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EXHIBIT 99.23(h)(5)
SUB-FUND ACCOUNTING AGREEMENT
AGREEMENT made this 1st day of December, 1999, between OLD KENT
SECURITIES CORPORATION ("Old Kent"), a Michigan corporation, and BISYS FUND
SERVICES OHIO, INC. ("BISYS"), an Ohio corporation.
WHEREAS, Old Kent has entered into a Fund Accounting Agreement, dated
December 1, 1999 (the "Services Agreement"), with The Kent Funds (the
"Company"), a Massachusetts business trust registered with the Securities and
Exchange Commission (the "Commission"), concerning the provision of various
services, including but not limited to fund accounting services, for the
investment portfolios of the Company, all as now or hereafter may be established
from time to time (individually referred to herein as a "Fund" and collectively
as the "Funds");
WHEREAS, Old Kent desires to retain BISYS to assist it in performing
certain fund accounting services for the Funds; and
WHEREAS, BISYS is willing to perform such services on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual premises and covenants
herein set forth, the parties agree as follows:
1. Services as Sub-Fund Accountant.
Subject to the supervision, direction and control of the
Company's Board of Trustees, BISYS shall perform the fund accounting services
set forth in Schedule A attached hereto in accordance with the service standards
set forth in Schedule B attached hereto. BISYS also agrees to perform such
special services incidental to the performance of the services enumerated herein
as agreed to by the parties from time to time. BISYS shall perform such
additional services as are provided on an amendment to this Agreement, in
consideration of such fees as the parties hereto may agree. Notwithstanding the
foregoing, BISYS agrees to provide reasonable assistance to Old Kent (including
but not limited to consultation, employee training and the performance of
certain agreed upon tasks) in connection with Old Kent's performance of its
duties and responsibilities under the Services Agreement. In performing its
duties under this Agreement, BISYS will act in conformity with the Company's
Declaration of Trust, By-Laws, Prospectuses and Statements of Additional
Information as in effect from time to time and will conform to and comply with
the requirements of the Investment Company Act of 1940 (the "1940 Act") and all
other applicable federal and state laws and regulations. BISYS shall, for all
purposes herein, be deemed to be an independent contractor and, unless otherwise
expressly provided or authorized, shall have no authority to act for or
represent Old Kent or the Company in any way and shall not be deemed an agent of
Old Kent or the Company.
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2. Fees.
Old Kent shall pay BISYS for the services to be provided by
BISYS under this Agreement in accordance with, and in the manner set forth in,
the Omnibus Fee Agreement between Old Kent and BISYS dated as of December 1,
1999 (the "Fee Agreement").
3. Reimbursement of Expenses.
In addition to paying BISYS the fees referred to in Section 2
hereof, Old Kent agrees to reimburse BISYS for its out-of-pocket expense in
obtaining security prices in accordance with guidelines established by the
Company.
4. Effective Date.
This Agreement shall become effective as of the date first
written above or, if a particular Fund is not in existence on that date, on the
date such Fund commences operation (the "Effective Date").
5. Term.
The Term of this Agreement shall be as specified in the
Omnibus Fee Agreement between Old Kent and BISYS dated as of December 1, 1999.
6. Standard of Care; Reliance on Records and Instructions;
Indemnification.
BISYS shall use its best efforts to ensure the accuracy of all
services performed under this Agreement, but shall not be liable to Old Kent or
the Company for any action taken or omitted by BISYS in the absence of bad
faith, willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties. Old Kent agrees to indemnify and hold harmless BISYS,
its employees, agents, directors, officers and nominees from and against any and
all claims, demands, actions and suits, whether groundless or otherwise, and
from and against any and all judgments, liabilities, losses, damages, costs,
charges, reasonable counsel fees and other expenses of every nature and
character arising out of or in any way relating to BISYS' actions taken or
nonactions with respect to the performance of services under this Agreement or
based, if applicable, upon reasonable reliance on information, records,
instructions or requests given or made to BISYS by a duly authorized
representative of the Company or Old Kent; provided that this indemnification
shall not apply to actions or omissions of BISYS in cases of its own bad faith,
willful misfeasance, negligence or from reckless disregard by it of its
obligations and duties; and further provided that prior to confessing any claim
against it which may be the subject of this indemnification, BISYS shall give
Old Kent written notice of and reasonable opportunity to defend against said
claim in its own name or in the name of BISYS.
