Exhibit 9(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
TRANSFER AGENCY SERVICES
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of March 1, 1996, by and between those
investment companies listed on Exhibit 1 as may be amended from time
to time, having their principal office and place of business at
Federated Investors Tower, Pittsburgh, PA 15222-3779 (the "Investment
Company"), on behalf of the portfolios (individually referred to
herein as a "Fund" and collectively as "Funds") of the Investment
Company, and FEDERATED SERVICES COMPANY, a Pennsylvania corporation,
having its principal office and place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779 on behalf of
itself and its subsidiaries (the "Company").
WHEREAS, the Investment Company is registered as an open-end
management investment company under the Investment Company Act of
1940, as amended (the "1940 Act"), with authorized and issued shares
of capital stock or beneficial interest ("Shares");
WHEREAS, the Investment Company may desire to retain the Company
as fund accountant to provide fund accounting services (as herein
defined) including certain pricing, accounting and recordkeeping
services for each of the Funds, including any classes of shares issued
by any Fund ("Classes") if so indicated on Exhibit 1, and the Company
desires to accept such appointment;
WHEREAS, the Investment Company may desire to appoint the Company
as its administrator to provide it with administrative services (as
herein defined), if so indicated on Exhibit, and the Company desires
to accept such appointment;
WHEREAS, the Investment Company may desire to appoint the Company
as its transfer agent and dividend disbursing agent to provide it with
transfer agency services (as herein defined) if so indicated on
Exhibit 1, and agent in connection with certain other activities, and
the Company desires to accept such appointment; and
WHEREAS, the Investment Company may desire to appoint the Company
as its agent to select, negotiate and subcontract for custodian
services from an approved list of qualified banks if so indicated on
Exhibit 1, and the Company desires to accept such appointment; and
NOW THEREFORE, in consideration of the premises and mutual
covenants herein contained, and intending to be legally bound hereby,
the parties hereto agree as follows:
SECTION ONE: FUND ACCOUNTING.
ARTICLE 1. APPOINTMENT.
The Investment Company hereby appoints the Company to provide
certain pricing and accounting services to the Funds, and/or the
Classes, for the period and on the terms set forth in this Agreement.
The Company accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided
in Article 3 of this Section.
ARTICLE 2. THE COMPANY'S DUTIES.
Subject to the supervision and control of the Investment
Company's Board of Trustees or Directors ("Board"), the Company will
assist the Investment Company with regard to fund accounting for the
Investment Company, and/or the Funds, and/or the Classes, and in
connection therewith undertakes to perform the following specific
services;
A. Value the assets of the Funds using: primarily, market
quotations, including the use of matrix pricing, supplied by
the independent pricing services selected by the Company in
consultation with the adviser, or sources selected by the
adviser, and reviewed by the board; secondarily, if a
designated pricing service does not provide a price for a
security which the Company believes should be available by
market quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the fund
holding the security, or if the adviser does not supply the
names of such brokers, the Company will attempt on its own
to find brokers to price those securities; thirdly, for
securities for which no market price is available, the
Pricing Committee of the Board will determine a fair value
in good faith. Consistent with Rule 2a-4 of the 40 Act,
estimates may be used where necessary or appropriate. The
Company's obligations with regard to the prices received
from outside pricing services and designated brokers or
other outside sources, is to exercise reasonable care in the
supervision of the pricing agent. The Company is not the
guarantor of the securities prices received from such agents
and the Company is not liable to the Fund for potential
errors in valuing a Fund's assets or calculating the net
asset value per share of such Fund or Class when the
calculations are based upon such prices. All of the above
sources of prices used as described are deemed by the
Company to be authorized sources of security prices. The
Company provides daily to the adviser the securities prices
used in calculating the net asset value of the fund, for its
use in preparing exception reports for those prices on which
the adviser has comment. Further, upon receipt of the
exception reports generated by the adviser, the Company
diligently pursues communication regarding exception reports
with the designated pricing agents;
B. Determine the net asset value per share of each Fund 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
and Statement of Additional Information ("Prospectus") of
each Fund;
C. Calculate the net income of each of the Funds, if any;
D. Calculate realized capital gains or losses of each of the
Funds resulting from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and
financial records of the Investment Company, including for
each Fund, and/or Class, as required under Section 31(a) of
the 1940 Act and the Rules thereunder in connection with the
services provided by the Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the
1940 Act the records to be maintained by Rule 31a-1 under
the 1940 Act in connection with the services provided by the
Company. The Company further agrees that all such records it
maintains for the Investment Company are the property of the
Investment Company and further agrees to surrender promptly
to the Investment Company such records upon the Investment
Company's request;
G. At the request of the Investment Company, 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
H. Such other similar services as may be reasonably requested
by the Investment Company.
The foregoing, along with any additional services that the
Company shall agree in writing to perform for the Investment Company
under this Section One, shall hereafter be referred to as "Fund
Accounting Services."
ARTICLE 3. COMPENSATION AND ALLOCATION OF EXPENSES.
A. The Funds will compensate the Company for Fund Accounting
Services in accordance with the fees agreed upon from time
to time between the parties hereto. Such fees do not
include out-of-pocket disbursements of the Company for
which the Funds shall reimburse the Company. Out-of-pocket
disbursements shall include, but shall not be limited to,
the items agreed upon between the parties from time to
time.
