Mutual Fund/Business Trust/Series
CUSTODIAN AGREEMENT
AGREEMENT dated as of October 25, 1995 between BANKERS TRUST
COMPANY (the "Custodian") and THE KENT FUNDS (the "Customer").
WHEREAS, the Customer may be organized with one or more
series of shares, each of which shall represent an interest in a
separate portfolio of Securities and Cash (each as hereinafter
defined) (all such existing and additional series now or hereafter
listed on Exhibit A being hereafter referred to individually as a
"Portfolio" and collectively, as the "Portfolios"); and
WHEREAS, the Customer desires to appoint the Custodian as
custodian on behalf of the Portfolios under the terms and
conditions set forth in this Agreement, and the Custodian has
agreed to so act as custodian.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
1. Employment of Custodian. The Customer hereby employs
the Custodian as custodian of all assets of each Portfolio which
are delivered to and accepted by the Custodian or any Subcustodian
(as that term is defined in Section 4) (the "Property") pursuant
to the terms and conditions set forth herein. Without limitation,
such Property shall include stocks and other equity interests of
every type, evidences of indebtedness, other instruments
representing same or rights or obligations to receive, purchase,
deliver or sell same and other non-cash investment property of a
Portfolio which is acceptable for deposit ("Securities") and cash
from any source and in any currency ("Cash"). The Custodian shall
not be responsible for any property of a Portfolio held or
received by the Customer or others and not delivered to the
Custodian or any Subcustodian.
2. Maintenance of Securities and Cash at Custodian and
Subcustodian Locations. Pursuant to Instructions, the Customer
shall direct the Custodian to (a) settle Securities transactions
and maintain cash in the country or other jurisdiction in which
the principal trading market for such Securities is located, where
such Securities are to be presented for payment or where such
Securities are acquired and (b) maintain cash and cash equivalents
in such countries in amounts reasonably necessary to effect the
Customer's transactions in such Securities. Instructions to settle
Securities transactions in any country shall be deemed to
authorize the holding of such Securities and Cash in that country.
3. Custody Account. The Custodian agrees to establish and
maintain one or more custody accounts on its books each in the
name of a Portfolio (each, an "Account") for any and all Property
from time to time received and accepted by the Custodian or any
Subcustodian for the account of such Portfolio. Upon delivery by
the Customer to the Custodian of any Property belonging to a
Portfolio, the Customer shall, by Instructions (as hereinafter
defined in Section 14), specifically indicate which Portfolio such
Property belongs or if such Property belongs to more than one
Portfolio shall allocate such Property to the appropriate
Portfolio. The Custodian shall allocate such Property to the
Accounts in accordance with the Instructions; provided that the
Custodian shall have the right, in its sole discretion, to refuse
to accept any Property that is not in proper form for deposit for
any reason. The Customer on behalf of each Portfolio, acknowledges
its responsibility as a principal for all of its obligations to
the Custodian arising under or in connection with this Agreement,
warrants its authority to deposit in the appropriate Account any
Property received therefor by the Custodian or a Subcustodian and
to give, and authorize others to give, instructions relative
thereto. The Custodian may deliver securities of the same class in
place of those deposited in the Account.
The Custodian shall hold, keep safe and protect as custodian
for each Account, on behalf of the Customer, all Property in such
Account. All transactions, including, but not limited to, foreign
exchange transactions, involving the Property shall be executed or
settled solely in accordance with Instructions (which shall
specifically reference the Account for which such transaction is
being settled), except that until the Custodian receives
Instructions to the contrary, the Custodian will:
(a) collect all interest and dividends and all other income and
payments, whether paid in cash or in kind, on the Property, as the
same become payable and credit the same to the appropriate
Account;
(b) present for payment all Securities held in an Account which
are called, redeemed or retired or otherwise become payable and
all coupons and other income items which call for payment upon
presentation to the extent that the Custodian or Subcustodian is
actually aware of such opportunities and hold the cash received in
such Account pursuant to this Agreement;
(c) (i) exchange Securities where the exchange is purely
ministerial (including, without limitation, the exchange of
temporary securities for those in definitive form and the exchange
of warrants, or other documents of entitlement to securities, for
the Securities themselves) and (ii) when notification of a tender
or exchange offer (other than ministerial exchanges described in
(i) above) is received for an Account, endeavor to receive
Instructions, provided that if such Instructions are not received
in time for the Custodian to take timely action, no action shall
be taken with respect thereto;
(d) whenever notification of a rights entitlement or a
fractional interest resulting from a rights issue, stock dividend
or stock split is received for an Account and such rights
entitlement or fractional interest bears an expiration date, if
after endeavoring to obtain Instructions such Instructions are not
received in time for the Custodian to take timely action or if
actual notice of such actions was received too late to seek
Instructions, sell in the discretion of the Custodian (which sale
the Customer hereby authorizes the Custodian to make) such rights
entitlement or fractional interest and credit the Account with the
net proceeds of such sale;
(e) execute in the Customer's name for an Account, whenever the
Custodian deems it appropriate, such ownership and other
certificates as may be required to obtain the payment of income
from the Property in such Account;
(f) pay for each Account, any and all taxes and levies in the
nature of taxes imposed on interest, dividends or other similar
income on the Property in such Account by any governmental
authority. In the event there is insufficient Cash available in
such Account to pay such taxes and levies, the Custodian shall
notify the Customer of the amount of the shortfall and the
Customer, at its option, may deposit additional Cash in such
Account or take steps to have sufficient Cash available. The
Customer agrees, when and if requested by the Custodian and
required in connection with the payment of any such taxes to
cooperate with the Custodian in furnishing information, executing
documents or otherwise; and
(g) appoint brokers and agents for any of the ministerial
transactions involving the Securities described in (a) - (f),
including, without limitation, affiliates of the Custodian or any
Subcustodian.
4. Subcustodians and Securities Svstems. The Customer
authorizes and instructs the Custodian to hold the Property in
each Account in custody accounts which have been established by
the Custodian with (a) one of its U.S. branches or another U.S.
bank or trust company or branch thereof located in the U.S. which
is itself qualified under the Investment Company Act of 1940, as
amended ("1940 Act"), to act as custodian (individually, a "U.S.
