CUSTODY AGREEMENT


     THIS AGREEMENT, is made as of March 30, 1995, by and between
CHURCHILL TAX-FREE FUND OF KENTUCKY, a business trust organized
under the laws of the Commonwealth of Massachusetts (the "Trust"),
and BANK ONE TRUST COMPANY, N.A., a banking company organized under
the laws of the United States (the "Custodian").

                           WITNESSETH:

     WHEREAS, the Trust desires that Securities and cash of the
Trust be held and administered by the Custodian pursuant to this
Agreement; and

     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 Custodian represents that it is a bank having the
qualifications prescribed in Section 26(a)(i) of the 1940 Act;

     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 Trust and
named in Exhibit B 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 Declaration of Trust, dated March
24, 1987, 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 No. 300, 31
CFR 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 Fund computes the net asset value of the Fund.

     1.5  "Fund" shall mean any of the individual investment
portfolios of the Trust, including any additional portfolios
hereafter created, as each are or will be identified in Exhibit A
hereto; provided, however, that in the event that the Trust
consists of only one such portfolio, "Fund" shall refer to the
Trust.

     1.6  "NASD" shall mean The National Association of Securities
Dealers, Inc.

     1.7  "Officer" shall mean the President, any Senior Vice
President, Vice President or Assistant Vice President, the
Secretary, any Assistant Secretary, the Chief Financial Officer,
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.  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  "Custody Account" shall mean any account in the name of
a Fund, which is provided for in Section 3.2 below, or of the
Trust.

     1.10 "Proper Instructions" shall mean Oral Instructions or
Written Instructions.  Proper Instructions may be continuing
Written Instructions when deemed appropriate by both parties.

     1.11 "Securities Depository" shall mean The Participants Trust
Company or The Depository Trust Company and (provided that the
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 Trust) any
other clearing agency registered with the Securities and Exchange
Commission under Section 17A of the Securities and Exchange Act of
1934 (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.

     1.12 "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, other money market instruments 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.

     1.13 "Shares" shall mean the units of beneficial interest
issued by the Trust. 

     1.14 "Written Instructions" shall mean (i) written
communications actually received by the Custodian and signed by one
or more persons as the Board of Trustees shall have from time to
time authorized, or (ii) communications by telex or any other such
system from a person or persons reasonably believed by the
Custodian to be Authorized, or (iii) communications transmitted
electronically through the Institutional Delivery System (IDS), or
any other similar electronic instruction system acceptable to the
Custodian and 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 Trust at any time during the period of
this Agreement, provided that such Securities or cash at all times
shall be and remain the property of the Trust.

     2.2  Acceptance.  The Custodian hereby accepts appointment as
such custodian and agrees to perform the duties thereof as
hereinafter set forth.

                           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, except 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 and shall be identified
as subject to this Agreement.

     3.2  Custody Account.  The Custodian shall open and maintain
in its trust department a custody account in the name of each 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 the Fund which are delivered to it.

     3.3  Appointment of Agents.  Subject to the continuing
approval of the Board of Trustees, the Custodian may appoint, and
at any time remove, any domestic bank or trust company, and is
qualified to act as a custodian under the 1940 Act, as sub-
custodian to hold Securities and cash of the Funds and to carry out
such other provisions of this Agreement as it may determine, and
may also open and maintain one or more banking accounts with such
a bank or trust company (any such accounts to be in the name of the
Custodian and subject only to its draft or order), provided,
however, that the appointment of any such agent shall not relieve
the Custodian of any of its obligations or liabilities under this
Agreement.

     3.4  Delivery of Assets to Custodian.  The Fund 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 Funds in a
Securities Depository or in a Book-Entry System, subject to the
following provisions:

     (a)  Prior to a deposit of Securities of the Funds in any
          Securities Depository or Book-Entry System, the Fund
          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 a 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 and the Custodian's account
          on the books of the Book-Entry System and Securities
          Depository as the case may be, with respect to Securities
          of a Fund maintained in a Book-Entry System or Securities
          Depository shall, by book-entry or otherwise, identify
          such Securities as belonging to the Fund.

