Exhibit h (xi) under Form N-1A
Exhibit (10) under Item 601/Reg. S-K
FINANCIAL ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT dated as of January 1, 2007 is made, severally and not jointly
(except that the parties agree that the calculation required by Section XIII
hereunder shall be joint and not several) by each of the investment companies
listed on Exhibit A hereto (each, a "Trust") and State Street Bank and Trust
Company ("State Street").
WHEREAS, each Trust is registered as a management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act") with authorized and
issued shares of capital stock or beneficial interest (the "Shares");
WHEREAS, certain Trusts subject to this Agreement are "series companies" as
defined in Rule 18f-2(a) under the 1940 Act and, as used in this Agreement, the
term "Portfolio" refers to either (i) an individual portfolio of such a series
company or (ii) an investment company that is not organized as a series company,
and the term "Portfolios" refers to all such portfolios and investment
companies, collectively;
WHEREAS, Shares of each Portfolio may be subdivided into "classes" as provided
in Rule 18f-3 under the 1940 Act;
WHEREAS, the Trust desires to retain State Street as financial administrator
(the "Financial Administrator") to furnish certain financial administrative
services on behalf of the Portfolios;
WHEREAS, the Trust desires to retain State Street as accounting agent (the
"Accounting Agent") to perform certain accounting and recordkeeping services on
behalf of the Portfolios; and
WHEREAS, State Street is willing to perform such services on the terms provided
herein.
NOW, THEREFORE, the parties agree as follows:
I. APPOINTMENT
A. Of State Street as the Financial Administrator
The Trust hereby appoints State Street to act as Financial Administrator with
respect to the Trust for purposes of providing certain financial administrative
services for the period and on the terms set forth in this Agreement. State
Street accepts such appointment and agrees to render the financial
administrative services stated herein.
The Trust will initially consist of the Portfolios identified on Exhibit A
hereto. In the event that the Trust establishes one or more additional
Portfolios with respect to which it wishes to retain the Financial Administrator
to act as financial administrator hereunder, the Trust shall notify the
Financial Administrator in writing (including by facsimile or electronic mail
communication). Upon such notification, such Portfolio shall become subject to
the provisions of this Agreement to the same extent as the existing Portfolios,
except to the extent that such provisions (including those relating to
compensation and expenses payable by the Trust and its Portfolios) may be
modified with respect to each additional Portfolio in writing by the Trust and
the Financial Administrator at the time of the addition of the Portfolio.
B. Of State Street as the Accounting Agent
The Trust hereby appoints State Street to act as Accounting Agent with respect
to the Portfolios for purposes of providing certain accounting and recordkeeping
services for the period and on the terms set forth in this Agreement. State
Street accepts such appointment and agrees to render the accounting and
recordkeeping services stated herein.
The Trust will initially consist of the Portfolios identified on Exhibit A. In
the event that the Trust establishes one or more additional Portfolios with
respect to which it wishes to retain the Accounting Agent to act as accounting
agent hereunder, the Trust shall notify the Accounting Agent in writing
(including by facsimile or electronic mail communication). Upon such
notification, such Portfolio shall become subject to the provisions of this
Agreement to the same extent as the existing Portfolios, except to the extent
that such provisions (including those relating to compensation and expenses
payable by the Trust and its Portfolios) may be modified with respect to each
additional Portfolio in writing by the Trust and the Accounting Agent at the
time of the addition of the Portfolio.
