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Exhibit 24 (b)(9)(b)
FUND ACCOUNTING AGREEMENT
AGREEMENT made as of this 5th day of August, 1996, by and between THE KENT
FUNDS (the "Trust"), a Massachusetts business trust having its principal place
of business at 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000, and BISYS FUND
SERVICES, INC. ("Fund Accountant"), a corporation organized under the laws of
the State of Delaware and having its principal place of business at 0000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxx 00000.
WHEREAS, the Trust desires that Fund Accountant perform certain fund
accounting services for each investment portfolio of the Trust currently in
existence or hereafter created (individually referred to herein as a "Fund" and
collectively as the "Funds"); and
WHEREAS, Fund Accountant 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 Fund Accountant.
Subject to the supervision, direction and control of the
Trust's Board of Trustees, Fund Accountant shall provide the
services set forth below in accordance with the service standards
set forth in Schedule A attached hereto and made a part hereof. In
performing its duties as Fund Accountant under this Agreement, Fund
Accountant will act in conformity with the Trust'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.
(a) Performance of Daily Accounting Services. Fund
Accountant shall perform the following accounting services
daily for each Fund:
(i) Calculate the net asset value per share in accordance
with the Fund's Prospectus and statement of additional
information utilizing prices obtained from the sources
described in subsection 1(a)(ii) below;
(ii) Obtain security prices from independent pricing
services, or if such quotes are unavailable, then
obtain such prices from such other appropriate sources
in accordance with the Trust's Pricing Procedures, as
approved by the Trust's Board of Trustees;
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(iii) Verify and reconcile with the Funds' custodian all
daily trade activity;
(iv) Compute, as appropriate, each Fund's net income and
capital gains, dividend payables, dividend factors,
7-day yields, 7-day effective yields, 30-day yields,
and weighted average portfolio maturity;
(v) Review daily the net asset value calculation and
dividend factor (if any) for each Fund prior to release
to shareholders, check and confirm the net asset values
and dividend factors for reasonableness and deviations,
and distribute net asset values and yields to NASDAQ;
(vi) Report to the Trust the daily market pricing of
securities in any money market Funds, with the
comparison to the amortized cost basis;
(vii) Determine unrealized appreciation and depreciation on
securities held in variable net asset value Funds;
(viii) Amortize premiums and accrete discounts on securities
purchased at a price other than face value, if
requested by the Trust;
(ix) Update fund accounting system to reflect rate changes,
as received from a Fund's investment adviser, on
variable interest rate instruments;
(x) Post Fund transactions to appropriate categories;
(xi) Accrue expenses of each Fund according to instructions
received from the Trust's Administrator;
(xii) Determine the outstanding receivables and payables for
all (1) security trades, (2) Fund share transactions
and (3) income and expense accounts;
(xiii) Provide accounting reports in connection with the
Trust's regular annual audit and other audits and
examinations by regulatory agencies; and
(xiv) Provide such periodic reports as the parties shall
agree upon.
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(b) Special Reports and Services.
(i) Fund Accountant may provide additional special reports
upon the request of the Trust or a Fund's investment
adviser, which may result in an additional charge, the
amount of which shall be agreed upon between the parties.
(ii) Fund Accountant may provide such other similar services
with respect to a Fund as may be reasonably requested by
the Trust, which may result in an additional charge, the
amount of which shall be agreed upon between the parties.
(c) Additional Accounting Services. Fund Accountant
shall also perform the following additional accounting
services for each Fund:
(i) Provide monthly a download (and hard copy thereof) of the
financial statements described below, upon request of the
Trust. The download will include the following items:
Statement of Assets and Liabilities,
Statement of Operations,
Statement of Changes in Net Assets, and
Condensed Financial Information;
(ii) Provide accounting information for the following:
(A) federal and state income tax returns and federal
excise tax returns;
(B) the Trust's semi-annual reports with the
Securities and Exchange Commission ("SEC") on Form N-SAR;
(C) the Trust's annual, semi-annual and quarterly
(if any) shareholder reports;
(D) registration statements on Form N-1A and other
filings relating to the registration of shares;
(E) the Administrator's monitoring of the Trust's
status as a regulated investment company under Subchapter
M of the Internal Revenue Code, as amended;
(F) annual audit by the Trust's auditors; and
(G) examinations performed by the SEC.
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2. Subcontracting.
Fund Accountant may, at its expense, subcontract with any entity or person
concerning the provision of the services contemplated hereunder; provided,
however, that Fund Accountant shall not be relieved of any of its obligations
under this Agreement by the appointment of such subcontractor and provided
further, that Fund Accountant shall be responsible, to the extent provided in
Section 7 hereof, for all acts of such subcontractor as if such acts were its
own.
