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EXHIBIT 99.23(h)(1)
ADMINISTRATION AGREEMENT
This AGREEMENT is made as of this 1st day of December, 1999, by and
between THE KENT FUNDS, a Massachusetts business trust (the "Company"), and OLD
KENT SECURITIES CORPORATION (the "Administrator"), a Michigan corporation having
its principal place of business at 000 Xxxx Xxxxxx XX, Xxxxx Xxxxxx, Xxxxxxxx
00000.
WHEREAS, the Company is an open-end management investment company
registered under the Investment Company Act of 1940, as amended (the "1940
Act"), consisting of several series of shares of beneficial interest ("Shares");
and
WHEREAS, the Company desires the Administrator to provide, and the
Administrator is willing to provide, management and administrative services to
such series of the Company that are currently in existence and which may
hereafter be created (the "Portfolios") on the terms and conditions hereinafter
set forth.
NOW, THEREFORE, in consideration of the premises and the covenants
herein set forth, the Company and the Administrator hereby agree as follows:
ARTICLE 1. Retention of the Administrator. The Company hereby appoints
the Administrator to act as the administrator of the Portfolios and, subject to
the supervision, direction and control of the Company's Board of Trustees, to
furnish the Portfolios with the management and administrative services set forth
in Article 2 below. The Administrator hereby accepts such appointment and agrees
to perform said services for the compensation provided for in Article 4 below.
The Administrator 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 the Company in any way and shall
not be deemed an agent of the Company.
ARTICLE 2. Administrative Services. The Administrator shall perform or
supervise the performance by others of the administrative services described
herein in connection with the operations of the Portfolios, and, on behalf of
the Company, will investigate, assist in the selection of and conduct relations
with custodians, depositories, accountants, legal counsel, underwriters, brokers
and dealers, corporate fiduciaries, insurers, banks and persons in any other
capacity deemed to be necessary or desirable for the Portfolios' operations. The
Administrator shall provide the Trustees of the Company with such reports
regarding the Portfolios' investment performance as they may reasonably request
but shall have no responsibility for supervising the performance by any
investment adviser or sub-adviser of its responsibilities. The Administrator
agrees to perform the services described herein in accordance with the service
standards set forth in Schedule A attached hereto and made a part hereof.
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The Administrator shall provide the Company with regulatory reporting,
all necessary office space, equipment, personnel, and facilities (including
facilities for Shareholders' and Trustees meetings) for handling the affairs of
the Portfolios and such other services as the Administrator shall, from time to
time, determine to be necessary to perform its obligations under this Agreement.
In addition, at the request of the Company's Board of Trustees, the
Administrator shall make reports to the Trustees concerning the performance of
its obligations hereunder.
Without limiting the generality of the foregoing, the Administrator
shall:
(a) calculate each Portfolio's contractual expenses and control
all disbursements by the Company and the Portfolios, and as
appropriate compute each Portfolio's yields, total return,
expense ratios, portfolio turnover rate and, if required,
portfolio average dollar-weighted maturity;
(b) prepare drafts of prospectuses, statements of additional
information, registration statements and proxy materials with
the advice of Company counsel and assist Company counsel with
the filing of the same;
(c) prepare such reports, applications and documents (including
reports regarding the sale and redemption of Shares as may be
required in order to comply with federal and state securities
law) as may be necessary or desirable to register the
Company's Shares with state securities authorities, monitor
the sale of Company Shares for compliance with state
securities laws, and file with the appropriate state
securities authorities the registration statements and reports
for the Company and the Company's Shares and all amendments
thereto, as may be necessary or desirable to register, or
otherwise quality, and keep effective the Company and the
Company's Shares with state securities authorities to enable
the Company to make a continuous offering of its Shares;
(d) develop and prepare, with the assistance of the Company's
investment adviser, communications to Shareholders, including
annual and semi-annual reports to Shareholders, coordinate the
mailing of prospectuses, statements of additional information,
notices, proxy statements, proxies and other reports to
Company Shareholders, and supervise and facilitate the proxy
solicitation process for all Shareholder meetings, including
the tabulation of Shareholder votes;
(e) administer contracts on behalf of the Company with, among
others, the Company's investment adviser, distributor,
custodian, transfer agent and fund accountant;
(f) supervise the Company's transfer agent with respect to the
payment of dividends and other distributions to Shareholders;
(g) calculate performance data of the Portfolios for dissemination
to information services covering the investment company
industry;
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(h) coordinate and supervise the preparation and filing of the
Company's tax returns and required tax filings;
