Exhibit (h)(v) 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, 2004 is made, severally and
not jointly (except that the parties jointly agree to the
provisions of Section XII hereunder) 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.
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 the review and comment by the Trust's auditors,
administrator and legal counsel and in accordance with procedures
which may be established from time to time between the Trust and
the Financial Administrator:
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 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);
4. 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
and Form 24F-2 and such other reports, forms or filings
as may be mutually agreed upon;
5. 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;
6. 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;
7. Prepare fund income forecasts and submit for approval by
officers of the Trust, recommendations for fund income
dividend distributions;
8. Maintain continuing awareness of significant emerging
regulatory and legislative developments which may affect
the Trust, and provide related planning assistance where
requested or appropriate;
9. 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 C attached hereto, as such Exhibit
may be amended from time to time by mutual agreement of
the parties (the "Compliance Procedures");
10. Complete monthly preferred shares basic maintenance amount
test for Fitch Ratings, Ltd. ("Fitch") preferred rate
auction (the "Fitch Preferred Shares Basic Maintenance
Test") following the Compliance Procedures; and
11. Complete monthly preferred shares basic maintenance amount
test for Xxxxx'x Investors Service, Inc. ("Xxxxx'x")
preferred rate auction (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.
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"):
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 of 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;
c. Calculate the net income of each of the Portfolios, if any;
d. Calculate realized capital gains or losses of each of the
Portfolios resulting from sale or disposition of
assets, if any;
e. 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;
f. 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
g. 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 XVI.B below, the Accounting
Agent shall preserve for the period required by law the
records required to be maintained thereunder.
IV. DUTIES of the TRUST
A. Delivery of Documents. The Trust will promptly deliver 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) sign
checks and pay 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. 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.
VI. 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.
VII. FORCE MAJEURE
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
(4) the non-performing Party uses reasonable efforts to remedy
its inability to perform as quickly as possible.
VIII. 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.
IX. 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
One Xxxxxxx Xxxxxx, 0xx Xxxxx (B02/9)
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
ATTN: Xxxx Xxxxx Zeven, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trust: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
ATTN: Xxxxxxx X. Xxxxxx, Treasurer with a copy to
the General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
X. 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.
XI. 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 XV, 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
XII 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 XI, its liability
shall be limited as described under Section XII 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.
XII. 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 XV hereunder during the calendar year (or annualized
period) preceding the event giving rise to liability.
XIII. 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.
XIV. 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 two (2) 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.
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.
XV. 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 in a written fee schedule 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 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.
XVI. 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.
XVII. 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.
XXIII. 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.
XIX. HEADINGS NOT CONTROLLING
Headings used in this Agreement are for reference purposes only
and shall not be deemed a part of this Agreement.
XX. SURVIVAL
After expiration or termination of this Agreement, all provisions
relating to payment (Section XV and the fee schedule) shall
survive until completion of required payments. In addition, all
provisions regarding termination (Section XIV), indemnification,
warranty, liability and limits thereon (Section XI and Section
XII) shall survive, unless and until the expiration of any time
period specified elsewhere in this Agreement with respect to the
provision in question.
XXI. 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.
XXII. 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.
XXIII. 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.
XXIV. REMOTE ACCESS SERVICES ADDENDUM
State Street and the Trust agree to be bound by the terms of the
Remote Access Services Addendum attached hereto.
XXV. 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]
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 (12/29/03)
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
INVESTMENT COMPANIES
(Listed on Exhibit A hereto)
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President - Treasurer
EXHIBIT A
FUNDS
FUND NAME
Capital Preservation Fund
Federated GNMA Trust
Federated U.S. Government Securities Fund: 2-5 Years
Federated Income Trust
Xxxxxx X. Xxxxx Money Market Fund
Federated Government Income Securities, Inc.
Federated High Yield Trust
Federated Limited Duration Government Fund
Federated Total Return Government Bond Fund
Federated U.S. Government Securities Fund: 1-3 Years
Federated American Leaders Fund, Inc.
Federated High Income Bond Fund, Inc.
Federated Municipal Securities Fund, Inc.
Federated Fund for US Government Securities
Federated Adjustable Rate Securities Fund
Federated Municipal Opportunities Fund, Inc.
Federated Muni and Stock Advantage Fund
Federated Stock Trust
Federated U.S. Government Bond Fund
Federated Equity Income Fund, Inc.
Federated Stock & Bond Fund, Inc.
Federated Income Securities Trust:
Federated Intermediate Income Fund
Federated Short-Term Income Fund
Federated Short-Term Municipal Trust
Federated Capital Income Fund
Intermediate Municipal Trust:
Federated Intermediate Municipal Trust
Cash Trust Series, Inc.:
Government Cash Series
Municipal Cash Series
Prime Cash Series
Treasury Cash Series
Cash Trust Series II:
Municipal Cash Series II
Treasury Cash Series II
Federated Institutional Trust:
Federated Government Ultrashort Duration Fund
Federated Municipal Securities Income Trust:
Federated California Municipal Income Fund
Federated Michigan Intermediate Municipal Trust
Federated New York Municipal Income Fund
Federated Ohio Municipal Income Fund
Federated Pennsylvania Municipal Income Fund
Federated North Carolina Municipal Income Fund
Federated Total Return Series, Inc.:
Federated Limited Duration Fund
Federated Mortgage Fund
Federated Ultrashort Bond Fund
Federated Fixed Income Securities, Inc.:
Federated Municipal Ultrashort Fund
Federated Institutional Trust:
Federated Institutional High Yield Bond Fund
Federated Equity Funds:
Federated Capital Appreciation Fund
Federated Communications Technology Fund
Federated Growth Strategies Fund
Federated Large Cap Growth Fund
Federated Market Opportunity Fund
Federated Xxxxxxxx Fund
Federated Xxxxxxxx Small Cap Fund
Federated Index Trust:
Federated Max-Cap Index Fund
Federated Mid-Cap Index Fund
Federated Mini-Cap Index Fund
Federated Premier Municipal Income:
Federated Premier Intermediate Municipal Income Fund
Federated Premier Municipal Income Fund
Federated Core Trust II, LP:
Emerging Markets Fixed Income Core Fund*
Capital Appreciation Core Fund
Federated Fixed Income Securities, Inc.:
Federated Limited Term Fund
Federated Limited Term Municipal Fund
Federated Strategic Income Fund
Federated Investment Series Funds, Inc.:
Federated Bond Fund
Federated Managed Allocation Portfolios:
Federated Growth Allocation Fund
Federated Conservative Allocation Fund
Federated Moderate Allocation Fund
Federated Total Return Series, Inc.:
Federated Total Return Bond Fund
Federated International Series Inc.:*
Federated International Bond Fund
Federated International Equity Fund
Federated World Investment Series, Inc.:*
Federated European Equity Fund
Federated Global Equity Fund
Federated Global Value Fund
Federated International Capital Appreciation Fund
Federated International High Income Fund
Federated International Small Company Fund
Federated International Value Fund
Federated Core Trust:
Federated Mortgage Core Portfolio
High Yield Bond Portfolio
Federated Insurance Series:
Federated American Leader Fund II
Federated Capital Appreciation Fund II
Federated Capital Income Fund II
Federated Equity Income Fund II
Federated Fund for U.S. Government Securities II
Federated Growth Strategies Fund II
Federated High Income Bond Fund II
Federated International Equity Fund II*
Federated Xxxxxxxx Fund II
Federated Prime Money Fund II
Federated Quality Bond Fund II
Federated Total Return Bond Fund II
Money Market Obligations Trust:
Tax-free Instruments Trust
Automated Government Cash Reserves
Automated Treasury Cash Reserves
U.S. Treasury Cash Reserves
Automated Cash Management Trust
Federated Master Trust
Government Obligations Fund
Government Obligations Tax-Managed Fund
Liquid Cash Trust
Municipal Obligations Fund
Prime Cash Obligations Fund
Prime Obligations Fund
Prime Value Obligations Fund
Tax-Free Obligations Fund
Treasury Obligations Fund
Trust for Government Cash Reserves
Trust for Short Term U.S. Government Securities
Automated Government Money Trust
Federated Short-Term U.S. Government Trust
Liberty U.S. Government Money Market Trust
Money Market Management
Money Market Trust
Trust for U.S. Treasury Obligations
Alabama Municipal Cash Trust
Arizona Municipal Cash Trust
California Municipal Cash Trust
Connecticut Municipal Cash Trust
Florida Municipal Cash Trust
Georgia Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
Michigan Municipal Cash Trust
Minnesota Municipal Cash Trust
New Jersey Municipal Cash Trust
New York Municipal Cash Trust
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Pennsylvania Municipal Cash Trust
Virginia Municipal Cash Trust
Federated Tax-Free Trust
*As of the date of this Agreement, the Trust has provided proper
notice under Section XIV.B of the Agreement that the Agreement
may be terminated solely with respect to such Trust by May 31,
2004.
