EXHIBIT 4.(h).
MASTER FEEDER PARTICIPATION AGREEMENT
BETWEEN
HOMESTEAD FUNDS, INC.
AND
STATE STREET MASTER FUNDS
DATED AS OF
JANUARY 1, 2001
AGREEMENT
THIS AGREEMENT is made and entered into as of the first day of January,
2001, by and between Homestead Funds, Inc. (the "Company"), on behalf of its
International Stock Index Fund (the "Fund") and State Street Master Funds, a
trust organized under the common law of the Commonwealth of Massachusetts, on
behalf of its State Street MSCI EAFE Index Portfolio (the "Portfolio").
WITNESSETH
WHEREAS, the Fund and the Portfolio are each open-end management
investment companies and the Fund and the Portfolio have the same investment
objectives and substantively the same investment policies;
WHEREAS, the Fund desires to invest all of the its investable assets in
the Portfolio in exchange for a beneficial interest in the Portfolio (the
"Investment") on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual promises
herein made and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
I
THE INVESTMENT
1.1 The Fund will invest all of its investable assets in the
Portfolio and, in exchange therefor, the Portfolio agrees to issue to the Fund a
beneficial interest in the Portfolio equal in value to the net value of the
assets of the Fund conveyed to the Portfolio (the "Account"). The Fund may add
to or reduce its investment in the Portfolio in the manner described in the
Portfolio's registration statement on Form N-1A, as it may be amended from time
to time (the "Portfolio's N-1A"). The Fund's aggregate interest in the Portfolio
would then be recomputed in accordance with the method described in the
Portfolio's N-1A.
1.2 On each date of Investment, the Fund shall authorize the Fund's
custodian to deliver all of the assets held by such custodian to the Portfolio's
custodian. The Portfolio's custodian shall acknowledge its acceptance of the
assets. In addition, each party shall deliver to the other such bills of sale,
checks, assignments, securities instruments, receipts or other documents as such
other party or its counsel may reasonably request.
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II
REPRESENTATIONS AND WARRANTIES
2.1 The Fund represents and warrants to the Portfolio (which
representations and warranties shall be deemed made at and as of this date and
at and as of all times when this Agreement is in effect) that:
(a) The Fund is a series of Homestead Funds, Inc., which is
a corporation duly organized and validly existing under the laws of the State of
Maryland, and has the requisite power and authority to own its property and
conduct its business as now being conducted and as proposed to be conducted
pursuant to this Agreement.
(b) The execution and delivery of this Agreement by the Fund
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Fund by its Board of
Directors and no other action or proceeding is necessary for the execution and
delivery of this Agreement by the Fund, the performance by the Fund of its
obligations hereunder and the consummation by the Fund of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by the
Fund and constitutes a legal, valid and binding obligation of the Fund,
enforceable against it in accordance with its terms.
(c) The Fund is not under the jurisdiction of a court in a
proceeding under Title 11 of the United States Code (the "Bankruptcy Code") or
similar case within the meaning of Section 368(a) (3) (A) of the Bankruptcy
Code.
(d) The fiscal year end for the Fund is December 31.
(e) The Fund has duly filed all forms, reports, proxy
statements and other documents (collectively, the "SEC Filings") required to be
filed under the Securities Act of 1933, as amended (the "1933 Act"), the
Securities Exchange Act of 1934 (the "1934 Act") or the Investment Company Act
of 1940 (the "1940 Act" and, together with the 1933 Act and the 1934 Act, the
"Securities Laws") in connection with the registration of its shares, any
meetings of its shareholders and its registration as an investment company. The
SEC Filings were prepared in accordance with the requirements of the Securities
Laws, as applicable, and the rules and regulations of the Securities and
Exchange Commission (the "SEC") thereunder, and did not at the time of their
filing contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(f) The Fund has duly registered as an open-end management
investment company under the 1940 Act and the Fund and its shares are registered
or qualified in any states where such registration or qualification is necessary
and such registrations or qualifications are in full force and effect. The Fund
is and will at all times when it owns or purchases interests in the Portfolio be
registered as an open-end investment company under the Investment Company Act of
1940, as amended.