(i) examine and review the operations and performance of the
various organizations providing services to the Company or any
Portfolio, including, without limitation, the Company's
investment adviser, distributor, custodian, fund accountant,
transfer agent, outside legal counsel and independent public
accountants, and at the request of the Company's Board of
Trustees, report to the Board on the performance of such
organizations;
(j) assist with the layout and printing of publicly disseminated
prospectuses and assist with and coordinate layout and
printing of the Company's semi-annual and annual reports to
Shareholders;
(k) assist with the design, development, and operation of the
Portfolios, including new classes, investment objectives,
policies and structure;
(l) provide individuals reasonably acceptable to the Company's
Board of Trustees to serve as officers of the Company, who
will be responsible for the management of certain of the
Company's affairs as determined by the Company's Board of
Trustees;
(m) advise the Company and its Board of Trustees on matters
concerning the Company and its affairs;
(n) obtain and keep in effect fidelity bonds and directors and
officers/errors and omissions insurance policies for the
Company in accordance with the requirements of Rules 17g-1 and
17d-1(d)(7) under the 1940 Act as such bonds and policies are
approved by the Company's Board of Trustees;
(o) monitor and advise the Company and its Portfolios on their
registered investment company status under the Internal
Revenue Code of 1986, as amended;
(p) perform all administrative services and functions of the
Company and each Portfolio to the extent administrative
services and functions are not provided to the Company or such
Portfolio pursuant to the Company's or such Portfolio's
investment advisory agreement, distribution agreement,
custodian agreement, transfer agent agreement and fund
accounting agreement;
(q) furnish advice and recommendations with respect to other
aspects of the business and affairs of the Portfolios as the
Company and the Administrator shall determine desirable;
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(r) prepare and file with the SEC the semi-annual report for the
Company on Form N-SAR and, within 60 days after the close of
each fiscal year of the Company, all required notices pursuant
to Rule 24f-2;
(s) provide reasonable assistance to the Company in connection
with any examination by the SEC;
(t) prepare and maintain a current compliance manual for the
Company;
(u) monitor on at least a monthly basis compliance by each
Portfolio with (i) the investment restrictions and
diversification requirements of the 1940 Act; and (ii) the
investment restrictions and policies in the Portfolio's
current prospectus and statement of additional information;
and
(v) prepare drafts of minutes for all meetings of the Company's
Board of Trustees and each committee thereof with the advice
of Company counsel and otherwise prepare and distribute all
materials necessary or desirable for each such meeting.
The Administrator shall perform such other services for the Company
that are mutually agreed upon by the parties from time to time. Such services
may include performing internal audit examinations; mailing the annual and
semi-annual reports of the Portfolios; preparing an annual list of Shareholders;
and mailing notices of Shareholders' meetings, proxies and proxy statements, for
all of which the Company will pay the Administrator's out-of-pocket expenses.
In performing its duties as Administrator under this Agreement, the
Administrator will act in conformity with the Company's Declaration of Trust,
By-Laws, prospectus and statements of additional information as in effect from
time to time and will conform to and comply with the requirements of the 1940
Act and all applicable federal and state laws and regulations.
ARTICLE 3. Allocation of Charges and Expenses.
(A) The Administrator. The Administrator shall furnish at its own
expense the executive, supervisory and clerical personnel necessary to perform
its obligations under this Agreement. The Administrator shall also provide the
items which it is obligated to provide under this Agreement, and shall pay all
compensation, if any, of officers of the Company as well as all Trustees of the
Company who are affiliated persons of the Administrator or any other
organization affiliated with the Administrator; provided, however, that unless
otherwise specifically provided the Administrator shall not be obligated to pay
the compensation of any employee of the Company retained by the Trustees of the
Company to perform services on behalf of the Company.
(B) The Company. The Company assumes and shall pay or cause to be
paid all other expenses of the Company not otherwise allocated herein,
including, without limitation, organization costs, taxes, expenses for legal and
auditing services, the expenses of preparing (including typesetting), printing
and mailing reports, prospectuses, statements of additional information, proxy
solicitation material and notices to existing Shareholders, all expenses
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incurred in connection with issuing and redeeming Shares, the costs of custodial
services, the cost of initial and ongoing registration of the Shares under
federal and state securities laws, fees and out-of-pocket expenses of Trustees
who are not affiliated persons of the Administrator or the investment adviser to
the Company or any other organization affiliated with the Administrator or the
investment adviser, insurance, interest, brokerage costs, litigation and other
extraordinary or nonrecurring expenses, and all fees and charges of investment
advisers to the Company.