II. REPRESENTATIONS and WARRANTIES
A. By State Street. State Street represents and warrants that:
1. It is a Massachusetts trust company, duly organized and
existing under the laws of The Commonwealth of Massachusetts;
2. It has the corporate power and authority to carry on its
business in The Commonwealth of Massachusetts;
3. All requisite corporate proceedings have been taken to
authorize it to enter into and perform this Agreement;
4. No legal or administrative proceedings have been instituted or
threatened which would impair State Street's ability to perform
its duties and obligations under this Agreement;
5. Its entrance into this Agreement shall not cause a material
breach or be in material conflict with any other agreement or
obligation of State Street or any law or regulation applicable to
it; and
6. It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
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B. By the Trust. The Trust represents and warrants that:
1. It is duly organized, existing and in
good standing under the laws of the jurisdiction in which
it was formed;
2. It has the power and authority under
applicable laws and by its organizational documents to
enter into and perform this Agreement;
3. All requisite proceedings have been
taken to authorize it to enter into and perform this
Agreement;
4. With respect to each Portfolio, it is
an investment company properly registered under the 1940
Act;
5. A registration statement under the
1940 Act (and if Shares of the Portfolio are offered
publicly, under the Securities Act of 1933, as amended
(the "1933 Act")) has been filed and will be effective and
remain effective during the term of this Agreement. The
Trust also warrants that as of the effective date of this
Agreement, all necessary filings under the securities laws
of the states in which the Trust offers or sells its
Shares have been made;
6. No legal or administrative
proceedings have been instituted or threatened which would
impair the Trust's ability to perform its duties and
obligations under this Agreement;
7. Its entrance into this Agreement will
not cause a material breach or be in material conflict
with any other agreement or obligation of the Trust or any
law or regulation applicable to it; and
8. As of the close of business on the
date of this Agreement, the Trust is authorized to issue
its Shares.
III.DUTIES of STATE STREET
A. As the Financial Administrator. The Financial Administrator shall
provide the following services, in each case, subject to the control,
supervision and direction of the respective Trust and its Board of
Trustees/Directors (the "Board") and in accordance with procedures which may be
established from time to time between the Trust and the Financial Administrator
(including the procedures established in the "Service Level Agreement" as
defined in Section V of this Agreement):
1. Compile, review and deliver to the Trust, fund performance statistics
including Securities and Exchange Commission (the "SEC") yields,
distribution yields and total returns;
2. Prepare and submit for approval by officers of the Trust a fund
expense budget, review expense calculations and arrange for payment
of the Trust's expenses;
3. Prepare and submit for approval the annual Statement of Position 93-2
("ROCSOP") adjustment based in part on the tax provision information
provided by Federated Administrative Services.
4. Prepare for review and approval by officers of the Trust financial
information required for the Trust's annual and semi-annual reports,
proxy statements and other communications required or otherwise to be
sent to shareholders; review text of "President's Letter to
Shareholders" and "Management's Discussion of Financial Performance"
as included in shareholder reports (which shall also be subject to
review by the Trust's legal counsel);
5. Prepare for review by an officer of and legal counsel for the Trust
the Trust's periodic financial reports required to be filed with the
SEC on Form N-SAR and financial information required by Form N-1A,
Form N-14, Form N-Q and Form 24F-2 and such other reports, forms or
filings as may be mutually agreed upon;
6. Prepare reports relating to the business and affairs of the Trust as
may be mutually agreed upon and not otherwise prepared by the Trust's
investment adviser, custodian, legal counsel or independent
accountants;
7. Oversee and review calculations of fees paid to State Street and to
the Trust's investment adviser, shareholder servicing agent,
distributor, custodian, fund administrator, fund accountant and
transfer and dividend disbursing agent ("Transfer Agent"), in
addition to the oversight and review of all asset based fee
calculations;
8. Prepare fund income forecasts and submit for approval by officers of
the Trust, recommendations for fund income dividend distributions;
9. Maintain continuing awareness of significant emerging regulatory and
legislative developments which may affect the Trust, and provide
related planning assistance where requested or appropriate;
10.Complete monthly preferred shares "asset coverage" test (as that term
is defined in Section 18(h) of the 1940 Act) (the "1940 Act Test")
following the compliance procedures contained in Exhibit D attached
hereto, as such Exhibit may be amended from time to time by mutual
agreement of the parties (the "Compliance Procedures");
11.Complete monthly preferred shares basic maintenance amount test for
Fitch Ratings, Ltd. ("Fitch") (the "Fitch Preferred Shares Basic
Maintenance Test") following the Compliance Procedures; and
12.Complete monthly preferred shares basic maintenance amount test for
Xxxxx'x Investors Service, Inc. ("Xxxxx'x") (the "Xxxxx'x Preferred
Shares Basic Maintenance Test") following the Compliance Procedures.
The Financial Administrator shall provide the office facilities and the
personnel required by it to perform the services contemplated herein.