     (d)  If Securities purchases 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 the 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)  Upon request, the Custodian shall provide the Fund with
          copies of any report (obtained by the Custodian from a
          Book-Entry System or Securities Depository in which
          Securities of the Fund is 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 Trust 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 the Custodian or any sub-
          custodian appointed pursuant to Section 3.3 above or any
          of its or their employees, or (ii) from failure of the
          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 for
          any loss or damage to the Funds arising from the use of
          such Book-Entry System or Securities Depository, if and
          to the extent that the Custodian has been made whole for
          any such loss or damage.

     3.6  Disbursement of Moneys from Custody Accounts.  Upon
receipt of Proper Instructions, the Custodian shall disburse moneys
from a Custody Account but only in the following cases:

     (a)  For the purchase of Securities for the Fund but only upon
          compliance 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 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 Trust 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 for the account of the Fund 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 Trust, including but not limited to the following
          payments for the account of a Fund:  interest; taxes;
          administration, investment management, investment
          advisory, accounting, auditing, transfer agent,
          custodian, trustee and legal fees; and other operating
          expenses of a 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 Trust;

     (g)  For transfer 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 Trust;

     (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 purposes, 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 Accounts.  Upon
receipt of Proper Instructions, the Custodian shall release and
deliver Securities from a Custody Account but only in the following
cases:

     (a)  Upon the sale of Securities for the account of a 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 a 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 Trust, 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 face 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 of
          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 a 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 a 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 Trust on behalf of a Fund requiring a
          pledge of assets by such Fund, 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 or a Fund;

     (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 Trust
          on behalf of a Fund;

     (m)  For delivery in accordance with the provisions of any
          agreement among the Trust on behalf of a Fund, 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 Trust on behalf of
          a Fund; or 

     (n)  For any other proper corporate purposes, 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 a Fund;

     (a)  Subject to Section 7.4 below, collect on a timely basis
          all income and other payments to which the Trust 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 Trust, 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 a 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 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 a 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 for the account of
the Trust on behalf of a Fund, if eligible therefor.  All other
Securities held for a Fund may be registered in the name of the
Trust on behalf of such 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; provided,
however, that such Securities are held specifically for the account
of the Trust on behalf of a Fund.  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 a Fund.

     3.10 Records.  (a)  The Custodian shall maintain, by Fund,
complete and accurate records with respect to Securities, cash or
other property held for the Trust, 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
accrued; and (iii) cancelled checks and bank records related
thereto.  The Custodian shall keep such other books and records of
the Trust as the Trust shall reasonably request, or as may be
required by the 1940 Act, including, but not limited to Section 31
and Rule 31a-1 and 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 by Fund and a summary of
all transfers to or from the 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, by
Fund, of the Securities and moneys held for the Trust 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, if any, relating to Securities which are not
registered in the name of a 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 include all
other proxy materials, if any, promptly deliver to the Trust such
proxies, all proxy soliciting materials, and all notices to the
holders of such Securities.

