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Exhibit 23(d)(9)
THE KENT FUNDS
INTERIM
INVESTMENT ADVISORY AGREEMENT
This Agreement (the "Agreement") by and between THE KENT FUNDS, a
Massachusetts business trust (the "Trust"), and FIFTH THIRD BANK ("Fifth Third"
or the "Adviser") is dated ______________, 2001.
WHEREAS, the Trust and the Adviser wish to enter into an Interim
Advisory Agreement setting forth the terms on which the Adviser will perform
certain services for the Trust's portfolios listed on Schedule A to this
Agreement (individually, a "Portfolio" and together, the "Portfolios") and for
each Portfolio of the Trust subsequently established;
WHEREAS, Fifth Third or its predecessors have been providing advisory
services to the Trust under a separate agreement which terminated as of
__________, 2001 in connection with a change in control involving Lyon Street
Asset Management; and Fifth Third will serve as Adviser to the Trust provided
the conditions of Rule 15a-4 under the Investment Company Act of 1940, as
amended, are met;
WHEREAS, the Board of Trustees of the Trust has approved this Agreement
and the Advisor is willing to furnish such services upon the terms and
conditions herein set forth;
THEREFORE, in consideration of the promises and the mutual agreements
hereinafter contained, the Trust and the Adviser agree as follows:
1. (a) The Trust hereby employs the Adviser to manage the investment
and reinvestment of the assets of the Portfolios of the Trust in conformity with
each Portfolio's investment objectives, fundamental policies and restrictions as
set forth from time to time in the Trust's then current prospectus and statement
of additional information thereto and other governing documents, subject to the
supervision and control of the Board of Trustees of the Trust, for the period
and on the terms set forth in this Agreement. The Adviser hereby hereby accepts
such employment and agrees during such period to render the services and to
assume the obligations set forth herein for the compensation provided herein.
The Adviser shall for all purposes herein be deemed to be an independent
contractor and shall, unless otherwise expressly provided or authorized, have no
authority to act for or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
(b) In the event the Trust establishes one or more Portfolios, in
addition to the existing Portfolios, for which it wishes the Adviser to perform
services hereunder, it shall notify the Adviser in writing. If the Adviser is
willing to render such services, it shall notify the Trust in writing and such
Portfolio shall become a Portfolio hereunder, and the compensation payable to
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the Adviser by the new Portfolio will be as agreed to in writing at the time and
as set forth on Schedule A attached hereto and made a part hereof.
2. The Adviser shall place all orders for the purchase and sale of
portfolio securities for the account of each Portfolio with broker-dealers
selected by the Adviser. In executing portfolio transactions and selecting
broker-dealers, the Adviser will use its best efforts to seek best execution on
behalf of each Portfolio. In assessing the best execution available for any
transaction, the Adviser shall consider all factors it deems relevant, including
the breadth of the market in the security, the price of the security, the
financial condition and execution capability of the broker-dealer and the
reasonableness of the commission, if any (for the specific transaction and on a
continuing basis). In evaluating the best execution available, and in selecting
the broker-dealer to execute a particular transaction, the Adviser may also
consider the brokerage and research services (as those terms are defined in
Section 28(e) of the Securities Exchange Act of 1934 ("1934 Act")) provided to
each Portfolio and or other accounts over which the Adviser or an affiliate of
the Adviser exercises investment discretion. The Adviser is authorized to pay a
broker-dealer who provides such brokerage and research services a commission for
executing a portfolio transaction for a Portfolio, which is in excess of the
amount of commission another broker-dealer would have charged for effecting that
transaction if, but only if, the Adviser determines in good faith that such
commission was reasonable in relation to the value of the brokerage and research
services provided by such broker-dealer viewed in terms of that particular
transaction or in terms of all of the accounts over which investment discretion
is so exercised.