3. Compensation.
During the term of this Agreement, the Trust shall pay Fund Accountant for
the services to be provided by Fund Accountant under this Agreement in
accordance with, and in the manner set forth in, Schedule B hereto, as such
Schedule may be amended from time to time.
4. Reimbursement of Expenses.
In addition to paying Fund Accountant the fees described in Section 3
hereof, the Trust agrees to reimburse Fund Accountant for its reasonable
out-of-pocket expenses in providing services hereunder, including without
limitation the following:
(a) All freight and other delivery and bonding charges incurred by
Fund Accountant in delivering materials to and from the Trust;
(b) All direct telephone, telephone transmission and telecopy or
other electronic transmission expenses incurred by Fund Accountant
in communication with the Trust, the Trust's investment advisor or
custodian, dealers or others as required for Fund Accountant to
perform the services to be provided hereunder;
(c) The cost of obtaining security market quotes pursuant to Section
l(b)(ii) above;
(d) The cost of microfilm or microfiche of records or other
materials;
(e) Any expenses Fund Accountant shall incur at the written
direction of an officer of the Trust thereunto duly authorized; and
(f) Any additional expenses reasonably incurred by Fund Accountant
in the performance of its duties and obligations under this
Agreement.
5. Effective Date.
This Agreement shall become effective with respect to a Fund 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").
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6. Term.
This Agreement shall commence on August 5, 1996 and shall remain in effect
through July 31, 1998 (the "Initial Term"). Thereafter, unless otherwise
terminated as provided herein, this Agreement shall be renewed automatically
for successive one-year periods ("Rollover Periods"). This Agreement may be
terminated without penalty (i) by provision of a notice of nonrenewal in the
manner set forth below, (ii) by provision of 60 days advance written notice of
termination during any Rollover Period, (iii) by mutual agreement of the
parties or (iv) for "cause," as defined below, upon the provision of 45 days
advance written notice by the party alleging cause. Written notice of
nonrenewal must be provided within 60 days following the Initial Term or any
Rollover Period in order to avoid automatic renewal. In the event such notice
is provided in a timely manner, this Agreement shall terminate 180 days after
such notice, if given following the Initial Term, or 60 days after such notice,
if given following a Rollover Period.
After such termination for so long as Fund Accountant, with the written
consent of the Trust, in fact continues to perform any one or more of the
services contemplated by this Agreement or any schedule or exhibit hereto, the
provisions of this Agreement, including without limitation the provisions
dealing with indemnification, shall continue in full force and effect.
Compensation due Fund Accountant and unpaid by the Trust upon such termination
shall be immediately due and payable upon and notwithstanding such termination.
Fund Accountant shall be entitled to collect from the Trust, in addition to
the compensation described under Section 3 hereof, the amount of all of Fund
Accountant's reasonable cash disbursements for services in connection with Fund
Accountant's activities in effecting such termination, including without
limitation, the delivery to the Trust and/or its designees of the Trust's
property, records, instruments and documents, or any copies thereof.
Subsequent to such termination, Fund Accountant shall remain obligated to
provide the Trust with reasonable access to any Trust documents or records
remaining in its possession. If requested by the Trust, Fund Accountant shall
deliver such documents or records, or copies thereof, to the Trust or its
designee for a reasonable fee.
For purposes of this Agreement, "cause" shall mean (a) willful
misfeasance, bad faith, gross negligence or reckless disregard on the part of
the party to be terminated with respect to its obligations and duties set forth
herein; (b) multiple negligent acts on the part of the party to be terminated
which in the aggregate constitute a serious failure to perform satisfactorily
that party's obligations hereunder; (c) a final, unappealable judicial,
regulatory or administrative ruling or order in which the party to be
terminated has been found guilty of criminal or unethical behavior in the
conduct of its business; (d) financial difficulties on the part of the party to
be terminated which are evidenced by the authorization or commencement of, or
involvement by way of pleading, answer, consent or acquiescence in, a voluntary
or involuntary case under Title 11 of the United States Code, as from time to
time is in effect, or any applicable law, other than said Title 11, of any
jurisdiction relating to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors; or (e) a service
standard deficiency, as defined in Schedule A.
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If the Trust terminates this Agreement other than as provided in the first
paragraph of this Section 6, then the Trust shall make a one-time cash payment,
as liquidated damages, to Fund Accountant equal to the balance due Fund
Accountant for the remainder of the then current term of this Agreement,
assuming for purposes of calculation of the payment that the asset level of the
Trust on the date the Agreement is terminated will remain constant for the
balance of the then current contract term.