EXHIBIT B
PRICE SOURCE AUTHORIZATION
To: State Street Bank and Trust Company
From: Federated Investors
Client Name: Federated Investors
Client Address: Federated Investors
Federated Investors Tower
Xxxxxxxxxx, XX 00000
Date: 12/29/2003
Re: PRICE SOURCE AUTHORIZATION
Reference is made to the Financial Administration and Accounting
Services Agreement dated January 1, 2004 between Federated Services
Company ("FSCo") and State Street Bank and Trust Company ("State
Street"). Capitalized terms used in this Price Source Authorization or
in any attachment or supplement shall have the meanings provided in
the Financial Administration and Accounting Services Agreement unless
otherwise specified. Pursuant to the Financial Administration and
Accounting Services Agreement, FSCo hereby directs State Street to
calculate the net asset value ("NAV") of the Funds or, if applicable,
its Series, in accordance with the terms of each Fund's or Series'
currently effective Prospectus. State Street will perform the NAV
calculation subject to the terms and conditions of the Financial
Administration and Accounting Services Agreement and this
Authorization.
FSCo hereby authorizes State Street to use the pricing sources
specified on the attached Authorization Matrix (as amended from
time to time) as sources for prices of assets in calculating the
net asset value of the Funds. FSCo understands that State Street
does not assume responsibility for the accuracy of the quotations
provided by the specified pricing sources and that State Street
shall have no liability for any incorrect data provided by the
pricing sources specified by FSCo or a Fund, except as provided
under the Portfolio Accounting and Administration Services
Agreement (including agreed upon tolerance checks as to the data
furnished and calculating the net asset value of the Fund in
accordance with the data furnished to State Street). FSCo also
acknowledges that prices supplied by the Funds or an affiliate
may be subject to approval of the Fund's Board and are not the
responsibility of State Street.
FSCo agrees to indemnify and hold State Street harmless as provided under
the Financial Administration and Accounting Services Agreement.
State Street agrees that written notice of any change in the name of
any specified pricing source will be sent to FSCo as such information
is available to State Street.
Kindly acknowledge your acceptance of the terms of this letter in the
space provided below.
(CLIENT/FUND NAME)
By: /s/ Xxxxxxx X. Xxxxxx The foregoing terms are hereby accepted.
Title: Senior Vice President - Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxx X'Xxxxxxx
Vice President
[OBJECT OMITTED] Authorization Matrix
--------------------------------------------------------------------
AUTHORIZATION MATRIX to be attached to Price Source Authorization
dated _December 29, 2003__
CLIENT: _FEDERATED INVESTORS __
Effective Date: January 1 2004(supersedes prior Authorization
Matrices)
Note: [Please submit Client Name, Fund Name and/or List of Funds
with this form]
------------------------------------------------------------------------------------------------------
-------------------------- Primary Secondary Tertiary Pricing Pricing Valuation
Security Type Source Source Source Logic Default Point
Logic
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
EQUITIES
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
U. S. Listed MARKET
Equities REUTERS BRIDGE FT LAST MEAN
(NYSE, AMEX) Interactive
Data CLOSE
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
U.S. OTC Equities REUTERS BRIDGE FT NOCP MEAN MARKET
(Nasdaq) Interactive CLOSE
Data
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Foreign Equities REUTERS BRIDGE FT LAST MEAN MARKET
Interactive CLOSE
Data
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Listed ADR's REUTERS BRIDGE FT LAST MEAN MARKET
Interactive CLOSE
Data
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
FIXED INCOME
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Municipal Bonds XX XXXXX FT BLOOMBERG MEAN EVALUATED
Interactive
Data
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
US Bonds (Treasuries, REUTERS FT BLOOMBERG MEAN EVALUATED
MBS, ABS, Interactive
Corporates) Data
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Eurobonds/Foreign FT FRI CORP BLOOMBERG LAST BID
Bonds Interactive
Data
----------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
OTHER ASSETS
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Options REUTERS BRIDGE BLOOMBERG LAST MEAN MARKET
CLOSE
----------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Futures REUTERS BRIDGE BLOOMBERG LAST MEAN SETTLEMENT
----------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
Non - Listed ADR's FT BLOOMBERG LAST MEAN
Interactive
Data
----------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
EXCHANGE RATES
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
REUTERS FT BLOOMBERG SNAPSHOT 12:00 NOON
Interactive
Data
------------------------------------------------------------------------------------------------------
FORWARD POINTS
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------
PRICE SOURCE AND METHODOLOGY AUTHORIZATION
INSTRUCTIONS: FOR EACH SECURITY TYPE ALLOWED BY THE FUND PROSPECTUS,
PLEASE INDICATE THE PRIMARY, SECONDARY AND TERTIARY SOURCE TO BE USED IN
CALCULATING NET ASSET VALUE FOR THE FUNDS IDENTIFIED. NOTE: IF
INVESTMENT MANAGER IS A PRICING SOURCE, PLEASE SPECIFY EXPLICITLY.
STATE STREET PERFORMS A DATA QUALITY REVIEW PROCESS AS SPECIFIED
IN THE SOURCES STATUS PRICING MATRIX ON THE NAVIGATOR PRICING
SYSTEM WHICH SPECIFIES PRICING TOLERANCE THRESHOLDS, INDEX AND
PRICE AGING DETAILS. THE SOURCES STATUS PRICING MATRIX WILL BE
PROVIDED FOR YOUR INFORMATION AND REVIEW.
AUTHORIZED BY: /S/ XXXXXXX X. XXXXXX ACCEPTED: _/S/ XXX X'XXXXXXX
FUND OFFICER STATE STREET VICE PRESIDENT
----------------------------------------------------------------------------------------------------
Explanation of Fields
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Client: Indicate the name of the Client and the Fund name or if multiple funds, attach a
list of fund names
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Primary Source: Indicate the primary source for prices for the security type. If an Investment
Manager is a pricing source, please specify explicitly.
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Secondary Source: Indicate the secondary source for prices for the security type. If an
Investment Manager is a pricing source, please specify explicitly.
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Tertiary Source: Indicate the tertiary (3rd level) source for prices for the security type. If
an Investment Manager is a pricing source, please specify explicitly.
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Pricing Logic: Indicate the price type to be referenced for the security type: Ask, Bid, Close,
Evaluated, Last, Official Close etc.- Please note that the closing price
reported by an exchange (which may sometimes be referred to by the exchange or
one or more pricing agents as the "official close", the "official closing price"
or other similar term) will be taken to be the "most recent sale price" for
purposes of this section. In these instances, it is believed to be
representative of the value at the close of the exchange.
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Pricing Default Indicate the price type to be referenced for the security type: Ask, Bid, Close,
Logic: Evaluated, Last, etc. in the instance where the preferred price type is not available.
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Authorized By: Provide the signature of the person authorizing the completion of the Price
Source Authorization
----------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------
Date: Indicate the date the Price Source Authorization was completed
----------------------------------------------------------------------------------------------------
To: State Street Bank and Trust Company
From: Federated Investors
Fund Entity Name: Federated Investors
Fund Entity Address: Federated Investors Tower, Pittsburgh, PA. 15222
Date: 12/29/2003
Re: FAIR VALUE PRICING AUTHORIZATION
Reference is made to the Financial Administration and Accounting
Services Agreement dated January 1, 2004 between Federated Investors
(the "Fund") and State Street Bank and Trust Company ("State Street").
Capitalized terms used in this Fair Value Pricing Authorization or in
any attachment or supplement shall have the meanings provided in the
Financial Administration and Accounting Services Agreement unless
otherwise specified. Pursuant to the Financial Administration and
Accounting Services Agreement, the Fund hereby directs State Street to
calculate the net asset value ("NAV") of the Fund or, if applicable,
its Portfolios, in accordance with the terms of the Fund's or
Portfolio's currently effective Prospectus or other governing
documents. State Street will perform the NAV calculation subject to
the terms and conditions of the Financial Administration and Accounting
Services Agreement, Price Source Authorization, and this Authorization.
The Fund's Board of Directors/Trustees has approved the vendor and fair
value procedures as detailed on the Fair Value Pricing Authorization
Form on page 2.
The Fund hereby authorizes State Street to use the Fair Value pricing
source specified on the attached Fair Value Authorization Form to
obtain adjustment factors to be applied to the closing prices of the
securities of the Fund or the Fund's portfolio(s) to calculate a
fair-value-adjusted market value to be used in the calculation of the
net asset value of the Fund or its Portfolios. The Fund understands
that State Street does not assume responsibility for the accuracy of
the adjustment factors or other fair value pricing information provided
by the specified fair value vendor and that State Street shall have no
liability for any incorrect data provided by said vendor specified by
the Fund, except as may arise from State Street's lack of reasonable
care in applying any adjustment factors to the closing prices of the
Fund's or Portfolio's securities and/or (if applicable) calculating the
fair value adjusted net asset value of the Fund or Portfolio in
accordance with the data furnished to State Street.
The Fund agrees to indemnify and hold State Street harmless from any
claim, loss or damage arising as a result of using Fair Value adjustment
factors or prices furnished by any specified Fair Value pricing source.
The Fund agrees to notify State Street promptly in writing if the fair
value pricing procedures authorized by the Fund's Board have been changed.