B. The Fund and/or the Class, and not the Company, shall bear
the cost of: custodial expenses; membership dues in the
Investment Company Institute or any similar organization;
transfer agency expenses; investment advisory expenses;
costs of printing and mailing stock certificates,
Prospectuses, reports and notices; administrative expenses;
interest on borrowed money; brokerage commissions; taxes
and fees payable to federal, state and other governmental
agencies; fees of Trustees or Directors of the Investment
Company; independent auditors expenses; legal and audit
department expenses billed to the Company for work
performed related to the Investment Company, the Funds, or
the Classes; law firm expenses; organizational expenses; or
other expenses not specified in this Article 3 which may be
properly payable by the Funds and/or Classes.
C. The compensation and out-of-pocket expenses attributable to
the Fund shall be accrued by the Fund and shall be paid to
the Company no less frequently than monthly, and shall be
paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and
out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Investment Company and/or the
Funds and a duly authorized officer of the Company.
E. The fee for the period from the effective date of this
Agreement with respect to a Fund or a Class to the end of
the initial month shall be prorated according to the
proportion that such period bears to the full month period.
Upon any termination of this Agreement before the end of
any month, the fee for such period shall be prorated
according to the proportion which such period bears to the
full month period. For purposes of determining fees payable
to the Company, the value of the Fund's net assets shall be
computed at the time and in the manner specified in the
Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person
or persons as the Company may believe to be particularly
suited to assist it in performing Fund Accounting Services.
Such person or persons may be affiliates of the Company,
third-party service providers, or they may be officers and
employees who are employed by both the Company and the
Investment Company; provided, however, that the Company
shall be as fully responsible to each Fund for the acts and
omissions of any such subcontractor as it is for its own
acts and omissions. The compensation of such person or
persons shall be paid by the Company and no obligation
shall be incurred on behalf of the Investment Company, the
Funds, or the Classes in such respect.
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 4. APPOINTMENT.
The Investment Company hereby appoints the Company as
Administrator for the period on the terms and conditions set forth in
this Agreement. The Company hereby accepts such appointment and agrees
to furnish the services set forth in Article 5 of this Agreement in
return for the compensation set forth in Article 9 of this Agreement.
ARTICLE 5. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of
the Board and in accordance with Proper Instructions (as defined
hereafter) from the Investment Company, the Company will provide
facilities, equipment, and personnel to carry out the following
administrative services for operation of the business and affairs of
the Investment Company and each of its portfolios:
A. prepare, file, and maintain the Investment Company's
governing documents and any amendments thereto, including
the Charter (which has already been prepared and filed), the
By-laws and minutes of meetings of the Board and
Shareholders;
B. prepare and file with the Securities and Exchange
Commission and the appropriate state securities authorities
the registration statements for the Investment Company and
the Investment Company's shares and all amendments thereto,
reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents
all as may be necessary to enable the Investment Company to
make a continuous offering of its shares;
C. prepare, negotiate, and administer contracts (if any) on
behalf of the Investment Company with, among others, the
Investment Company's investment advisers and distributors,
subject to any applicable restrictions of the Board or the
1940 Act;
D. calculate performance data of the Investment Company for
dissemination to information services covering the
investment company industry;
E. prepare and file the Investment Company's tax returns;
F. coordinate the layout and printing of publicly disseminated
prospectuses and reports;
G. perform internal audit examinations in accordance with a
charter to be adopted by the Company and the Investment
Company;
H. assist with the design, development, and operation of the
Investment Company and the Funds;
I. provide individuals reasonably acceptable to the Board for
nomination, appointment, or election as officers of the
Investment Company, who will be responsible for the
management of certain of the Investment Company's affairs
as determined by the Investment Company's Board; and
J. consult with the Investment Company and its Board on matters
concerning the Investment Company and its affairs.
The foregoing, along with any additional services that the
Company shall agree in writing to perform for the Investment Company
under this Section Two, shall hereafter be referred to as
"Administrative Services."
ARTICLE 6. RECORDS.
The Company shall create and maintain all necessary books and
records in accordance with all applicable laws, rules and regulations,
including but not limited to records required by Section 31(a) of the
Investment Company act of 1940 and the rules thereunder, as the same
may be amended from time to time, pertaining to the Administrative
Services performed by it and not otherwise created and maintained by
another party pursuant to contract with the Investment Company. Where
applicable, such records shall be maintained by the Company for the
periods and in the places required by Rule 31a-2 under the 1940 Act.
The books and records pertaining to the Investment Company which are
in the possession of the Company shall be the property of the
Investment Company. The Investment Company, or the Investment
Company's authorized representatives, shall have access to such books
and records at all times during the Company's normal business hours.
Upon the reasonable request of the Investment Company, copies of any
such books and records shall be provided promptly by the Company to
the Investment Company or the Investment Company's authorized
representatives.
ARTICLE 7. DUTIES OF THE FUND.
The Fund assumes full responsibility for the preparation,
contents and distribution of its own offering document and for
complying with all applicable requirements the 1940 Act, the Internal
Revenue Code, and any other laws, rules and regulations of government
authorities having jurisdiction.
ARTICLE 8. EXPENSES.