B. As the Accounting Agent. The Accounting Agent shall provide the
following services, in each case, subject to the control, supervision
and direction of the respective Trust and its Board and in accordance
with procedures which may be established from time to time between the
Trust and the Accounting Agent (including the procedures established in
the "Service Level Agreement" as defined in Section V of this
Agreement):
1. Books of Account. The Accounting Agent shall maintain the
books of account of the Trust and shall perform the following
duties in the manner prescribed by the respective Trust's
currently effective prospectus, statement of additional
information or other governing document, certified copies of which
have been supplied to the Accounting Agent (a "Governing
Document") (including the procedures established in the Service
Level Agreement):
a. Value the assets of each Portfolio using: primarily, market
quotations (including the use of matrix pricing) supplied by the
independent pricing services selected by the Accounting Agent in
consultation with the Trust's investment adviser (the "Adviser")
and approved by the Board; secondarily, if a designated pricing
service does not provide a price for a security that the
Accounting Agent believes should be available by market quotation,
the Accounting Agent may obtain a price by calling brokers
designated by the Adviser, or if the Adviser does not supply the
names of such brokers, the Accounting Agent will attempt on its
own to find brokers to price the security, subject to approval by
the Adviser; thirdly, for securities for which no market price is
available, the Valuation Committee overseen by the Board (the
"Committee") will determine a fair value in good faith; or
fourthly, such other procedures as may be adopted by the Board.
Consistent with Rule 2a-4 under the 1940 Act, estimates may be
used where necessary or appropriate. The Accounting Agent is not
the guarantor of the accuracy of the securities prices received
from such pricing agents and the Accounting Agent is not liable to
the Trust for errors in valuing a Portfolio's assets or
calculating the net asset value (the "NAV") per share of such
Portfolio or class when the calculations are based upon inaccurate
prices provided by pricing agents. The Accounting Agent will
provide daily to the Adviser the security prices used in
calculating the NAV of each Portfolio, for its use in preparing
exception reports for those prices on which the Adviser has a
comment. Further, upon receipt of the exception reports generated
by the Adviser, the Accounting Agent will diligently pursue
communication regarding exception reports with the designated
pricing agents;
b. Determine the NAV per share of each Portfolio and/or class, at
the time and in the manner from time to time determined by the
Board and as set forth in the Prospectus of such Portfolio;
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c. Prepare the weekly or bi-weekly xxxx-to-market reports and
analysis in compliance with Rule 2a-7 for each of the money market
portfolios.
d. Monitor the triggers used to determine when the ITG fair value
pricing procedures may be invoked, as further detailed on attached
Exhibit C (the Fair Value Pricing Authorization), and inform the
appropriate Federated personnel that triggers had been met.
e. Calculate the net income of each of the Portfolios, if any;
f. Calculate realized capital gains or losses of each of the
Portfolios resulting from sale or disposition of assets, if any;
g. Calculate the expense accruals for each fund/class of shares;
h. Determine the dividend factor for all daily dividend funds;
i. Maintain the general ledger and other accounts, books and
financial records of the Trust, including for each Portfolio, as
required under Section 31(a) of the 1940 Act and the rules
thereunder in connection with the services provided by State
Street
j. At the request of the Trust, prepare various reports or other
financial documents in accordance with generally accepted
accounting principles as required by federal, state and other
applicable laws and regulations; and
k. Such other similar services as may be reasonably requested by
the Trust.
The Trust shall provide timely prior notice to the Accounting Agent of any
modification in the manner in which such calculations are to be performed as
prescribed in any revision to the Trust's Governing Document. The Accounting
Agent shall not be responsible for any revisions to the manner in which such
calculations are to be performed unless such revisions are communicated in
writing to the Accounting Agent.
2. Records. The Accounting Agent shall create and maintain all records
relating to its activities and obligations under this Agreement in
such a manner as will meet the obligations of the Trust under the
1940 Act, specifically Section 31 thereof and Rules 31a-1 and 31a-2
thereunder. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the
Accounting Agent be open for inspection by duly authorized officers,
employees or agents of the Trust and employees and agents of the SEC.
Subject to Section XVII.B below, the Accounting Agent shall preserve
for the period required by law the records required to be maintained
thereunder.