Kindly acknowledge your acceptance of the terms of this letter in the
space provided below.
By: /s/ Xxxxxxx X. Xxxxxx The foregoing terms are hereby accepted.
[Authorized Officer of the Fund]
Title: Senior Vice President - Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxx X'Xxxxxxx
Vice President
Fund Entity Name: Federated Investors
(Attach list, if required, of funds and portfolios, if
applicable, or create separate forms if multiple triggers apply)
Effective Date: 1-1-2004
Vendor: ITG
Market Trigger(s): Monitored by Client
Timing of Trigger(s): 4:30 p.m.
Threshold to Invoke Fair Value (+ or -) Monitored by Client*%
*(Fair Value invoked when client notification is received)
Filter on Confidence Interval (FT Interactive Only):
Yes_________ No___________
Minimum Confidence Interval ___________%
Authorized By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President - Treasurer
Officer of the Fund
Accepted By: /s/ Xxx X'Xxxxxxx
Name: Xxx X'Xxxxxxx
Vice President
State Street Bank and Trust Company
-----------------------------------------------------------------
Fund Entity Indicate fund name or if multiple funds or
Name portfolios of a fund, attach a complete list
-----------------------------------------------------------------
-----------------------------------------------------------------
Effective Date the funds are to begin using Fair Value
Date vendor feed at SSC
-----------------------------------------------------------------
-----------------------------------------------------------------
Vendor Name of Fair Value vendor to be used
-----------------------------------------------------------------
-----------------------------------------------------------------
Market Name of Trigger used to determine when to invoke
Trigger(s) Fair Value Pricing procedures, i.e., S&P 500,
Nikkei
-----------------------------------------------------------------
-----------------------------------------------------------------
Timing of A specific time at which the Trigger determines
Trigger(s) Fair Value Pricing procedures should be
initiated, i.e., Japan close to 4 PM EST (Nikkei
Futures), 4 PM EST prior day to 4 PM EST current
day (S&P500)
-----------------------------------------------------------------
-----------------------------------------------------------------
Threshold to Minimum percentage of movement of designated
Invoke Fair Trigger to determine that Fair Value should be
Value invoked
-----------------------------------------------------------------
-----------------------------------------------------------------
FT
Interactive
Only
Indicate "Yes" if the fund should impose a
Filter on confidence interval filter to determine which
Confidence securities should be Fair Valued
Interval
Minimum Minimum confidence interval percentage used to
Confidence apply Fair Value Adjustment Factors
Interval
-----------------------------------------------------------------
-----------------------------------------------------------------
Authorized By Provide signature of the Fund Officer authorizing
the completion of the Fair Value Pricing
Authorization Form
-----------------------------------------------------------------
-----------------------------------------------------------------
Accepted By Provide signature of a Vice President from State
Street Fund Group accepting the completion of the
Fair Value Pricing Authorization Form
-----------------------------------------------------------------
EXHIBIT C
Compliance Procedures
1940 Act Preferred Shares Asset Coverage
Section 18(h) of the Investment Company Act of 1940
"Asset coverage" of a class of senior security of an issuer which
is a stock means the ratio which the value of the total assets of
such issuer, less all liabilities and indebtedness not
represented by senior securities, bears to the aggregate amount
of senior securities representing indebtedness of such issuer
plus the aggregate of the involuntary liquidation preference of
such class of senior security which is a stock. The involuntary
liquidation preference of a class of senior security which is a
stock shall be deemed to mean the amount to which such class of
senior security would be entitled on involuntary liquidation of
the issuer in preference to a security junior to it.
Frequency: Monthly, as of the last business day of each month
Calculation: Determine whether the Asset Coverage is at least
200%
-------------------------------------------------------------
Total fund net assets / Value of senior securities
representing indebtedness
-------------------------------------------------------------
-------------------------------------------------------------
+ accrued unpaid + +
dividends on pfd shs
-------------------------------------------------------------
-------------------------------------------------------------
+ liquidation preference on + liquidation
pfd shares preference on pfd shs
-------------------------------------------------------------
-------------------------------------------------------------
+ value of senior + accrued unpaid
securities representing dividends on pfd shs
indebtedness
-------------------------------------------------------------
-------------------------------------------------------------
= Asset Coverage Percentage
-------------------------------------------------------------
-------------------------------------------------------------
> 200% = Fund Passes Test
-------------------------------------------------------------
-------------------------------------------------------------
< 200% = Fund Fails Test
-------------------------------------------------------------
Tolerance:
State Street Fund Administration (SSFA) will complete the test on
a monthly basis and report the results of the test to Federated
Investors Inc. Once SSFA has notified Federated of the test
results, Federated may impose certain restrictions on trading.
Cure Period:
Should the Fund fail to maintain the 1940 Act Preferred Shares
Asset Coverage as of a given Valuation Date (the last business
day of each month), the cure date is as of the last business day
of the month following such Valuation Date.
Preferred Shares Basic Maintenance Amount:
Frequency: Monthly
Reporting Deadlines: As of the Closing Time (February 18, 2003),
on a pro forma basis assuming the receipt of the
net proceeds from the sale of the AMPS and using
portfolio holdings and valuations as of the close
of business on any day not more than six business
days prior to the Closing Time (provided that the
total net assets of the Fund as of the Closing
Time have not declined by more than 5% or more
from such valuation date). [Note: Compliance as
of the Closing Time (using portfolio holdings and
valuations as of the Closing Time) with the
Investment Company Act Preferred Shares Asset
Coverage is also required.
On the first business day after the date of
original issue (i.e., February 18, 2003) of the
preferred shares (by 5 pm ET); as of the close of
business on original issue date
On the seventh business day after each monthly
Valuation Date (by 5 pm ET), as of the Valuation
Date
In instances of failure to satisfy Preferred
Shares Basic Maintenance Amount as of any
Valuation Date, on the seventh business day after
the Preferred Shares Basic Maintenance Cure Date
(Deadline = the 14th business day after the
failure Valuation Date) (by 5 pm ET), as of the
Preferred Shares Basic Maintenance Cure Date
On the seventh business day after the Fund has
redeemed Common Shares (by 5 pm ET)
On the seventh business day after the ratio of the
Discounted Value of (Fitch or Xxxxx'x) Eligible
Assets to the Preferred Shares Basic Maintenance
Amount as of any monthly Valuation Date is less
than or equal to 105% (by 5 pm ET) [Note: This
adds nothing to the existing requirement to
furnish a report as of each Valuation Date].
On the seventh business day after a request by
Moody's or Fitch (by 5pm ET), as of the date of
such request
On the second business day prior to the first day
of a Special Rate Period (by 11 am ET), as of the
third business day prior to the first day of the
Special Rate Period and assuming for purposes of
the calculation that (a) the Maximum Rate is the
Maximum Rate on such third business day as if such
day were the Auction date for the proposed Special
Rate Period and (b) the Moody's and Fitch Discount
Factors are determined by reference to an Exposure
Period of 8 weeks.
Cure Period:
Should the Fund fail to satisfy the Preferred Shares Basic
Maintenance Amount as of a given Valuation Date (the last
business day of each month), the cure date is as of the seventh
business day following such Valuation Date.
Calculation:
To ensure that the eligible assets (assets discounted based upon
Fitch's and Moody's ratings, as described below) of the Fund are
greater than the Fund's basic maintenance amount (as described
below). If the eligible assets are less than the basic
maintenance amount, the Fund fails the test.
Basic Maintenance Amount (BMA):
The Fund's basic maintenance amount is the sum of the following:
-----------------------------------------------------------------
BMA Component Calculation
-----------------------------------------------------------------
-----------------------------------------------------------------
1. Sum of:
-----------------------------------------------------------------
-----------------------------------------------------------------
a. Liquidation Value of the
outstanding shares of Number of preferred shares
preferred stock outstanding * liquidation
The product of the number price of preferred shares
of Preferred Shares
outstanding on the Federated to inform SSFA of
Valuation Date multiplied any instance of a redemption
by the liquidation price premium.
of $25,000 (plus the
product of the number of
shares of any other
series of preferred
shares outstanding on
such date multiplied by
the liquidation
preference of such
shares) plus any
redemption premium
applicable to Preferred
Shares (or other
preferred shares) then
subject to redemption
-----------------------------------------------------------------
-----------------------------------------------------------------
b. Current period dividend
exposure For each series of preferred
The aggregate amount of shares:
dividends that will have
accumulated at the Number of preferred shares
respective Applicable outstanding * $25,000 *
Rates (whether or not Auction rate * (# of days in
earned or declared) to dividend period / 365 [if
(but not including) the dividend period = 7 days or
first respective Dividend 360 [for all other dividend
Payment Dates for periods])
Preferred Shares
outstanding that follows
such Valuation Date (plus
the aggregate amount of
dividends, whether or
not earned or declared,
that will have
accumulated in respect of
other outstanding
preferred shares to, but
not including, the first
respective dividend
payment dates for such
other shares that follow
such Valuation Date)
-----------------------------------------------------------------
-----------------------------------------------------------------
c. Projected dividend amount
The aggregate amount of For each series of preferred
dividends that would shares:
accumulate on shares of
each series of Preferred # of preferred shares
Shares outstanding * $25,000 *
Maximum Rate* Volatility
Factor
* # of days from first
Dividend Payment Date
following Valuation Date
through the 49th day after
Valuation Date
-----------------------------------------------------------------
-----------------------------------------------------------------
365 [if dividend period = 7
days] or
360 [for all other dividend
periods]
-----------------------------------------------------------------
-----------------------------------------------------------------
outstanding from such Maximum rate= Rate Multiple
first respective Dividend (1.10 if prevailing rating is
Payment Date therefore Aa3 or higher for Xxxxx'x, and
through the 49th day AA- or higher for Fitch)
after such Valuation Date, multiplied by (A) the "AA"
Financial Composite Commercial
Paper Rate (in the case of
Minimum Rate Periods and
Special Rate Periods of fewer
than 183 Rate Period Days) or
(B) the Treasury Xxxx Rate in
the case of Special Rate
Periods of more than 182 Rate
Period Days but fewer than 365
Rate Period Days.
