Second Amended and Restated
Services Agreement Page 1
(i) Exhibit (h)(iv) under Form N-1A
(ii) Exhibit (10) under Item 601/Reg. S-K
SECOND AMENDED AND RESTATED SERVICES AGREEMENT
THIS AGREEMENT, amended and restated as of December 1, 2001, is
entered into between each Fund listed on Schedule 1, as may be amended
from time to time, severally and not jointly, and Federated Shareholder
Services Company, ("FSSC"). Unless otherwise defined herein, Section 10
sets forth the definition of capitalized terms used in this Agreement.
WHEREAS, Schedule 1 to this Agreement sets forth the classes of
Shares for which the Funds will compensate persons who agree to provide
services to Shareholders and assist in the maintenance of Shareholder
accounts ("Services");
WHEREAS, FSSC and certain of the Funds entered into a Shareholder
Services Agreement dated March 1, 1994 and amended September 1, 1995, (the
"Prior Agreement") which provided for FSSC to enter into agreements for
Services with third parties ("Third-Party Agreements") and to utilize fees
received under the Prior Agreement to compensate third parties pursuant to
such Third-Party Agreements;
WHEREAS, it is contemplated that hereafter, the Funds will
compensate third-parties for Services directly, and that FSSC will no
longer enter into Third-Party Agreements;
WHEREAS, FSSC will continue to compensate third parties pursuant to
any Third-Party Agreements and the Funds will continue to make payments to
FSSC to fund those obligations; and
WHEREAS, FSSC will also receive fees for Services it provides to
Shareholders under this Agreement.
NOW THEREFORE, the parties agree to amend and restate the Agreement
as follows:
SECTION 2. Agreement to Provide Services
(a) Services. FSSC agrees to provide Services for Shareholders of the
Funds that have fully-disclosed accounts in the Funds for which
either (i) Federated Securities Corp. or any other affiliate of FSSC
is the dealer of record; or (ii) for which the dealer of record does
not provide Services (collectively, the "FSSC Accounts"). FSSC shall
also provide Services or cause Services to be provided to
Shareholders whose accounts are subject to Third-Party Agreements.
Services shall include, but are not limited to, telephone, mail or
electronic communications with Shareholders.
(b) Delivery of Disclosure Documents. Upon request by a customer that
is a Shareholder of the Funds, FSSC will send a copy of the current
Prospectus (and, if expressly requested, Statement of Additional
Information), annual report or semi-annual report for any Fund
("Disclosure Documents") to the customer within three (3) business
days of such request.
(i) The Funds will furnish to FSSC at the Funds' own expense such number
of copies of the then-current Disclosure Documents
as FSSC requests to satisfy its obligations under
this paragraph.
(ii) FSSC covenants to the Funds that it will not make any
representations concerning any Shares other than
those contained in the Disclosure Documents of the
applicable Fund.
(iii) The parties may agree from time to time to set appropriate security
procedures and to perform electronically certain of
their obligations under this Agreement, including
without limitation the delivery of requested
Disclosure Documents.
(c) FSSC shall not have any obligation to pay the cost of producing or
delivering Disclosure Documents or any other costs incurred by the
Funds in connection with the Services provided hereunder.
SECTION 3. Service Fees Payable to FSSC
(a) During the term of this Agreement, FSSC will be entitled to receive
from each Fund as full compensation for Services rendered hereunder
a fee calculated daily at an annual rate, as set forth Schedule 1 to
this Agreement, of up to 0.25% of average net assets held in FSSC
Accounts of each Fund. Service fees paid by the Funds are in
addition to other fees paid by the Funds such as those paid pursuant
to an Agreement for Fund Accounting Services, Administrative
Services, Transfer Agency Services and Custody Services Procurement
and fees paid pursuant to each Fund's Distributor's Contract.
(b) For so long as any Third-Party Agreement remains in effect, FSSC
shall be entitled to receive fees from the Funds calculated daily at
an annual rate, as set forth in Schedule 1 to this Agreement, of up
to 0.25% on the average net assets held in accounts of each Fund for
which Services are provided by such third-parties which amount shall
be paid by FSSC in accordance with such Third-Party Agreements.
(c) The Funds shall pay service fees to FSSC in accordance with their
regular payment schedules. For the payment period in which this
Agreement becomes effective or terminates with respect to any Fund,
there shall be an appropriate proration of the fee on the basis of
the number of days that this Agreement is in effect with respect to
such Fund during the period.