ARTICLE 4. Compensation of the Administrator.
(A) Administrative Fees. For the services to be rendered, the
facilities furnished and the expenses assumed by the Administrator pursuant to
this Agreement, the Company shall pay to the Administrator during the term of
this Agreement compensation in accordance with, and in the manner set forth in,
Schedule B attached hereto. Such compensation shall be calculated and accrued
daily, and paid to the Administrator monthly. The Company shall also reimburse
the Administrator for its reasonable out-of-pocket expenses, including the
reasonable travel and lodging expenses incurred by officers and employees of the
Administrator in connection with attendance at Board meetings.
(B) Survival of Compensation Rights. All rights of compensation
under this Agreement for services performed as of the termination date shall
survive the termination of this Agreement.
(C) Reimbursement Based Upon State Expense Limitations. If in any
fiscal year the aggregate expenses of a particular Portfolio (as defined under
the securities regulations of any state having jurisdiction over the Company)
exceed the expense limitations of any such state, the Administrator will
reimburse such Portfolio for a portion of such excess expenses equal to such
excess times the ratio of the fees respecting such Portfolio otherwise payable
to the Administrator hereunder to the aggregate fees respecting such Portfolio
otherwise payable to the Administrator hereunder and to Old Kent Bank under the
Investment Advisory Agreement between Old Kent Bank and the Company. The expense
reimbursement obligation of the Administrator is limited to the amount of its
fees hereunder for such fiscal year, provided, however, that notwithstanding the
foregoing, the Administrator shall reimburse a particular Portfolio for such
proportion of such excess expenses regardless of the amount of fees paid to it
during such fiscal year to the extent that the securities regulations of any
state having jurisdiction over the Company so require. Such expense
reimbursement, if any, will be estimated daily and reconciled and paid on a
monthly basis.
ARTICLE 5. Limitation of Liability of the Administrator. The duties of
the Administrator shall be confined to those expressly set forth herein, and no
implied duties are assumed by or may be asserted against the Administrator
hereunder. The Administrator shall not be liable for any error of judgment or
mistake of law or for any loss arising out of any act or omission in carrying
out its duties hereunder, except a loss resulting from willful misfeasance, bad
faith or negligence in the performance of its duties, or by reason of reckless
disregard of its obligations and duties hereunder, except as may otherwise be
provided under provisions of applicable law which cannot be waived or modified
hereby. (As used in this Article 5, the term "Administrator" shall include
partners, directors, officers, employees and other agents of the
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Administrator as well as the Administrator itself.) Any person, even though also
an officer, director, partner, employee or agent of the Administrator, 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 Portfolio, or acting on
any business of the Company or of any Portfolio (other than services or business
in connection with the Administrator's duties hereunder) to be rendering such
services to or acting solely for the Company or the Portfolio and not as an
officer, director, partner, employee or agent or one under the control or
direction of the Administrator even though paid by the Administrator.
So long as the Administrator acts in good faith and with due diligence
and without negligence, the Company assumes full responsibility and shall
indemnify the Administrator and hold it harmless from and against any and all
actions, suits and claims, whether groundless or otherwise, and from and against
any and all losses, damages, costs, charges, reasonable counsel fees and
disbursements, payments, expenses and liabilities (including reasonable
investigation expenses) arising directly or indirectly out of the
Administrator's actions taken or nonactions with respect to the performance of
services hereunder. The indemnity and defense provisions set forth herein shall
survive the termination of this Agreement for a period of five years.
Except for actions, suits or claims brought or threatened against the
Administrator by (i) the Company, or (ii) one or more Shareholders of the
Company, the rights hereunder shall include the right to reasonable advances of
defense expenses in the event of any pending or threatened litigation with
respect to which indemnification hereunder may ultimately be merited. In order
that the indemnification provision contained herein shall apply, however, it is
understood that if in any case the Company may be asked to indemnify or hold the
Administrator harmless, the Company shall be fully and promptly advised of all
pertinent facts concerning the situation in question, and it is further
understood that the Administrator will use all reasonable care to identify and
notify the Company promptly concerning any situation which presents or appears
likely to present the probability of such a claim for indemnification against
the Company, but failure to do so in good faith shall not affect the
Administrator's indemnification rights hereunder.