The Company shall be responsible for expenses incurred in
providing office space, equipment, and personnel as may be necessary
or convenient to provide the Administrative Services to the Investment
Company, including the compensation of the Company employees who serve
as trustees or directors or officers of the Investment Company. The
Investment Company shall be responsible for all other expenses
incurred by the Company on behalf of the Investment Company, including
without limitation postage and courier expenses, printing expenses,
travel expenses, registration fees, filing fees, fees of outside
counsel and independent auditors, or other professional services,
organizational expenses, insurance premiums, fees payable to persons
who are not the Company's employees, trade association dues, and other
expenses properly payable by the Funds and/or the Classes.
ARTICLE 9. COMPENSATION.
For the Administrative Services provided, the Investment Company
hereby agrees to pay and the Company hereby agrees to accept as full
compensation for its services rendered hereunder an administrative fee
at an annual rate per Fund, as specified below.
The compensation and out of pocket expenses attributable to the
Fund shall be accrued by the Fund and paid to the Company no less
frequently than monthly, and shall be paid daily upon request of the
Company. The Company will maintain detailed information about the
compensation and out of pocket expenses by the Fund.
MAX. ADMIN. AVERAGE DAILY NET ASSETS
FEE OF THE FUNDS
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750 million
(Average Daily Net Asset break-points are on a complex-wide basis)
However, in no event shall the administrative fee received during
any year of the Agreement be less than, or be paid at a rate less than
would aggregate $125,000 per Fund and $30,000 per Class. The minimum
fee set forth above in this Article 9 may increase annually upon each
March 1 anniversary of this Agreement over the minimum fee during the
prior 12 months, as calculated under this agreement, in an amount
equal to the increase in Pennsylvania Consumer Price Index (not to
exceed 6% annually) as last reported by the U.S. Bureau of Labor
Statistics for the twelve months immediately preceding such
anniversary.
ARTICLE 10. RESPONSIBILITY OF ADMINISTRATOR.
A. The Company shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the
Investment Company in connection with the matters to which
this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless
disregard by it of its obligations and duties under this
Agreement. The Company shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the
Investment Company) on all matters, and shall be without
liability for any action reasonably taken or omitted
pursuant to such advice. Any person, even though also an
officer, director, trustee, partner, employee or agent of
the Company, who may be or become an officer, director,
trustee, partner, employee or agent of the Investment
Company, shall be deemed, when rendering services to the
Investment Company or acting on any business of the
Investment Company (other than services or business in
connection with the duties of the Company hereunder) to be
rendering such services to or acting solely for the
Investment Company and not as an officer, director,
trustee, partner, employee or agent or one under the
control or direction of the Company even though paid by the
Company.
B. The Company shall be kept indemnified by the Investment
Company and be without liability for any action taken or
thing done by it in performing the Administrative Services
in accordance with the above standards. In order that the
indemnification provisions contained in this Article 10
shall apply, however, it is understood that if in any case
the Investment Company may be asked to indemnify or hold the
Company harmless, the Investment Company shall be fully and
promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the
Company will use all reasonable care to identify and notify
the Investment Company promptly concerning any situation
which presents or appears likely to present the probability
of such a claim for indemnification against the Investment
Company. The Investment Company shall have the option to
defend the Company against any claim which may be the
subject of this indemnification. In the event that the
Investment Company so elects, it will so notify the Company
and thereupon the Investment Company shall take over
complete defense of the claim, and the Company shall in such
situation initiate no further legal or other expenses for
which it shall seek indemnification under this Article. The
Company shall in no case confess any claim or make any
compromise in any case in which the Investment Company will
be asked to indemnify the Company except with the Investment
Company's written consent.
SECTION THREE: TRANSFER AGENCY SERVICES.
ARTICLE 11. TERMS OF APPOINTMENT.
Subject to the terms and conditions set forth in this Agreement,
the Investment Company hereby appoints the Company to act as, and the
Company agrees to act as, transfer agent and dividend disbursing agent
for each Fund's Shares, and agent in connection with any accumulation,
open-account or similar plans provided to the shareholders of any Fund
("Shareholder(s)"), including without limitation any periodic
investment plan or periodic withdrawal program.
ARTICLE 12. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance
with Proper Instructions as may be provided from time to time by the
Investment Company as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the
purchase of shares and promptly deliver payment and
appropriate documentation therefore to the custodian of the
relevant Fund, (the "Custodian"). The Company shall notify
the Fund and the Custodian on a daily basis of the total
amount of orders and payments so delivered.
(2) Pursuant to purchase orders and in accordance with the
Fund's current Prospectus, the Company shall compute and
issue the appropriate number of Shares of each Fund and/or
Class and hold such Shares in the appropriate Shareholder
accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or
its agent requests a certificate, the Company, as Transfer
Agent, shall countersign and mail by first class mail, a
certificate to the Shareholder at its address as set forth
on the transfer books of the Funds, and/or Classes, subject
to any Proper Instructions regarding the delivery of
certificates.