SECTION 4. Agreements with Other Service Providers
Each Fund hereby appoints FSSC as the Fund's agent to enter into
agreements with financial intermediaries that are not registered as
broker/dealers under the 1934 Act (each an "Unregistered Intermediary") to
provide Services to their customers that are Shareholders of the Fund.
Each Fund agrees to pay Service Fees at an annual rate as set forth in
Schedule 1 to this Agreement of up to 0.25% of the average net assets held
in Fund accounts for which an Unregistered Intermediary has agreed to
provide Services. Any such accounts shall not be treated as FSSC Accounts
for purposes of this Agreement.
SECTION 5. Representations
(a) Each party represents and warrants to the other party that:
(i) Status. It is duly organized and validly existing under the laws of
the jurisdiction of its organization or
incorporation and, if relevant under such laws, in
good standing.
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which
it is a party, to deliver this Agreement and any
other documentation relating to this Agreement that
it is required by this Agreement to deliver and to
perform its obligations under this Agreement and
has taken all necessary action to authorize such
execution, delivery and performance.
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable
to it, any provision of its constitutional
documents, any order or judgment of any court or
other agency of government applicable to it or any
contractual restriction binding on or affecting it.
(iv) Obligations Binding. Its obligations under this Agreement constitute
its legal, valid and binding obligations,
enforceable in accordance with their respective
terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and
subject, as to enforceability, to equitable
principles of general application regardless of
whether enforcement is sought in a proceeding in
equity or law).
(v) Compliance with Laws. It will comply in all material respects with
all applicable laws and orders to which it may be
subject if failure to so comply would materially
impair its ability to perform its obligations under
this Agreement.
SECTION 6. Indemnification and Limitation of Liability
(a) In the absence of willful misfeasance, bad faith, gross negligence
or reckless disregard of obligations or duties hereunder on the part
of FSSC and its trustees, officers, employees, agents and
representatives, the Funds agree to indemnify FSSC and its trustees,
officers, employees, agents and representatives against any and all
claims, demands, liabilities and reasonable expenses (including
attorneys' fees), related to or otherwise connected with (i) any
breach by the Funds of any provision of this Agreement; or (ii) any
action by a Fund's Shareholder against FSSC.
(b) FSSC shall not be liable for any error of judgment or mistake of law
or for any loss suffered by any Fund 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. In no event shall
FSSC be liable for indirect or consequential damages.
(c) Any person, even though also an officer, trustee, partner, employee
or agent of FSSC, who may be or become an officer, employee or agent
of any Fund or a member of a Fund's Board, shall be deemed, when
rendering services to such Fund or acting on any business of such
Fund (other than services or business in connection with the duties
of FSSC hereunder) to be rendering such services to or acting solely
for such Fund and not as an officer, trustee, partner, employee or
agent or one under the control or direction of FSSC even though paid
by FSSC.
(d) FSSC is expressly put on notice of the limitation of liability as
set forth in the Declaration of Trust of each Fund that is a
Massachusetts business trust and agrees that the obligations assumed
by each such Fund pursuant to this Agreement shall be limited in any
case to such Fund and its assets and that FSSC shall not seek
satisfaction of any such obligations from the Shareholders of such
Fund, the Trustees, Officers, Employees or Agents of such Fund, or
any of them.
(e) The provisions of this Section shall survive the termination of this
Agreement.
SECTION 7.
Privacy Policy
(a) The parties acknowledge that:
(i) The Securities and Exchange Commission has adopted Regulation S-P at
17 CFR Part 248 to protect the privacy of
individuals who obtain a financial product or
service for personal, family or household use;
(ii) Regulation S-P permits financial institutions, such as the Funds, to
disclose "nonpublic personal information" ("NPI")
of its "customers" and "consumers" (as those terms
are therein defined in Regulation S-P) to
affiliated and nonaffiliated third parties of the
Funds, without giving such customers and consumers
the ability to opt out of such disclosure, for the
limited purposes of processing and servicing
transactions (17 CFR ss. 248.14); for specified law
enforcement and miscellaneous purposes (17 CFR ss.
248.15); and to service providers or in connection
with joint marketing arrangements (17 CFR ss.