Subcustodian"), or a U.S. securities depository or clearing agency
or system in which the Custodian or a U.S. Subcustodian
participates (individually, a "U.S. Securities System") or (b) one
of its non-U.S. branches or majority-owned non-U.S. subsidiaries,
a non-U.S. branch or majorityowned subsidiary of a U.S. bank or a
non-U.S. bank or trust company, acting as custodian (individually,
a "non-U.S. Subcustodian"; U.S. Subcustodians and non-U.S.
Subcustodians, collectively, "Subcustodians"), or a non-U.S.
depository or clearing agency or system in which the Custodian or
any Subcustodian participates (individually, a "non-U.S.
Securities System"; U.S. Securities System and non-U.S. Securities
System, collectively, Securities System"), provided that in each
case in which a U.S. Subcustodian or U.S. Securities System is
employed, each such Subcustodian or Securities System shall have
been approved by Instructions; provided further that in each case
in which a non-U.S. Subcustodian or non-U.S. Securities System is
employed, (a) such Subcustodian or Securities System either is (i)
a "qualified U.S. bank" as defined by Rule 17f-5 under the 1940
Act ("Rule 17f-5") or (ii) an "eligible foreign custodian" within
the meaning of Rule 1 7f-5 or such Subcustodian or Securities
System is the subject of an order granted by the U.S. Securities
and Exchange Commission ("SEC") exempting such agent or the
subcustody arrangements thereto from all or part of the provisions
of Rule 17f-5 and (b) the agreement between the Custodian and such
non-U.S. Subcustodian has been approved by Instructions; it being
understood that the Custodian shall have no liability or
responsibility for determining whether the approval of any
Subcustodian or Securities System has been proper under the 1940
Act or any rule or regulation thereunder.
Upon receipt of Instructions, the Custodian agrees to cease
the employment of any Subcustodian or Securities System with
respect to the Customer, and if desirable and practicable, appoint
a replacement subcustodian or securities system in accordance with
the provisions of this Section. In addition, the Custodian may, at
any time in its discretion, upon written notification to the
Customer, terminate the employment of any Subcustodian or
Securities System.
Upon request of the Customer, the Custodian shall deliver to
the Customer annually a certificate stating: (a) the identity of
each non-U.S. Subcustodian and non-U.S. Securities System then
acting on behalf of the Custodian and the name and address of the
governmental agency or other regulatory authority that supervises
or regulates such non-U.S Subcustodian and non-U.S. Securities
System; (b) the countries in which each non-U.S. Subcustodian or
non-U.S. Securities System is located; and (c) so long as Rule
17f-5 requires the Customer's Board of Trustees to directly
approve its foreign custody arrangements, such other information
relating to such non-U.S. Subcustodians and non-U.S. Securities
Systems as may reasonably be requested by the Customer to ensure
compliance with Rule 17f-5. So long as Rule 17f-5 requires the
Customer's Board of Trustees to directly approve its foreign
custody arrangements, the Custodian also shall furnish annually to
the Customer information concerning such non-U.S. Subcustodians
and non-U.S. Securities Systems similar in kind and scope as that
furnished to the Customer in connection with the initial approval
of this Agreement. Custodian agrees to promptly notify the
Customer if, in the normal course of its custodial activities, the
Custodian has reason to believe that any non-U.S. Subcustodian or
non-U.S. Securities System has ceased to be a qualified U.S. bank
or an eligible foreign custodian each within the meaning of Rule 1
7f-5 or has ceased to be subject to an exemptive order from the
SEC.
5. Use of Subcustodian. With respect to Property in an
Account which is maintained by the Custodian in the custody of a
Subcustodian employed pursuant to Section 4:
(a) The Custodian will identify on its books as belonging to the
Customer on behalf of a Portfolio, any Property held by such
Subcustodian.
(b) Any Property in the Account held by a Subcustodian will be
subject only to the instructions of the Custodian or its agents.
(c) Property deposited with a Subcustodian will be maintained in
an account holding only assets for customers of the Custodian.
(d) Any agreement the Custodian shall enter into with a non-U.S.
Subcustodian with respect to the holding of Property shall require
that (i) the Account will be adequately indemnified or its losses
adequately insured; (ii) the Securities are not subject to any
right, charge, security interest, lien or claim of any kind in
favor of such Subcustodian or its creditors except a claim for
payment in accordance with such agreement for their safe custody
or administration and expenses related thereto, (iii) beneficial
ownership of such Securities be freely transferable without the
payment of money or value other than for safe custody or
administration and expenses related thereto, (iv) adequate records
will be maintained identifying the Property held pursuant to such
Agreement as belonging to the Custodian, on behalf of its
customers and (v) to the extent permitted by applicable law,
officers of or auditors employed by, or other representatives of
or designated by, the Custodian, including the independent public
accountants of or designated by, the Customer be given access to
the books and records of such Subcustodian relating to its actions
under its agreement pertaining to any Property held by it
thereunder or confirmation of or pertinent information contained
in such books and records be furnished to such persons designated
by the Custodian.
6. Use of Securities System. With respect to Property in
the Account(s) which are maintained by the Custodian or any
Subcustodian in the custody of a Securities System employed
pursuant to Section 4:
(a) The Custodian shall, and the Subcustodian will be required
by its agreement with the Custodian to, identify on its books such
Property as being held for the account of the Custodian or
Subcustodian for its customers.
(b) Any Property held in a Securities System for the account of
the Custodian or a Subcustodian will be subject only to the
instructions of the Custodian or such Subcustodian, as the case
may be.
(c) Property deposited with a Securities System will be
maintained in an account holding only assets for customers of the
Custodian or Subcustodian, as the case may be, unless precluded by
applicable law, rule, or regulation.
(d) The Custodian shall provide the Customer with any report
obtained by the Custodian on the Securities System's accounting
system, internal accounting control and procedures for
safeguarding securities deposited in the Securities System.
7. Agents. The Custodian may at any time or times in its
sole discretion appoint (or remove) any other U.S. bank or trust
company which is itself qualified under the 1940 Act to act as
custodian, as its agent to carry out such of the provisions of
this Agreement as the Custodian may from time to time direct;
provided, however, that the appointment of any agent shall not
relieve the Custodian of its responsibilities or liabilities
hereunder.