-----------------------------------------------------------------
-----------------------------------------------------------------
at the Maximum Rate Federated to notify SSFA in
(calculated as if such case of :
Valuation Date were the |X| special rate period
Auction Date for the Rate |X| credit rating for
Period commencing on such preferred shares falls below
Dividend Payment Date) Aa3 for Xxxxx'x or AA- for
Fitch
|X| if a Failure to Deposit
occurs
|X| if all outstanding
shares are subject to
Submitted Hold Orders
-----------------------------------------------------------------
-----------------------------------------------------------------
for a Minimum Rate Period
of shares of such series
to commence on such
Dividend Payment Date,
-----------------------------------------------------------------
-----------------------------------------------------------------
assuming, solely for
purposes of the
foregoing, that if on
such Valuation Date the
Fund shall have delivered
a Notice of Special Rate
Period to the Auction
Agent with respect to
shares of such series,
such Maximum Rate shall
be the higher of
-----------------------------------------------------------------
-----------------------------------------------------------------
i. the Maximum Rate for the
Special Rate Period of
shares of such series
to commence on such
Dividend Payment Date
and
-----------------------------------------------------------------
-----------------------------------------------------------------
ii. the Maximum Rate for a
Minimum Rate Period of
shares of such series
to commence on such
Dividend Payment Date,
multipled by the
greater of
-----------------------------------------------------------------
-----------------------------------------------------------------
iii. the Xxxxx'x Volatility
Factor (if Xxxxx'x is SSFA will use a volatility
then rating the rate of 2.75 for conservatism.
Preferred Shares) and
-----------------------------------------------------------------
-----------------------------------------------------------------
iv. the Fitch Volatility
Factor (if Fitch is
then rating the
Preferred Shares)
applicable to a Minimum
Rate Period, or,
-----------------------------------------------------------------
-----------------------------------------------------------------
in the event the Fund
shall have delivered a
Notice of Special Rate
Period to the Auction
Agent with respect to
such shares of such
series designating a
Special Rate Period
consisting of 56 Rate
Period Days or more the
greater of
-----------------------------------------------------------------
-----------------------------------------------------------------
v. the Xxxxx'x Volatility
Factor and
-----------------------------------------------------------------
-----------------------------------------------------------------
vi. Fitch Volatility Factor
applicable to a Special
Rate Period of that length
-----------------------------------------------------------------
-----------------------------------------------------------------
(plus the aggregate
amount of dividends that
would accumulate at the
maximum dividend rate or
rates on any other
preferred stock
outstanding from such
respective dividend
payment dates through the
56th day after such
Valuation Date, as
established by or
pursuant to the
respective statements
supplementary
establishing and fixing
the rights and
preferences of such other
preferred shares),
(except that
-----------------------------------------------------------------
-----------------------------------------------------------------
if such Valuation Date
occurs at a time when a
Failure to Deposit (or,
in the case of preferred
stock other than
Preferred Shares, a
failure similar to a
Failure to Deposit) has
occurred that has not
been cured, the dividend
for purposes of
calculation would
accumulate at the current
dividend rate then
applicable to the shares
in respect of which such
failure has occurred and
-----------------------------------------------------------------
-----------------------------------------------------------------
for those days during the
period described in this
subparagraph (C) in
respect of which the
Applicable Rate in effect
immediately prior to such
Dividend Payment Date
will remain in effect
(or, in the case of
preferred shares other
than Preferred Shares, in
respect of which the
dividend rate or rates in
effect immediately prior
to such respective
dividend payment dates
will remain in effect),
the dividend for purposes
of calculation would
accumulate at such
Applicable Rate (or other
rate or rates, as the
case may be) in respect
of those days)
-----------------------------------------------------------------
-----------------------------------------------------------------
d. The amount of anticipated
expenses of the Fund for Current daily expense accrual
the 90 days subsequent to * 90 days
such Valuation Date.
-----------------------------------------------------------------
-----------------------------------------------------------------
e. The amount of the Fund's
Maximum Potential Federated to inform SSFA if
Gross-up Payment such situation exists.
Liability
in respect of Preferred Estimated taxable distribution
Shares (and similar (capital gain + taxable
amounts payable in income) to preferred shares *
respect of other 38.6% federal tax.
preferred shares, as of
such Valuation Date.
MAXIMUM POTENTIAL
GROSS-UP PAYMENT
LIABILITY as of any
Valuation Date, shall
mean the aggregate amount
of Gross-up Payments that
would be due if the Fund
were to make Taxable
Allocations, with respect
to any taxable year,
estimated based upon
dividends paid and the
amount of undistributed
realized net capital
gains and other taxable
income earned by the
Fund, as of the end of
the calendar month
immediately preceding
such Valuation Date, and
assuming such Gross-up
Payments are fully
taxable.
-----------------------------------------------------------------
-----------------------------------------------------------------
f. The amount of any
indebtedness or Federated to inform SSFA if
obligations of the Fund such situation exists.
senior in right of
payment to the Preferred
Shares; and
-----------------------------------------------------------------
-----------------------------------------------------------------
g. Any current liabilities
as of such Valuation Date Liabilities from the trial
to the extent not balance.
reflected in any of 1a
through 1f (including,
without limitation, any
payables for Municipal
Obligations purchased as
of such Valuation Date
and any liabilities
incurred for the purpose
of clearing securities
transactions)
-----------------------------------------------------------------
-----------------------------------------------------------------
2. LESS:
the face value of Less:
(i.e., for purposes of
current Moody's guidelines, The value of any of the Fund's
a. cash, assets irrevocably deposited
b. short-term Municipal by the Fund for the payment of
Obligations rated MIG-1, any of 1a through 1g.
VMIG-1 or P-1, and
c. short-term securities
that are the direct
obligation of the U.S.
government, provided in
each case that such
securities mature on or
prior to the date upon
which any of 1a through
1g become payable,
otherwise the Moody's
Discounted Value)
of any of the Fund's assets
irrevocably deposited by the
Fund for the payment of any
of 1a through 1g
-----------------------------------------------------------------
===================================================================
FITCH
===================================================================
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Fitch Eligible Assets:
-----------------------------------------------------------------
-----------------------------------------------------------------
Eligible Asset Component Calculation
-----------------------------------------------------------------
-----------------------------------------------------------------
1. Cash,
Cash per trial balance
-----------------------------------------------------------------
-----------------------------------------------------------------
2. Receivables for Municipal
Obligations Sold, or Receivable for Municipal
Obligations Sold per trial
balance. Ensure that the
receivables are due to settle
within five business days of
the Valuation Date.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. Unrealized Gain from
Hedging Transactions Unrealized Gain from Hedging
Transactions' shall mean, as
of any Valuation Date, (1) in
the case of a swap contract
(including total return swaps
and interest rate swaps), the
amount, if any, that the Fund
would receive if the swap
contract were terminated as of
the Valuation Date, (2) in the
case of an interest rate
futures contract, the amount,
if any, that the Fund would
receive if it were to
eliminate its open futures
position as of the Valuation
Date by entering into an
offsetting contract of the
same specifications or (3) in
the case of an option on
interest rate futures
contracts, the Market Value
thereof as of the Valuation
Date. For the purpose of
determining the Discounted
Value of any Unrealized Gain
from Hedging Transactions,
(i) unrealized gain from a
swap contract shall be treated
in the same manner as a
Municipal Obligation, except
that the issuer rating
assigned to the swap
counterparty shall be used,
and (ii) unrealized gain from
an interest rate futures
contract or an option on
interest rate futures
contracts shall be deemed to
have a rating of A by Fitch.
The amount of any unrealized
loss from hedging transactions
as of any Valuation Date shall
be treated as a reduction to
Fitch Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
4. Municipal Obligation that
-----------------------------------------------------------------
-----------------------------------------------------------------
a. Pays interest in cash,
Federated to inform SSFA in
any instance where interest is
not paid in cash.
-----------------------------------------------------------------
-----------------------------------------------------------------
b. Does not have its Fitch
rating suspended by Federated to inform SSFA in
Fitch, and any instance where Fitch's
ratings have been suspended.