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IV. DUTIES of the TRUST
A. Delivery of Documents. The Trust will promptly deliver, upon request,
to the Financial Administrator copies of each of the following documents and all
future amendments and supplements, if any:
1. The Trust's organizational documents;
2. The Trust's currently effective registration statements under
the 1933 Act (if applicable) and the 1940 Act and the Trust's
Prospectus(es) and Statement(s) of Additional Information
(collectively, the "Prospectus") relating to all Portfolios and
all amendments and supplements thereto as in effect from time to
time;
3. Certified copies of resolutions of the Board authorizing (a)
the Trust to enter into this Agreement and (b) certain individuals
on behalf of the Trust and its third-party agents to (i) give
instructions to the Financial Administrator pursuant to this
Agreement and (ii) authorize the payment of expenses;
4. The investment advisory agreements between the Trust and the
Advisers; and
5. Such other certificates, documents or opinions which the
Financial Administrator may, in its reasonable discretion, deem
necessary or appropriate in the proper performance of its duties.
The Trust shall provide, or shall cause its third-party agent to provide, timely
notice to the Accounting Agent of all data reasonably required by the Accounting
Agent for performance of its duties described in Section III.B hereunder. The
Trust's failure to provide such timely notice shall excuse the Accounting Agent
from the performance of such duties, but only to the extent the Accounting
Agent's performance is prejudiced by the Trust's failure.
State Street is authorized and instructed to rely upon any and all information
it receives from the Trust or its third-party agent that it reasonably believes
to be genuine. State Street shall have no responsibility to review, confirm or
otherwise assume any duty with respect to the accuracy or completeness of any
data supplied to it by or on behalf of the Trust.
State Street shall value the Trust's securities and other assets utilizing
prices obtained from sources designated by the Trust, or the Trust's duly-
authorized agent, on a Price Source Authorization substantially in the form
attached hereto as Exhibit B or otherwise designated by means of Proper
Instructions (as such term is defined herein) (collectively, the "Authorized
Price Sources"). State Street shall not be responsible for any revisions to the
methods of calculation adopted by the Trust unless and until such revisions are
communicated in writing to State Street.
B. Proper Instructions. The Trust and its third-party agents shall
communicate to State Street by means of Proper Instructions. Proper
Instructions shall mean (i) a writing signed or initialed by one or more persons
as the Board shall have from time to time authorized or (ii) a communication
effected directly between the Trust or its third-party agent and State Street by
electro-mechanical or electronic devices, provided that the Trust and State
Street have approved such procedures. State Street may rely upon any Proper
Instruction believed by it to be genuine and to have been properly issued by or
on behalf of the Trust. Oral instructions shall be considered Proper
Instructions if State Street reasonably believes them to have been given by a
person authorized to give such instructions. The Trust and its third-party
agents shall cause all oral instructions to be confirmed in accordance with
clauses (i) or (ii) above, as appropriate. The Trust and its third-party agents
shall give timely Proper Instructions to State Street in regard to matters
affecting accounting practices and State Street's performance pursuant to this
Agreement.
V. PERFORMANCE GOALS:
A. The Trust and State Street have developed mutually acceptable
performance goals dated January 1, 2007, and as may be amended from time to
time, regarding the manner in which they expect to deliver and receive the
services under this Agreement (hereinafter referred to as "Service Level
Agreement"). The parties agree that such Service Level Agreement reflects
performance goals and any failure to perform in accordance with the provisions
thereof shall not be considered a breach of contract that gives rise to
contractual or other remedies. It is the intention of the parties that the sole
remedy for failure to perform in accordance with the provisions of the Service
Level Agreement, or any dispute relating to performance goals set forth in the
Service Level Agreement, will be a meeting of the parties to resolve the failure
pursuant to the consultation procedure described in Sections V. B. and V.C.
below. Notwithstanding the foregoing, the parties hereby acknowledge that any
party's failure (or lack thereof) to meet the provisions of the Service Level
Agreement, while not in and of itself a breach of contract giving rise to
contractual or other remedies, may factor into the Trust's reasonably determined
belief regarding the standard of care exercised by State Street hereunder.
B. Consultation Procedure. If a party hereto is unable to meet the
provisions of the Service Level Agreement, or in the event that a dispute arises
relating to performance goals set forth in the Service Level Agreement, either
party to this Agreement shall address any concerns it may have by requiring a
consultation with the other party.
