5 thereunder, if
applicable.
(c) The Custodian is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money
received by the Custodian for the accounts of the Trust.
4. RECEIPT OF SECURITIES.
(a) The Custodian shall hold in safekeeping in a separate account,
and physically segregated at all times from those of any other
persons, firms, corporations or trusts or any other series of
the Trust, pursuant to the provisions hereof, all securities
received by it from or for the account of each series of the
Trust, and the Trust will deliver or cause to be delivered to
the Custodian all securities owned by the Trust. All such
securities are to be held or disposed of by the Custodian
under, and subject at all times to the instructions pursuant
to, the terms of this Agreement. The Custodian shall have no
power or authority to assign, hypothecate, pledge, lend or
otherwise dispose of any such securities and investments,
except pursuant to instructions and only for the account of
the Trust as set forth in Section 5 of this Agreement.
(b) Notwithstanding anything herein to the contrary, the Custodian
may at any time or times with the written approval of the
Board of Trustees, appoint (and may at any time without the
written approval of such Board of Trustees remove) any other
bank or trust company as its sub-custodian or agent to carry
out such of the provisions of Subsection (a) of this Section 4
and of Section 5 of this Agreement, as instructions may from
time to time request, provided, however, that the appointment
of such sub-custodian or agent shall not relieve the Custodian
of any of its responsibilities hereunder, and provided,
further, that the Custodian shall not enter into arrangement
with any sub-custodian unless such sub-custodian meets the
requirements of Section 26 of the Investment Company Act of
1940 or Rule 17f-5 thereunder, if applicable.
5. TRANSFER, EXCHANGE, REDELIVERY, ETC. OF SECURITIES.
The Custodian shall have sole power to release or deliver any
Securities of the Trust held by it pursuant to this Agreement. The
Custodian agrees to transfer, exchange or deliver Securities held by it
on behalf of the Trust hereunder only:
(a) for sales of such Securities for the account of the Trust upon
receipt by the Custodian of Payment therefor;
(b) when such securities mature or are called, redeemed or retired
or otherwise become payable;
(c) for examination by any broker selling any such securities in
accordance with "street delivery" custom;
(d) in exchange for or upon conversion into other Securities alone
or other securities and cash whether pursuant to any plan of
merger, consolidation, reorganization, recapitalization or
readjustment, or otherwise;
(e) upon conversion of such Securities pursuant to their terms
into other Securities;
(f) upon exercise of subscription, purchase or other similar
rights represented by such Securities;
(g) for the purpose of exchanging interim receipts for temporary
Securities for definitive securities;
(h) for the purpose of effecting a loan of the portfolio
Securities to any person, firm, corporation or trust upon the
receipt by the Custodian of cash or cash equivalent collateral
at least equal to the market value of the securities loaned;
(i) to any bank for the purpose of collateralizing the obligation
of the Trust to repay any moneys borrowed by the Trust from
such bank; provided, however, that the Custodian may at the
option of such lending bank keep such collateral in its
possession, subject to the rights of such bank given to it by
virtue of any promissory note or agreement executed and
delivered by the Trust to such bank; or
(j) for other proper purposes of the Trust.
As to any deliveries made by the Custodian pursuant to items (a), (b),
(c), (d), (e), (f), (g) and (h), Securities or funds receivable in
exchange therefor shall be deliverable to the Custodian. Before making
any such transfer, exchange or delivery, the Custodian shall receive
(and may rely upon) instructions requesting such transfer, exchange, or
delivery and stating that it is for a purpose permitted under the terms
(a), (b), (c), (d), (e), (f), (g), (h), or (i) of this Section 5, and,
in respect of item (j), upon receipt of instructions of a certified
copy of a resolution of the Board of Trustees of the Trust, signed by
an officer of the Trust and certified by its Secretary or an Assistant
Secretary, specifying the Securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose
to be a proper purpose of the Trust, and naming the person or persons
to whom delivery of such Securities shall be made. In respect of item
(h), the instructions shall state the market value of the Securities to
be loaned and the corresponding amount of collateral to be deposited
with the Custodian; thereafter, upon receipt of instructions stating
that the market value of the Securities loaned has increased and
specifying the amount of increase, the Custodian shall collect from the
borrower additional cash collateral in such amount.