8. Records. Ownership of Property. Statements. Opinions
of Independent Certified Public Accountants.
(a) The ownership of the Property whether Securities, Cash
and/or other property, and whether held by the Custodian or a
Subcustodian or in a Securities System as authorized herein, shall
be clearly recorded on the Custodian's books as belonging to the
appropriate Account and not for the Custodian's own interest. The
Custodian shall keep accurate and detailed accounts of all
investments, receipts, disbursements and other transactions for
each Account. All accounts, books and records of the Custodian
relating thereto shall be open to inspection and audit at all
reasonable times during normal business hours by any person
designated by the Customer. All such accounts shall be maintained
and preserved in the form reasonably requested by the Customer.
The Custodian will supply to the Customer from time to time, as
mutually agreed upon, a statement in respect to any Property in an
Account held by the Custodian or by a Subcustodian. In the absence
of the filing in writing with the Custodian by the Customer of
exceptions or objections to any such statement within sixty (60)
days of the mailing thereof, the Customer shall be deemed to have
approved such statement and in such case or upon written approval
of the Customer of any such statement, such statement shall be
presumed to be for all purposes correct with respect to all
information set forth therein.
(b) The Custodian shall take all reasonable action as the
Customer may request to obtain from year to year favorable
opinions from the Customer's independent certified public
accountants with respect to the Custodian's activities hereunder
in connection with the preparation of the Customer's Form N- I A
and the Customer's Form N-SAR or other periodic reports to the SEC
and with respect to any other requirements of the SEC.
(c) At the request of the Customer, the Custodian shall
deliver to the Customer a written report prepared by the
Custodian's independent certified public accountants with respect
to the services provided by the Custodian under this Agreement,
including, without limitation, the Custodian's accounting system,
internal accounting control and procedures for safeguarding Cash
and Securities, including Cash and Securities deposited and/or
maintained in a securities system or with a Subcustodian. Such
report shall be of sufficient scope and in sufficient detail as
may reasonably be required by the Customer and as may reasonably
be obtained by the Custodian.
(d) The Customer may elect to participate in any of the
electronic on-line service and communications systems offered by
the Custodian which can provide the Customer, on a daily basis,
with the ability to view on-line or to print on hard copy various
reports of Account activity and of Securities and/or Cash being
held in any Account. To the extent that such service shall include
market values of Securities in an Account, the Customer hereby
acknowledges that the Custodian now obtains and may in the future
obtain information on such values from outside sources that the
Custodian considers to be reliable and the Customer agrees that
the Custodian (i) does not verify nor represent or warrant either
the reliability of such service nor the accuracy or completeness
of any such information furnished or obtained by or through such
service and (ii) shall be without liability in selecting and
utilizing such service or furnishing any information derived
therefrom.
9. Holding of Securities. Nominees. etc. Securities in an
Account which are held by the Custodian or any Subcustodian may be
held by such entity in the name of the Customer, on behalf of a
Portfolio, in the Custodian's or Subcustodian's name, in the name
of the Custodian's or Subcustodian's nominee, or in bearer form.
Securities that are held by a Subcustodian or which are eligible
for deposit in a Securities System as provided above may be
maintained with the Subcustodian or the Securities System in an
account for the Custodian's or Subcustodian's customers, unless
prohibited by law, rule, or regulation. The Custodian or
Subcustodian, as the case may be, may combine certificates
representing Securities held in an Account with certificates of
the same issue held by it as fiduciary or as a custodian. In the
event that any Securities in the name of the Custodian or its
nominee or held by a Subcustodian and registered in the name of
such Subcustodian or its nominee are called for partial redemption
by the issuer of such Security, the Custodian may, subject to the
rules or regulations pertaining to allocation of any Securities
System in which such Securities have been deposited, allot, or
cause to be allotted, the called portion of the respective
beneficial holders of such class of security in any manner the
Custodian deems to be fair and equitable.
10. Proxies. etc. With respect to any proxies, notices,
reports or other communications relative to any of the Securities
in any Account, the Custodian shall perform such services and only
such services relative thereto as are (i) set forth in Section 3
of this Agreement, (ii) described in Exhibit B attached hereto (as
such service therein described may be in effect from time to time)
(the "Proxy Service") and (iii) as may otherwise be agreed upon
between the Custodian and the Customer. The liability and
responsibility of the Custodian in connection with the Proxy
Service referred to in (ii) of the immediately preceding sentence
and in connection with any additional services which the Custodian
and the Customer may agree upon as provided in (iii) of the
immediately preceding sentence shall be as set forth in the
description of the Proxy Service and as may be agreed upon by the
Custodian and the Customer in connection with the furnishing of
any such additional service and shall not be affected by any other
term of this Agreement. Neither the Custodian nor its nominees or
agents shall vote upon or in respect of any of the Securities in
an Account, execute any form of proxy to vote thereon, or give any
consent or take any action (except as provided in Section 3) with
respect thereto except upon the receipt of Instructions relative
thereto.
11. Segregated Account. To assist the Customer in complying
with the requirements of the 1940 Act and the rules and
regulations thereunder, the Custodian shall, upon receipt of
Instructions, establish and maintain a segregated account or
accounts on its books for and on behalf of a Portfolio.
12. Settlement Procedures. Securities will be transferred,
exchanged or delivered by the Custodian or a Subcustodian upon
receipt by the Custodian of Instructions which include all
information required by the Custodian. Settlement and payment for
Securities received for an Account and delivery of Securities out
of such Account may be effected in accordance with the customary
or established securities trading or securities processing
practices and procedures in the jurisdiction or market in which
the transaction occurs, including, without limitation, delivering
Securities to the purchaser thereof or to a dealer therefor (or an
agent for such purchaser or dealer) against a receipt with the
expectation of receiving later payment for such Securities from
such purchaser or dealer, as such practices and procedures may be
modified or supplemented in accordance with the standard operating
procedures of the Custodian in effect from time to time for that
jurisdiction or market. The Custodian shall not be liable for any
loss which results from effecting transactions in accordance with
the customary or established securities trading or securities
processing practices and procedures in the applicable jurisdiction
or market, so long as the Custodian used reasonable care in
effecting such transactions.