C. Purpose of Consultation Procedure. The purpose of the consultation
procedure is to endeavor to resolve any failure to meet the provisions of the
Service Level Agreement. If a consultation occurs under this Section V, all
parties must negotiate in good faith to endeavor to:
1. implement changes which will enable the Service Level
Agreement provisions to be met - such changes may include, but
are not limited to, modification of either or both parties'
respective operational resources;
2. agree to alternative Service Level Agreement provisions which
meet the parties' respective business requirements; or
3. otherwise find a solution such that within a reasonable time
after the consultation, the inability to meet the Service
Level Agreement provision(s) is reasonably expected to be less
likely to occur in the future.
VI. COMPLIANCE WITH GOVERNMENTAL RULES and REGULATIONS; RECORDS
The Trust assumes full responsibility for its compliance with all securities,
tax, commodities and other laws, rules and regulations applicable to it.
VII. WARRANTIES
If, prior to the Accounting Agent's calculation of the current NAV, the Trust or
its third-party agent notifies the Accounting Agent that any of its accounting
services are erroneous in any material respect, the Accounting Agent shall
endeavor in a timely manner to correct such failure. Third-parties that are
selected by and approved by the Trust and from which the Accounting Agent may
obtain certain data included in the accounting services are solely responsible
for the contents of such data and the Trust agrees to make no claim against the
Accounting Agent arising out of the contents of such third-party data including,
but not limited to, the accuracy thereof.
VIII. FORCE MAJEURE
The parties will maintain throughout the term of this Agreement, such
contingency plans as are reasonably believed to be necessary and appropriate to
recover the parties' operations from the occurrence of a disaster and which are
consistent with any statute or regulation to which the parties are subject that
imposes business resumption and contingency planning standards. The parties
agree to provide to one another a summary of their respective contingency plans
as they relate to the systems used to provide the services hereunder and to
provide periodic updates of such summary upon a party's reasonable request. If
any 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 such period shall not exceed fifteen (15)
business days), provided that:
(1) where reasonably practicable, 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;
(2) the suspension of obligations is of no greater scope and of no
longer duration than is required by the Force Majeure;
(3) no obligations of any party that accrued before the Force Majeure
are excused as a result of the Force Majeure; and
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(4) the non-performing Party uses reasonable efforts to remedy its
inability to perform as quickly as possible.
IX. INSTRUCTIONS and ADVICE
At any time, State Street may apply to any officer of the Trust for instructions
and may consult with its own legal counsel with respect to any matter arising in
connection with the services to be performed by State Street under the terms of
this Agreement. At any time, State Street may consult with outside counsel for
the Trust or the independent accountants for the Trust ("Trust Advisers") at the
expense of the Trust, provided that State Street first obtains consent of the
Trust which shall not be unreasonably withheld, with respect to any matter
arising in connection with the services to be performed by State Street under
the terms of this Agreement. In its capacity as the Financial Administrator or
as the Accounting Agent under the terms of this Agreement, State Street shall
not be liable, and shall be indemnified by the Trust or appropriate Portfolio
for any action taken or omitted by it in good faith reliance upon any
instructions or advice provided to State Street by a Trust Adviser or upon any
paper or document reasonably believed by it to be genuine and to have been
signed by the proper person or persons. State Street shall not be held to have
notice of any change of authority of any person until receipt of written notice
thereof from the Trust. Nothing in this paragraph shall be construed as
imposing upon State Street any obligation to seek such instructions or advice,
or to act in accordance with such advice when received.
X. NOTICES
All notices shall be in writing and deemed given when delivered in person, by
facsimile, by overnight delivery through a commercial courier service, or by
registered or certified mail, return receipt requested. Notices shall be
addressed to each party at its address set forth below, or such other address as
the recipient may have specified by earlier notice to the sender:
If to State Street:LaFayette Corporate Center
0 Xxxxxx xx XxXxxxxxx, 0 Xxxxx
Xxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: State Street Bank and Trust Company
0 Xxxxxx xx XxXxxxxxx, 0xx Xxxxx
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
ATTN: Xxxx Xxxxx Zeven, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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If to the Trust: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
ATTN: Xxxxxxx X. Xxxxx, Treasurer
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
XI. CONFIDENTIALITY
State Street agrees that, except as otherwise required by law or in connection
with any required disclosure to a banking or other regulatory authority, it will
keep confidential all records and information in its possession relating to the
Trust or its beneficiaries and will not disclose the same to any person except
at the request or with the written consent of the Trust.