6. FEDERAL RESERVE BOOK-ENTRY SYSTEM.
Notwithstanding any other provisions of this Agreement, it is expressly
understood and agreed that the Custodian is authorized in the
performance of its duties hereunder to deposit in the book-entry
deposit system operated by the Federal Reserve Bank (the "System"),
United States government, instrumentality and agency securities and any
other Securities deposited in the System and to use the facilities of
the System, as permitted by Rule 17f-4 under the Investment Company Act
of 1940, in accordance with the following terms and provisions:
(a) The Custodian may keep Securities of the Trust in the System
provided that such Securities are represented in an account
("Account") of the Custodian's in the System which shall not
include any assets of the Custodian other than assets held in
a fiduciary or custodian capacity.
(b) The records of the Custodian with respect to the participation
in the System through the Custodian shall identify by
Book-Entry Securities belonging to the Trust which are
included with other Securities deposited in the Account and
shall at all times during the regular business hours of the
Custodian be open for inspection by duly authorized officers,
employees or agents of the Trust and employees and agents of
the Securities and Exchange Commission.
(c) The Custodian shall pay for Securities purchased for the
account of the Trust upon:
(i) receipt of advice from the 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 Trust. The Custodian shall transfer Securities sold
for the account of the Trust upon:
(1)receipt of advice from the System that payment for
such Securities has been transferred to the
Account; and
(2)the making of an entry on the records of the
Custodian to reflect such transfer and payment for
the account of the Trust. The Custodian shall
send the Trust a confirmation of any transfers to
or from the account of the Trust.
(d) The Custodian will provide the Trust with any report obtained
by the Custodian on the System's accounting system, internal
accounting control and procedures for safeguarding Securities
deposited in the System. The Custodian will provide the Trust
with reports by independent public accountants on the
accounting system, internal accounting control and procedures
for safeguarding Securities, including Securities deposited in
the System relating to the services provided by the Custodian
under this Agreement; such reports shall detail material
inadequacies disclosed by such examination, and, if there are
no such inadequacies, shall so state, and shall be of such
scope and in such detail as the Trust may reasonably require
and shall be of sufficient scope to provide reasonable
assurance that any material inadequacies would be disclosed.
7. USE OF CLEARING FACILITIES.
Notwithstanding any other provisions of the Agreement, the Custodian
may, in connection with transactions in portfolio Securities by the
Trust, use the facilities of the Depository Trust Company ("DTC"), and
the Participants Trust Company ("PTC"), as permitted by Rule 17f-4
under the Investment Company Act of 1940, if such facilities have been
approved by the Board of Trustees of the Trust in accordance with the
following:
(a) DTC and PTC may be used to receive and hold eligible
Securities owned by the Trust;
(b) payment for Securities purchased may be made through the
clearing medium employed by DTC and PTC for transactions of
participants acting through them;
(c) Securities of the Trust deposited in DTC and PTC will at all
times be segregated from any assets and cash controlled by the
Custodian in other than a fiduciary or custodian capacity but
may be commingled with other assets held in such capacities.
Subject to the provisions of the Agreement with regard to
instructions, the Custodian will pay out money only upon
receipt of Securities or notification thereof and will deliver
Securities only upon the receipt of money or notification
thereof;
(d) all books and records maintained by the Custodian which relate
to the participation in DTC and PTC shall identify by
Book-Entry Securities belonging to the Trust which are
deposited in DTC and PTC and shall at all times during the
Custodian's regular business hours be open to inspection by
the duly authorized officers, employees, agents and auditors,
and the Trust will be furnished with all the information in
respect of the services rendered to it as it may require;
(e) the Custodian will make available to the Trust copies of any
internal control reports concerning DTC and PTC delivered to
it by either internal or external auditors within ten days
after receipt of such a report by the Custodian; and
(f) confirmations of transactions using the facilities of DTC and
PTC shall be provided as set forth in Rule 17f-4 of the
Investment Company Act of 1940.