The Company shall be entitled to participate at its own expense or, if
it so elects, to assume the defense of any suit brought to enforce any claims
subject to this indemnity provision. If the Company elects to assume the defense
of any such claim, the defense shall be conducted by counsel chosen by the
Company and satisfactory to the Administrator, whose approval shall not be
unreasonably withheld. In the event that the Company elects to assume the
defense of any suit and retain counsel, the Administrator shall bear the fees
and expenses of any additional counsel retained by it. If the Company does not
elect to assume the defense of a suit, it will reimburse the Administrator for
the reasonable fees and expenses of any counsel retained by the Administrator.
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The Administrator may apply to the Company at any time for instructions
and may consult counsel for the Company or its own counsel and with accountants
and other experts with respect to any matter arising in connection with the
Administrator's duties, and the Administrator shall not be liable or accountable
for any reasonable action taken or omitted by it in good faith in accordance
with such instructions or with the opinion of such counsel, accountants or other
experts.
Also, the Administrator shall be protected in acting in good faith upon
any document which it reasonably believes to be genuine and to have been signed
or presented by the proper person or persons.
ARTICLE 6. Activities of the Administrator. The services of the
Administrator rendered to the Company are not to be deemed to be exclusive. The
Administrator is free to render such services to others and to have other
businesses and interests. To the extent the Administrator renders services to
another investment company which are similar to the services the Administrator
is obligated to perform under this Agreement, the Administrator will take
reasonable precautions to avoid any conflict of interest between its obligations
to the Company and its obligations to any such other investment company. It is
understood that directors, officers, employees and Shareholders of the Company
are or may be or become interested in the Administrator, as officers, employees
or otherwise and that partners, officers and employees of the Administrator and
its counsel are or may be or become similarly interested in the Company, and
that the Administrator may be or become interested in the Company as a
Shareholder or otherwise.
ARTICLE 7. Duration of this Agreement. The duration of this Agreement
shall be as specified in Schedule C hereto.
ARTICLE 8. Assignment. This Agreement shall not be assignable by
either party without the written consent of the other party; provided, however,
that the Administrator may, at its expense, subcontract with any entity or
person concerning the provision of the services contemplated hereunder. The
Administrator shall not, however, be relieved of any of its obligations under
this Agreement by the appointment of such subcontractor and provided further,
that the Administrator shall be responsible, to the extent provided in Article 5
hereof, for all acts of such subcontractor as if such acts were its own. This
Agreement shall be binding upon, and shall inure to the benefit of, the parties
hereto and their respective successors and permitted assigns.
ARTICLE 9. 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.
ARTICLE 10. Certain Records. The Administrator shall maintain
customary records in connection with its duties as specified in this Agreement.
Any records required to be maintained and preserved pursuant to Rules 31a-1 and
31a-2 under the 1940 Act which are prepared or maintained by the Administrator
on behalf of the Company shall be prepared and
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maintained at the expense of the Administrator, but shall be the property of the
Company and will be made available to or surrendered promptly to the Company on
request.
In case of any request or demand for the inspection of such records by
another party, the Administrator shall notify the Company and follow the
Company's instructions as to permitting or refusing such inspection; provided
that the Administrator may exhibit such records to any person in any case where
it is advised by its counsel that it may be held liable for failure to do so,
unless (in cases involving potential exposure only to civil liability) the
Company has agreed to indemnify the Administrator against such liability.
ARTICLE 11. Definitions of Certain Terms. The terms "interested
person" and "affiliated person," when used in this Agreement, shall have the
respective meanings specified in the 1940 Act and the rules and regulations
thereunder, subject to such exemptions as may be granted by the Securities and
Exchange Commission.
ARTICLE 12. Notices.