-----------------------------------------------------------------
-----------------------------------------------------------------
c. Is part of an issue of
Municipal Obligations of Issuer size from Bloomberg
at least $10,000,000 will be used to determine
eligibility. SSFA to perform
the analysis based on cusip
and notify Federated of any
issues below $10,000,000.
Federated will determine and
communicate to SSFA whether or
not the cusip is part of an
overall issue of at least
$10,000,000.
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
For purposes of applying the following requirements for Single
Issuer Concentration, State Concentration and applying the
applicable Fitch Discount Factor:
----------------------------------------------------------------
1. If a Municipal Obligation is not rated by Fitch but is
rated by Xxxxx'x and S&P, such Municipal Obligation
(excluding short-term Municipal Obligations) will be deemed
to have the Fitch rating which is the lower of the Moody's
and S&P rating.
2. If a Municipal Obligation is not rated by Fitch but is
rated by Moody's or S&P, such Municipal Obligation
(excluding short-term Municipal Obligations) will be deemed
to have such rating.
SSFA will obtain ratings from Bloomberg for new buys and for
the entire portfolio monthly.
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
A. Single Issuer Concentration:
-----------------------------------------------------------------
-----------------------------------------------------------------
1. Municipal Obligations
issued by any one issuer and For purposes of identifying
rated BB or lower, or not single issuers, the first six
rated, may comprise no more digits of the municipal
than 4% of total Fitch security's cusip will be
Eligible Assets. considered the issuer
identifier. It is possible
that the six digit cusip may
represent a conduit rather
than the true issuer.
Therefore, if any issuer
exceeds the set limit, SSFA
will research the true issuer
on Bloomberg and notify
Federated.
-----------------------------------------------------------------
-----------------------------------------------------------------
2. The total amount
identified in item 1
(above), together with any
Municipal Obligations issued
by the same issuer and rated
BBB by Fitch may comprise no
more than 6% of total Fitch
Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. The total amount
identified in item 2 (above)
together with any Municipal
Obligations issued by the
same issuer and rated A by
Fitch may comprise no more
than 10% of total Fitch
Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
4. The total amount
identified in item 3 (above)
together with any Municipal
Obligations issued by the
same issuer and rated AA by
Fitch may comprise no more
than 20% of total Fitch
Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
For purposes of the For purposes of this test,
calculations in items 1 - 4 SSFA will assume that the
(above), any Municipal rating provided by Bloomberg
Obligation backed by the is for the obligation AND
guaranty, letter of credit based solely on the underlying
or insurance issued by a credit enhancement, unless
third party shall be deemed information is supplied by
to be issued by such third Federated.
party if the issuance of
such third party credit is
the sole determinant of the
rating on such Municipal
Obligations; and any
Municipal Obligation for
which the nominal issuer is
a conduit for a third party
the obligations of which are
the sole source of revenues
for the payment of such
Municipal Obligation shall
be deemed to be issued by
such third party.
-----------------------------------------------------------------
-----------------------------------------------------------------
B. State Concentration:
-----------------------------------------------------------------
-----------------------------------------------------------------
1. Municipal Obligations
issued by issuers located
within a single state or
territory and rated BB or
lower or not rated may
comprise no more than 12% of
total Fitch Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
2. The total amount
identified in item 1
(above), together with any
Municipal Obligations issued
by issuers located within
the same state or territory
and rated BBB by Fitch may
comprise no more than 20% of
total Fitch Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. The total amount
identified in item 2 (above)
together with any Municipal
Obligations issued by
issuers located within the
same state or territory and
rated A by Fitch may
comprise no more than 40% of
total Fitch Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
4. The total amount
identified in item 3 (above)
together with any Municipal
Obligations issued by
issuers located within the
same state or territory and
rated AA by Fitch may
comprise no more than 60% of
total Fitch Eligible Assets
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
For purposes of applying the foregoing requirements for Single
Issuer Concentration and State Concentration:
1. Eligible Assets shall be calculated without including
cash; and
2. Municipal Obligations rated F1 by Fitch or, if not rated
by Fitch, rated XXX-0, XXXX-0 or P-1 by Moody's; or, if not
rated by Moody's, rated A-1+/AA or SP-1+/AA by S&P shall be
considered to have a long-term rating of A.
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Adjustments to Fitch's Eligible
Assets for Futures, Options
and Forward Commitments:
-----------------------------------------------------------------
-----------------------------------------------------------------
1. For purposes of
determining whether the Fund
has Fitch Eligible Assets
with an aggregate Discounted
Value that equals or exceeds
the Preferred Shares Basic
Maintenance Amount,
the Discounted Value of
Fitch Eligible Assets which
the Fund is obligated to
deliver or receive pursuant
to an outstanding option
shall be as follows:
-----------------------------------------------------------------
-----------------------------------------------------------------
a. assets subject to call
options written by the SSFA will test whether the
Fund which are either written call options expire
exchange-traded and within 49 days after the
"readily reversible" or Valuation Date.
which expire within 49
days after the date as of If the 49 day limit test is
which such valuation is not passed, SSFA will contact
made shall be valued at Federated to determine whether
the lesser of: the written call options are
exchange-traded and "readily
reversible".
-----------------------------------------------------------------
-----------------------------------------------------------------
i. Discounted Value and
-----------------------------------------------------------------
-----------------------------------------------------------------
ii. the exercise price of the
call option written by
the Fund;
-----------------------------------------------------------------
-----------------------------------------------------------------
b. assets subject to call
options written by the
Fund not meeting the
requirements of clause
(a) of this sentence
shall have no value;
-----------------------------------------------------------------
-----------------------------------------------------------------
c. assets subject to put
options written by the
Fund shall be valued at
the lesser of:
-----------------------------------------------------------------
-----------------------------------------------------------------
i. the exercise price and
ii. the Discounted Value of
the subject security;
and
-----------------------------------------------------------------
-----------------------------------------------------------------
d. where delivery may be
made to the Fund with any Federated to inform SSFA of
security of a class of the various securities of the
securities, the Fund class of securities if such
shall assume it will take situation exists.
delivery of the security
with the lowest
Discounted Value.
-----------------------------------------------------------------
-----------------------------------------------------------------
2. For purposes of
determining whether the Fund
has Fitch Eligible Assets
with an aggregate Discounted
Value that equals or exceeds
the Preferred Shares Basic
Maintenance Amount,
the following amounts shall
be subtracted from the
aggregate Discounted Value
of the Fitch Eligible Assets
held by the Fund:
-----------------------------------------------------------------
-----------------------------------------------------------------
a. 10% of the exercise price
of a written call option;
-----------------------------------------------------------------
-----------------------------------------------------------------
b. the exercise price of any
written put option;
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
c. the settlement price of
the underlying futures
contract if the Fund
writes put options on a
futures contract
-----------------------------------------------------------------
-----------------------------------------------------------------
d. 105% of the Market Value
of the underlying futures
contracts if the Fund
writes call options on a
futures contract and does
not own the underlying
contract.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. For purposes of
determining whether the Fund
has Fitch Eligible Assets
with an aggregate Discounted
Value that equals or exceeds
the Preferred Shares Basic
Maintenance Amount,
the Discounted Value of
Forward Commitments will be
the Discounted Value as
calculated by applying the
respective Fitch Discount
Factor.
-----------------------------------------------------------------
Discounting Fitch's Assets: Once the above procedures have been
performed, determine the discounted market value for each
security. Discount each security as follows:
RATING CATEGORY
EXPOSURE PERIOD AAA* AA* A* BBB* F1** UNRATED***
7 weeks 151% 159% 166% 173% 136% 225%
8 weeks or less
but greater 154% 161% 168% 176% 137% 231%
than 7 weeks
9 weeks or less
but greater 158% 163% 170% 177% 138% 240%
than 8 weeks
* Fitch rating.
** Municipal Obligations rated F2 by Fitch, which do not mature
or have a demand feature at par exercisable in 30 days and
which do not have a long-term rating.
*** Municipal Obligations rated less than BBB by Fitch or unrated.
Notwithstanding the foregoing:
1. The Fitch Discount Factor for short-term Municipal
Obligations will be 115%, so long as:
a. Such Municipal Obligations are rated at least F2 by Fitch
(or, if not rated by Fitch, rated XXX-0, XXXX-0 or P-1 by
Moody's or at least A-1+ or SP-1+ by S&P) and
b. Mature or have a demand feature at par exercisable in 30
days or less, and
2. No Fitch Discount Factor will be applied to cash or to
Receivables for Municipal Obligations Sold.
-----------------------------------------------------------------
When the Fund sells a Municipal
Obligation and agrees to
repurchase such Municipal
Obligation at a future date,
such Municipal Obligation shall
be valued at its Discounted
Value for purposes of
determining Fitch Eligible
Assets, and the amount of the
repurchase price of such
Municipal Obligation shall be
included as a liability for
purposes of calculating the
Preferred Shares Basic
Maintenance Amount.