     3.14 Information on Corporate Actions.  The Custodian will
promptly notify the Trust of corporate actions, limited to those
Securities registered in nominee name and to those Securities held
at a Depository or sub-Custodian acting as agent for the Custodian. 
The Custodian will be responsible only if the notice of such
corporate actions is published by the Financial Card Service, J.J.
Kenny's Munibase System, Depository Trust Reorganization Notices,
Xcitek Inc., Standard & Poor's Called Bond Listing or The Wall
Street Journal or received by first class mail from the agent.  For
market announcements not yet received and distributed by the
Custodian's services, the Trust will inform its custody
representative with appropriate instructions.  The Custodian will,
upon receipt of the Trusts's response within the required deadline,
effect such action for receipt or payment for the Trust.  For those
responses received after the deadline, the Custodian will effect
such action for receipt or payment, subject to the limitations of
the agent(s) effecting such actions.  The Custodian will promptly
notify the Trust for put options only if the notice is received by
first class mail from the agent.  The Trust will provide or cause
to be provided to the Custodian with all relevant information
contained in the prospectus for any security which has unique
put/option provisions and provide the Custodian with specific
tender instructions at least ten 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 Trust, Written Instructions shall be delivered
to the Custodian, specifying (a) the Fund making the purchase, (b)
the name of the issuer or writer of such Securities, and the title
or other description thereof, (c) the number of shares, principal
amount (and accrued interest, if any) or other units purchased, (d)
the date of purchase and settlement, (e) the purchase price per
unit, (f) the total amount payable upon such purchase, and (g) the
name of the person to whom such amount is payable.  The Custodian
shall upon receipt of such Securities purchased by a Fund pay out
of the moneys held for the account of such 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 a Fund, if in the
relevant 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 a Fund is made by the Custodian in advance of
receipt for the account of the Fund of the Securities purchased but
in the absence of specific Written or Oral 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 a Fund, Written Instructions shall be delivered to
the Custodian, specifying (a) the Fund making the purchase, (b) the
name of the issuer or writer of such Securities, and the title or
other description thereof, (c) the number of shares, principal
amount (and accrued interest, if any), or other units sold, (d) the
date of sale and settlement (e) the sale price per unit, (f) the
total amount payable upon such sale, and (g) the person to whom
such Securities are to be delivered.  Upon receipt of the total
amount payable to the Trust 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 so directed in Written Instructions and 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 Trust 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 of the foregoing.

     4.5  Payment for Securities Sold, etc.  In its sole discretion
and from time to time, the Custodian may credit the relevant
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 Trust, and (iii)
income from cash, Securities or other assets of the Trust.  Any
such credit shall be conditional upon actual receipt by the
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 Trust to use funds so
credited to its 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 Custody Account.

     4.6  Advances by Custodian for Settlement.  If the Custodian
should, in its sole discretion, advance funds to the Trust to
facilitate the settlement of transactions on behalf of a Fund in
its Custody Account, then such advance shall be repayable
immediately upon demand made by the Custodian and shall bear
interest from the date incurred at a rate per annum (based on a
360-day year from the actual number of days involved) equal to 1%
over the Federal Funds rate in effect from time to time as
announced by The Wall Street Journal under the section entitled
Money Rates, or any successor title, such rate to be adjusted on
the effective date of any changes in such rate.

                            ARTICLE V

                   REDEMPTION OF TRUST SHARES     

     5.1  Transfer of Funds.  From such funds as may be available
for the purpose in the relevant Custody Account, and upon receipt
of Proper Instructions specifying that the funds are required to
redeem Shares of a 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 and in conformity with Proper Instructions,
the Custodian shall establish and maintain a segregated account or
accounts for and on behalf of each Fund, into and from 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 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,

     (b)  for purposes of segregating cash or Securities in
          connection with securities options purchased or written
          by a Fund or in connection with financial futures
          contracts (or options thereon) purchased or sold by a
          Fund,

     (c)  which constitute collateral for loans of Securities made
          by a Fund,

     (d)  for purposes of compliance by the Trust 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.

                           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 for any
loss, damage, cost, expense (including attorneys' fees and
disbursements), liability or claim unless such loss, damages, 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
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 custodian of, any cash belonging to
the Trust 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.  The 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 Trust if such Securities are in default or payment is
not made after due demand or presentation.  The Custodian shall
inform the Trust promptly of any such default or failure to make
payment.

     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/or 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  Cooperation.  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 Trust and/or compute
the value of the assets of the Trust.  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 filings 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.  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 or, in the case of any such sub-custodian, from
the performance of its obligations under such custody agreement,
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  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.