3. The Adviser assumes and shall pay for all expenses of the Adviser
incurred in the management of the investment and reinvestment of the assets of
each Portfolio of the Trust. The Trust assumes and shall pay all other costs and
expenses of the Trust and its Portfolios, including, without limitation: (1) all
charges and expenses of a manager; (2) all charges and expenses of any custodian
or depository appointed by the Trust for the safekeeping of its cash, securities
and other property; (3) all charges and expenses for bookkeeping and auditors;
(4) all charges and expenses of any transfer agents and registrars appointed by
the Trust; (5) all fees of all Trustees of the Trust; (6) the cost of all
securities and other property purchased by the Trust and all brokers' fees,
expenses and commissions, issue and transfer taxes and other expenses chargeable
to the Trust in connection with the transactions involving securities and other
property to which the Trust is a party; (7) all taxes and corporate fees payable
by the Trust to federal, state or other governmental agencies; (8) all fees and
expenses involved in registering and maintaining registrations of the Trust and
of its shares with the Securities and Exchange Commission ("Commission") and
registering or qualifying its shares under state or other securities laws,
including the preparation and printing of prospectuses for filing with the
Commission and other authorities; (9) the costs of sales literature and
advertising, including expenses of preparing, printing and mailing prospectuses
and reports to shareholders of the Trust; (10) all expenses of shareholders' and
Trustees' meetings and of preparing, printing and mailing notices, reports and
proxy materials to shareholders of the Trust; (11) all charges and expenses of
legal counsel for the Trust, its officers and Trustees in connection with legal
matters relating to the Trust, including, without limitation, legal services
rendered in connection with the Trust's existence, trust and financial structure
and relations with its shareholders, registrations and qualifications of
securities under federal, state and other laws, issues of securities, expenses
which the Trust has herein assumed and extraordinary matters; (12) all charges
and expenses of
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filing annual and other reports with the Commission; and (13) all extraordinary
expenses and charges of the Trust. In the event that the Adviser provides any of
these services or pays any of these expenses, the Trust will promptly reimburse
the Adviser therefor on a cost basis. No agreement is made hereby with respect
to the provision of any other of such services by the Adviser or any of its
affiliates, or payment therefor.
The services of the Adviser to the Trust's Portfolios hereunder are not
to be deemed exclusive, and the Adviser shall be free to render similar services
to others.
4. As compensation for the Adviser's services during the period of this
Agreement for the Portfolios, and for each Portfolio subsequently established,
the Trust will pay to the Adviser for each Portfolio a fee at the annual rate as
set forth on Schedule A attached hereto and made a part hereof and as computed
in the manner provided in the Trust's then current prospectus and statement of
additional information thereto as of the close of business on each business day.
Subject to Section 7 hereof, a pro rata portion of the fee shall be
payable in arrears at the end of each calendar month. Subject to Section 7(b)
hereof, if this Agreement becomes effective or terminates before the end of any
month, the investment management fee for the period from the effective date to
the end of such month or from the beginning of such month to the date of
termination, as the case may be, shall be prorated according to the proration
which such period bears to the full month in which such effectiveness or
termination occurs.
5. The Adviser shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Trust in connection with the performance
of this Agreement, except a loss resulting from a breach of fiduciary duty with
respect to the receipt of compensation for services or a loss resulting from
willful misfeasance, bad faith or gross negligence on the part of the Adviser in
the performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. Any person, even though also an
officer, Director, partner, employee or agent of the Adviser, who may be or
become an officer, Trustee, employee or agent of the Trust, shall be deemed,
when rendering services to the Trust or acting on any business of the Trust
(other than services or business in connection with the Adviser's duties
hereunder), to be rendering such services to or acting solely for the Trust and
not as an officer, Director, partner, employee or agent or one under the control
or direction of the Adviser even though paid by it. The Trust agrees to
indemnify and hold the Adviser harmless from all taxes charges, expenses,
assessments, claims and liabilities (including, without limitation, liabilities
arising under the Securities Act of 1933, the 1934 Act, the Investment Company
Act of 1940 (the "1940 Act"), and any state and foreign securities and blue sky
laws, as amended from time to time) and expenses, including (without limitation)
attorneys' fees and disbursements, arising directly or indirectly from any
action or thing which the Adviser takes or does or omits to take or do hereunder
provided that the Adviser shall not be indemnified against any liability to the
Trust or to its shareholders (or any expenses incident to such liability)
arising out of a breach of fiduciary duty with respect to the receipt of
compensation for services, willful misfeasance, bad faith or negligence on the
part of the Adviser in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
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6. The term of this Agreement shall begin on the date first above
written and shall terminate without penalty upon the earlier of (i) 150 days
from the date hereof, (ii) 10 calendar days' written notice by the Trust to the
Adviser, provided that the Trust's Board of Trustees or a Majority (as defined
below) of the outstanding voting securities of a Portfolio have voted to
terminate the Agreement with respect to such Portfolio; (iii) an event of
assignment (as defined in the 1940 Act); and (iv) upon the effective date of
Investment Advisory Agreement between the Adviser and the Trust that has
received the approval of the vote of a Majority of the Trust's outstanding
voting securities. For purposes of the foregoing, "Majority" is defined as the
lesser of (a) 67% of the shares of the Trust represented at a meeting, if
holders of more than 50% of the outstanding shares of the Trust are present in
person or by proxy or (b) more than 50% of the outstanding shares of the Trust.
Subject to Section 7(a), termination of this Agreement shall not affect the
right of the Adviser to receive payments on any unpaid balance of the
compensation to which it is entitled under this Agreement entered prior to such
termination.