8. CUSTODIAN'S ACTS WITHOUT INSTRUCTIONS.
Unless and until the Custodian receives instructions to the contrary,
the Custodian shall on behalf of the Trust:
(a) Present for payment all coupons and other income items held by
it for the account of the Trust which call for payment upon
presentation and hold the funds received by it upon such
payment for the Trust;
(b) collect interest and cash dividends received, with notice to
the Trust, for the accounts of the Trust;
(c) hold for the accounts of the Trust hereunder all stock
dividends, rights and similar Securities issued with respect
to any securities held by it hereunder;
(d) execute as agent on behalf of the Trust all necessary
ownership certificates required by the Internal Revenue Code
or the Income Tax Regulations of the United States Treasury
Department or under the laws of any state now or hereafter in
effect, inserting the name of such certificates as the owner
of the Securities covered thereby, to the extent it may
lawfully do so;
(e) transmit promptly to the Trust all reports, notices and other
written information received by the Custodian from or
concerning issuers of the portfolio Securities; and
(f) collect from the borrower the Securities loaned and delivered
by the Custodian pursuant to item (h) of Section 5 hereof, any
interest or cash dividends paid on such Securities, and all
stock dividends, rights and similar Securities issued with
respect to any such loaned Securities.
With respect to Securities of foreign issuers, it is expected that the
Custodian will use its best efforts to effect collection of dividends,
interest and other income, and to notify the Trust of any call for
redemption, offer of exchange, right of subscription, reorganization,
or other proceedings affecting such Securities, or any default in
payments due thereon. It is understood, however, that the Custodian
shall be under no responsibility for any failure or delay in effecting
such collections or giving such notice with respect to Securities of
foreign issuers, regardless of whether or not the relevant information
is published in any financial service available to it unless (a) such
failure or delay is due to the Custodian's or any sub-custodians'
negligence or (b) any relevant sub-custodian has acted in accordance
with established industry practices. Collections of income in foreign
currency are, to the extent possible, to be converted into United
States dollars unless otherwise instructed in writing, and in effecting
such conversion the Custodian may use such methods or agencies as it
may see fit, including the facilities of its own foreign division at
customary rates. All risk and expenses incident to such collection and
conversion is for the accounts of the Trust and the Custodian shall
have no responsibility for fluctuations in exchange rates affecting any
such conversion.
9. REGISTRATION OF SECURITIES.
Except as otherwise directed by instructions, the Custodian shall
register all Securities, except such as are in bearer form, in the name
of a registered nominee of the Custodian, as defined in the Internal
Revenue Code and any Regulation of the Treasury Department issued
thereunder or in any provision of any subsequent Federal tax law
exempting such transaction from liability for stock transfer taxes, and
shall execute and deliver all such certificates in connection therewith
as may be required by such laws or Regulations or under the laws of any
State. The Custodian shall use its best efforts to the end that the
specific securities held by it hereunder shall be at all times
identifiable in its records.
The Trust, Nottingham, or NCSS shall from time to time 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 its
registered nominee, any securities which it may hold for the accounts
of the Trust and which may from time to time be registered in the name
of the Trust.
