Exhibit 9(iii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
OPERATIONS AGENCY
AGREEMENT
AGREEMENT made as of JULY 28, 1997 by and between DEUTSCHE PORTFOLIOS having
its principal office and place of business at Cardinal Avenue, Cayman Islands ,
BWI (the "Investment Company"), on behalf of the portfolios (individually
referred to herein as a "Fund" and collectively as "Funds") of the Investment
Company, and FEDERATED SERVICES COMPANY, a Pennsylvania Corporation, having its
principal office and place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, on behalf of itself and its subsidiaries (the
"Company").
WHEREAS, the Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), with authorized and issued beneficial interests ("Interest(s)");
WHEREAS, the Fund is a Hub(R) in a Hub(R) and Spoke(R) investment
structure; and
WHEREAS the Investment Company may desire to appoint the Company as its
operations agent to provide it with operations agency services (as herein
defined) and the Company desires to accept such appointment; and
WHEREAS, from time to time the Investment Company may desire and may instruct
the Company to subcontract for the performance of certain of its duties and
responsibilities hereunder to another agent (the "Agent").
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
SECTION ONE: OPERATIONS AGENCY SERVICES.
ARTICLE 1. APPOINTMENT
The Investment Company hereby appoints the Company as Operations Agent for the
period and on the terms and conditions set forth in this Agreement. The Company
accepts such appointment and agrees to furnish the services set forth in Article
2 of this Agreement in return for the compensation set forth in Article 6 of
this Agreement.
ARTICLE 2. THE COMPANY'S DUTIES.
As Operations Agent, and subject to the supervision and control of the Board,
and in accordance with Proper Instructions (as defined hereafter) from the
Investment Company the Company will provide facilities, equipment, and personnel
to carry out the following operations agency services for operation of the
business and affairs of the Investment Company and each of its portfolios:
(1) following the organization of the Investment Company,
prepare the Investment Company's governing documents and any
amendments thereto, including the Charter (which has already
been prepared and filed), the By-laws and minutes of
meetings of the Board and Investors;
(2) following the Investment Company's effectiveness with the
Securities and Exchange Commission, prepare the registration
statements for the Fund and all amendments thereto, reports
to regulatory authorities and Investors, offering documents,
proxy and/or information statements, and such other
documents all as may be necessary to enable the Investment
Company to make a private offering of its shares;
(3) conduct compliance training sessions for the benefit of the
investment advisers of the Funds;
(4) maintain the Investment Company's calendar of reporting and
filing obligations
(5) perform internal audit examinations;
(6) monitor and supervise the collection of tax reclaims;
(7) plan and prepare for meetings of the Investment Company's
Board, including maintaining the Board's agenda and
preparing materials for the Board's review and
consideration;
(8) attend in person, and record the minutes of meetings of, the
Investment Company's Board;
(9) consult with the Investment Company and its Board on matters
concerning the Investment Company and its affairs;
(10) prepare materials necessary for shareholder meetings and
record the minutes of shareholder meetings;
(11) prepare expense projections for the Funds;
(12) coordinate the activities of all service providers to the
Investment Company. By way of example, the Company will, in
conjunction with item (4) above, communicate to the other
service providers to the Investment Company lists of
information and materials needed for filing obligations, as
well as deadlines for the receipt of such materials. The
Company does not take responsibility for the failure of
other service providers to provide such materials to the
Investment Company in a timely fashion or for the
performance of functions for which other service providers
are responsible.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Fund under this Section One, shall hereafter
be referred to as "Operations Agency Services."
ARTICLE 3. RECORDS.
The Company shall maintain a set of all necessary books and records in
accordance with all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the Investment Company act of
1940 and the rules thereunder, as the same may be amended from time to time,
pertaining to the Operations Agency Services performed by it and not otherwise
created and maintained by another party pursuant to contract with the Investment
Company. Where applicable, such records shall be maintained by the Company for
the periods and in the places required by Rule 31a-2 under the 1940 Act. The
books and records pertaining to the Investment Company which are in the
possession of the Company shall be the property of the Fund. The Investment
Company, or the Investment Company's authorized representatives, shall have
access to such books and records at all times during the Company `s normal
business hours. Upon the reasonable request of the Investment Company, copies of
any such books and records shall be provided promptly by the Company to the
Investment Company or the Investment Company's authorized representatives.