                           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
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 the date first set forth above 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 ninety (90) 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 Trust 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 Trust 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 in the State of Ohio 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 trust
company of its own selection, which is (a) a "Bank" as defined in
the 1940 Act, (b) has aggregate capital, surplus and undivided
profits as shown on its then most recent published report of not
less than $25 million, and (c) is doing business in New York, New
York, all Securities, cash and other property held by the Custodian
under this Agreement and to transfer to an account of or for the
Trust at such bank or trust company all Securities of the Trust
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.  If, after
reasonable inquiry, the Custodian cannot find a successor custodian
as contemplated in this Section 10.3, then the Custodian shall have
the right to deliver to the Trust all Securities and cash then
owned by the Trust and to transfer any Securities held in a Book-
Entry System or Securities Depository to an account of or for the
Trust.  Thereafter, the Trust shall be deemed to be its own
custodian with respect to the Trust 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
Funds are set forth in Exhibit C attached hereto.

                           ARTICLE XII

                     LIMITATION OF LIABILITY

     The Trust is a business trust organized under the laws of the
Commonwealth of Massachusetts and under a Declaration of Trust, to
which reference is hereby made a copy of which is on file at the
office of the Secretary of State of Massachusetts as required by
law, and to any and all amendments thereto so filed or hereafter
filed.  The obligations of the Trust entered into in the name of
the Trust or on behalf thereof by any of the Trustees, officers,
employees or agents are made not individually, but in such
capacities, and are not binding upon any of the Trustees, officers,
employees, agents or shareholders of the Trust or the Funds
personally, but bind only the assets of the Trust, and all persons
dealing with any of the Funds of the Trust must look solely to the
assets of the Trust belonging to such Fund for the enforcement of
any claims against the Trust.

                          ARTICLE XIII

                             NOTICES

     Unless otherwise specified herein, all demands, notices,
instructions, and other communications to be given to a party
hereunder shall be in writing and shall be sent or delivered to the
party at the address set forth after its name herein below:

               To the Trust:

               CHURCHILL TAX-FREE FUND OF KENTUCKY
               380 Madison Avenue
               New York, NY 10017 
               Attn:     Mr. Richard F. West, Treasurer and Mr.
                         William Killeen, Senior Operations
                         Officer
               Telephone:  (212)-697-6666
               Facsimile:  (212)-687-5373
               

               To the Custodian:

               BANK ONE TRUST COMPANY, N.A., 
               100 East Broad Street
               Columbus, OH 43271-0187
               Attention:     Mr. Robert F. Schultz, Senior Trust
                              Officer
               Telephone: (614)-248-5445
               Facsimile: (614)-248-2554


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 transmission 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 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.

     14.3 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.

     14.4 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.

     14.5 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.

     14.6 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.

     14.7 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.

     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:                            CHURCHILL TAX-FREE FUND
                                         OF KENTUCKY



                                   By:                        
Assistant Secretary                       President




ATTEST:                            BANK ONE TRUST COMPANY, N.A.




                                   By:                         
                                        Senior Trust Officer

<PAGE> 

                            EXHIBIT A


     Name of Fund (if different from
     the Trust                               Date Added (if
                                             different from
                                             date of original
                                             Custody Agreement


<PAGE>


                             EXHIBIT B

I, Richard F. West, Treasurer, and I, Patricia Craven, Assistant
Secretary, of CHURCHILL TAX-FREE FUND OF KENTUCKY, a Massachusetts
business trust (the "Fund"), do hereby certify that:

The following individuals have been duly authorized by the Board of
Trustees of the Fund in conformity with the Fund's Declaration of
Trust and By-Laws to give Oral Instructions and Certificate on
behalf of the Fund, and the signatures set forth opposite their
respective names are their true and correct signatures:


          NAME                               SIGNATURE        

  Lacy B. Herrmann                 _____________________________

  Rose F. Marotta                  _____________________________

  Richard F. West                  _____________________________

  William C. Wallace               _____________________________

  Diana P. Herrmann                _____________________________

  Charles E. Childs III            _____________________________

  John M. Herndon                  _____________________________

  William Killeen                  _____________________________

  Patricia A. Craven               _____________________________


________________________           _____________________________
  Richard F. West,                   Patricia A. Craven,
   Treasurer                            Assistant Secretary