7. Standard of Care; Reliance on Records and Instructions;
Indemnification.
Fund Accountant shall use its best efforts to insure the accuracy of all
services performed under this Agreement, but shall not be liable to the Trust
for any action taken or omitted by Fund Accountant in the absence of bad faith,
willful misfeasance, negligence or reckless disregard by it of its obligations
and duties hereunder. The Trust agrees to indemnify and hold harmless Fund
Accountant, its employees, agents, directors and officers 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 Fund Accountant's 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 Fund Accountant by a duly
authorized representative of the Trust; provided that this indemnification
shall not apply to actions or omissions of Fund Accountant 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, Fund
Accountant shall give the Trust written notice of and reasonable opportunity to
defend against said claim in its own name or in the name of Fund Accountant.
Any person even though also an officer, director, employee or agent of
Fund Accountant, who may be or become an officer, Trustee, employee or agent of
the Trust, shall be deemed, when rendering services to the Trust or to any
Fund, or acting on any business of the Trust or of any Fund (other than
services or business in connection with Fund Accountant's duties hereunder) to
be rendering such services to or acting solely for the Trust or the Fund and
not as an officer, director, employee or agent or one under the control or
direction of Fund Accountant even though paid by Fund Accountant.
8. Record Retention and Confidentiality.
Fund Accountant shall keep and maintain on behalf of the Trust all books
and records which the Trust and Fund Accountant is, or may be, required to keep
and maintain pursuant to any applicable statutes, rules and regulations,
including without limitation Rules 31a-1 and 31a-2 under the 1940 Act, relating
to the maintenance of books and records in connection with the services to be
provided hereunder. Fund Accountant further agrees that all such books and
records shall be the property of the Trust and to make such books and records
available for inspection by the Trust or by the Securities and Exchange
Commission at reasonable times and otherwise to keep confidential
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all books and records and other information relative to the Trust and its
shareholders; except when requested to divulge such information by
duly-constituted authorities or court process. Fund Accountant agrees to
surrender promptly such books and records on the Trust's request.
9. Uncontrollable Events.
Fund Accountant 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. Fund Accountant shall, however, be
obligated to design and institute reasonable procedures to prevent or limit any
such damages, loss of data, delay or other losses.
10. Rights of Ownership.
All computer programs and procedures developed to perform services
required to be provided by Fund Accountant under this Agreement are the
property of Fund Accountant. All records and other data except such computer
programs and procedures are the exclusive property of the Trust and all such
other records and data will be furnished to the Trust in appropriate form as
soon as practicable after termination of this Agreement for any reason.
11. Representations of the Trust.
The Trust certifies to Fund Accountant 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 the Trust and, when executed and delivered by the Trust,
will constitute a legal, valid and binding obligation of the Trust, enforceable
against the Trust 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. Representations of Fund Accountant.
Fund Accountant represents and warrants that: (1) the various procedures
and systems which Fund Accountant has implemented with regard to safeguarding
from loss or damage attributable to fire, theft, or any other cause the
records, and other data of the Trust and Fund Accountant's 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 (2) this Agreement has been duly authorized by Fund Accountant
and, when executed and delivered by Fund Accountant, will constitute a legal,
valid and binding obligation of Fund Accountant, enforceable against Fund
Accountant 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.
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13. Insurance.
Fund Accountant shall notify the Trust should any of Fund Accountant's
insurance coverage be canceled or reduced. Such notification shall include the
date of change and the reasons therefor. Fund Accountant shall notify the
Trust of any material claims against Fund Accountant with respect to services
performed under this Agreement, whether or not they may be covered by
insurance, and shall notify the Trust from time to time as may be appropriate
of the total outstanding claims made by Fund Accountant under its insurance
coverage.
14. Information to be Furnished by the Trust and Funds.
The Trust has furnished to Fund Accountant the following:
(a) Copies of the Declaration of Trust of the Trust 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 Trust's Bylaws and any amendments thereto; and
(ii) Certified copies of resolutions of the Board of Trustees
covering the approval of this Agreement and authorization of
a specified officer of the Trust to execute and deliver this
Agreement.
(c) A list of all the officers of the Trust.
(d) Two copies of the Prospectuses and Statements of Additional
Information for each Fund.
15. Information Furnished by Fund Accountant.
(a) Fund Accountant has furnished to the Trust the following:
(i) Fund Accountant's Articles of Incorporation; and
(ii) Fund Accountant's Bylaws and any amendments thereto.