Notwithstanding that the Custodian may settle purchases and
sales against, or credit income to, an Account, on a contractual
basis, as outlined in the Investment Manager User Guide provided
to the Customer by the Custodian, the Custodian may, at its sole
option, reverse such credits or debits to the appropriate Account
in the event that the transaction does not settle, or the income
is not received in a timely manner, and the Customer agrees to
hold the Custodian harmless from any losses which may result
therefrom.
Except as otherwise may be agreed upon by the parties
hereto, the Custodian shall not be required to comply with
Instructions to settle the purchase of any Securities for an
Account unless there is sufficient Cash in such Account at the
time or to settle the sale of any Securities in such Account
unless such Securities are in deliverable form. Notwithstanding
the foregoing, if the purchase price of such securities exceeds
the amount of Cash in an Account at the time of settlement of such
purchase, the Custodian may, in its sole discretion, but in no way
shall have any obligation to, permit an overdraft in such Account
in the amount of the difference solely for the purpose of
facilitating the settlement of such purchase of securities for
prompt delivery for such Account. The Customer agrees to
immediately repay the amount of any such overdraft in the ordinary
course of business and further agrees to indemnify and hold the
Custodian harmless from and against any and all losses, costs,
including, without limitation the cost of funds, and expenses
incurred in connection with such overdraft. The Customer agrees
that it will not use the Account to facilitate the purchase of
securities without sufficient funds in the Account (which funds
shall not include the proceeds of the sale of the purchased
securities).
13. Permitted Transactions. The Customer agrees that it
will cause transactions to be made pursuant to this Agreement only
upon Instructions in accordance Section 14 and only for the
purposes listed below.
(a) In connection with the purchase or sale of Securities at
prices as confirmed by Instructions.
(b) When Securities are called, redeemed or retired, or
otherwise become payable.
(c) In exchange for or upon conversion into other securities
alone or other securities and cash pursuant to any plan or merger,
consolidation, reorganization, recapitalization or readjustment.
(d) Upon conversion of Securities pursuant to their terms into
other securities.
(e) Upon exercise of subscription, purchase or other similar
rights represented by Securities.
(f) For the payment of interest, taxes, management or
supervisory fees, distributions or operating expenses.
(g) In connection with any borrowings by the Customer requiring
a pledge of Securities, but only against receipt of amounts
borrowed.
(h) In connection with any loans, but only against receipt of
collateral as specified in Instructions which shall reflect any
restrictions applicable to the Customer.
(I) For the purpose of redeeming shares of the capital stock of
the Customer against delivery of the shares to be redeemed to the
Custodian, a Subcustodian or the Customer's transfer agent.
(j) For the purpose of redeeming in kind shares of the Customer
against delivery of the shares to be redeemed to the Custodian, a
Subcustodian or the Customer's transfer agent.
(k) For delivery in accordance with the provisions of any
agreement among the Customer, on behalf of a Portfolio, the
Custodian and a broker-dealer registered under the Securities
Exchange Act of 1934 and a member of the National Association of
Securities Dealers, Inc., relating to compliance with the rules of
The Options Clearing Corporation, the Commodities Futures Trading
Commission 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
Customer.
(l) For release of Securities to designated brokers under
covered call options, provided, however, that such Securities
shall be released only upon payment to the Custodian of monies for
the premium due and a receipt for the Securities which are to be
held in escrow. Upon exercise of the option, or at expiration, the
Custodian will receive the Securities previously deposited from
broker. The Custodian will act strictly in accordance with
Instructions in the delivery of Securities to be held in escrow
and will have no responsibility or liability for any such
Securities which are not returned promptly when due other than to
make proper request for such return.
(m) For spot or forward foreign exchange transactions to
facilitate security trading or receipt of income from Securities
related transactions.
(n) Upon the termination of this Agreement as set forth in
Section 20.
(o) For other proper purposes.
The Customer agrees that the Custodian shall have no
obligation to verify the purpose for which a transaction is being
effected.
14. Instructions. The term "Instructions" means
instructions from the Customer in respect of any of the
Custodian's duties hereunder which have been received by the
Custodian at its address set forth in Section 21 below (i) in
writing (including, without limitation, facsimile transmission) or
by tested telex signed or given by such one or more person or
persons as the Customer shall have from time to time authorized in
writing to give the particular class of Instructions in question
and whose name and (if applicable) signature and office address
have been filed with the Custodian, or (ii) which have been
transmitted electronically through an electronic on-line service
and communications system offered by the Custodian or other
electronic instruction system acceptable to the Custodian, or
(iii) a telephonic or oral communication by one or more persons as
the Customer shall have from time to time authorized to give the
particular class of Instructions in question and whose name has
been filed with the Custodian; or (iv) upon receipt of such other
form of instructions as the Customer may from time to time
authorize in writing and which the Custodian has agreed in writing
to accept. Instructions in the form of oral communications shall
be confirmed by the Customer by tested telex or writing in the
manner set forth in clause (i) above, but the lack of such
confirmation shall in no way affect any action taken by the
Custodian in reliance upon such oral instructions prior to the
Custodian's receipt of such confirmation. Instructions may relate
to specific transactions or to types or classes of transactions,
and may be in the form of standing instructions.
The Custodian shall have the right to assume in the absence
of notice to the contrary from the Customer that any person whose
name is on file with the Custodian pursuant to this Section has
been authorized by the Customer to give the Instructions in
question and that such authorization has not been revoked. The
Custodian may act upon and conclusively rely on, without any
liability to the Customer or any other person or entity for any
losses resulting therefrom, any Instructions reasonably believed
by it to be furnished by the proper person or persons as provided
above.