(g) The Fund understands and agrees that the interests in
the Portfolio (the "Interests") have not been registered and will not be
registered under the 1933 Act or any state securities law, and that the
Interests offered and the offering of the Interests have not been approved,
disapproved, or passed on by any federal or state regulatory agency or
commission, securities or commodities exchange, or other self-regulatory
organization. The sale of interests is being made privately by the Portfolio
pursuant to the private placement exemption from registration provided by
Section 4(2) of the 1933 Act.
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(h) The Fund acknowledges that it has received copies of the
Offering Memorandum of the Portfolio (the "Memorandum") and of the Portfolio's
Declaration of Trust and By-Laws. The Fund has read, understands, and is fully
familiar with each of those documents and has received adequate information
concerning all matters that the Fund considers material to a decision to
purchase the interests.
(i) The Interests subscribed for will be acquired solely by
and for the account of the Fund, solely for investment, and are not being
purchased for resale or distribution. The Fund has no existing or contemplated
agreement or arrangement with any person to sell, exchange, transfer, assign,
pledge, or otherwise dispose of the interests. The Fund acknowledges and agrees
that the interests are non-transferable.
(j) The Fund has relied solely upon the Memorandum, the
advice of its tax or other advisers, and independent investigations made by the
Fund in purchasing the Interests. No representations or agreements other than
those set forth in the Memorandum have been made to the Fund by the Portfolio.
(k) The Fund agrees to notify the Trust promptly if there is
any change with respect to any of the information, representations, or
warranties contained herein and to provide such further information as the Trust
may reasonably request.
2.2 The Portfolio represents and warrants to the Fund that:
(a) The Portfolio is a series of the State Street Master
Funds, a trust duly organized and validly existing under the Commonwealth of
Massachusetts, and has the requisite power and authority to own its property and
conduct its business as now being conducted and as proposed to be conducted
pursuant to this Agreement.
(b) The execution and delivery of this Agreement by the
Portfolio and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary action on the part of the Portfolio by its
Board of Trustees and no other action or proceeding is necessary for the
execution and delivery of this Agreement by the Portfolio, the performance by
the Portfolio of its obligations hereunder and the consummation by the Portfolio
of the transactions contemplated hereby. This Agreement has been duly executed
and delivered by the Portfolio and constitutes a legal, valid and binding
obligation of the Portfolio, enforceable against it in accordance with its
terms.
(c) The issuance by the Portfolio of the Interests in
exchange for the Investment by the Fund of its assets has been duly authorized
by all necessary action on the part of the Board of Trustees of the Portfolio.
When issued in accordance with the terms of this Agreement, the Interests will
be validly issued, fully paid and non-assessable by the Portfolio.
(d) The Portfolio is not under the jurisdiction of a court
in a proceeding under Title II of the Bankruptcy Code or similar case within the
meaning of Section 368(a)(3)(A) of the Bankruptcy Code.
(e) The fiscal year end of the Portfolio is December 31.
(f) The Portfolio has duly filed all SEC Filings required to
be filed with the SEC pursuant to the 1934 Act and the 1940 Act in connection
with any meetings of its investors and its registration as an investment
company. The SEC Filings were prepared in accordance with the requirements of
the Securities Laws, as applicable, and the rules and regulations of the SEC
thereunder,
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and do not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(g) The Portfolio is duly registered as an open-end
management investment company under the 1940 Act and such registration is in
full force and effect.
III
COVENANTS
3.1 The Fund covenants that:
(a) The Fund will own no investment security other than its
Account in the Portfolio for all periods during which this Agreement is in
effect.
(b) If requested to vote on matters pertaining to the
Portfolio, the Fund will (i) call a meeting of shareholders of the Fund for the
purpose of seeking instructions from shareholders regarding such matters, (ii)
vote the Fund's Interests proportionally as instructed by Fund shareholders, and
(iii) vote the Fund's Interests with respect to the shares held by Fund
shareholders who do not give voting instructions in the same proportion as the
shares of Fund shareholders who do give voting instructions. The Fund will hold
each such meeting of Fund shareholders in accordance with a timetable reasonably
established by the Portfolio.