(4) In the event that any check or other order for the purchase
of Shares of the Fund and/or Class is returned unpaid for
any reason, the Company shall debit the Share account of the
Shareholder by the number of Shares that had been credited
to its account upon receipt of the check or other order,
promptly mail a debit advice to the Shareholder, and notify
the Fund and/or Class of its action. In the event that the
amount paid for such Shares exceeds proceeds of the
redemption of such Shares plus the amount of any dividends
paid with respect to such Shares, the Fund and/the Class or
its distributor will reimburse the Company on the amount of
such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration
of any distribution to Shareholders, the Company
shall act as Dividend Disbursing Agent for the
Funds in accordance with the provisions of its
governing document and the then-current Prospectus
of the Fund. The Company shall prepare and mail or
credit income, capital gain, or any other payments
to Shareholders. As the Dividend Disbursing Agent,
the Company shall, on or before the payment date
of any such distribution, notify the Custodian of
the estimated amount required to pay any portion
of said distribution which is payable in cash and
request the Custodian to make available sufficient
funds for the cash amount to be paid out. The
Company shall reconcile the amounts so requested
and the amounts actually received with the
Custodian on a daily basis. If a Shareholder is
entitled to receive additional Shares by virtue of
any such distribution or dividend, appropriate
credits shall be made to the Shareholder's
account, for certificated Funds and/or Classes,
delivered where requested; and
(2) The Company shall maintain records of account for
each Fund and Class and advise the Investment
Company, each Fund and Class and its Shareholders
as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and
redemption directions and, if such redemption
requests comply with the procedures as may be
described in the Fund Prospectus or set forth in
Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The
Company shall notify the Funds on a daily basis of
the total amount of redemption requests processed
and monies paid to the Company by the Custodian
for redemptions.
(2) At the appropriate time upon receiving redemption
proceeds from the Custodian with respect to any
redemption, the Company shall pay or cause to be
paid the redemption proceeds in the manner
instructed by the redeeming Shareholders, pursuant
to procedures described in the then-current
Prospectus of the Fund.
(3) If any certificate returned for redemption or
other request for redemption does not comply with
the procedures for redemption approved by the
Fund, the Company shall promptly notify the
Shareholder of such fact, together with the reason
therefor, and shall effect such redemption at the
price applicable to the date and time of receipt
of documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the
registered owners thereof.
(5) The Company shall identify and process abandoned
accounts and uncashed checks for state escheat requirements on an
annual basis and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of
each Fund, and/or Class, and maintain pursuant to
applicable rules of the Securities and Exchange
Commission ("SEC") a record of the total number of
Shares of the Fund and/or Class which are
authorized, based upon data provided to it by the
Fund, and issued and outstanding. The Company
shall also provide the Fund on a regular basis or
upon reasonable request with the total number of
Shares which are authorized and issued and
outstanding, but shall have no obligation when
recording the issuance of Shares, except as
otherwise set forth herein, to monitor the
issuance of such Shares or to take cognizance of
any laws relating to the issue or sale of such
Shares, which functions shall be the sole
responsibility of the Funds.
(2) The Company shall establish and maintain records
pursuant to applicable rules of the SEC relating
to the services to be performed hereunder in the
form and manner as agreed to by the Investment
Company or the Fund to include a record for each
Shareholder's account of the following:
(a) Name, address and tax identification number
(and whether such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account,
including dividends paid and date and price
for all transactions;
(d) Any stop or restraining order placed against
the account;
(e) Information with respect to withholding in
the case of a foreign account or an account
for which withholding is required by the
Internal Revenue Code;
(f) Any dividend reinvestment order, plan
application, dividend address and
correspondence relating to the current
maintenance of the account;
(g) Certificate numbers and denominations for any
Shareholder holding certificates;
(h) Any information required in order for the
Company to perform the calculations
contemplated or required by this Agreement.
(3) The Company shall preserve any such records
required to be maintained pursuant to the rules of
the SEC for the periods prescribed in said rules
as specifically noted below. Such record retention
shall be at the expense of the Company, and such
records may be inspected by the Fund at reasonable
times. The Company may, at its option at any time,
and shall forthwith upon the Fund's demand, turn
over to the Fund and cease to retain in the
Company's files, records and documents created and
maintained by the Company pursuant to this
Agreement, which are no longer needed by the
Company in performance of its services or for its
protection. If not so turned over to the Fund,
such records and documents will be retained by the
Company for six years from the year of creation,
during the first two of which such documents will
be in readily accessible form. At the end of the
six year period, such records and documents will
either be turned over to the Fund or destroyed in
accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) The total number of Shares issued and
outstanding in each state for "blue sky"
purposes as determined according to
Proper Instructions delivered from time
to time by the Fund to the
Company;
(d) Shareholder lists and statistical information;
(e) Payments to third parties relating to
distribution agreements, allocations of sales loads, redemption fees,
or other transaction- or sales-related payments;
(f) Such other information as may be agreed upon from
time to time.
(2) The Company shall prepare in the appropriate form,
file with the Internal Revenue Service and
appropriate state agencies, and, if required, mail
to Shareholders, such notices for reporting
dividends and distributions paid as are required
to be so filed and mailed and shall withhold such
sums as are required to be withheld under
applicable federal and state income tax laws,
rules and regulations.