15. Standard of Care. The Custodian shall be responsible
for the performance of only such duties as are set forth herein or
contained in Instructions given to the Custodian which are not
contrary to the provisions of this Agreement. The Custodian will
use reasonable care with respect to the safekeeping of Property in
each Account and in carrying out its obligations under this
Agreement. So long as and to the extent that it has exercised
reasonable care, the Custodian shall not be responsible for the
title, validity or genuineness of any Property or other property
or evidence of title thereto received by it or delivered by it
pursuant to this Agreement and shall be held harmless in acting
upon, and may conclusively rely on, without liability for any loss
resulting therefrom, any notice, request, consent, certificate or
other instrument reasonably believed by it to be genuine and to be
signed or furnished by the proper party or parties, including,
without limitation, Instructions, and shall be indemnified by the
Customer for any losses, damages, costs and expenses (including,
without limitation, the reasonable fees and expenses of counsel)
incurred by the Custodian and arising out of action taken or
omitted with reasonable care by the Custodian hereunder or under
any Instructions. The Custodian shall be liable to the Customer
for any act or omission to act of any Subcustodian to the same
extent as if the Custodian committed such act itself. With respect
to a Securities System, the Custodian shall only be responsible or
liable for losses arising from employment of such Securities
System caused by the Custodian's own failure to exercise
reasonable care. In the event of any loss to the Customer by
reason of the failure of the Custodian or a Subcustodian to
utilize reasonable care, the Custodian shall be liable to the
Customer to the extent of the Customer's actual damages at the
time such loss was discovered without reference to any special
conditions or circumstances. In no event shall the Custodian be
liable for any consequential or special damages. The Custodian
shall be entitled to rely, and may act, on advice of counsel (who
may be counsel for the Customer) on all matters and shall be
without liability for any action reasonably taken or omitted
pursuant to such advice.
In the event the Customer subscribes to an electronic
on-line service and communications system offered by the
Custodian, the Customer shall be fully responsible for the
security of the Customer's connecting terminal, access thereto and
the proper and authorized use thereof and the initiation and
application of continuing effective safeguards with respect
thereto and agree to defend and indemnify the Custodian and hold
the Custodian harmless from and against any and all losses,
damages, costs and expenses (including the reasonable fees and
expenses of counsel) incurred by the Custodian as a result of any
improper or unauthorized use of such terminal by the Customer or
by any others.
All collections of funds or other property paid or
distributed in respect of Securities in an Account, including
funds involved in third-party foreign exchange transactions, shall
be made at the risk of the Customer.
Subject to the exercise of reasonable care, the Custodian
shall have no liability for any loss occasioned by delay in the
actual receipt of notice by the Custodian or by a Subcustodian of
any payment, redemption or other transaction regarding Securities
in each Account in respect of which the Custodian has agreed to
take action as provided in Section 3 hereof. The Custodian shall
not be liable for any loss resulting from, or caused by, or
resulting from acts of governmental authorities (whether de jure
or de facto), including, without limitation, nationalization,
expropriation, and the imposition of currency restrictions;
devaluations of or fluctuations in the value of currencies;
changes in laws and regulations applicable to the banking or
securities industry; market conditions that prevent the orderly
execution of securities transactions or affect the value of
Property; acts of war, terrorism, insurrection or revolution;
strikes or work stoppages; the inability of a local clearing and
settlement system to settle transactions for reasons beyond the
control of the Custodian; hurricane, cyclone, earthquake, volcanic
eruption, nuclear fusion, fission or radioactivity, or other acts
of God.
The Custodian shall have no liability in respect of any
loss, damage or expense suffered by the Customer, insofar as such
loss, damage or expense arises from the performance of the
Custodian's duties hereunder by reason of the Custodian's reliance
upon records that were maintained for the Customer by entities
other than the Custodian prior to the Custodian's employment under
this Agreement.
The provisions of this Section shall survive termination of
this Agreement.
1 16. Investment Limitations and Legal or Contractual
Restrictions or Regulations. The Custodian shall not be liable to
the Customer and the Customer agrees to indemnify the Custodian
and its nominees, for any loss, damage or expense suffered or
incurred by the Custodian or its nominees arising out of any
violation of any investment restriction or other restriction or
limitation applicable to the Customer or any Portfolio pursuant to
any contract (other than contracts to which the Custodian is a
party) or any law or regulation. The provisions of this Section
shall survive termination of this Agreement.
17. Fees and Expenses. The Customer agrees to pay to the
Custodian such compensation for its services pursuant to this
Agreement as may be mutually agreed upon in writing from time to
time and the Custodian's reasonable out-of-pocket or incidental
expenses in connection with the performance of this Agreement,
including (but without limitation) legal fees as described herein
and/or deemed necessary in the judgment of the Custodian to keep
safe or protect the Property in the Account. The initial fee
schedule is attached hereto as Exhibit C. The Customer hereby
agrees to hold the Custodian harmless from any liability or loss
resulting from any taxes or other governmental charges, and any
expense related thereto, which may be imposed, or assessed with
respect to any Property in an Account and also agrees to hold the
Custodian, its Subcustodians, and their respective nominees
harmless from any liability as a record holder of Property in such
Account. The provisions of this Section shall survive the
termination of this Agreement.
18. Tax Reclaims. With respect to withholding taxes
deducted and which may be deducted from any income received from
any Property in an Account, the Custodian shall perform such
services with respect thereto as are described in Exhibit D
attached hereto and shall in connection therewith be subject to
the standard of care set forth in such Exhibit D. Such standard of
care shall not be affected by any other term of this Agreement.
l9. Amendment. Modifications. etc. No provision of this
Agreement may be amended, modified or waived except in a writing
signed by the parties hereto. No waiver of any provision hereto
shall be deemed a continuing waiver unless it is so designated. No
failure or delay on the part of either party in exercising any
power or right under this Agreement operates as a waiver, nor does
any single or partial exercise of any power or right preclude any
other or further exercise thereof or the exercise of any other
power or right.