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Any person, even though also an officer, director, employee or
agent of BISYS who may be or become an officer, Trustee, employee or agent of
the Company, shall be deemed, when rendering services to the Company or to any
Fund, or acting on any business of the Company or of any Fund (other than
services or business in connection with BISYS' duties hereunder) to be rendering
such services to or acting solely for the Company or the Fund and not as an
officer, director, employee or agent or one under the control or direction of
BISYS even though paid by BISYS.
7. Record Retention and Confidentiality.
BISYS shall keep and maintain on behalf of the Company all
books and records that it is, or may be, required to keep and maintain in
connection with the services provided hereunder pursuant to all applicable
statutes, rules and regulations, including without limitation Rules 31a-1 and
31a-2 under the 1940 Act. BISYS further agrees that all such books and records
shall be the property of the Company and to make such books and records
available for inspection by Old Kent or the Company or by the Commission at
reasonable times and otherwise to keep confidential all books and records and
other information relative to the Company and its shareholders; except when
requested to divulge such information by duly-constituted authorities or court
process. BISYS agrees to surrender promptly such books and records upon request
by Old Kent or the Company.
8. Uncontrollable Events.
BISYS assumes no responsibility hereunder, and shall not be
liable, for any damage, loss of data, delay or any other loss whatsoever caused
by events beyond its reasonable control. BISYS shall, however, be obligated to
design and institute reasonable procedures to prevent or limit any such damages,
loss of data, delay or other losses.
9. Rights of Ownership.
All computer programs and procedures developed to perform
services required to be provided by BISYS under this Agreement are the property
of BISYS. All records and other data except such computer programs and
procedures are the exclusive property of the Company and all such other records
and data will be furnished to the Company in appropriate form as soon as
practicable after termination of this Agreement for any reason.
10. Representations of Old Kent.
Old Kent certifies to BISYS that: (1) as of the close of
business on the Effective Date, each Fund that is in existence as of the
Effective Date has authorized unlimited shares, and (2) this Agreement has been
duly authorized by Old Kent and, when executed and delivered by Old Kent, will
constitute a legal, valid and binding obligation of Old Kent, enforceable
against Old Kent
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in accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights and
remedies of creditors and secured parties.
11. Representations of BISYS.
BISYS represents and warrants that: (a) the various procedures
and systems which BISYS has implemented with regard to safeguarding from loss or
damage attributable to fire, theft, or any other cause of the records, and other
data of the Company and BISYS' records, data, equipment, facilities and other
property used in the performance of its obligations hereunder are adequate and
that it will make such changes therein from time to time as are required for the
secure performance of its obligations hereunder, and (b) this Agreement has been
duly authorized by BISYS and, when executed and delivered by BISYS, will
constitute a legal, valid and binding obligation of BISYS, enforceable against
BISYS in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors and secured parties.
12. Insurance.
BISYS shall notify Old Kent should any of its insurance
coverage be canceled or reduced. Such notification shall include the date of
change and the reasons therefor. BISYS shall notify Old Kent of any material
claims against it with respect to services performed under this Agreement,
whether or not they may be covered by insurance, and shall notify Old Kent from
time to time as may be appropriate of the total outstanding claims made by BISYS
under its insurance coverage.
13. Information Furnished by Old Kent.
Old Kent has furnished to BISYS the following:
(a) Copies of the Declaration of Trust of the Company and
of any amendments thereto, certified by the proper
official of the state in which such document has been
filed.
(b) Copies of the following documents:
(i) The Company's Bylaws and any amendments thereto; and
(ii) Certified copies of resolutions of the Board of
Trustees of the Company authorizing (i) Old Kent to
provide fund accounting services to the Company and
(ii) specified officers of the Company to instruct
Old Kent pursuant to the Services Agreement.
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(c) A list of all the officers of the Company; and
(d) Two copies of the Prospectus and Statement of
Additional Information for each Fund.
14. Information Furnished by BISYS.
(a) BISYS has furnished to Old Kent the following:
(i) BISYS' Articles of Incorporation; and
(ii) BISYS' Bylaws and any amendments thereto.
(b) BISYS shall, upon request, furnish certified copies of
corporate actions covering the following matters:
(i) approval of this Agreement and authorization of
a specified officer of BISYS to execute and
deliver this Agreement; and
(ii) authorization of BISYS to provide accounting
services for the Company.
