Mutual Fund/Business Trust/Series
Exhibit No. 8
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.Xxxxxxxxxx,
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
transaction) ($50 per 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 Holding
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.