20. Termination. (a) Termination of Entire Agreement. This
Agreement may be terminated by the Customer or the Custodian by
ninety (90) days' written notice to the other; provided that
notice by the Customer shall specify the names of the persons to
whom the Custodian shall deliver the Securities in each Account
and to whom the Cash in such Account shall be paid. If notice of
termination is given by the Custodian, the Customer shall, within
ninety (90) days following the giving of such notice, deliver to
the Custodian a written notice specifying the names of the persons
to whom the Custodian shall deliver the Securities in each Account
and to whom the Cash in such Account shall be paid. In either
case, the Custodian will deliver such Securities and Cash to the
persons so specified, after deducting therefrom any amounts which
the Custodian determines to be owed to it under Sections 12, 17,
and 23. In addition, the Custodian may in its discretion withhold
from such delivery such Cash and Securities as may be necessary to
settle transactions pending at the time of such delivery. The
Customer grants to the Custodian a lien and right of setoff
against the Account and all Property held therein from time to
time in the full amount of the foregoing obligations. If within
ninety (90) days following the giving of a notice of termination
by the Custodian, the Custodian does not receive from the Customer
a written notice specifying the names of the persons to whom the
Custodian shall deliver the Securities in each Account and to whom
the Cash in such Account shall be paid, the Custodian, at its
election, may deliver such Securities and pay such Cash to a bank
or trust company doing business in the State of New York to be
held and disposed of pursuant to the provisions of this Agreement,
or may continue to hold such Securities and Cash until a written
notice as aforesaid is delivered to the Custodian, provided that
the Custodian's obligations shall be limited to safekeeping.
(b) Termination as to One or More Portfolios. This
Agreement may be terminated by the Customer or the Custodian as to
one or more Portfolios (but less than all of the Portfolios) by
delivery of an amended Exhibit A deleting such Portfolios, in
which case termination as to such deleted Portfolios shall take
effect ninety (90) days after the date of such delivery, or such
earlier time as mutually agreed. The execution and delivery of an
amended Exhibit A which deletes one or more Portfolios shall
constitute a termination of this Agreement only with respect to
such deleted Portfolio(s), shall be governed by the preceding
provisions of Section 20 as to the identification of a successor
custodian and the delivery of Cash and Securities of the
Portfolio(s) so deleted to such successor custodian, and shall not
affect the obligations of the Custodian and the Customer hereunder
with respect to the other Portfolios set forth in Exhibit A, as
amended from time to time.
21. Notices. Except as otherwise provided in this
Agreement, all requests, demands or other communications between
the parties or notices in connection herewith (a) shall be in
writing, hand delivered or sent by telex, telegram, cable,
facsimile or other means of electronic communication agreed upon
by the parties hereto addressed, if to the Customer, to:
The Kent Funds
000 Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
if to the Custodian, to:
Bankers Trust Company
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
or in either case to such other address as shall have been
furnished to the receiving party pursuant to the provisions hereof
and (b) shall! be deemed effective when received, or, in the case
of a telex, when sent to the proper number and acknowledged by a
proper answerback.
22. Several Obligations of the Portfolios. With respect to
any obligations of the Customer on behalf of each Portfolio and
each of its related Accounts arising out of this Agreement, the
Custodian shall look for payment or satisfaction of any obligation
solely to the assets and property of the Portfolio and such
Accounts to which such obligation relates as though the Customer
had separately contracted with the Custodian by separate written
instrument with respect to each Portfolio and its related
Accounts.
23. Security for Payment. To secure payment of all
obligations due hereunder, the Customer hereby grants to Custodian
a continuing security interest in and right of setoff against each
Account and all Property held therein from time to time in the
full amount of such obligations; provided that, if there is more
than one Account and the obligations secured pursuant to this
Section can be allocated to a specific Account or the Portfolio
related to such Account, such security interest and right of
setoff will be limited to Property held for that Account only and
its related Portfolio. Should the Customer fail to pay promptly
any amounts owed hereunder, Custodian shall be entitled to use
available Cash in the Account or applicable Account, as the case
may be, and to dispose of Securities in the Account or such
applicable Account as is necessary. In any such case and without
limiting the foregoing, Custodian shall be entitled to take such
other action(s) or exercise such other options, powers and rights
as Custodian now or hereafter has as a secured creditor under the
New York Uniform Commercial Code or any other applicable law.
24. Representations and Warranties.
(a) The Customer hereby represents and warrants to the
Custodian that:
(i) the employment of the Custodian and the allocation
of fees, expenses and other charges to any Account as herein
provided, is not prohibited by law or any governing documents or
contracts to which the Customer is subject;
(ii) the terms of this Agreement do not violate any
obligation by which the Customer is bound, whether arising by
contract, operation of law or otherwise;
(iii) this Agreement has been duly authorized by
appropriate action and when executed and delivered will be binding
upon the Customer and each Portfolio in accordance with its terms;
and
(iv) the Customer will deliver to the Custodian such
evidence of such authorization as the Custodian may reasonably
require, whether by way of a certified resolution or otherwise.
(b) The Custodian hereby represents and warrants to the
Customer that:
(i) the terms of this Agreement do not violate any
obligation by which the Custodian is bound, whether arising by
contract, operation of law or otherwise;
(ii) this Agreement has been duly authorized by
appropriate action and when executed and delivered will be binding
upon the Custodian in accordance with its terms;
(iii) the Custodian will deliver to the Customer such
evidence of such authorization as the Customer may reasonably
require, whether by way of a certified resolution or otherwise;
and
(iv) Custodian is qualified as a custodian under
Section 26(a) of the 1940 Act and warrants that it will remain so
qualified or upon ceasing to be so qualified shall promptly notify
the Customer in writing.
25. Governing Law and Successors and Assigns. This
Agreement shall be governed by the law of the State of New York
and shall not be assignable by either party, but shall bind the
successors in interest of the Customer and the Custodian.
26. Publicity. Customer shall furnish to Custodian at its
office referred to in Section 21 above, prior to any distribution
thereof, copies of any material prepared for distribution to any
persons who are not parties hereto that refer in any way to the
Custodian. Customer shall not distribute or permit the
distribution of such materials if Custodian reasonably objects in
writing within ten (10) business days of receipt thereof (or such
other time as may be mutually agreed) after receipt thereof. The
provisions of this Section shall survive the termination of this
Agreement.
27. Representative Capacity and Binding Obligation. A copy
of the Declaration of Trust of the Customer is on file with The
Secretary of the Commonwealth of Massachusetts, and notice is
hereby given that this Agreement is not executed on behalf of the
Trustees of the Customer as individuals, and the obligations of
this Agreement are not binding upon any of the Trustees, officers
or shareholders of the Customer individually but are binding only
upon the assets and property of the Portfolios.