15. Amendments to Documents.
Old Kent shall furnish BISYS with written copies of any
amendments to, or changes in, any of the items referred to in Section 13 hereof
forthwith upon such amendments or changes becoming effective. In addition, Old
Kent agrees that no amendments will be made to the Prospectuses or Statements of
Additional Information of the Company which might have the effect of changing
the procedures employed by BISYS in providing the services agreed to hereunder
or which amendment might affect the duties of BISYS hereunder unless Old Kent
first obtains BISYS' approval of such amendments or changes.
16. Compliance with Law.
Old Kent represents and warrants that the Company has
assumed full responsibility for the preparation, contents and distribution of
each prospectus of the Company as to compliance with all applicable requirements
of the Securities Act of 1933, as amended (the "Securities Act"), the 1940 Act
and any other laws, rules and regulations of governmental authorities having
jurisdiction, except for any noncompliance caused by the actions of BISYS and
its affiliates or based upon information provided by BISYS and its affiliates.
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17. Notices.
Any notice required or permitted to be given by either party
to the other shall be deemed sufficient if sent by registered or certified mail,
postage prepaid, addressed by the party giving notice to the other party at the
following address: if to Old Kent, at 000 Xxxxxx Xxxxxx, X.X., Xxxxx Xxxxxx,
Xxxxxxxx 00000, facsimile number (000) 000-0000, ATTENTION: XXXXX XXXX; and if
to BISYS, at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, facsimile number (614)
470-8715, ATTENTION: XXXXXXX X. XXXXX; or at such other address as such party
may from time to time specify in writing to the other party pursuant to this
Section.
18. Headings.
Paragraph headings in this Agreement are included for
convenience only and are not to be used to construe or interpret this Agreement.
19. Assignment.
This Agreement and the rights and duties hereunder shall not
be assignable by either of the parties hereto except by the specific written
consent of the other party. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective successors and
permitted assigns.
20. Governing Law.
This Agreement shall be construed and enforced in accordance
with the laws of the State of Ohio and the applicable provisions of the 1940
Act. To the extent that applicable laws of the State of Ohio, or any of the
provisions herein, conflict with applicable provisions of the 1940 Act, the
latter shall control.
21. Proprietary and Confidential Information.
BISYS agrees on behalf of itself and its officers and
employees to treat confidentially and as proprietary information of the Company
all records and other information relative to the Company and prior, present, or
potential shareholders, and not to use such records and information for any
purpose other than performance of its responsibilities and duties hereunder,
except after prior notification to and approval in writing by Old Kent, which
approval shall not be unreasonably withheld and may not be withheld where BISYS
may be exposed to civil or criminal contempt proceedings for failure to comply,
when requested to divulge such information by duly constituted authorities, or
when so requested by Old Kent.
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22. Year 2000 Readiness.
BISYS has performed comprehensive date testing on the systems
it utilizes to provide the services hereunder to simulate the actual turning of
the century and leap year. These tests were intended to identify any operational
issues regarding the accurate process of date/time data from, into and between
the Twentieth and Twenty-First Century, including leap year calculations. BISYS
agrees to use all commercially reasonable efforts to implement all necessary
updates and changes for such systems, if any, to accommodate the turn of the
century and leap year if not making such updates or changes would have a
material or significant adverse affect on the services to be performed by BISYS
hereunder. BISYS agrees to provide the Company with updates on the status of its
Year 2000 readiness project and to make its personnel reasonably available to
address any questions or concerns.
If, at any time prior to December 31, 1999, the Company or Old
Kent reasonably determines that any of the systems BISYS utilizes to perform the
services hereunder will not be Year 2000 ready, and that such lack of readiness
will have a material or significant adverse effect on the services to be
performed by BISYS hereunder, Old Kent shall have the right to terminate this
Agreement upon providing written notice to BISYS describing, in reasonable
detail, the basis for its termination; provided, however, that BISYS shall have
sixty (60) days following receipt of any such notice to cure any deficiencies to
Old Kent's reasonable satisfaction. Promptly upon becoming aware of such, BISYS
agrees to use all commercially reasonable efforts to cure any defect or
deficiency that relates to the processing of date/time data from, into and
between the Twentieth and Twenty-First centuries, including leap year
calculations, in any system BISYS utilizes to provide services hereunder if not
curing such defect or deficiency would have a material or significant adverse
effect on the services to be performed by BISYS hereunder.
23. Amendments.
No provision of this Agreement may be changed, waived,
discharged or terminated, except by an instrument in writing signed by the party
against whom an enforcement of the change, waiver, discharge or termination is
sought.