(c) The Fund will furnish the Portfolio, at least five (5)
business days prior to filing or first use, as the case may be, with drafts of
amendments to its registration statement on Form N-1A and prospectus supplements
or amendments relating to the Fund. The Fund will furnish the Portfolio with any
proposed advertising or sales literature relating to the Fund at least three (3)
business days prior to filing or first use; provided, however, that such advance
notice shall not be required for advertising or sales literature that merely
references the name of the Fund. The Fund agrees that it will include in all
such Fund documents any disclosures that may be required by law and it will
include in all such Fund documents any material comments reasonably made by the
Portfolio and its counsel. The Portfolio will, however, in no way be liable for
any errors or omissions in such documents, whether or not it makes any objection
thereto, except to the extent such errors or omissions result from information
provided in writing by the Portfolio. The Fund will not make any other written
or oral representation about the Portfolio without its prior written consent.
3.2 Indemnification by Fund.
(a) Fund will indemnify and hold harmless the Portfolio, and
the Company and its respective trustees, directors, officers and employees and
each other person who controls the Portfolio, as the case may be, within the
meaning of Section 15 of the 1933 Act (each, a "Covered Person" and
collectively, "Covered Persons"), against any and all losses, claims, demands,
damages, liabilities and expenses (each, a "Liability" and collectively, the
"Liabilities") (including the reasonable cost of investigating and defending
against any claims therefor and any counsel fees incurred in connection
therewith), joint or several, which
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any
registration statement, any prospectus, or any amendment thereof or supplement
thereto, or any advertisement or sales literature, or any other document or
publication filed, created, or published or otherwise disseminated by the Fund,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
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necessary to make the statements therein not misleading; provided, however, that
the Fund will not be liable in any such case to the extent that such Liability
arises out of or is based upon any untrue statement or omission in or from any
thereof in reliance upon and in conformity with written information furnished to
the Fund by the Portfolio specifically for use therein;
(ii) result from the failure of any representation or
warranty made by the Fund to be accurate when made or the failure of the Fund to
perform any covenant contained herein or to otherwise comply with the terms of
this Agreement; or
(iii) arise out of any failure of the Fund or any
director, officer, employee or agent of Fund, to comply with any applicable law;
provided, however, that in no case shall the Fund be liable with respect to any
claim made against any Covered Person unless the party shall have notified the
Fund in writing of the nature of the claim within a reasonable time after the
summons, other first legal process or formal or informal initiation of a
regulatory investigation or proceeding shall have been served upon or provided
to a Covered Person, or any federal, state or local tax deficiency has come to
the attention of the Adviser, the Portfolio or a Covered Person. Failure to
notify the Fund of such claim shall not relieve it from any liability that it
may have to any party otherwise than on account of the indemnification contained
in this Section.
(b) The Fund will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if the Fund elects to assume the
defense, such defense shall be conducted by counsel chosen by the Fund and
reasonably acceptable to the Portfolio. In the event the Fund elects to assume
the defense of any such suit and retain such counsel, each Covered Person and
any other defendant or defendants may retain additional counsel, but shall bear
the fees and expenses of such counsel unless (A) the Fund shall have
specifically authorized the retaining of such counsel or (B) the parties to such
suit include any Covered Person and the Fund, and any such Covered Person has
been advised by counsel that one or more legal defenses may be available to it
that may not be available to the Fund, in which case the Fund shall not be
entitled to assume the defense of such suit notwithstanding its obligation to
bear the fees and expenses of such counsel. The Fund shall not be liable to
indemnify any Covered Person for any settlement of any claim effected without
the Fund's written consent, which consent shall not be unreasonably withheld or
delayed. The indemnities set forth in paragraph (a) will be in addition to any
liability that the Fund might otherwise have to a Covered Person.