7. Escrow Provisions. (a) Notwithstanding any other provision of this
Agreement, in no event shall compensation paid to the Adviser hereunder exceed
the amount permitted by Rule 15a-4 under the 1940 Act. All compensation paid to
the Adviser hereunder shall be held in an interest-bearing escrow account with
Fifth Third Bank (the "ESCROW ACCOUNT"). Trust Funds held in the Escrow Account,
including interest earned ("ESCROW MONEY"), shall be paid to the Adviser
promptly after approval of an Investment Advisory Agreement between the Trust
and the Adviser by the vote of a Majority of each Portfolio's outstanding voting
securities in accordance with the 1940 Act, provided that such approval is
obtained no later than 150 days after the date of this Agreement.
(b) If an Investment-Advisory Agreement between the Trust and the Adviser is not
approved by a vote of a majority of each Portfolio's outstanding voting
securities within the time period stated above, the Adviser shall receive from
the Escrow Account as full compensation for its services hereunder the lesser
of: (x) the sum of the amount of any costs incurred by Adviser in performing its
duties under this Agreement prior to such termination plus any interest earned
on that amount, or (y) the sum of the amount deposited in the Escrow Account
plus any interest earned on that amount.
(c) The Trust shall deposit monthly advisory fees payable to the Adviser in a
segregated account with Fifth Third Bank. Fifth Third Bank shall invest the same
in a money market mutual fund or interest bearing bank account agreed to by the
Trust and the Adviser from time to time in writing. Whenever required by this
Agreement to disburse any of the Escrow Money and upon written directions from
Adviser and the Trust, Fifth Third Bank shall promptly liquidate sufficient
investments to permit such disbursement to be made, or, if directed by the
Adviser, distribute the Escrow Money in kind.
8. This Agreement may be amended at any time by an instrument in
writing executed by both parties hereto or their respective successors, provided
that such execution by the Trust shall have been first approved by vote of the
holders of a Majority of the outstanding voting securities of the affected
Portfolio of the Trust and by the vote of a majority of Trustees of the Trust
who are not interested persons (as that term is defined in the 0000 Xxx) of the
Adviser, or any predecessor of the Adviser, a manager of the Trust or the Trust,
cast in person at a meeting called for the purpose of voting on such approval.
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9. Matters Relating to the Trust as a Massachusetts Business Trust. The
names "The Kent Funds" and "Trustees of The Kent Funds" refer respectively to
the business trust created and the Trustees, as trustees but not individually or
personally, acting from time to time under a Declaration of Trust dated as of
May 9, 1986 to which reference is hereby made and a copy of which is on file at
the office of the Secretary of the Commonwealth of Massachusetts and elsewhere
as required by law, and to any and all amendments thereto so filed or hereafter
filed. The obligations of "The Kent Funds" entered into in the name or on behalf
thereof by any of the Trustees, representatives or agents are made not
individually, but in such capacities, and are not binding upon any of the
Trustees, shareholders or representatives of the Trust personally, but bind only
the assets of the Trust, and all persons dealing with any Fund must look solely
to the assets of the Trust belonging to such Fund for the enforcement of any
claims against the Trust.
10. The provisions of this Agreement shall be governed, construed and
enforced in accordance with the laws of The Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the day and year first above written.
Fifth Third BANK
By:
-------------------------
Name:
Title:
THE KENT FUNDS
By:
-------------------------
Name:
Title:
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SCHEDULE A
TO INTERIM
INVESTMENT ADVISORY AGREEMENT
SCHEDULE OF ANNUAL INVESTMENT ADVISORY FEES
Fund Annual Advisory Fee
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Kent Growth & Income Fund 0.70% of the Portfolio's average daily net assets
Kent Index Equity Fund 0.30% of the Portfolio's average daily net assets
Kent Large Company Growth Fund 0.70% of the Portfolio's average daily net assets
Kent Small Company Growth Fund 0.70% of the Portfolio's average daily net assets
Kent International Growth Fund 0.75% of the Portfolio's average daily net assets
Kent Income Fund 0.60% of the Portfolio's average daily net assets
Kent Intermediate Bond Fund 0.55% of the Portfolio's average daily net assets
Xxxx Xxxxx Term Bond Fund 0.50% of the Portfolio's average daily net assets
Kent Tax Free Income Fund 0.55% of the Portfolio's average daily net assets
Kent Intermediate Tax-Free Fund 0.50% of the Portfolio's average daily net assets
Kent Michigan Municipal Bond Fund 0.45% of the Portfolio's average daily net assets
Kent Money Market Fund 0.40% of the Portfolio's average daily net assets
The Kent Government Money Market Fund 0.40% of the Portfolio's average daily net assets
Kent Michigan Municipal Money Market Fund 0.40% of the Portfolio's average daily net assets
Kent Science and Technology Fund 0.70% of the Portfolio's average daily net assets
Xxxx Xxxxxxxxxx Fund 0.70% of the Portfolio's average daily net assets
Kent Cascade Fund 0.70% of the Portfolio's average daily net assets
Lyon Street Institutional Money Market Fund 0.40% of the Portfolio's average daily net assets
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