-----------------------------------------------------------------
-----------------------------------------------------------------
When the Fund purchases a Fitch
Eligible Asset and agrees to
sell it at a future date, such
Fitch Eligible Asset shall be
valued at the amount of cash to
be received by the Fund upon
such future date, provided that
the counterparty to the
transaction has a long-term
debt rating of at least A by
Fitch and the transaction has a
term of no more than 30 days;
otherwise, such Fitch Eligible
Asset shall be valued at the
Discounted Value of such Fitch
Eligible Asset.
-----------------------------------------------------------------
-----------------------------------------------------------------
Notwithstanding the foregoing, SSFA will assume this
an asset will not be considered paragraph is not applicable
a Fitch Eligible Asset for unless information is provided
purposes of determining the by Federated.
Preferred Shares Basic
Maintenance Amount to the
extent it is
1. subject to any material
lien, mortgage, pledge,
security interest or
security agreement of any
kind (collectively,
"Liens"), except for
a. Liens which are being
contested in good faith
by appropriate
proceedings and which
Fitch (if Fitch is then
rating the Preferred
Shares) has indicated to
the Fund will not affect
the status of such asset
as a Fitch Eligible
Asset,
b. Liens for taxes that are
not then due and payable
or that can be paid
thereafter without
penalty,
c. Liens to secure payment
for services rendered or
cash advanced to the Fund
by the Fund's investment
adviser, custodian or the
Auction Agent,
d. Liens by virtue of any
repurchase agreement, and
e. Liens in connection with
any futures margin
account or swap contract;
or
2. deposited irrevocably for
the payment of any
liabilities.
-----------------------------------------------------------------
===================================================================
MOODY'S
===================================================================
-----------------------------------------------------------------
Moody's Eligible Assets:
-----------------------------------------------------------------
-----------------------------------------------------------------
Eligible Asset Component Calculation
-----------------------------------------------------------------
-----------------------------------------------------------------
1. Cash,
Cash per trial balance
-----------------------------------------------------------------
-----------------------------------------------------------------
2. Receivables for Municipal
Obligations Sold, or Receivable for Municipal
Obligations Sold per trial
balance. Ensure that the
receivables are due to settle
within five business days of
the Valuation Date.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. Unrealized Gain from
Hedging Transactions Unrealized Gain from Hedging
Transactions' shall mean, as
of any Valuation Date, (1) in
the case of a swap contract
(including total return swaps
and interest rate swaps), the
amount, if any, that the Fund
would receive if the swap
contract were terminated as of
the Valuation Date, (2) in the
case of an interest rate
futures contract, the amount,
if any, that the Fund would
receive if it were to
eliminate its open futures
position as of the Valuation
Date by entering into an
offsetting contract of the
same specifications or (3) in
the case of an option on
interest rate futures
contracts, the Market Value
thereof as of the Valuation
Date. For the purpose of
determining the Discounted
Value of any Unrealized Gain
from Hedging Transactions,
(i) unrealized gain from a
swap contract shall be treated
in the same manner as a
Municipal Obligation, except
that the issuer rating
assigned to the swap
counterparty shall be used,
and (ii) unrealized gain from
an interest rate futures
contract or an option on
interest rate futures
contracts shall be deemed to
have a rating of A by
Moody's. The amount of any
unrealized loss from hedging
transactions as of any
Valuation Date shall be
treated as a reduction to
Moody's Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
4. Municipal Obligation that
-----------------------------------------------------------------
-----------------------------------------------------------------
a. Pays interest in cash,
Federated to inform SSFA in
any instance where interest is
not paid in cash.
-----------------------------------------------------------------
-----------------------------------------------------------------
b. Does not have its Xxxxx'x
rating suspended by Federated to inform SSFA in
Moody's, and any instance where Moody's
ratings have been suspended.
-----------------------------------------------------------------
-----------------------------------------------------------------
c. Is part of an issue of
Municipal Obligations of Issuer size from Bloomberg
at least $10,000,000 will be used to determine
eligibility. SSFA to perform
the analysis based on cusip
and notify Federated of any
issues below $10,000,000.
Federated will determine and
communicate to SSFA whether or
not the cusip is part of an
overall issue of at least
$10,000,000.
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
For purposes of applying the following requirements for Single
Issuer Concentration, State Concentration and applying the
applicable Moody's Discount Factor, except as the Fund is
otherwise advised in writing by Moody's:
----------------------------------------------------------------
1. if a Municipal Obligation is not rated by Moody's but is
rated by Fitch and S&P, such Municipal Obligation (excluding
short-term Municipal Obligations) will be deemed to have the
Xxxxx'x rating which is equivalent to the lower of the Fitch
and S&P ratings;
2. if a Municipal Obligation is not rated by Moody's but is
rated by Fitch or S&P, such Municipal Obligation (excluding
short-term Municipal Obligations) will be deemed to have the
Moody's equivalent of such rating.
SSFA will obtain ratings from Bloomberg for new buys and for
the entire portfolio monthly. Federated to inform SSFA in any
instance where the Fund is advised in writing by Moody's that
the foregoing does not apply to a Municipal Obligation held by
the Fund
-----------------------------------------------------------------
-----------------------------------------------------------------
A. Single Issuer Concentration:
-----------------------------------------------------------------
-----------------------------------------------------------------
1. Municipal Obligations
issued by any one issuer and For purposes of identifying
rated Ba or lower by Moody's single issuers, the first six
or not rated by Moody's may digits of the municipal
comprise no more than 4% of security's cusip will be
total Moody's Eligible considered the issuer
Assets. identifier. It is possible
that the six digit cusip may
represent a conduit rather
than the true issuer.
Therefore, if any issuer
exceeds the set limit, SSFA
will research the true issuer
on Bloomberg and notify
Federated.
-----------------------------------------------------------------
-----------------------------------------------------------------
2. The total amount
identified in item 1
(above), together with any
Municipal Obligations issued
by the same issuer and rated
Baa by Moody's may comprise
no more than 6% of total
Moody's Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. The total amount
identified in item 2 (above)
together with any Municipal
Obligations issued by the
same issuer and rated A by
Moody's may comprise no more
than 10% of total Moody's
Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
4. The total amount
identified in item 3 (above)
together with any Municipal
Obligations issued by the
same issuer and rated Aa by
Moody's may comprise no more
than 20% of total Moody's
Eligible Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
For purposes of the For purposes of this test,
calculations in items 1 - 4 SSFA will assume that the
(above), any Municipal rating provided by Bloomberg
Obligation backed by the is for the obligation AND NOT
guaranty, letter of credit based solely on the underlying
or insurance issued by a credit enhancement, unless
third party shall be deemed information is supplied by
to be issued by such third Federated.
party if the issuance of
such third party credit is
the sole determinant of the
rating on such Municipal
Obligations; and any
Municipal Obligation for
which the nominal issuer is
a conduit for a third party
the obligations of which are
the sole source of revenues
for the payment of such
Municipal Obligation shall
be deemed to be issued by
such third party.
-----------------------------------------------------------------
-----------------------------------------------------------------
B. State Concentration:
-----------------------------------------------------------------
-----------------------------------------------------------------
1. Municipal Obligations
issued by issuers located
within a single state or
territory and rated Ba or
lower by Moody's or not
rated by Moody's may
comprise no more than 12% of
total Moody's Eligible
Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
2. The total amount
identified in item 1
(above), together with any
Municipal Obligations issued
by issuers located within a
single state or territory
and rated Baa by Moody's may
comprise no more than 20% of
total Moody's Eligible
Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. The total amount
identified in item 2 (above)
together with any Municipal
Obligations issued by
issuers located within a
single state or territory
and rated A by Moody's may
comprise no more than 40% of
total Moody's Eligible
Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
4. The total amount
identified in item 3 (above)
together with any Municipal
Obligations issued by
issuers located within a
single state or territory
and rated Aa by Moody's may
comprise no more than 60% of
total Moody's Eligible
Assets.
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
For purposes of applying the foregoing requirements for Single
Issuer Concentration and State Concentration:
1. Eligible Assets shall be calculated without including
cash; and
2. Municipal Obligations rated XXX-0, XXXX-0 or P-1 by
Moody's or, if not rated by Moody's, rated A-1+/AA or
SP-1+/AA by S&P, or if not rated by S&P, rated F1 by Fitch,
shall be considered to have a long-term rating of A.
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
-----------------------------------------------------------------
Adjustments to Moody's Eligible
Assets for Futures, Options
and Forward Commitments:
-----------------------------------------------------------------
-----------------------------------------------------------------
1. For purposes of
determining whether the Fund
has Moody's Eligible Assets
with an aggregate Discounted
Value that equals or exceeds
the Preferred Shares Basic
Maintenance Amount,
the Discounted Value of
Moody's Eligible Assets
which the Fund is obligated
to deliver or receive
pursuant to an outstanding
option shall be as follows:
-----------------------------------------------------------------
-----------------------------------------------------------------
a. assets subject to call
options written by the SSFA will test whether the
Fund which are either written call options expire
exchange-traded and within 49 days after the
"readily reversible" or Valuation Date.
which expire within 49
days after the date as of If the 49 day limit test is
which such valuation is not passed, SSFA will contact
made shall be valued at Federated to determine whether
the lesser of: the written call options are
exchange-traded and "readily
reversible".