10. SEGREGATED ACCOUNT.
The Custodian shall upon receipt of written instructions from the
Trust, Nottingham, or NCSS establish and maintain a segregated account
or accounts for and on behalf of the Trust, into which account or
accounts may be transferred cash and/or Securities, including
Securities maintained in an account by the Custodian pursuant to
Section 4 hereof,
(i) in accordance with the provisions of any agreement
among the Trust, the Custodian and a broker-dealer
registered under the Securities and Exchange Act of
1934 and a member of the NASD (or any futures
commission merchant registered under the Commodity
Exchange Act), relating to compliance with the rules
of The Options Clearing Corporation and of any
registered national securities exchange (or the
commodity Futures Trading Commission or any
registered contract market), or of any similar
organization or organizations, regarding escrow or
other arrangements in connection with transactions
by the Trust;
(ii) for purposes of segregating cash or government
securities in connection with options purchased, sold
or written by the Trust or commodity futures
contracts or options thereon purchased or sold by the
Trust;
(iii) for the purposes of compliance by the Trust with the
procedures required by the Investment Company Act
Release No. 10666, or any subsequent release or
releases of the Securities and Exchange Commission
relating to the maintenance of segregated accounts by
registered investment companies; and
(iv) for other proper corporate purposes, but only, in the
case of clause (iv), upon receipt of, in addition to
an Officer's Certificate, a certified copy of a
resolution of the Board of Trustees signed by an
officer of the Trust and certified by the Secretary
or an Assistant Secretary, setting forth the purpose
or purposes of such segregated account and declaring
such purposes to be proper corporate purposes.
11. VOTING AND OTHER ACTIONS.
Neither the Custodian nor any nominee of the Custodian shall vote any
of the Securities held hereunder by or for the accounts of the Trust,
except in accordance with instructions. The Custodian shall execute and
deliver, or cause to be executed and delivered, to the appropriate
investment advisor of each series of the Trust, all notices, proxies
and proxy soliciting materials with relation to such Securities
(excluding any Securities loaned and delivered by the Custodian
pursuant to item (h) of Section 5 hereof), such proxies to be executed
by the registered holder of such Securities (if registered otherwise
than in the name of the Trust), but without indicating the manner in
which such proxies are to be voted. Such proxies shall be delivered by
regular mail to the appropriate investment advisor of each series of
the Trust.
12. TRANSFER TAX AND OTHER DISBURSEMENTS.
The Trust shall pay or reimburse the Custodian from time to time for
any transfer taxes payable upon transfers of securities made hereunder
and for all other necessary and proper disbursements and expenses made
or incurred by the Custodian in the performance of this Agreement. The
Custodian shall execute and deliver such certificates in connection
with Securities delivered to it or by it under this Agreement as may be
required under the provisions of the Internal Revenue Code and any
Regulations of the Treasury Department issued thereunder, or under the
laws of any State, to exempt from taxation any exemptible transfers
and/or deliveries of any such securities.
13. CONCERNING THE CUSTODIAN.
(a) The Custodian's compensation shall be paid by the Trust. The
Custodian shall not be liable for any action taken in good
faith upon receipt of instructions as herein defined or a
certified copy of any resolution of the Board of Trustees, and
may rely on the genuineness of any such document which it may
in good faith believe to have been validly executed.
(b) The Custodian shall not be liable for any loss or damage,
resulting from its action or omission to act or otherwise,
except for any such loss or damage arising out of its own
negligence or willful misconduct and except that the Custodian
shall be responsible for the acts of any sub-custodian, or
agent appointed hereunder and approved by the Board of
Trustees of the Trust. At any time, the Custodian may seek
advice from legal counsel for the Trust whose legal fees shall
be paid at the sole expense of the Trust, with respect to any
matter arising in connection with this Agreement, and it shall
not be liable for any action taken or not taken or suffered by
it in good faith in accordance with the opinion of counsel for
the Trust. The Trust and not the Custodian shall be
responsible for any fee or charges by counsel for the Trust in
connection with any such opinion rendered to the Custodian.