Any notice provided hereunder shall be sufficiently given when
sent to the party required to be served with such notice, at the following
address:
Administrator:
Old Kent Securities Corporation
000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000
Facsimile number (000) 000-0000
The Trust:
The Kent Funds
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. All notices or
other communications permitted or required hereunder shall be in writing and
shall be sufficiently given if and when hand delivered to the persons set forth
above or if sent by documented overnight delivery service or registered or
certified mail, postage prepaid, return receipt requested, or by telegram, telex
or telecopy, receipt acknowledged, addressed as set forth above or to such other
person or persons and/or at such other address or addresses as shall be
furnished in writing by any party hereto to the others. Any such notice or
communication shall be deemed to have been given as of the date received, in the
case of personal delivery, or on the date shown on the receipt or confirmation
therefor in all other cases.
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ARTICLE 13. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of Michigan and the applicable provisions
of the 1940 Act. To the extent that the applicable laws of the State of
Michigan, or any of the provisions herein, conflict with the applicable
provisions of the 1940 Act, the latter shall control.
ARTICLE 14. 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.
ARTICLE 15. Confidentiality. The Administrator agrees on behalf of
itself and its employees to treat confidentially and as the 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 the Company, which approval shall not be unreasonably
withheld and may not be withheld where the Administrator or 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 Company.
ARTICLE 16. 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 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 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 Company personally, but
bind only the assets of the Company, and all persons dealing with any Portfolio
must look solely to the assets of the Company belonging to such Portfolio for
the enforcement of any claims against the Company.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
THE KENT FUNDS
By: /s/ Xxxxx X. Xxxx, XX
-------------------------------------
Name: Xxxxx X. Xxxx, XX
Title: President
OLD KENT SECURITIES CORPORATION
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Name: Xxxx Xxxxxx
Title: President
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SCHEDULE A
TO THE ADMINISTRATION AGREEMENT
BETWEEN THE KENT FUNDS
AND
OLD KENT SECURITIES CORPORATION
SERVICE STANDARDS
Pursuant to Article 2 of this Agreement, the Administrator 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 the Administrator fails to meet a service standard in any particular
month, the Administrator agrees to take appropriate collective 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 the
Administrator's failure to meet a service standard was due to circumstances
beyond its control.
In the event the Administrator 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 the Administrator 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 the Administrator 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 the Administrator 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 contained in the
Duration and Termination provisions set forth in Schedule C.
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OLD KENT SECURITIES CORPORATION/THE KENT FUNDS
SERVICING STANDARDS
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ITEM STANDARD
------------------------------------------------------------ ---------------------------------------------------------
TRANSFER AGENCY (PROCESSING):
------------------------------------------------------------ ---------------------------------------------------------
New Account Set-up
Timeliness 100% processed same day
Accuracy 98%
------------------------------------------------------------ ---------------------------------------------------------
Financial Quality Rate
Timeliness 100% processed same day
Accuracy 98%
------------------------------------------------------------ ---------------------------------------------------------
Maintenance Items
Non-financial 5 business days
------------------------------------------------------------ ---------------------------------------------------------
Not in good order items Call out next business day
------------------------------------------------------------ ---------------------------------------------------------
Research received by phone or mail 100% completed within 5 business days from day of
receipt
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TRANSFER AGENCY (PHONES):
------------------------------------------------------------ ---------------------------------------------------------
Abandonment Rate 3% or less
------------------------------------------------------------ ---------------------------------------------------------
Average speed of answer 20 seconds or less
------------------------------------------------------------ ---------------------------------------------------------
Service level 85% of calls will be answered in 20 seconds or less
------------------------------------------------------------ ---------------------------------------------------------
TRANSFER AGENCY (PRINT/MAIL):
------------------------------------------------------------ ---------------------------------------------------------
Quarterly Statements Five business days
------------------------------------------------------------ ---------------------------------------------------------
Daily Confirms T + 2
------------------------------------------------------------ ---------------------------------------------------------
Checks T + 1
------------------------------------------------------------ ---------------------------------------------------------
TRANSFER AGENCY (FULFILLMENT): Within 48 hours
------------------------------------------------------------ ---------------------------------------------------------
FUND ACCOUNTING/CUSTODY:
------------------------------------------------------------ ---------------------------------------------------------
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
------------------------------------------------------------ ---------------------------------------------------------
FUND ADMINISTRATION:
------------------------------------------------------------ ---------------------------------------------------------
Portfolio Compliance Reviews Monthly
------------------------------------------------------------ ---------------------------------------------------------
Financial Reports Printed and mailed within sixty days fiscal year end,
or 60 days fiscal semi-annual
------------------------------------------------------------ ---------------------------------------------------------
Prospectus Updates Prepared and printed within five days of the effective
date of the Registration Statement
------------------------------------------------------------ ---------------------------------------------------------
Review of accruals Monthly
------------------------------------------------------------ ---------------------------------------------------------
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SCHEDULE B
TO THE ADMINISTRATION AGREEMENT
DATED AS OF DECEMBER 1, 1999
BETWEEN THE KENT FUNDS
AND
OLD KENT SECURITIES CORPORATION
Portfolios: This Agreement shall apply to all Portfolios of the Company,
either now or hereafter created (collectively, the
"Portfolios"). The current Portfolios of the Company are set
forth below: The Kent International Growth Fund, The Kent
Small Company Growth Fund, The Kent Large Company Growth Fund,
The Kent Index Equity Fund, The Kent Growth and Income Fund,
The Kent Income Fund, The Kent Intermediate Bond Fund, The
Xxxx Xxxxx Term Bond Fund, The Kent Tax-Free Income Fund, The
Kent Intermediate Tax-Free Fund, The Kent Michigan Municipal
Bond Fund, The Kent Money Market Fund, The Kent Government
Money Market Fund, The Lyon Street Institutional Money Market
Fund and The Kent Michigan Municipal Money Market Fund.