The Custodian agrees that no shareholder, trustee or of
officer of the Customer may be held personally liable or
responsible for any obligations of the Customer arising out of
this Agreement.
28. Submission to Jurisdiction. Any suit, action or
proceeding arising out of this Agreement may be instituted in any
State or Federal court sitting in the City of Xxx Xxxx, Xxxxx xx
Xxx Xxxx, Xxxxxx Xxxxxx of America, and the Customer irrevocably
submits to the non-exclusive jurisdiction of any such court in any
such suit, action or proceeding and waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have
to the laying of venue of any such suit, action or proceeding
brought in such a court and any claim that such suit, action or
proceeding was brought in an inconvenient forum.
29. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original.
This Agreement shall become effective when one or more
counterparts have been signed and delivered by each of the parties
hereto.
30. Confidentiality. The parties hereto agree that each
shall treat confidentially the terms and conditions of this
Agreement and all information provided by each party to the other
regarding its business and operations. All confidential
information provided by a party hereto shall be used by any other
party hereto solely for the purpose of rendering services pursuant
to this Agreement and, except as may be required in carrying out
this Agreement, shall not be disclosed to any third party without
the prior consent of such providing party. The foregoing shall not
be applicable to any information that is publicly available when
provided or thereafter becomes publicly available other than
through a breach of this Agreement, or that is required or
requested to be disclosed by any bank or other regulatory examiner
of the Custodian, Customer, or any Subcustodian, any auditor of
the parties hereto, by judicial or administrative process or
otherwise by applicable law or regulation.
31. Severabilitv. If any provision of this Agreement is
determined to be invalid or unenforceable, such determination
shall not affect the validity or enforceability of any other
provision of this Agreement.
32. Headings. The headings of the paragraphs hereof are
included for convenience of reference only and do not form a part
of this Agreement.
THE KENT FUNDS
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X.Xxxxxxxxx,
Title: Treasurer
BANKERS TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Name:Xxxxxx X. Xxxxxxxxxxx
Title:Vice President
EXHIBIT A
To Custodian Agreement dated as of October 25, 1995 between
Bankers Trust Company
and The Kent Funds.
LIST OF PORTFOLIOS
The following is a list of Portfolios referred to in the
first WHEREAS clause of the above-referred to Custodian Agreement.
Terms used herein as defined terms unless otherwise defined shall
have the meanings ascribed to them in the above-referred to
Custodian Agreement.
Kent Growth and Income Fund
Kent Small Company Growth Fund
Kent International Growth Fund
Kent Index Equity Fund
Xxxx Xxxxx Term Bond Fund
Kent Intermediate Bond Fund
Kent Limited Term Tax-Free Fund
Kent Intermediate Tax-Free Fund
Kent Michigan Municipal Bond Fund
Kent Money Market Fund
Kent Michigan Municipal Money Market Fund
Kent Income Fund
Kent Tax-Free Income Fund
Dated as of: THE KENT FUNDS
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
BANKERS TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
EXHIBIT B
To Custodian Agreement dated as of October 25, 1995 between
Bankers Trust Company and The Kent Funds.
PROXY SERVICE
The following is a description of the Proxy Service referred
to in Section 10 of the above referred to Custodian Agreement.
Terms used herein as defined terms shall have the meanings
ascribed to them therein l]unless otherwise defined below.
The Custodian provides a service, described below, for the
transmission of corporate communications in connection with
shareholder meetings relating to Securities held in Argentina,
Australia, Austria, Canada, Denmark, Finland, France, Germany,
Greece, Hong Kong, Indonesia, Ireland, Italy, Japan, Korea,
Malaysia, Mexico, Netherlands, New Zealand, Pakistan, Poland,
Singapore, South Africa, Spain, Sri Lanka, Sweden, United Kingdom,
United States, and Venezuela. For the United States and Canada,
the term "corporate communications" means the proxy statements or
meeting agenda, proxy cards, annual reports and any other meeting
materials received by the Custodian. For countries other than the
United States and Canada, the term "corporate communications"
means the meeting agenda only and does not include any meeting
circulars, proxy statements or any other corporate communications
furnished by the issuer in connection with such meeting.
Non-meeting related corporate communications are not included in
the transmission service to be provided by the Custodian except
upon request as provided below.
The Custodian's process for transmitting and translating
meeting agendas will be as follows:
1) If the meeting agenda is not provided by the issuer in the
English language, and if the language of such agenda is in the
official language of the country in which the related security is
held, the Custodian will as soon as practicable after receipt of
the original meeting agenda by a Subcustodian provide an English
translation prepared by that Subcustodian
2) If an English translation of the meeting agenda is
furnished, the local language agenda will not be furnished unless
requested.
Translations will be free translations and neither the
Custodian nor any Subcustodian will be liable or held responsible
for the accuracy thereof or any direct or indirect consequences
arising therefrom, including without limitation arising out of any
action taken or omitted to be taken based thereon.
If requested, the Custodian will, on a reasonable efforts
basis, endeavor to obtain any additional corporate communication
such as annual or interim reports, proxy statements, meeting
circulars, or local language agendas, and provide them in the form
obtained.
Timing in the voting process is important and, in that
regard, upon receipt by the Custodian of notice from a
Subcustodian, the Custodian will provide a notice to the Customer
indicating the deadline for receipt of its instructions to enable
the voting process to take place effectively and efficiently. As
voting procedures will vary from market to market, attention to
any required procedures will be very important.
Upon timely receipt of voting instructions, the Custodian
will promptly forward such instructions to the applicable
Subcustodian. If voting instructions are not timely received, the
Custodian shall have no liability or obligation to take any
action.
For Securities held in markets other than those set forth in
the first paragraph, the Custodian will not furnish the material
described above or seek voting instructions. However, if requested
to exercise voting rights at a specific meeting, the Custodian
will endeavor to do so on a reasonable efforts basis without any
assurance that such rights will be so exercised at such meeting.