-----------------------------------------------------------------
-----------------------------------------------------------------
i. Discounted Value and
-----------------------------------------------------------------
-----------------------------------------------------------------
ii. the exercise price of the
call option written by
the Fund;
-----------------------------------------------------------------
-----------------------------------------------------------------
b. assets subject to call
options written by the
Fund not meeting the
requirements of clause
(A) of this sentence
shall have no value;
-----------------------------------------------------------------
-----------------------------------------------------------------
c. assets subject to put
options written by the
Fund shall be valued at
the lesser of:
-----------------------------------------------------------------
-----------------------------------------------------------------
i. the exercise price and
ii. the Discounted Value of
the subject security;
and
-----------------------------------------------------------------
-----------------------------------------------------------------
d. where delivery may be
made to the Fund with any Federated to inform SSFA of
security of a class of the various securities of the
securities, the Fund class of securities if such
shall assume it will take situation exists.
delivery of the security
with the lowest
Discounted Value.
-----------------------------------------------------------------
-----------------------------------------------------------------
2. For purposes of
determining whether the Fund
has Moody's Eligible Assets
with an aggregate Discounted
Value that equals or exceeds
the Preferred Shares Basic
Maintenance Amount,
the following amounts shall
be subtracted from the
aggregate Discounted Value
of the Moody's Eligible
Assets held by the Fund:
-----------------------------------------------------------------
-----------------------------------------------------------------
a. 10% of the exercise price
of a written call
option;
-----------------------------------------------------------------
-----------------------------------------------------------------
b. the exercise price of any
written put option;
-----------------------------------------------------------------
-----------------------------------------------------------------
c. the settlement price of
the underlying futures
contract if the Fund
writes put options on a
futures contract; and
-----------------------------------------------------------------
-----------------------------------------------------------------
d. 105% of the Market Value
of the underlying futures
contracts if the Fund
writes call options on a
futures contract and does
not own the underlying
contract.
-----------------------------------------------------------------
-----------------------------------------------------------------
3. For purposes of
determining whether the Fund
has Moody's Eligible Assets
with an aggregate Discounted
Value that equals or exceeds
the Preferred Shares Basic
Maintenance Amount,
the Discounted Value of all
Forward Commitments will be
the Discounted Value as
calculated by applying the
respective Moody's Discount
Factor.
-----------------------------------------------------------------
Discounting Moody's Assets: Once the above procedures have been
performed, determine the discounted market value for each
security. Discount each security as follows:
RATING CATEGORY
Exposure Period
Aaa* Aa* A* Baa* (V)MIG-1*UNRATED***
7 weeks.......... 151% 159% 166% 173% 136% 225%
8 weeks or less
but greater
than 7 weeks.....
154% 161% 168% 176% 137% 231%
9 weeks or less
but greater
than 8 weeks.....
158% 163% 170% 177% 138% 240%
____________________
* Xxxxx'x rating (or, if not rated by Moody's, see above).
** Municipal Obligations rated MIG-1 or VMIG-1 (or, if not
rated by Moody's, see above), which do not mature or have a
demand feature at par exercisable in 30 days and which do
not have a long-term rating.
*** Municipal Obligations rated less than Baa3 by Moody's (or,
if not rated by Moody's, see above) or unrated. Securities
rated below Baa by Moody's (or, if not rated by Moody's, see
above) and unrated securities, which are securities rated by
neither Moody's, S&P or Fitch, may not exceed 10% of Moody's
Eligible Assets.
Notwithstanding the foregoing:
1. The Moody's Discount Factor for short-term Municipal
Obligations will be 115%, so long as
a) such Municipal Obligations are rated at least XXX-0, XXXX-0
or P-1 by Moody's (or if not rated by Moody's, rated at least
F1 by Fitch or at least A-1+/AA or SP-1+/AA by S&P) and
b) mature or have a demand feature at par exercisable in 30
days or less, and
2. No Moody's Discount Factor will be applied to cash or to
Receivables for Municipal Obligations Sold.
-----------------------------------------------------------------
When the Fund sells a Municipal
Obligation and agrees to
repurchase such Municipal
Obligation at a future date,
such Municipal Obligation shall
be valued at its Discounted
Value for purposes of
determining Moody's Eligible
Assets and the amount of the
repurchase price of such
Municipal Obligation shall be
included as a liability for
purposes of calculating the
Preferred Shares Basic
Maintenance Amount.
-----------------------------------------------------------------
-----------------------------------------------------------------
When the Fund purchases a
Moody's Eligible Asset and
agrees to sell it at a future
date, such Moody's Eligible
Asset shall be valued at the
amount of cash to be received
by the Fund upon such future
date, provided that the
counterparty to the transaction
has a long-term debt rating of
at least A2 from Moody's and
the transaction has a term of
no more than 30 days;
otherwise, such Moody's
Eligible Asset shall be valued
at the Discounted Value of such
Moody's Eligible Asset.
-----------------------------------------------------------------
-----------------------------------------------------------------
Notwithstanding the foregoing, SSFA will assume this
an asset will not be considered paragraph is not applicable
a Moody's Eligible Asset for unless information is provided
purposes of determining the by Federated.
Preferred Shares Basic
Maintenance Amount to the
extent it is
1. subject to any Liens,
except for
a. Liens which are being
contested in good faith
by appropriate
proceedings and which
Moody's (if Xxxxx'x is
then rating the Preferred
Shares) has indicated to
the Fund will not affect
the status of such asset
as a Moody's Eligible
Asset,
b. Liens for taxes that are
not then due and payable
or that can be paid
thereafter without
penalty,
c. Liens to secure payment
for services rendered or
cash advanced to the Fund
by the Fund's investment
adviser, custodian or the
Auction Agent,
d. Liens by virtue of any
repurchase agreement, and
e. Liens in connection with
any futures margin
account or swap contract;
or
2. deposited irrevocably for
the payment of any
liabilities.
-----------------------------------------------------------------
-------------------------------------------------------------------
STATE STREET BANK AND TRUST COMPANY
-------------------------------------------------------------------
FEDERATED FUNDS
Fund Accounting and Financial Administration Fee Schedule
FUND ACCOUNTING AND FINANCIAL ADMINISTRATION SERVICES
Fund accounting and financial administration services provided by
State Street Bank and Trust Company ("State Street") shall be as
set forth in Section III of the Financial Administration and
Accounting Services Agreement (the "Agreement") dated as of
January 1, 2004 between each of the investment companies listed
on Exhibit A to the Agreement and State Street.
-------------------------------------------------------------------
I. FEES
-------------------------------------------------------------------
Each fund will be required to pay an asset based fee as described
below.
Type of fee Annual charge billed and
payable monthly
Asset based fee per fund 0.0003 on first $100,000,000
assets, plus 0.0002 on next
$200,000,000 assets, plus 0.0001 on
next $200,000,000 assets, plus
0.00005 on assets over
$500,000,000. The per fund asset
based fee is limited to a minimum
of $39,000 and a maximum of
$158,000.
Additional class fee $12,000 per class after the
initial class
New funds will be billed at the above fees but waived during the
first 6 months or until the fund reaches $100,000,000, whichever
is sooner. For funds with less than $100,000,000 in assets, the
following waivers apply:
0 - 3 months: 100% of fee waived
4 - 6 months: 50% of fee waived
This fee reduction is intended to provide relief to funds in the
event that assets do not grow during the initial 6 months.
Assets from an "in kind" transfer, common trust conversion or
transferred from another Federated Fund qualify as fund assets
for purposes of the $100,000,000 asset base used to determine
applicability of the above fee waiver.
-------------------------------------------------------------------
II. SPECIFIC SERVICES PURCHASED
-------------------------------------------------------------------
In addition to the asset based fee, the following fees will be
charged on an annual basis for the services listed below when
they are provided to a specific fund.
Wash Sales Reporting $5,000 per fund
Closed end fund preferred shares testing $16,500 per fund
Qualified Dividend Report $500 per fund (includes three
reports for any
period; $200 per report thereafter)
-------------------------------------------------------------------
III. VALUATION FEE
-------------------------------------------------------------------
For billing purposes, the monthly quote charge will be billed at
cost.
Type of quote Primary Vendors Secondary Vendors
Domestic Equities Reuters Bridge
International Equities Reuters Bridge
Domestic Fixed Income Reuters FT Interactive Data
International Fixed FT Interactive Data FRI Corp.
Income
Municipal Bonds XX Xxxxx FT Interactive Data
Other Assets Reuters Bridge
(Options/Futures)
-------------------------------------------------------------------
IV. SPECIAL SERVICES
-------------------------------------------------------------------
Fees for activities of a non-recurring nature such as fund
consolidations or reorganizations, extraordinary security
shipments and the preparation of special reports will be subject
to negotiation.
-------------------------------------------------------------------
V. PAYMENT
-------------------------------------------------------------------
The above fees will be invoiced monthly. Payment is due within 5
days following calendar month-end through the auto debit process.