ARTICLE 4. DUTIES OF THE FUND.
the Fund assumes full responsibility for the preparation, contents and
distribution of its own offering document and for complying with all applicable
requirements the 1940 Act, the Internal Revenue Code, and any other laws, rules
and regulations of government authorities having jurisdiction.
ARTICLE 5. EXPENSES.
The Company shall be responsible for expenses incurred in providing office
space, equipment, and personnel as may be necessary or convenient to provide the
Operations Agency Services to the Funds. The Fund shall be responsible for all
other reasonable and documented expenses incurred by the Company on behalf of
the Investment Company, including without limitation postage and courier
expenses, printing expenses, travel expenses, registration fees, filing fees,
fees of outside counsel and independent auditors or other professional services,
organizational expenses, insurance premiums, fees payable to Error! Reference
source not found.= business trust "Trustees" "Directors" persons who are not the
Company employees, trade association dues, and other expenses properly payable
by the Funds and/or Classes.
ARTICLE 6. COMPENSATION.
For the Operations Agency Services provided, the Investment Company hereby
agrees to pay and the Company hereby agrees to accept as full compensation for
its services rendered hereunder an operations agency fee at an annual rate per
portfolio of the Investment Company's shares as specified on Exhibit A.
The compensation and out-of-pocket expenses attributable to the Fund shall
be accrued by the Fund and shall be paid to the Company no less frequently than
monthly, and shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket expenses
by the Fund.
ARTICLE 7. RESPONSIBILITY OF OPERATIONS AGENT.
A. The Company shall not be liable for any error of judgment or mistake of law
or for any loss suffered by the Investment Company in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. The Company shall be entitled
to rely on and may act upon advice of counsel (who may be counsel for the
Fund) on all matters, and shall be without liability for any action
reasonably taken or omitted pursuant to such advice. Any person, even
though also an officer, director, trustee, partner, employee or agent of
the Company, who may be or become an officer,Error! Reference source not
found.= business trust "Trustee" "Director" director, trustee, partner,
employee or agent of the Investment Company, shall be deemed, when
rendering services to the Investment Company or acting on any business of
the Investment Company (other than services or business in connection with
the duties of the Company hereunder) to be rendering such services to or
acting solely for the Investment Company and not as an officer, director,
trustee, partner, employee or agent or one under the control or direction
of the Company even though paid by the Company.
B. The Company shall be kept indemnified by the Investment Company and be
without liability for any action taken or thing done by it in performing
the Operations Agency Services in accordance with the above standards. In
order that the indemnification provisions contained in this Article 7 shall
apply, however, it is understood that if in any case the Investment Company
may be asked to indemnify or save the Company harmless, the Investment
Company shall be fully and promptly advised of all pertinent facts
concerning the situation in question, and it is further understood that the
Company will use all reasonable care to identify and notify the Investment
Company promptly concerning any situation which presents or appears likely
to present the probability of such a claim for indemnification against the
Investment Company. The Investment Company shall have the right to defend
the Company against any claim which may be the subject of this
indemnification. In the event that the Investment Company so elects, it
will so notify the Company and thereupon the Investment Company shall take
over complete defense of the claim, and the Company shall in such situation
initiate no further legal or other expenses for which it shall seek
indemnification under this Article. The Company shall in no case confess
any claim or make any compromise in any case in which the Investment
Company will be asked to indemnify the Company except with the Investment
Company's written consent.
SECTION TWO: GENERAL PROVISIONS.
ARTICLE 8. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed to
be Proper Instructions if (a) the Company reasonably believes them to have been
given by a person previously authorized in Proper Instructions to give such
instructions with respect to the transaction involved, and (b) the Investment
Company, or the Fund, and the Company promptly cause such oral instructions to
be confirmed in writing. Proper Instructions may include communications effected
directly between electro-mechanical or electronic devices provided that the
Investment Company, or the Fund, and the Company are satisfied that such
procedures afford adequate safeguards for the Fund's assets. Proper Instructions
may only be amended in writing.