If the Custodian or any Subcustodian incurs extraordinary
expenses in exercising voting rights related to any Securities
pursuant to appropriate instructions or direction (e.g., by way of
illustration only and not by way of limitation, physical presence
is required at a meeting and/or travel expenses are incurred),
such expenses will be reimbursed out of the Account containing
such Securities unless other arrangements have been made for such
reimbursement.
It is the intent of the Custodian to expand the Proxy
Service to include jurisdictions which are not currently included
as set forth in the second paragraph hereof. The Custodian will
notify the Customer as to the inclusion of additional countries or
deletion of existing countries after their inclusion or deletion
and this Exhibit B will be deemed to be automatically amended to
include or delete such countries as the case may be.
Dated as of: THE KENT FUNDS
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
BANKERS TRUST COMPANY
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxxx
Title: VicePresident
EXHIBIT D
To Custodian Agreement dated as of October 25, 1995 between
Bankers Trust Company and The Kent Funds.
TAX RECLAIMS
Pursuant to Section 18 of the above referred to Custodian
Agreement, the Custodian shall perform the following services with
respect to withholding taxes imposed or which may be imposed on
income from Property in any Account. Terms used herein as defined
terms shall unless otherwise defined have the meanings ascribed to
them in the above referred to Custodian Agreement.
When withholding tax has been deducted with respect to
income from any Property in an Account, the Custodian will
actively pursue on a reasonable efforts basis the reclaim process,
provided that the Custodian shall not be required to institute any
legal or administrative proceeding against any Subcustodian or
other person. The Custodian will provide fully detailed
advices/vouchers to support reclaims submitted to the local
authorities by the Custodian or its designee. In all cases of
withholding, the Custodian will provide full details to the
Customer. If exemption from withholding at the source can be
obtained in the future, the Custodian will notify the Customer and
advise what documentation, if any, is required to obtain the
exemption. Upon receipt of such documentation from the Customer,
the Custodian will file for exemption on the Customer's behalf and
notify the Customer when it has been obtained.
In connection with providing the foregoing service, the
Custodian shall be entitled to apply categorical treatment of the
Customer according to the Customer's nationality, the particulars
of its organization and other relevant details that shall be
supplied by the Customer. It shall be the duty of the Customer to
inform the Custodian of any change in the organization, domicile
or other relevant fact concerning tax treatment of the Customer
and further to inform the Custodian if the Customer is or becomes
the beneficiary of any special ruling or treatment not applicable
to the general nationality and category or entity of which the
Customer is a part under general laws and treaty provisions. The
Custodian may rely on any such information provided by the
Customer.
In connection with providing the foregoing service, the
Custodian may also rely on professional tax services published by
a major international accounting firm and/or advice received from
a Subcustodian in the jurisdictions in question. In addition, the
Custodian may seek the advice of counsel or other professional tax
advisers in such jurisdictions. The Custodian is entitled to rely,
and may act, on information set forth in such services and on
advice received from a Subcustodian, counsel or other professional
tax advisers and shall be without liability to the Customer for
any action reasonably taken or omitted pursuant to information
contained in such services or such advice.
Dated as of: THE KENT FUNDS
By: /s/ Xxxxxx X. Xxxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
BANKERS TRUST COMPANY
By: /s/ Xxxxxx X. Sarbinowki
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
Bankers Trust Company
Custody
Appendix A - Fee Schedule
Global
1. Annual Asset Fee (based on mkt value per annum)
TIER I 2 Basis Points
Cedel (Eurobonds)
Euroclear (Eurobonds)
TIER II 6 Basis Points
Canada
Germany
Italy ($50 transaction fee)
Japan
United Kingdom
TIER III 7 Basis Points
Australia Netherlands
Austria ($50 per New Zealand ($50 per
transaction) transaction)
Belgium Norway ($50 per
transaction)
Denmark ($50 per Switzerland
transaction)
France Sweden
Ireland
TIER IV 10 Basis Points
Hong Kong - ($60 per transaction)
Indonesia
Luxembourg
Malaysia
Mexico
Philippines
Singapore
South Africa
Spain
Thailand
Fee Schedule
Tier V
Country Annual Receive and Deliver
Asset Fee Transactions
Argentina 40 Basis Points $150
Brazil 40 Basis Points $100
Chile 30 Basis Points $100
Columbia 30 Basis Points $100
Finland 15 Basis Points $100
Greece 40 Basis Points 20 Basis Points
Israel 25 Basis Points $50
Pakistan 30 Basis Points $150
Xxxx 00 Basis Points $100
Portugal 15 Basis Points $100
Xxxxxxx/Xxxxxxxx 00 Xxxxx Xxxxxx $100
South Korea 15 Basis Points $100
Sri Lanka 30 Basis Points $100
Taiwan 15 Basis Points $100
Turkey 30 Basis Points $100
Venezuela 30 Basis Points $100
2. Account Charge - $0 Per Account (Per Month)
3. Trades - Receive and Deliver Transactions
$30
For Tier I, II, III (unless noted)
Tier IV (unless noted)
$75
4. Front End System Free
of Charge
Notes
1. Fees are billed monthly
2. Fees for the receipt of positions relating to the initial asset transition
will be waived
with the exception of the United Kingdom, Spain and Indonesia where registration
fees will be
assessed.
3. Cash movements will be assessed at $25 per U.S. wire movement and $50 per
non U.S.
wire movement. For FX trades concluded with BTCo., this charge will be waived.
4. Fees for investment in countries not listed will be negotiated
Date:
April 7, 1993
BANKERS TRUST COMPANY
Appendix A
DOMESTIC CUSTODY FEE SCHEDULE
Activity Monthly Holdong Charge per
issue
DTC $1.00
FBE $1.00
PTC $1.00
Physical $2.40
*Eurobonds Market Value 20 Basis Points
Blue Sheet $2.40
Private Placements $2.40
Activity Per Transaction
Reorg $4.50
DTC $4.50
FBE $6.00
PTC $6.00
Physical $15.00
Euroclear/Codel $30.00
Wires (P&I, Privates, etc.) $6.50
Activity Miscellaneous
Fed Wire In $7.50
Fed Wire Out $7.50
*2.0 basis points reflects an annualized charge.