-------------------------------------------------------------------
VI. TERM OF CONTRACT
-------------------------------------------------------------------
The parties agree that this fee schedule shall become effective
January 1, 2004.
Investment Companies State Street Bank and
Trust Company
(Listed on Exhibit A the Financial Administration
and Accounting Services Agreement)
By: /s/ Xxxxxxx X. Xxxxxx By: /s/
Xxxxxxx X Xxxxxxx
Title: Sr. Vice President - Treasurer Title: Senior Vice
President
Date: 1/5/2004 Date: 12/29/2003
REMOTE ACCESS SERVICES ADDENDUM
TO
FINANCIAL ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
ADDENDUM to that certain Financial Administration and
Accounting Services Agreement dated as of January 1, 2004 (the
"Services Agreement") between each of the investment companies
listed on Exhibit A to the Services Agreement (the "Customer")
and State Street Bank and Trust Company, including its
subsidiaries and affiliates ("State Street").
State Street has developed and utilizes proprietary
accounting and other systems in conjunction with the custodian
services which State Street provides to the Customer. In this
regard, State Street maintains certain information in databases
under its control and ownership which it makes available to its
customers (the "Remote Access Services").
The Services
State Street agrees to provide the Customer, and its designated
investment advisors, consultants or other third parties
authorized by State Street ("Authorized Designees") with access
to In~SightSM as described in Exhibit A or such other systems as
may be offered from time to time (the "System") on a remote basis.
Security Procedures
The Customer agrees to comply, and to cause its Authorized
Designees to comply, with remote access operating standards and
procedures and with user identification or other password control
requirements and other security procedures as may be issued from
time to time by State Street for use of the System and access to
the Remote Access Services. The Customer agrees to advise State
Street immediately in the event that it learns or has reason to
believe that any person to whom it has given access to the System
or the Remote Access Services has violated or intends to violate
the terms of this Addendum and the Customer will cooperate with
State Street in seeking injunctive or other equitable relief.
The Customer agrees to discontinue use of the System and Remote
Access Services, if requested, for any security reasons cited by
State Street.
Fees
Fees and charges for the use of the System and the Remote Access
Services and related payment terms shall be as set forth in the
Financial Administration and Accounting Services Fee Schedule in
effect from time to time between the parties (the "Fee
Schedule"). The Customer shall be responsible for any tariffs,
duties or taxes imposed or levied by any government or
governmental agency by reason of the transactions contemplated by
this Addendum, including, without limitation, federal, state and
local taxes, use, value added and personal property taxes (other
than income, franchise or similar taxes which may be imposed or
assessed against State Street). Any claimed exemption from such
tariffs, duties or taxes shall be supported by proper documentary
evidence delivered to State Street.
Proprietary Information/Injunctive Relief
The System and Remote Access Services described herein and the
databases, computer programs, screen formats, report formats,
interactive design techniques, formulae, processes, systems,
software, know-how, algorithms, programs, training aids, printed
materials, methods, books, records, files, documentation and
other information made available to the Customer by State Street
as part of the Remote Access Services and through the use of the
System and all copyrights, patents, trade secrets and other
proprietary rights of State Street related thereto are the
exclusive, valuable and confidential property of State Street and
its relevant licensors (the "Proprietary Information"). The
Customer agrees on behalf of itself and its Authorized Designees
to keep the Proprietary Information confidential and to limit
access to its employees and Authorized Designees (under a similar
duty of confidentiality) who require access to the System for the
purposes intended. The foregoing shall not apply to Proprietary
Information in the public domain or required by law to be made
public.
The Customer agrees to use the Remote Access Services only in
connection with the proper purposes of this Addendum. The
Customer will not, and will cause its employees and Authorized
Designees not to, (i) permit any third party to use the System or
the Remote Access Services, (ii) sell, rent, license or otherwise
use the System or the Remote Access Services in the operation of
a service bureau or for any purpose other than as expressly
authorized under this Addendum, (iii) use the System or the
Remote Access Services for any fund, trust or other investment
vehicle without the prior written consent of State Street, or
(iv) allow or cause any information transmitted from State
Street's databases, including data from third party sources,
available through use of the System or the Remote Access
Services, to be published, redistributed or retransmitted for
other than use for or on behalf of the Customer, as State
Street's customer.
The Customer agrees that neither it nor its Authorized Designees
will modify the System in any way; enhance or otherwise create
derivative works based upon the System; nor will the Customer or
Customer's Authorized Designees reverse engineer, decompile or
otherwise attempt to secure the source code for all or any part
of the System.
The Customer acknowledges that the disclosure of any Proprietary
Information, or of any information which at law or equity ought
to remain confidential, will immediately give rise to continuing
irreparable injury to State Street inadequately compensable in
damages at law and that State Street shall be entitled to obtain
immediate injunctive relief against the breach or threatened
breach of any of the foregoing undertakings, in addition to any
other legal remedies which may be available.
Limited Warranties
State Street represents and warrants that it is the owner of and
has the right to grant access to the System and to provide the
Remote Access Services contemplated herein. Because of the
nature of computer information technology, including but not
limited to the use of the Internet, and the necessity of relying
upon third party sources, and data and pricing information
obtained from third parties, the System and Remote Access
Services are provided "AS IS", and the Customer and its
Authorized Designees shall be solely responsible for the
investment decisions, results obtained, regulatory reports and
statements produced using the Remote Access Services. State
Street and its relevant licensors will not be liable to the
Customer or its Authorized Designees for any direct or indirect,
special, incidental, punitive or consequential damages arising
out of or in any way connected with the System or the Remote
Access Services, nor shall either party be responsible for delays
or nonperformance under this Addendum arising out of any cause or
event beyond such party's control.
State Street will take reasonable steps to ensure that its
products (and those of its third-party suppliers) reflect the
available state of the art technology to offer products that are
Year 2000 compliant, including, but not limited to, century
recognition of dates, calculations that correctly compute same
century and multi century formulas and date values, and interface
values that reflect the date issues arising between now and the
next one-hundred years, and if any changes are required, State
Street will make the changes to its products at no cost to you
and in a commercially reasonable time frame and will require
third-party suppliers to do likewise. The Customer will do
likewise for its systems.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR
ITSELF AND ITS RELEVANT LICENSORS, EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES CONCERNING THE SYSTEM AND THE SERVICES TO BE
RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
Infringement
State Street will defend or, at our option, settle any claim or
action brought against the Customer to the extent that it is
based upon an assertion that access to the System or use of the
Remote Access Services by the Customer under this Addendum
constitutes direct infringement of any patent or copyright or
misappropriation of a trade secret, provided that the Customer
notifies State Street promptly in writing of any such claim or
proceeding and cooperates with State Street in the defense of
such claim or proceeding. Should the System or the Remote Access
Services or any part thereof become, or in State Street's opinion
be likely to become, the subject of a claim of infringement or
the like under any applicable patent or copyright or trade secret
laws, State Street shall have the right, at State Street's sole
option, to (i) procure for the Customer the right to continue
using the System or the Remote Access Services, (ii) replace or
modify the System or the Remote Access Services so that the
System or the Remote Access Services becomes noninfringing, or
(iii) terminate this Addendum without further obligation.
Termination
Either party to the Services Agreement may terminate this
Addendum (i) for any reason by giving the other party at least
one-hundred and eighty (180) days' prior written notice in the
case of notice of termination by State Street to the Customer or
thirty (30) days' notice in the case of notice from the Customer
to State Street of termination, or (ii) immediately for failure
of the other party to comply with any material term and condition
of the Addendum by giving the other party written notice of
termination. This Addendum shall in any event terminate within
ninety (90) days after the termination of the Services
Agreement. In the event of termination, the Customer will return
to State Street all copies of documentation and other
confidential information in its possession or in the possession
of its Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive
termination for a period of three (3) years.
Miscellaneous
This Addendum and the exhibits hereto constitute the entire
understanding of the parties to the Services Agreement with
respect to access to the System and the Remote Access Services.
This Addendum cannot be modified or altered except in a writing
duly executed by each of State Street and the Customer and shall
be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
By its execution of the Services Agreement, the Customer accepts
responsibility for its and its Authorized Designees' compliance
with the terms of this Addendum.
EXHIBIT A
to
REMOTE ACCESS SERVICES ADDENDUM TO
FINANCIAL ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
IN~SIGHTSM
System Product Description
In~SightSM provides bilateral information delivery,
interoperability, and on-line access to State Street. In~SightSM
allows users a single point of entry into State Street's diverse
systems and applications. Reports and data from systems such as
Investment Policy MonitorSM, Multicurrency HorizonSM, Securities
Lending, Performance & Analytics, and Electronic Trade Delivery
can be accessed through In~SightSM. This Internet-enabled
application is designed to run from a Web browser and perform
across low-speed data lines or corporate high-speed backbones.
In~SightSM also offers users a flexible toolset, including an
ad-hoc query function, a custom graphics package, a report
designer, and a scheduling capability. Data and reports offered
through In~SightSM will continue to increase in direct proportion
with the customer roll out, as it is viewed as the information
delivery system will grow with State Street's customers.