XII. LIMITATION of LIABILITY and INDEMNIFICATION
State Street shall be held to a standard of reasonable care in carrying out its
duties under this Agreement. State Street shall be responsible for the
performance of only such duties as are set forth in this Agreement and, except
as otherwise provided under Section XVI, shall have no responsibility for the
actions or activities of any other party, including other service providers.
State Street shall have no liability for any error of judgment or mistake of law
or for any loss or damage resulting from the performance or nonperformance of
its duties hereunder unless caused by or resulting from the negligence, reckless
misconduct, willful malfeasance or lack of good faith of State Street, its
officers or employees and, in such event, such liability will be subject to the
limitations set forth in Section XIII herein. STATE STREET SHALL NOT BE LIABLE
FOR ANY SPECIAL, INDIRECT, INCIDENTAL, OR CONSEQUENTIAL DAMAGES OF ANY KIND
WHATSOEVER (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) IN ANY WAY DUE TO
THE TRUST'S USE OF THE SERVICES DESCRIBED HEREIN OR THE PERFORMANCE OF OR
FAILURE TO PERFORM STATE STREET'S OBLIGATIONS UNDER THIS AGREEMENT. This
disclaimer applies without limitation to claims regardless of the form of
action, whether in contract (including negligence), strict liability, or
otherwise and regardless of whether such damages are foreseeable.
The Trust will indemnify and hold harmless State Street and its stockholders,
directors, officers, employees, agents, and representatives (collectively, the
"Trust Indemnified Persons") for, and will pay to the Trust Indemnified Persons
the amount of, any actual and direct damages, whether or not involving a third-
party claim (collectively, the "Damages"), arising from or in connection with
(i) any act or omission by State Street (or any of its affiliates) pursuant to
this Agreement which does not constitute negligence, reckless misconduct,
willful malfeasance or lack of good faith in fulfilling the terms and
obligations of this Agreement, (ii) any act or omission by the Trust (or any of
its affiliates) which constitutes a breach of any representation, warranty,
term, or obligation contained in this Agreement, or (iii) any act or omission by
the Trust (or any of its affiliates) which constitutes negligence, reckless
misconduct, willful malfeasance, or lack of good faith in fulfilling the terms
and obligations of this Agreement. The remedies provided in this paragraph are
not exclusive of or limit any other remedies that may be available to State
Street or any other Trust Indemnified Person.
State Street will indemnify and hold harmless the Trust, and its respective
shareholders, trustees, directors, officers, agents, and representatives
(collectively, the "State Street Indemnified Persons") for, and will pay to the
State Street Indemnified Persons the amount of, any Damages, arising from or in
connection with (i) any act or omission by State Street (or any of its
affiliates) which constitutes a breach of any representation, warranty, term, or
obligation contained in this Agreement or (ii) any act or omission by State
Street (or any of its affiliates) which constitutes negligence, reckless
misconduct, willful malfeasance, or lack of good faith in fulfilling the terms
and obligations of this Agreement; provided, however, that State Street shall
not be required to provide indemnification for damages arising from errors
caused by inaccurate prices received from independent pricing services and
reasonably relied upon by State Street. In the event that State Street is
required to provide indemnification under this Section XII, its liability shall
be limited as described under Section XIII below. The remedies provided in this
paragraph are not exclusive of or limit any other remedies that may be available
to the Trust or any other State Street Indemnified Person.
The indemnification and limitation of liability contained herein shall survive
the termination of this Agreement.
XIII. EXCLUSIVE REMEDY
State Street's total cumulative liability under this Agreement for all of the
Trusts in the aggregate during any calendar year shall be limited to actual or
direct damage up to the aggregate amount of two (2) times the fees earned by
State Street under Section XVI hereunder during the calendar year (or annualized
period) preceding the event giving rise to liability.