248.13); and
(iii) Regulation S-P provides that the right of a customer and consumer to
opt out of having his or her NPI disclosed pursuant
to 17 CFR ss. 248.7 and 17 CFR ss. 248.10 does not
apply when the NPI is disclosed to service
providers or in connection with joint marketing
arrangements, provided the Fund and third party
enter into a contractual agreement that prohibits
the third party from disclosing or using the
information other than to carry out the purposes
for which the Fund disclosed the information (17
CFR ss. 248.13).
(b) The parties agree that the Funds may disclose Shareholder NPI to
FSSC as agent of the Funds and solely in furtherance of fulfilling
FSSC's contractual obligations under the Agreement in the ordinary
course of business to support the Funds and their Shareholders.
(c) FSSC hereby agrees to be bound to use and redisclose such NPI only
for the limited purpose of fulfilling its duties and obligations
under the Agreement, for law enforcement and miscellaneous purposes
as permitted in 17 CFR ss.248.15, or in connection with joint
marketing arrangements that the Funds may establish with FSSC in
accordance with the limited exception set forth in 17 CFR 248.13.
(d) FSSC represents and warrants that, in accordance with 17 CFR ss.
248.30, it has implemented, and will continue to carry out for the
term of the Agreement, policies and procedures reasonably designed
to:
(i) Insure the security and confidentiality of records and NPI of Fund
customers;
(ii) Protect against any anticipated threats or hazards to the security
or integrity of Fund customer records and NPI; and
(iii) Protect against unauthorized access or use of such Fund customer
records or NPI that could result in substantial
harm or inconvenience to any Fund customer.
(e) FSSC may redisclose Section 248.13 NPI only to: (a) the Funds and
affiliated persons of the Funds ("Fund Affiliates"); (b) affiliated
persons of FSSC ("Service Provider Affiliates") (which in turn may
disclose or use the information only to the extent permitted under
the original receipt); (c) a third party not affiliated with FSSC or
the Funds ("Nonaffiliated Third Party") under the service and
processing (ss.248.14) or miscellaneous (ss.248.15) exceptions, but only
in the ordinary course of business to carry out the activity covered
by the exception under which FSSC received the information in the
first instance; and (d) a Nonaffiliated Third Party under the
service provider and joint marketing exception (ss.248.13), provided
FSSC enters into a written contract with the Nonaffiliated Third
Party that prohibits the Nonaffiliated Third Party from disclosing
or using the information other than to carry out the purposes for
which the Funds disclosed the information in the first instance.
(f) FSSC may redisclose Section 248.14 NPI and Section 248.15 NPI to:
(a) the Funds and Fund Affiliates; (b) Service Provider Affiliates
(which in turn may disclose the information to the same extent
permitted under the original receipt); and (c) a Nonaffiliated Third
Party to whom the Funds might lawfully have disclosed NPI directly.
(g) The provisions of this Section shall survive the termination of the
Agreement.
SECTION 8. Notices
(a) All notices of any kind to be given hereunder shall be given in
writing and delivered by personal delivery or by postage prepaid,
registered or certified United States first class mail, return
receipt requested, overnight courier services, or by fax or e-mail
(with confirming copy by mail).
(b) Unless otherwise notified in writing, all notices to any Fund shall
be given or sent to such Fund at:
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: President
(c) Unless otherwise notified in writing, all notices to FSSC shall be
given or sent to:
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: President
SECTION 9. Assignments and No Third-Party Rights
(a) Except for any Third-Party Agreements entered into prior to the date
of this Agreement, this Agreement will not be assigned or
subcontracted by either party, without prior written consent of the
other party, except that either party may assign or subcontract this
Agreement to an affiliate controlled, controlled by, or under common
control with the assigning or subcontracting party without such
consent. Subject to the preceding, this Agreement will apply to, be
binding in all respects upon, and inure to the benefit of permitted
assigns and subcontractors of the parties. In no event shall the
Funds be obligated to make any payment under this Agreement to any
person other than FSSC.
(b) Nothing expressed or referred to in this Agreement will be construed
to give anyone other than the parties to this Agreement any legal or
equitable right, remedy or claim under or with respect to this
Agreement or any provision of this Agreement. This Agreement and all
of its provisions and conditions are for the sole and exclusive
benefit of the parties to this Agreement and their permitted assigns
and subcontractors.