<PAGE>


                             EXHIBIT C
   Compensation of Custodian - Equity Fund/Money Market Funds

Whereas Article XI of the Custody Agreement between Churchill Tax-
Free Fund of Kentucky and Bank One Trust Company, N.A. stipulates
that the compensation of Custodian shall be agreed upon by the
Trust and Custodian, the following is hereby agreed:

The compensation of the Custodian shall be computed according to
the following schedule:

     I. Activity Fee:

          A. $5.00 per book entry security transaction.

          For the purpose of this agreement, a "transaction "
          includes, but is not limited to, a purchase sale,
          maturity, redemption, tender, exchange, deposit,
          withdrawal, and collateral movement of a security.

          B. $28.00 per ineligible security transaction.

          C. $10.00 per principal paydown on amortized issues.

     II. Other Activity Fees:

          A. $5.00 per wire.

          B. $2.00 per outgoing check from custody account.

     III. Overdraft Charges:

          As described in Section 4.6 of the Custody Agreement,
          overdraft charges will be at 100 basis points above the
          Fed Funds rate.

An earnings credit using the most recent 90-day T-bill auction rate
applied to 90% of each day's positive collected balance will reduce
custody, FDIC and other fees as allowed by law.  For each month
that the charges exceed the earnings credit, the deficiency shall
be paid to Custodian.  For each month that the earnings credit
exceeds the charges, the Custodian shall carry such surplus credits
forward to subsequent month(s) and calendar year(s) until utilized.

Custodian is to be reimbursed for out of pocket expenses deemed to
be exceptional.

The above fee schedule will remain in effect until March 31, 1998
and thereafter unless changed.

As stated by the Custodian in bidding to provide custody services
to the Fund, if at any time the Fund is not completely satisfied
with the Custodian's service levels, the Custodian will cease to
charge custody fees until its responsiveness and accuracy meet the
requirements of the Fund.


<PAGE>


                            EXHIBIT C
             Compensation of Custodian - Bond Funds

Whereas Article XI of the Custody Agreement between Churchill Tax-
Free Fund of Kentucky and Bank One Trust Company, N.A. stipulates
that the compensation of Custodian shall be agreed upon by the
Trust and Custodian, the following is hereby agreed:

The compensation of the Custodian shall be computed according to
the following schedule:

     I. Annual Holding Fee:
          .00006 times the market value of assets held

     II. Activity Fee:
          A. $5.00 per book entry security transaction.

          For the purpose of this agreement, a "transaction "
          includes, but is not limited to, a purchase sale,
          maturity, redemption, tender, exchange, deposit,
          withdrawal, and collateral movement of a security.

          B. $28.00 per ineligible security transaction.

          C. $10.00 per principal paydown on amortized issues.

     II. Other Activity Fees:
          A. $5.00 per wire.

          B. $2.00 per outgoing check from custody account.

     III. Overdraft Charges:
          As described in Section 4.6 of the Custody Agreement,
          overdraft charges will be at 100 basis points above the
          Fed Funds rate.

An earnings credit using the most recent 90-day T-bill auction rate
applied to 90% of each day's positive collected balance will reduce
custody, FDIC and other fees as allowed by law.  For each month
that the charges exceed the earnings credit, the deficiency shall
be paid to Custodian.  For each month that the earnings credit
exceeds the charges, the Custodian shall carry such surplus credits
forward to subsequent month(s) and calendar year(s) until utilized.

Custodian is to be reimbursed for out of pocket expenses deemed to
be exceptional.

The above fee schedule will remain in effect until March 31, 1998
and thereafter unless changed.

As stated by the Custodian in bidding to provide custody services
to the Fund, if at any time the Fund is not completely satisfied
with the Custodian's service levels, the Custodian will cease to
charge custody fees until its responsiveness and accuracy meet the
requirements of the Fund.