(c) Without limiting the generality of the foregoing, the
Custodian shall be under no duty or obligation to inquire
into, and shall not be liable for:
(i) The validity of the issue of any Securities purchased
by or for the Trust, the legality of the purchase
thereof, or the propriety of the amount paid
therefor;
(ii) The legality of the issue or sale of any Securities
by or for the Trust, or the propriety of the amount
for which the same are sold;
(iii) The legality of the issue or sale of any shares of
the Trust, or the sufficiency of the amount to be
received therefor;
(iv) The legality of the redemption of any shares of the
Trust, or the propriety of the amount to be paid
therefor;
(v) The legality of the declaration of any dividend or
distribution by the Trust, or the legality of the
issue of any Securities of the Trust in payment of
any dividend or distribution in shares;
(vi) The legality of the delivery of any Securities held
for the Trust for the purpose of collateralizing the
obligation of the Trust to repay any moneys borrowed
by the Trust; or
(vii) The legality of the delivery of any Securities held
for the Trust for the purpose of lending said
securities to any person, firm or corporation.
(d) The Custodian shall not be under any duty or obligation to
take action to effect collection of any amount, if the
Securities upon which such amount is payable are in default,
or if payment is refused after due demand or presentation by
the Custodian on behalf of the Trust, unless and until
(i) the Custodian shall be directed to take such action
by written instructions signed in the name of the
Trust on behalf of the Trust by one of its executive
officers; and
(ii) the Custodian shall be assured to its satisfaction of
reimbursement of its costs and expenses in connection
with any such action.
(e) The Custodian shall not be under any duty or obligation to
ascertain whether any securities at any time delivered to or
held by it for the account of the Trust, are such as may
properly be held by the Trust under the provisions of the
Trust's Declaration of Trust or By-Laws as amended from time
to time.
(f) The Trust agrees to indemnify and hold harmless the Custodian
and its nominees, sub-custodians, depositories and agent from
all taxes, charges, expenses, assessments, liabilities, and
losses (including counsel fees) incurred or assessed against
it or its nominees, sub-custodians, depositories and agents in
connection with the performance of this Agreement, except such
as may arise from its or its nominee's, sub-custodian's,
depositories' and agent's own negligent action, negligent
failure to act, breach of this agreement or willful
misconduct. The Custodian is authorized to charge any account
of the Trust for such items; provided, however, that, except
for overdrafts as to which the Custodian shall have the
immediate right of offset, prior to charging any such account
for such items, the Custodian shall first have forwarded an
invoice for such item to the Trust and 30 days shall have
elapsed from the date of such invoice to the Trust without
payment of the same having been received by the Custodian. In
the event of any advance of funds for any purpose made by the
Custodian resulting from orders or instructions of the Trust,
or in the event that the Custodian or its nominees,
sub-custodians, depositories and agents shall incur or be
assessed any taxes, charges, expenses, assessments, claims or
liabilities in connection with the performance of this
Agreement, except such as may arise from its or its nominee's
own negligent action, negligent failure to act or willful
misconduct any property at any time held for the accounts of
the Trust shall be security therefor. Nothing in this
paragraph, however, shall be deemed to apply to transaction
and asset holding fees or out of pocket expenses of the
Custodian which are payable by Nottingham and/or NCSS, and as
to such fees and expenses the Custodian shall have no right of
offset or security under this paragraph.
(g) The Custodian agrees to indemnify and hold harmless the Trust
and Trust's Trustees and officers from all taxes, charges,
expenses, assessments, claims liabilities, and losses
(including counsel fees) incurred or assumed against any of
them as a result of any breach or violation of this Agreement
by the Custodian or any act or omission by the Custodian or
its Trustees, officers, employees and agents and resulting
from their negligence or willful misconduct.
(h) In the event that, pursuant to this Agreement, instructions
direct the Custodian to pay for securities on behalf of the
Trust, the Trust hereby grants to the Custodian a security
interest in such Securities, until the Custodian has been
reimbursed by the Trust in immediately available funds. The
instructions designating the Securities to be paid for shall
be considered the requisite description and designation of the
Securities pledged to the Custodian for purposes of the
requirements of the Uniform Commercial Code.