(3) In addition to and not in lieu of the services set
forth above, the Company shall:
(a) Perform all of the customary services of
a transfer agent, dividend disbursing
agent and, as relevant, agent in
connection with accumulation,
open-account or similar plans (including
without limitation any periodic
investment plan or periodic withdrawal
program), including but not limited to:
maintaining all Shareholder accounts,
mailing Shareholder reports and
Prospectuses to current Shareholders,
withholding taxes on accounts subject to
back-up or other withholding (including
non-resident alien accounts), preparing
and filing reports on U.S. Treasury
Department Form 1099 and other
appropriate forms required with respect
to dividends and distributions by federal
authorities for all Shareholders,
preparing and mailing confirmation forms
and statements of account to Shareholders
for all purchases and redemptions of
Shares and other conformable transactions
in Shareholder accounts, preparing and
mailing activity statements for
Shareholders, and providing Shareholder
account information; and
(b) provide a system which will enable the
Fund to monitor the total number of
Shares of each Fund (and/or Class) sold
in each state ("blue sky reporting"). The
Fund shall by Proper Instructions (i)
identify to the Company those
transactions and assets to be treated as
exempt from the blue sky reporting for
each state and (ii) verify the
classification of transactions for each
state on the system prior to activation
and thereafter monitor the daily activity
for each state. The responsibility of the
Company for each Fund's (and/or Class's)
state blue sky registration status is
limited solely to the recording of the
initial classification of transactions or
accounts with regard to blue sky
compliance and the reporting of such
transactions and accounts to the Fund as
provided above.
F. Other Duties
(1) The Company shall answer correspondence from
Shareholders relating to their Share accounts and such
other correspondence as may from time to time be
addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists,
mail proxy cards and other material supplied to it by
the Fund in connection with Shareholder meetings of
each Fund; receive, examine and tabulate returned
proxies, and certify the vote of the Shareholders;
(3) The Company shall establish and maintain facilities and
procedures for safekeeping of stock certificates, check
forms and facsimile signature imprinting devices, if
any; and for the preparation or use, and for keeping
account of, such certificates, forms and devices.
The foregoing, along with any additional services that the
Company shall agree in writing to perform for the Investment Company
under this Section Three, shall hereafter be referred to as "Transfer
Agency Services."
ARTICLE 13. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company or Fund assume full responsibility
for the preparation, contents and distribution of their own
and/or their classes' Prospectus and for complying with all
applicable requirements of the Securities Act of 1933, as
amended (the "1933 Act"), the 1940 Act and any laws, rules
and regulations of government authorities having
jurisdiction.
B. Share Certificates
The Investment Company shall supply the Company with a
sufficient supply of blank Share certificates and from time
to time shall renew such supply upon request of the
Company. Such blank Share certificates shall be properly
signed, manually or by facsimile, if authorized by the
Investment Company and shall bear the seal of the
Investment Company or facsimile thereof; and
notwithstanding the death, resignation or removal of any
officer of the Investment Company authorized to sign
certificates, the Company may continue to countersign
certificates which bear the manual or facsimile signature
of such officer until otherwise directed by the Investment
Company.
C. Distributions
The Fund shall promptly inform the Company of the
declaration of any dividend or distribution on account of any Fund's
shares.
ARTICLE 14. COMPENSATION AND EXPENSES.
A. Annual Fee
For performance by the Company pursuant to Section Three of
this Agreement, the Investment Company and/or the Fund
agree to pay the Company an annual maintenance fee for each
Shareholder account as agreed upon between the parties and
as may be added to or amended from time to time. Such fees
may be changed from time to time subject to written
agreement between the Investment Company and the Company.
Pursuant to information in the Fund Prospectus or other
information or instructions from the Fund, the Company may
sub-divide any Fund into Classes or other sub-components
for recordkeeping purposes. The Company will charge the
Fund the same fees for each such Class or sub-component the
same as if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 7A above, the
Investment Company and/or Fund agree to reimburse the
Company for out-of-pocket expenses or advances incurred by
the Company for the items agreed upon between the parties,
as may be added to or amended from time to time. In
addition, any other expenses incurred by the Company at the
request or with the consent of the Investment Company
and/or the Fund, will be reimbursed by the appropriate
Fund.
C. Payment
The compensation and out-of-pocket expenses shall be
accrued by the Fund and shall be paid to the Company no
less frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Investment Company and/or
the Funds and a duly authorized officer of the Company.
SECTION FOUR: CUSTODY SERVICES PROCUREMENT.
ARTICLE 15. APPOINTMENT.
The Investment Company hereby appoints Company as its agent to
evaluate and obtain custody services from a financial institution that
(i) meets the criteria established in Section 17(f) of the 1940 Act
and (ii) has been approved by the Board as eligible for selection by
the Company as a custodian (the "Eligible Custodian"). The Company
accepts such appointment.
ARTICLE 16. THE COMPANY AND ITS DUTIES.