Fees: Pursuant to Article 4, in consideration of services rendered
and expenses assumed pursuant to this Agreement, the Company
will pay the Administrator on the first business day of each
month, or at such time(s) as the Administrator shall request
and the parties hereto shall agree, a fee computed daily at
the annual rate of:
Eighteen and one-half one-hundredths of one
percent (.185%) of the Company's average
daily net assets up to $5 billion.
Sixteen and one-half one-hundredths of one
percent (.165%) of the Company's average
daily net assets in excess of $5 billion up
to $7.5 billion.
Thirteen and one-half one-hundredths of one
percent (.135%) of the Company's average
daily net assets in excess of $7.5 billion.
The fee payable by the Company hereunder shall be allocated to
each Portfolio based upon its pro rata share of the total fee
payable hereunder. Such fee as is attributable to each
Portfolio shall be a separate (and not joint or joint and
several) obligation of each such Portfolio. The Administrator
may agree, from time to time, to waive any fees payable under
this Agreement. Such waiver shall be at Administrator's sole
discretion. All Portfolios that are created after the
effective date of this Agreement shall be subject to a per
Portfolio annual minimum fee of $45,000.
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Upon any termination of this Agreement before the end of any
month, the fee for such part of a month shall be prorated
according to the proportion which such period bears to the
full monthly period and shall be payable upon the date of
termination of this Agreement.
For purposes of determining the fees payable to the
Administrator, the value of the net assets of a particular
Portfolio shall be computed in the manner described in the
Company's Declaration of Trust or in the Prospectus or
Statement of Additional Information respecting that Portfolio
as from time to time is in effect for the computation of the
value of such net assets in connection with the purchase and
redemption of the shares of such Portfolio.
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SCHEDULE C
TO THE ADMINISTRATION AGREEMENT
BETWEEN THE KENT FUNDS
AND
OLD KENT SECURITIES CORPORATION
DURATION AND TERMINATION
Pursuant to Article 7, the term of this Agreement shall commence on December 1,
1999 and shall remain in effect through December 31, 2001 (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.
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, non-appealable 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.
Notwithstanding the foregoing, after such termination for so long as the
Administrator, with the written consent of the Company, 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 the Administrator and unpaid by the Company
upon such termination shall be immediately due and payable upon and
notwithstanding such termination. The Administrator shall be entitled to collect
from the Company, in addition to the compensation described in Schedule B, the
amount of all of the Administrator's reasonable cash disbursements for services
in connection with the
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16
Administrator's activities in effecting such termination, including without
limitation, the delivery to the Company and/or its designees of the Company's
property, records, instruments and documents, or any copies thereof. Subsequent
to such termination, the Administrator shall remain obligated to provide the
Company with reasonable access to any Company documents or records in its
possession. If requested by the Company, the Administrator shall deliver such
documents or records, or copies thereof, to the Company or its designee for a
reasonable fee.
If the Company terminates this Agreement other than as provided in the first
paragraph of this Schedule C, then the Company shall make a one-time cash
payment, as liquidated damages, to the Administrator equal to the balance due
the Administrator 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
Company on the date the Agreement is terminated will remain constant for the
balance of the then current contract term.
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