(i) The Custodian represents that it is qualified to act as such
under section 26(a) of the Investment Company Act of 1940.
14. REPORTS BY THE CUSTODIAN.
(a) The Custodian shall furnish the Trust and the appropriate
investment advisor of each series of the Trust, daily with a
statement summarizing all transactions and entries for the
accounts of the Trust. The Custodian shall furnish the Trust
at the end of every month with a list of the portfolio
Securities held by it as Custodian for the Trust, adjusted for
all commitments confirmed by instructions as of such time. The
books and records of the Custodian pertaining to its actions
under this Agreement shall be open to inspection and audit at
reasonable times by officers of the Trust, its independent
public accountants and officers of its investment advisers.
(b) The Custodian will maintain such books and records relating to
transactions effected by it as are required by the Investment
Company Act of 1940, as amended, and any rule or regulation
thereunder; or by any other applicable provision of the law to
be maintained by the Trust or its Custodian, with respect to
such transactions, and preserving or causing to be preserved,
any such books and records for such periods as may be required
by any such rule or regulation.
15. TERMINATION OR ASSIGNMENT.
This agreement may be terminated by the Trust, or by the Custodian, on
sixty (60) days' notice, given in writing and sent by registered mail
to the Custodian, or to the Trust, as the case may be, at the address
hereinafter set forth. Upon any termination of this Agreement, pending
appointment by the Trust of a successor to the Custodian or a vote of
the shareholders of the Trust to dissolve or to function without a
Custodian of its funds, the Custodian shall not deliver funds,
Securities or other property of the Trust to the Trust, but may deliver
them to a bank or trust company of its own selection having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report of not less than ten million dollars ($10,000,000) and
otherwise qualified to act as a custodian to a registered investment
company as a Custodian for the Trust to be held under terms similar to
those of this Agreement; provided, however, that the Custodian shall
not be required to make any such delivery or payment until full payment
shall have been made to the Custodian of all its contractual fees,
compensations, costs and expenses, except for fees and expenses all as
set forth in Section 13 of this Agreement.
16. MISCELLANEOUS.
(a) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Custodian, shall
be sufficiently given if addressed to the Custodian and mailed
or delivered to it at its office at First Union National Bank
of North Carolina, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, or at such other place as the Custodian may
from time to time designate in writing.
(b) Any notice or other instrument in writing, authorized or
required by this Agreement to be given to the Trust, shall be
sufficiently given if addressed to the Trust and mailed or
delivered to it at 000 X. Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxx Xxxxxxxx 00000, or at-such other place as the Trust may
from time to time designate in writing.
(c) This Agreement may not be amended or modified in any manner
except by a written agreement executed by both parties with
the same formality as this Agreement, and authorized or
approved by a resolution of the Board of Trustees of the
Trust.
(d) 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 Trust without the written consent of the Custodian or
by the Custodian without the written consent of the Trust,
authorized or approved by a resolution of its Board of
Trustees.
(e) This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but such
counterparts shall, together, constitute but one instrument.
(f) This Agreement and the rights and obligations of the Trust and
the Custodian hereunder shall be construed and interpreted in
accordance with the laws of the State of North Carolina.
(g) The Declaration of Trust of the Trust has been filed with the
Secretary of State of the Commonwealth of Massachusetts. The
obligations of the Trust on behalf of the Funds are not
personally binding upon, nor shall resort be had to the
private property of any of the Trustees, shareholders,
officers, employees or agents of the Trust, but only the
Trust's property shall be bound.
IN WITNESS WHEREOF, the Trust and the Custodian have caused this Agreement to be
signed and witnessed by duly authorized persons as of the date first written
above. Executed in several counterparts, each of which is an original.
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
Attest:_____________________
By:_______________________________
Title:____________________________
XXXXXXXX INVESTMENT TRUST
Attest:_____________________
By:_______________________________
Title:____________________________