XIV. SERVICES NOT EXCLUSIVE
The services of State Street to the Trust are not to be deemed exclusive and
State Street shall be free to render similar services to others. State Street
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Trust from time to time, have no
authority to act or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
XV. TERM; TERMINATION; AMENDMENT
A. Term. This Agreement shall become effective on the date first written
above and shall remain in full force and effect for a period of four (4) years
from the effective date (the "Initial Term") and shall automatically continue in
full force and effect after such Initial Term unless either party terminates
this Agreement by written notice to the other party at least six (6) months
prior to the expiration of the Initial Term. During the Initial Term and upon
reasonable prior notice to State Street and or the circumstances, the Treasurer
of the funds may, at any time, and from time to time, as approved by the Board,
remove funds from the list of funds on Exhibit A for purposes of selecting
another service provider; provided, however, that the number of funds so removed
within any calendar year shall not exceed five (5). Additionally, if State
Street (or any of its affiliates) engages in (i) any act or omission which
constitutes a breach of any representation, warranty, term, or obligation
contained in this Agreement or (ii) any act or omission which constitutes
negligence, reckless misconduct, willful malfeasance, or lack of good faith in
fulfilling the terms and obligations of this Agreement, then each Trust or
series thereof, shall have the right to immediately terminate this Agreement.
B. Termination. Either party may terminate this Agreement at any time
after the Initial Term upon at least six (6) months' prior written notice to the
other party. Termination of this Agreement with respect to any given Portfolio
shall in no way affect the continued validity of this Agreement with respect to
any other Portfolio. Upon termination of this Agreement, the Trust shall pay to
State Street such compensation and any reimbursable expenses as may be due under
the terms hereof as of the date of such termination, including reasonable out-
of-pocket expenses associated with such termination.
C. Amendment. This Agreement may be modified or amended from time to time
by the mutual agreement of the parties hereto. No amendment to this Agreement
shall be effective unless it is in writing and signed by a duly authorized
representative of each party. The term "Agreement", as used herein, includes all
schedules and attachments hereto and any future written amendments,
modifications, or supplements made in accordance herewith.
XVI. FEES, EXPENSES and EXPENSE REIMBURSEMENT
State Street shall receive from the Trust such compensation for its services
provided pursuant to this Agreement as may be agreed to from time to time as set
forth in the Financial Administration and Accounting Services Fee Schedule
between the parties (the "Fee Schedule"), attached as Schedule 1, approved by
the parties. In the event of substantial change in the mix of types of
Portfolios or in the event of new types of Portfolios offered by the Trust or
modifications or changes to the service delivery requirements, the parties shall
review the existing fee structure and an appropriate adjustment to the fee, if
any, shall be negotiated by the parties within ninety (90) days. The fees are
accrued daily and billed monthly and shall be due and payable upon receipt of
the invoice. Upon the termination of this Agreement before the end of any
month, the fee for the part of the month before such termination shall be
prorated according to the proportion which such part bears to the full monthly
period and shall be payable upon the date of termination of this Agreement. In
addition, the Trust shall reimburse State Street for its out-of-pocket costs and
expenses incurred in connection with this Agreement with respect to reasonable
attorney's fees incurred by State Street to collect any charges due under this
Agreement.
The Trust agrees to promptly reimburse State Street for any equipment and
supplies specially ordered by or for the Trust (with the Trust's consent)
through State Street and for any other expenses not contemplated by this
Agreement that State Street may incur on the Trust's behalf at the Trust's
request and with the Trust's consent.
Each party will bear all expenses that are incurred in its operation and not
specifically assumed by the other party. Expenses to be borne by the Trust
include, but are not limited to: Organization expenses; cost of services of
independent accountants and outside legal and tax counsel (including such
counsel's review of the Trust's registration statement, proxy materials, federal
and state tax qualification as a regulated investment company and other reports
and materials prepared by State Street under this Agreement); cost of any
services contracted for by the Trust directly from parties other than State
Street; cost of trading operations and brokerage fees, commissions and transfer
taxes in connection with the purchase and sale of securities for the Trust;
investment advisory fees; taxes, insurance premiums and other fees and expenses
applicable to its operation; costs incidental to any meetings of shareholders
including, but not limited to, legal and accounting fees, proxy filing fees and
the costs of preparation, printing and mailing of any proxy materials; costs
incidental to Board meetings, including fees and expenses of Board members; the
salary and expenses of any officer, director/trustee or employee of the Trust;
costs incidental to the preparation, printing and distribution of the Trust's
registration statements and any amendments thereto and shareholder reports; cost
of typesetting and printing of prospectuses; cost of preparation and filing of
the Trust's tax returns, Form N-1A or N-2, Form N-14, Form N-Q and Form N-SAR,
and all notices, registrations and amendments associated with applicable federal
and state tax and securities laws; fidelity bond and directors' and officers'
liability insurance; and cost of independent pricing services used in computing
the Trust's NAV.