ARTICLE 9. ASSIGNMENT.
Except as provided below, neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by either party without the
written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. With regard to Operations Agency Services, the Company may without
further consent on the part of the Investment Company subcontract for
the performance of such services with Federated Administrative Services,
a wholly-owned subsidiary of the Company.
C. The Company shall upon instruction from the Investment Company subcontract
for the performance of services under this Agreement with an Agent selected by
the Investment Company, other than as described in B. above; provided, however,
that the Company shall in no way be responsible to the Investment Company for
the acts and omissions of the Agent.
ARTICLE 10. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
the Investment Company shall file with the Company the following
documents relating to it:
(1) a copy of its Charter and By-Laws and all amendments thereto;
(2) a copy of the resolution of its Board authorizing this Agreement;
(3) all documents relating to the Fund or Investor accounts; and
(4) a copy of its current offering document.
B. The Investment Company will also furnish from time to time the following
documents relating to it:
(1) a resolution of its Board authorizing the original offering of its
Interests;
(2) a Registration Statement filed with the SEC and amendments thereof and
orders relating thereto in effect with respect to the sale of its
Interests;
(3) a certified copy of each amendment to the governing document and the
By-Laws of the Investment Company;
(4) certified copies of each vote of the Board authorizing persons to
give Proper Instructions;
(5) such other documents or opinions which the Company may, in its
discretion, deem necessary or appropriate in the proper
performance of its duties; and
(6) revisions to the offering document for each Fund.
ARTICLE 11. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Fund that:
(1) it is a corporation duly organized and existing and in good standing
under the laws of the Commonwealth of Pennsylvania;
(2) it is duly qualified to carry on its business in the Commonwealth of
Pennsylvania;
(3) it is empowered under applicable laws and by its Articles of
Incorporation and By-Laws to enter into and perform this Agreement;
(4) all requisite corporate proceedings have been taken to authorize it to
enter into and perform its obligations under this Agreement;
(5) it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement;
(6) it is in compliance with federal securities law requirements and in
good standing as an administrator and fund accountant; and
(7) it has obtained all required approvals from all government or
regulatory authorities necessary to enter into this arrangement and to
provide the services contemplated herein.
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the Company that:
(1) it is an investment company duly organized and existing and in good
standing under the laws of its state of organization;
(2) it is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform its obligations under this Agreement;
(3) all corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform its
obligations under this Agreement; and
(4) it is an open-end investment company registered under the 1940 Act.
ARTICLE 12. TERM AND TERMINATION OF AGREEMENT.
The initial term of this Agreement shall commence on the date hereof, and
extend for a period of three years following the date of the commencement of the
public offering of the Fund's shares. After the initial term of this Agreement,
the Agreement will be terminable on not less than 90 days' notice by either the
Company or the Investment Company subject to the payment of all deferred
expenses and unamortized expenses. In the event, however, of willful
misfeasance, bad faith, negligence or reckless disregard of its duties by the
Company, the Investment Company has the right to terminate the Agreement upon 30
days written notice, if Company has not cured such willful misfeasance, bad
faith, gross negligence or reckless disregard of its duties within that same 30
days. The termination date for all original or after-added Investment companies
which are, or become, a party to this Agreement shall be coterminous. Investment
Companies that merge or dissolve during the Term shall cease to be a party on
the effective date of such merger or dissolution.
Should the Investment Company exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and materials
will be borne by the Investment Company or the appropriate Fund. Additionally,
the Company reserves the right to charge for any other reasonable expenses
associated with such termination. The provisions of Article 7 shall survive the
termination of this Agreement.
ARTICLE 13. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by a written agreement executed by both parties.
ARTICLE 14. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Investment Company may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions shall be in a writing signed by all
parties and shall be annexed hereto, PROVIDED that no such interpretive or
additional provisions shall contravene any applicable federal regulations or any
provision of the organizational documents. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
ARTICLE 15. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted under
and in accordance with the laws of the State of New York.