24. Multiple Originals.
This Agreement may be executed in two or more counterparts,
each of which when so executed shall be deemed to be an original, but such
counterparts shall together constitute but one and the same instrument.
25. Matters Relating to the Company 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 Company, as trustees
but not individually or personally, acting
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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 Company's, representatives or agents are made not individually, but
in such capacities, and are not binding upon any of the Company's, shareholders
or representatives of the Company personally, but bind only the assets of the
Company, and all persons dealing with any Fund must look solely to the assets of
the Company, belonging to such Fund for the enforcement of any claims against
the Company.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first above written.
OLD KENT SECURITIES CORPORATION
By: /s/ Xxxx X. Xxxxxx
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Title: President
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BISYS FUND SERVICES OHIO, INC.
By: /s/
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Title: President
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SCHEDULE A
TO THE SUB-FUND ACCOUNTING AGREEMENT
BETWEEN
OLD KENT SECURITIES CORPORATION
AND
BISYS FUND SERVICES OHIO, INC.
SERVICES
1. Calculate net asset value (NAV) and public offering price (POP).
2. Compute net income, dividend payments and capital gains, dividend factors,
xxxx-to-market, 7 and 30 day yields, SEC yields, and weighted average
maturity.
3. Execute security pricing per the direction of the Company.
4. Verify and reconcile all daily trade activity with both custodian and
investment adviser.
5. Reconcile cash, foreign currency and security holding positions with
custodian.
6. Report NAV/Income factor to NASDAQ.
7. Report NAV/Income factor to Transfer Agent personnel.
8. Report NAV/Income factor to client locations, as requested.
9. Determine unrealized appreciation and depreciation on securities.
10. Amortize premiums and discounts on securities as required.
11. Reset interest accruals on variable/floating rate securities.
12. Identify, research and post all corporate actions due the Company.
13. Calculate fee-based expenses as appropriate.
14. Calculate allocation of income, expense and security
appreciation/depreciation across multiple classes, as appropriate.
15. Post summary shareholder activity received from Transfer Agent personnel
and reconcile share balances, including receivables and payables, with
Transfer Agent personnel on a daily basis.
16. Respond to surveys from industry publications including, but not limited to
Lipper, Morningstar, Xxxxxxxx, XXXXXX, Standard and Poor's and Investment
Company Institute.
17. Provide reports to investment adviser on daily, weekly and monthly basis.
18. Provide reports used in preparation of financial reports, regulatory
filings, compliance reporting, total return and tax reporting.
19. Post all Fund transactions to general ledger categories, as appropriate.
20. Maintain books and records of the Company pursuant to Rule 31a-1 under the
Investment Company Act of 1940.
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SCHEDULE B
TO THE SUB-FUND ACCOUNTING AGREEMENT
BETWEEN
OLD KENT SECURITIES CORPORATION
AND
BISYS FUND SERVICES OHIO, INC.
Pursuant to Section 1 of this Agreement, BISYS has agreed to perform
the services described in this Agreement in accordance with the service
standards set forth in this Schedule B. Such standards are contained on the page
attached hereto. The parties agree that such service standards may be revised,
from time to time, by mutual agreement.
Each of the service standards will be monitored by a Quality Assurance
team. In the event BISYS fails to meet a service standard in any particular
month, BISYS agrees to take appropriate corrective measures within the following
thirty-day period in order to be in compliance with the appropriate standard at
the end of such thirty-day period; provided, however, that the foregoing
requirement shall not apply in those instances in which BISYS's failure to meet
a service standard was due to circumstances beyond its control.
In the event BISYS fails to meet a particular service standard (except
for any failure due to circumstances beyond its control) in two consecutive
months, the fee payable to BISYS hereunder shall be reduced by one percent (1%)
or such lower amount as the parties shall agree upon for the second of those two
months. If such failure occurs in three consecutive months, the fee payable to
BISYS hereunder shall be reduced by one and one-half percent (1.5%) or such
lower amount as the parties shall agree upon for the third of those three
months.
In the event BISYS fails to meet a particular service standard (except
for any failure due to circumstances beyond its control) for any three months
within a six-month period, such failure shall be deemed to be a service standard
deficiency for purposes of the "cause" definition set forth in Schedule B to the
Fee Agreement.
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SERVICING STANDARDS
ITEM STANDARD
NAV Calculation Accuracy Accurate 98% of time
Daily Bulletin 98% delivered by 6:30 p.m.
Cash Availability 98% delivered by 9:30 a.m.
Position Reconciliation Detailed security position
reconciliation weekly
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