Subject to the review, supervision and control of the Board, the
Company shall:
A. evaluate and obtain custody services from a financial
institution that meets the criteria established in Section
17(f) of the 1940 Act and has been approved by the Board as
being eligible for selection by the Company as an Eligible
Custodian;
B. negotiate and enter into agreements with Eligible Custodians
for the benefit of the Investment Company, with the
Investment Company as a party to each such agreement. The
Company may, as paying agent, be a party to any agreement
with any such Eligible Custodian;
C. establish procedures to monitor the nature and the quality
of the services provided by Eligible Custodians;
D. monitor and evaluate the nature and the quality of services
provided by Eligible Custodians;
E. periodically provide to the Investment Company (i) written
reports on the activities and services of Eligible
Custodians; (ii) the nature and amount of disbursements made
on account of the each Fund with respect to each custodial
agreement; and (iii) such other information as the Board
shall reasonably request to enable it to fulfill its duties
and obligations under Sections 17(f) and 36(b) of the 1940
Act and other duties and obligations thereof;
F. periodically provide recommendations to the Board to enhance
Eligible Custodian's customer services capabilities and
improve upon fees being charged to the Fund by Eligible
Custodian; and
The foregoing, along with any additional services that Company
shall agree in writing to perform for the Fund under this Section
Four, shall hereafter be referred to as "Custody Services
Procurement."
ARTICLE 17. FEES AND EXPENSES.
A. Annual Fee
For the performance of Custody Services Procurement by the
Company pursuant to Section Four of this Agreement, the
Investment Company and/or the Fund agree to compensate the
Company in accordance with the fees agreed upon from time
to time.
B. Reimbursements
In addition to the fee paid under Section 11A above, the
Investment Company and/or Fund agree to reimburse the
Company for out-of-pocket expenses or advances incurred by
the Company for the items agreed upon between the parties,
as may be added to or amended from time to time. In
addition, any other expenses incurred by the Company at the
request or with the consent of the Investment Company
and/or the Fund, will be reimbursed by the appropriate
Fund.
C. Payment
The compensation and out-of-pocket expenses shall be
accrued by the Fund and shall be paid to the Company no
less frequently than monthly, and shall be paid daily upon
request of the Company. The Company will maintain detailed
information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a
duly authorized officer of the Investment Company and/or
the Funds and a duly authorized officer of the Company.
ARTICLE 18. REPRESENTATIONS.
The Company represents and warrants that it has obtained all
required approvals from all government or regulatory authorities
necessary to enter into this arrangement and to provide the services
contemplated in Section Four of this Agreement.
SECTION FIVE: GENERAL PROVISIONS.
ARTICLE 19. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a
writing signed or initialed by one or more person or persons as the
Board shall have from time to time authorized. Each such writing shall
set forth the specific transaction or type of transaction involved.
Oral instructions will be deemed to be Proper Instructions if (a) the
Company reasonably believes them to have been given by a person
previously authorized in Proper Instructions to give such instructions
with respect to the transaction involved, and (b) the Investment
Company, or the Fund, and the Company promptly cause such oral
instructions to be confirmed in writing. Proper Instructions may
include communications effected directly between electro-mechanical or
electronic devices provided that the Investment Company, or the Fund,
and the Company are satisfied that such procedures afford adequate
safeguards for the Fund's assets. Proper Instructions may only be
amended in writing.
ARTICLE 20. ASSIGNMENT.
Except as provided below, neither this Agreement nor any of the
rights or obligations under this Agreement may be assigned by either
party without the written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding
upon the parties and their respective permitted successors and
assigns.
B. With regard to Transfer Agency Services, the Company may
without further consent on the part of the Investment
Company subcontract for the performance of Transfer Agency
Services with
(1) its subsidiary, Federated Shareholder Service Company,
a Delaware business trust, which is duly registered as
a transfer agent pursuant to Section 17A(c)(1) of the
Securities Exchange Act of 1934, as amended, or any
succeeding statute ("Section 17A(c)(1)"); or
(2) such other provider of services duly registered as a
transfer agent under Section 17A(c)(1) as Company shall
select.
The Company shall be as fully responsible to the Investment
Company for the acts and omissions of any subcontractor as it is for
its own acts and omissions.
C. With regard to Fund Accounting Services, Administrative
Services and Custody Procurement Services, the Company may
without further consent on the part of the Investment
Company subcontract for the performance of such services
with Federated Administrative Services, a wholly-owned
subsidiary of the Company.
D. The Company shall upon instruction from the Investment
Company subcontract for the performance of services under
this Agreement with an Agent selected by the Investment
Company, other than as described in B. and C. above;
provided, however, that the Company shall in no way be
responsible to the Investment Company for the acts and
omissions of the Agent.
ARTICLE 21. DOCUMENTS.
A. In connection with the appointment of the Company under this
Agreement, the Investment Company shall file with the Company the
following documents:
(1) A copy of the Charter and By-Laws of the Investment
Company and all amendments thereto;
(2) A copy of the resolution of the Board of the Investment
Company authorizing this Agreement;
(3) Specimens of all forms of outstanding Share
certificates of the Investment Company or the Funds in
the forms approved by the Board of the Investment
Company with a certificate of the Secretary of the
Investment Company as to such approval;
(4) All account application forms and other documents
relating to Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Investment Company
authorizing the original issuance of each Fund's,
and/or Class's Shares;
(2) Each Registration Statement filed with the SEC and
amendments thereof and orders relating thereto in
effect with respect to the sale of Shares of any Fund,
and/or Class;
(3) A certified copy of each amendment to the governing
document and the By-Laws of the Investment Company;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian
and agents for fund accountant, custody services
procurement, and shareholder recordkeeping or transfer
agency services;
(5) Specimens of all new Share certificates representing
Shares of any Fund, accompanied by Board resolutions
approving such forms; (6) Such other certificates,
documents or opinions which the Company may, in its
discretion, deem necessary or appropriate in the proper
performance of its duties; and
(7) Revisions to the Prospectus of each Fund.