(b) Fund Accountant 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 Fund Accountant to execute and deliver this
Agreement; and
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(ii) Authorization of Fund Accountant to act as
fund accountant for the Trust and to provide accounting
services for the Trust.
16. Amendments to Documents.
The Trust shall furnish Fund Accountant written copies of any amendments
to, or changes in, any of the items referred to in Section 14 hereof forthwith
upon such amendments or changes becoming effective. In addition, the Trust
agrees that no amendments will be made to the Prospectuses or Statements of
Additional Information of the Trust which might have the effect of changing the
procedures employed by Fund Accountant in providing the services agreed to
hereunder or which amendment might affect the duties of Fund Accountant
hereunder unless the Trust first obtains Fund Accountant's approval of such
amendments or changes.
17. Compliance with Law.
The Trust assumes full responsibility for the preparation, contents and
distribution of each prospectus of the Trust in compliance with all applicable
requirements of the Securities Act of 1933, as amended, the 1940 Act and any
other laws, rules and regulations of governmental authorities having
jurisdiction, except for any noncompliance caused by the actions of Fund
Accountant and its affiliates or based upon information provided by Fund
Accountant and its affiliates. Fund Accountant shall have no obligation to
take cognizance of any laws relating to the sale of the Trust's shares.
18. Notices.
Any notice provided hereunder shall be sufficiently given when sent by
facsimile or registered or certified mail to the party required to be served
with such notice, at the following address: 0000 Xxxxxxx Xxxx, Xxxxxxxx, Xxxx
00000, facsimile number (000) 000-0000, or at such other address or facsimile
number as such party may from time to time specify in writing to the other
party pursuant to this Section. Notice sent by registered or certified mail
shall be deemed to have been given three days after it is sent. Notice sent by
facsimile shall be deemed to have been given immediately.
19. Headings.
Paragraph headings in this Agreement are included for convenience only and
are not to be used to construe or interpret this Agreement.
20. 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
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be binding upon, and shall inure to the benefit of, the parties hereto and
their respective successors and permitted assigns.
21. 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.
22. 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.
23. Governing Law.
This Agreement shall be governed by and provisions shall be construed in
accordance with the laws of the State of Ohio.
24. Confidentiality.
Fund Accountant agrees on behalf of itself and its employees to treat
confidentially and as the proprietary information of the Trust, all records and
other information relative to the Trust 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 the Trust, which approval
shall not be unreasonably withheld and may not be withheld where the Fund
Accountant 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 the Trust.
25. 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.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
THE KENT FUNDS
By: /s/ Xxxxxx X. Xxx Xxxxxxxx
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BISYS FUND SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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SCHEDULE A
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN THE KENT FUNDS
AND
BISYS FUND SERVICES, INC.
SERVICE STANDARDS
Pursuant to Section 1 of this Agreement, Fund Accountant has agreed to perform
the services described in this Agreement in accordance with the service
standards set forth in this Schedule A. Such standards are contained on the
pages 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 Fund Accountant fails to meet a service standard in any particular
month, Fund Accountant 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 Fund
Accountant's failure to meet a service standard was due to circumstances beyond
its control.
In the event Fund Accountant 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 Fund Accountant 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 Fund Accountant 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 Fund Accountant 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 Section
6 of this Agreement.
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SCHEDULE B
TO THE FUND ACCOUNTING AGREEMENT
BETWEEN THE KENT FUNDS
AND
BISYS FUND SERVICES, INC.
FEES
The Trust will pay Fund Accountant on the first business day of each month, or
at such time(s) as Fund Accountant shall request and the parties hereto shall
agree, a fee computed daily at the annual rate of one and one-half
one-hundredths of one percent (.015%) of the Trust's average daily net assets.
The fee payable by the Trust hereunder shall be allocated to each Fund based
upon its pro rata share of the total fee payable hereunder. Such fee as is
attributable to each Fund shall be a separate (and not joint or joint and
several) obligation of each such Fund. Fund Accountant may agree, from time to
time, to waive fees payable under this Agreement. Such waiver shall be at Fund
Accountant's sole discretion. All Funds that are created after the effective
date of this Agreement shall be subject to a per Fund annual minimum fee of
$5,000. With respect to any class of shares (other than Investment Shares or
Institutional Shares) that is created after the effective date of this
Agreement in a Fund in existence on the date hereof or in a Fund established
after the date hereof, the fee paid by such Fund that is allocated to such
class shall be subject to an annual minimum of $10,000.
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