SECTION 10. Force Majeure
If either party is unable to carry out any of its obligations under
this Agreement because of conditions beyond its reasonable control,
including, but not limited to, acts of war or terrorism, work stoppages,
fire, civil disobedience, delays associated with hardware malfunction or
availability, riots, rebellions, storms, electrical failures, acts of God,
and similar occurrences ("Force Majeure"), this Agreement will remain in
effect and the non-performing party's obligations shall be suspended
without liability for a period equal to the period of the continuing Force
Majeure (which period shall not exceed fifteen (15) business days),
provided that:
(i) the non-performing party gives the other party prompt notice
describing the Force Majeure, including the nature
of the occurrence and its expected duration and,
where reasonably practicable, continues to furnish
regular reports with respect thereto during the
period of Force Majeure;
(ii) the suspension of obligations is of no greater scope and of no
longer duration than is required by the Force
Majeure;
(iii) no obligations of either party that accrued before the Force Majeure
are excused as a result of the Force Majeure;
(iv) the non-performing party uses all reasonable efforts to remedy its
inability to perform as quickly as possible.
SECTION 11. Definition of Terms
(a) "1934 Act" means the Securities Exchange Act of 1934, and "1940
Act" means the Investment Company Act of 1940, in each case as
amended and in effect at the relevant time.
(b) "Fund" means an investment company registered under the 1940 Act
and, in the case of a "series company" as defined in Rule 18f-2(a)
under the 1940 Act, each individual portfolio of the series company,
set forth on Schedule 1 to this Agreement from time to time. "Funds"
means the Funds listed on Schedule 1 collectively.
(c) "Prospectus" means, with respect to any Shares the most recent
Prospectus and Statement of Additional Information ("SAI") and any
supplement thereto, pursuant to which a Fund publicly offers the
Shares; provided, however, that this definition shall not be
construed to require FSC, Dealer or any Fund to deliver any SAI
other than at the express request of Dealer's customer.
(d) "Shares" means (1) shares of beneficial interest in a Fund organized
as a business trust; and (2) shares of capital stock in a Fund
organized as a corporation. With respect to a Fund that has
established separate classes of Shares in accordance with Rule 18f-3
under the 1940 Act, Shares refers to the relevant class.
"Shareholder" means the beneficial owner of any Share.
SECTION 12. Miscellaneous
(a) This Agreement may be terminated by either party by giving the other
party at least sixty (60) days' written notice thereof.
(b) This Agreement may be amended only by a writing signed by both
parties, provided that, any Fund may amend Schedule 1 from time to
time by sending a copy of the amended Schedule to FSSC. Any such
amendment shall be effective ten (10) days after notice thereof.
(c) This Agreement constitutes (along with its Schedules) a complete and
exclusive statement of the terms of the agreement between the
parties and supersedes any prior agreement with respect to its
subject matter.
(d) This Agreement has been entered into between FSSC and each Fund
severally and not jointly, and the provisions this Agreement shall
apply separately to each Fund. No Fund shall be obligated to make
any payments to FSSC under this Agreement other than with respect to
its Shares. No breach of this Agreement by a Fund, or by FSSC
against a Fund, shall constitute a breach of this Agreement with
respect to any other Fund.
(e) This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall
be an original, and all such counterparts shall together constitute
one and the same instrument.
(f) If any provision of this Agreement is held invalid or unenforceable,
the other provisions of this Agreement will remain in full force and
effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and
effect to the extent not held invalid and unenforceable.
(g) This Agreement will be governed by the laws of the Commonwealth of
Pennsylvania, without regard to conflicts of laws principles
thereof. Any action or proceeding seeking to enforce any provision
of, or based on any right arising out of, this Agreement may be
brought against the parties in the courts of the Commonwealth of
Pennsylvania, County of Allegheny, or, if it has or can acquire
jurisdiction, in the United States District Court for the Western
District of Pennsylvania, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to
venue laid therein. Each party waives its right to a jury trial.
IN WITNESS WHEREOF, the parties hereto have caused this instrument
to be executed by their officers designated below as of the day and year
first above written.
Attest: Funds (listed on Schedule 1)
By:
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Xxxx X. XxXxxxxxx Xxxx X. Xxxxxxx
Secretary Chairman
Attest: Federated Shareholder Services Company
By:
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Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxx, Xx.
Secretary President