ARTICLE 22. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Fund that:
(1) it is a corporation duly organized and existing and in
good standing under the laws of the Commonwealth of
Pennsylvania;
(2) It is duly qualified to carry on its business in each
jurisdiction where the nature of its business requires
such qualification, and in the Commonwealth of
Pennsylvania;
(3) it is empowered under applicable laws and by its
Articles of Incorporation and By-Laws to enter into and
perform this Agreement;
(4) all requisite corporate proceedings have been taken to
authorize it to enter into and perform its obligations
under this Agreement;
(5) it has and will continue to have access to the
necessary facilities, equipment and personnel to
perform its duties and obligations under this
Agreement;
(6) it is in compliance with federal securities law
requirements and in good standing as an administrator
and fund accountant; and
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the
Company that:
(1) It is an investment company duly organized and existing
and in good standing under the laws of its state of
organization;
(2) It is empowered under applicable laws and by its
Charter and By-Laws to enter into and perform its
obligations under this Agreement;
(3) All corporate proceedings required by said Charter and
By-Laws have been taken to authorize it to enter into
and perform its obligations under this Agreement;
(4) The Investment Company is an open-end investment
company registered under the 1940 Act; and
(5) A registration statement under the 1933 Act will be
effective, and appropriate state securities law filings
have been made and will continue to be made, with
respect to all Shares of each Fund being offered for
sale.
ARTICLE 23. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One, Three and Four, the Company
shall be held to a standard of reasonable care in carrying
out the provisions of this Contract. The Company shall be
entitled to rely on and may act upon advice of counsel (who
may be counsel for the Investment Company) on all matters,
and shall be without liability for any action reasonably
taken or omitted pursuant to such advice, provided that
such action is not in violation of applicable federal or
state laws or regulations, and is in good faith and without
negligence.
B. Indemnification by Investment Company
The Company shall not be responsible for and the Investment
Company or Fund shall indemnify and hold the Company,
including its officers, directors, shareholders and their
agents, employees and affiliates, harmless against any and
all losses, damages, costs, charges, counsel fees,
payments, expenses and liabilities arising out of or
attributable to:
(1) The acts or omissions of any Custodian, Adviser,
Sub-adviser or other party contracted by or approved by
the Investment Company or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in
proper form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf
of the Fund, its Shareholders or investors
regarding the purchase, redemption or transfer of
Shares and Shareholder account information;
(b) are received by the Company from independent
pricing services or sources for use in valuing the
assets of the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers or
other third parties contracted by or approved by
the Investment Company of Fund for use in the
performance of services under this Agreement;
(d) have been prepared and/or maintained by the Fund
or its affiliates or any other person or firm on
behalf of the Investment Company.
(3) The reliance on, or the carrying out by the
Company or its agents or subcontractors of Proper
Instructions of the Investment Company or the
Fund.
(4) The offer or sale of Shares in violation of any
requirement under the federal securities laws or
regulations or the securities laws or regulations
of any state that such Shares be registered in
such state or in violation of any stop order or
other determination or ruling by any federal
agency or any state with respect to the offer or
sale of such Shares in such state.
Provided, however, that the Company shall not be
protected by this Article 23.B. from liability for
any act or omission resulting from the Company's
willful misfeasance, bad faith, negligence or
reckless disregard of its duties or failure to
meet the standard of care set forth in 23.A.
above.
C. Reliance
At any time the Company may apply to any officer of the
Investment Company or Fund for instructions, and may
consult with legal counsel with respect to any matter
arising in connection with the services to be performed by
the Company under this Agreement, and the Company and its
agents or subcontractors shall not be liable and shall be
indemnified by the Investment Company or the appropriate
Fund for any action reasonably taken or omitted by it in
reliance upon such instructions or upon the opinion of such
counsel provided such action is not in violation of
applicable federal or state laws or regulations. The
Company, its agents and subcontractors shall be protected
and indemnified in recognizing stock certificates which are
reasonably believed to bear the proper manual or facsimile
signatures of the officers of the Investment Company or the
Fund, and the proper countersignature of any former
transfer agent or registrar, or of a co-transfer agent or
co-registrar.
D. Notification
In order that the indemnification provisions contained in
this Article 23 shall apply, upon the assertion of a claim
for which either party may be required to indemnify the
other, the party seeking indemnification shall promptly
notify the other party of such assertion, and shall keep
the other party advised with respect to all developments
concerning such claim. The party who may be required to
indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim.
The party seeking indemnification shall in no case confess
any claim or make any compromise in any case in which the
other party may be required to indemnify it except with the
other party's prior written consent.
ARTICLE 24. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from March 1, 1996 and shall
continue until February 28, 2003 (`Term"). Thereafter, the Agreement
will continue for 18 month terms. The Agreement can be terminated by
either party upon 18 months notice to be effective as of the end of
such 18 month period. In the event, however, of willful misfeasance,
bad faith, negligence or reckless disregard of its duties by the
Company, the Investment Company has the right to terminate the
Agreement upon 60 days written notice, if Company has not cured such
willful misfeasance, bad faith, negligence or reckless disregard of
its duties within 60 days. The termination date for all original or
after-added Investment companies which are, or become, a party to this
Agreement. shall be coterminous. Investment Companies that merge or
dissolve during the Term, shall cease to be a party on the effective
date of such merger or dissolution.