State Street is authorized to and may employ or associate with such person or
persons as it may deem desirable to assist it in performing its duties under
this Agreement; provided, however, that the compensation of such person or
persons shall be paid by State Street and State Street shall be as fully
responsible to the Trust for the acts and omissions of any such person or
persons as it is for its own acts and omissions.
XVII. ASSIGNMENT; SUCCESSOR AGENT
A. Assignment. This Agreement shall not be assigned by either party
without the prior written consent of the other party, except that either party
may assign to a successor all of or a substantial portion of its business, or to
a party controlling, controlled by, or under common control with such party.
B. Successor Agent. This Agreement shall be binding on and shall inure to
the benefit of each party and to their successors and permitted assigns. If a
successor agent for the Trust shall be appointed by the Trust, State Street
shall upon termination deliver to such successor agent all properties of the
Trust held by it hereunder.
In the event that no written order designating a successor agent or Proper
Instructions shall have been delivered to State Street on or before the date
when such termination shall become effective, then State Street 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
$100,000,000, all properties held by State Street under this Agreement.
Thereafter, such bank or trust company shall be the successor of State Street
under this Agreement.
XVIII.ENTIRE AGREEMENT
This Agreement (including all schedules and attachments hereto) constitutes the
entire Agreement between the parties with respect to the subject matter hereof
and terminates and supersedes all prior agreements, representations, warranties,
commitments, statements, negotiations and undertakings with respect to such
services to be performed hereunder whether oral or in writing.
XIX. WAIVER
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver nor shall it deprive
such party of the right thereafter to insist upon strict adherence to that term
or any term of this Agreement. Any waiver must be in writing signed by the
waiving party.
XX. HEADINGS NOT CONTROLLING
Headings used in this Agreement are for reference purposes only and shall not be
deemed a part of this Agreement.
XXI. SURVIVAL
After expiration or termination of this Agreement, all provisions relating to
payment (Section XVI and the Fee Schedule) shall survive until completion of
required payments. In addition, all provisions regarding termination (Section
XV), indemnification, warranty, liability and limits thereon (Section XII and
Section XIII) shall survive, unless and until the expiration of any time period
specified elsewhere in this Agreement with respect to the provision in question.
XXII. SEVERABILITY
In the event any provision of this Agreement is held illegal, invalid, void or
unenforceable, the balance shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
XXIII.GOVERNING LAW; JURISDICTION
This Agreement shall be deemed to have been made in The Commonwealth of
Massachusetts and shall be governed by and construed under and in accordance
with the laws of The Commonwealth of Massachusetts without giving effect to its
conflict of laws principles and rules. The parties agree that any dispute
arising herefrom shall be subject to the exclusive jurisdiction of courts
sitting in The Commonwealth of Massachusetts.
XXIV. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments hereto
may be reproduced by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
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XXV. REMOTE ACCESS SERVICES ADDENDUM
State Street and the Trust agree to be bound by the terms of the Remote Access
Services Addendum attached hereto as Exhibit E.
XXVI. MISCELLANEOUS
The execution and delivery of this Agreement have been authorized by the Board
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by the Board 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 any member of the Board or shareholders of the
Trust, but bind only the property of the Trust, or Portfolio, as provided in the
organizational documents.
Each party agrees to promptly sign all documents and take any additional
actions reasonably requested by the other to accomplish the purposes of this
Agreement.
[Remainder of Page Intentionally Blank]
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first above written.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
Date: December 29, 2006
INVESTMENT COMPANIES
(Listed on Exhibit A hereto)
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Treasurer
Date: December 28, 2006
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EXHIBIT A
TO THE FINANCIAL ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
(REVISED AS OF 6/1/07)
CASH TRUST SERIES II:
Treasury Cash Series II
Date: 12/29/06
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