ARTICLE 16. NOTICES.
Except as otherwise specifically provided herein, notices and other writings
delivered or mailed postage prepaid to the Investment Company at Cardinal
Avenue, Grand Cayman, Cayman Islands, BWI with a copy to Deutsche Fund
Management, Inc. at 00 Xxxx 00xx Xxxxxx, xxx Xxxx, Xxx Xxxx 00000, Attn:
President or to the Company at Federated Investors Tower, Pittsburgh,
Pennsylvania, 15222-3779, or to such other address as the Investment Company or
the Company may hereafter specify, shall be deemed to have been properly
delivered or given hereunder to the respective address.
ARTICLE 17. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 18. SUCCESSOR AGENT.
If a successor agent shall be appointed by the Investment Company, the
Company shall upon termination of this Agreement deliver to such successor agent
at the office of the Company all properties of the Fund held by it hereunder. If
no such successor agent shall be appointed, the Company shall at its office upon
receipt of Proper Instructions deliver such properties in accordance with such
instructions.
With regard to Section One, in the event that no written order designating a
successor agent or Proper Instructions shall have been delivered to the Company
on or before the date when such termination shall become effective, then the
Company shall have the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, of its own selection, having an aggregate
capital, surplus, and undivided profits, as shown by its last published report,
of not less than $2,000,000, all properties held by the Company under this
Agreement. Thereafter, such bank or trust company shall be the successor of the
Company under this Agreement.
ARTICLE 19. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to the Investment Company or the Fund as a
result of work stoppage, natural disaster, governmental action, loss or
malfunction of utilities or other impossibility of performance.
ARTICLE 20. ASSIGNMENT; SUCCESSORS.
Either party may assign all of or a substantial portion of its business to a
party controlling, controlled by, or under common control with such party.
Nothing in this Article 21 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
ARTICLE 21. SEVERABILITY.
In the event any provision of this Agreement or any interpretive or
additional provision described in Article 15 are held illegal, void or
unenforceable, the balance shall remain in effect.
ARTICLE 22. LIMITATIONS OF LIABILITY OF TRUSTEES AND INVESTORS OF THE INVESTMENT
COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of Investment Company and signed by an authorized officer of the
Investment Company, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to have
been made by any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon the
Trustees, the Fund or Investors, but bind only the appropriate property of the
Investment Company, as provided in the Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
DEUTSCHE PORTFOLIOS
By: /S/ XXXXXXX X'XXXXX
Attorney-In-Fact
FEDERATED SERVICES COMPANY
By: /S/ XXXXXX X. XXXX
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
ADMINISTRATIVE OR OPERATIONAL AGENCY SERVICES
OUT-OF-POCKET EXPENSES SCHEDULE
Cost of preparing, printing and mailing stock certificates, prospectuses,
sales literature, proxies, reports and notices.
Interest on borrowed money
Taxes and fees payable to Federal, state and other governmental agencies
Fees of Trustees of the Funds
Outside auditing and legal expenses
Travel expenses incurred by employees of Federated Services Company and its
affiliates in connection with such employees' attendance at Fund Board
meetings or in performance of Internal Audit Department functions
Insurance premiums
Trade association dues
Other expenses which may be properly payable by a Fund, as applicable
ADMINISTRATIVE SERVICES
FEE SCHEDULE
HUB PORTFOLIOS 3.5 basis points
(minimum fee of $60,000 per Hub)
DOMESTIC SPOKES
First $500 million 6.5 basis points
(minimum fee of $75,000 per Spoke)
Assets over $500 million 5.0 basis points
(minimum fee of $75,000 per Spoke)
OFFSHORE SPOKES 2.5 basis points
(minimum fee of $35,000 per Spoke)
Fees will be capped at $75,000 per Hub and Spoke cluster (Hub with two Spokes,
two classes of shares on each domestic Spoke) for the first year of the contract
and $125,000 per Hub and Spoke cluster in the second contract.