Should the Investment Company exercise its rights to terminate,
all out-of-pocket expenses associated with the movement of records and
materials will be borne by the Investment Company or the appropriate
Fund. Additionally, the Company reserves the right to charge for any
other reasonable expenses associated with such termination. The
provisions of Articles 10 and 23 shall survive the termination of this
Agreement.
ARTICLE 25. AMENDMENT.
This Agreement may be amended or modified by a written agreement
executed by both parties.
ARTICLE 26. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company
and the Investment Company may from time to time agree on such
provisions interpretive of or in addition to the provisions of this
Agreement as may in their joint opinion be consistent with the general
tenor of this Agreement. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be
annexed hereto, PROVIDED that no such interpretive or additional
provisions shall contravene any applicable federal or state
regulations or any provision of the Charter. No interpretive or
additional provisions made as provided in the preceding sentence shall
be deemed to be an amendment of this Agreement.
ARTICLE 27. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof
interpreted under and in accordance with the laws of the Commonwealth
of Massachusetts
ARTICLE 28. NOTICES.
Except as otherwise specifically provided herein, Notices and
other writings delivered or mailed postage prepaid to the Investment
Company at Federated Investors Tower, Pittsburgh, Pennsylvania,
15222-3779, or to the Company at Federated Investors Tower,
Pittsburgh, Pennsylvania, 15222-3779, or to such other address as the
Investment Company or the Company may hereafter specify, shall be
deemed to have been properly delivered or given hereunder to the
respective address.
ARTICLE 29. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original. ARTICLE 30.
LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE COMPANY.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Company and signed by an authorized officer of
the Company, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this
Agreement are not binding upon any of the Trustees or Shareholders of
the Company, but bind only the appropriate property of the Fund, or
Class, as provided in the Declaration of Trust.
ARTICLE 31. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the
subject hereof whether oral or written.
ARTICLE 32. SUCCESSOR AGENT.
If a successor agent for the Investment Company shall be
appointed by the Investment Company, the Company shall upon
termination of this Agreement deliver to such successor agent at the
office of the Company all properties of the Investment Company held by
it hereunder. If no such successor agent shall be appointed, the
Company shall at its office upon receipt of Proper Instructions
deliver such properties in accordance with such instructions.
In the event that no written order designating a successor agent
or Proper Instructions shall have been delivered to the Company on or
before the date when such termination shall become effective, then the
Company shall have the right to deliver to a bank or trust company,
which is a "bank" as defined in the 1940 Act, of its own selection,
having an aggregate capital, surplus, and undivided profits, as shown
by its last published report, of not less than $2,000,000, all
properties held by the Company under this Agreement. Thereafter, such
bank or trust company shall be the successor of the Company under this
Agreement.
ARTICLE 33. FORCE MAJEURE.
The Company shall have no liability for cessation of services
hereunder or any damages resulting therefrom to the Fund as a result
of work stoppage, power or other mechanical failure, natural disaster,
governmental action, communication disruption or other impossibility
of performance.
ARTICLE 34. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the
prior written consent of the other party, except that either party may
assign all of or a substantial portion of its business to a successor,
or to a party controlling, controlled by, or under common control with
such party. Nothing in this Article 34 shall prevent the Company from
delegating its responsibilities to another entity to the extent
provided herein.
ARTICLE 35. SEVERABILITY.
In the event any provision of this Agreement is held illegal,
void or unenforceable, the balance shall remain in effect.
ARTICLE 36. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE INVESTMENT COMPANY.
The execution and delivery of this Agreement have been authorized
by the Trustees of the Investment Company and signed by an authorized
officer of the Investment Company, acting as such, and neither such
authorization by such Trustees nor such execution and delivery by such
officer shall be deemed to have been made by any of them individually
or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon any of the Trustees
or Shareholders of the Investment Company, but bind only the property
of the Fund, or Class, as provided in the Declaration of Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed in their names and on their behalf under their seals by
and through their duly authorized officers, as of the day and year
first above written.
INVESTMENT COMPANIES
(LISTED ON EXHIBIT 1)
By: /S/ S. XXXXXXX XXXXX
S. Xxxxxxx Xxxxx
Assistant Secretary
FEDERATED SERVICES COMPANY
By: /S/ XXXXXX X. XXXX
Xxxxxx X. Xxxx
Secretary
EXHIBIT 1
CONTRACT
DATE INVESTMENT COMPANY
Portfolios
Classes
March 1, 1997 Federated Equity Funds
Federated Growth Strategies Fund
Class A Shares
Class B Shares
Class C Shares
Federated Small Cap Strategies Fund
Class A Shares
Class B Shares
Class C Shares
Federated Capital Appreciation Fund
Class A Shares
Class B Shares
Class C Shares
Federated Aggressive Growth Fund
Class A Shares
Class B Shares
Class C Shares
FEDERATED SERVICES COMPANY provides the following services:
Fund Accounting
Administrative Services
Transfer Agency Services
Custody Services Procurement