3.3 Indemnification by the Portfolio.
(a) The Portfolio will indemnify and hold harmless the Fund
and the Trust and its respective trustees, officers and employees and each other
person who controls the Fund, as the case may be, within the meaning of Section
15 of the 1933 Act (each, a "Covered Person" and collectively, "Covered
Persons"), against any and all losses, claims, demands, damages, liabilities and
expenses (each, a "Liability" and collectively, the "Liabilities") (including
the reasonable costs of investigating and defending against any claims therefor
and any counsel fees incurred in connection therewith), joint or several,
whether incurred directly by the Fund or through the Fund's Investment in the
Portfolio, which
(i) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Portfolio's N-1A, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading; provided, however, that
the Portfolio will not be liable in any such case to the extent that any such
Liability arises out of or is based upon any untrue statement or omission in or
from the Portfolio's N-1A in reliance upon and in conformity with written
information
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furnished to the Portfolio by the Fund specifically for use therein (for this
purpose, information of any kind contained in any filing by the Fund with the
Securities and Exchange Commission being deemed to have been so furnished to the
Portfolio);
(ii) arise out of or are based upon a materially
inaccurate calculation of the Portfolio's net asset value (whether by the
Portfolio or any party retained for that purpose);
(iii) result from the failure of any representation or
warranty made by the Portfolio to be accurate when made or the failure of the
Portfolio to perform any covenant contained herein or to otherwise comply with
the terms of this Agreement; or
(iv) arise out of any claim that the use of the names
"Standard & Poor's," "S&P," "Standard & Poor's 500," "S&P 500" or 500" by the
Portfolio violates any license or infringes upon any trademark;
provided, however, that in no case shall the Portfolio be liable with respect to
any claim made against any such Covered Person unless such Covered Person shall
have notified the Portfolio in writing of the nature of the claim within a
reasonable time after the summons, other first legal process or formal or
informal initiation of a regulatory investigation or proceeding shall have been
served upon or provided to a Covered Person or any federal, state or local tax
deficiency has come to the attention of the Fund or a Covered Person. Failure to
notify the Portfolio of such claim shall not relieve it from any liability that
it may have to any Covered Person otherwise than on account of the
indemnification contained in this paragraph.
(b) The Portfolio will be entitled to participate at its own
expense in the defense or, if it so elects, to assume the defense of any suit
brought to enforce any such liability, but, if the Portfolio elects to assume
the defense, such defense shall be conducted by counsel chosen by the Portfolio.
In the event that the Portfolio elects to assume the defense of any such suit
and retain such counsel, each Covered Person and any other defendant or
defendants may retain additional counsel, but shall bear the fees and expenses
of such counsel unless (A) the Portfolio shall have specifically authorized the
retaining of such counsel or (B) the parties to such suit include any Covered
Person and the Portfolio, and any such Covered Person has been advised by
counsel that one or more legal defenses may be available to it that may not be
available to the Portfolio, in which case the Portfolio shall not be entitled to
assume the defense of such suit notwithstanding its obligation to bear the fees
and expenses of such counsel. The Portfolio shall not be liable to indemnify any
Covered Person for any settlement of any claim affected without the Portfolio's
written consent, which consent shall not be unreasonably withheld or delayed.
The indemnities set forth in paragraph (a) will be in addition to any liability
that the Portfolio might otherwise have to a Covered Person.
3.4 Allocation of Losses.
(a) If the indemnification provided for in Section 3.2 or
Section 3.3 is for any reason unavailable to or insufficient to hold harmless a
Covered Person in respect of any losses, claims, demands, damages, liabilities,
or expenses referred to therein, then each indemnifying party shall contribute
to the aggregate amount of such any losses, claims, demands, damages,
liabilities, or expenses incurred by such Covered Person in such proportion as
is appropriate to reflect the relative fault of the Fund and the Portfolio in
connection with the statements or omissions or other action or failure to act
which resulted in such losses, liabilities, claims, damages, or expenses, as
well as any other relevant equitable considerations.
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(b) In the case of any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, the relative fault of the Fund and the Portfolio shall be determined by
reference to, among other things, whether any such untrue statement or alleged
untrue statement or omission or alleged omission related to information supplied
by the Fund or the Portfolio and the parties' relative intent, knowledge, access
to information, and opportunity to correct or prevent such statement or
omission.
(c) The Fund and the Portfolio agree that it would not be
just and equitable if contribution pursuant to this Section 3.4 were determined
by any method of allocation which does not take account of the equitable
considerations referred to above in this Section 3.4. The aggregate amount of
losses, claims, demands, damages, liabilities, and expenses incurred by a
Covered Person and referred to above in this Section 3.4 shall be deemed to
include any legal or other expenses reasonably incurred by such Covered Person
in investigating, preparing, or defending against any litigation or any
investigation or proceeding or any such claims and reasonable counsel fees
incurred in connection therewith.
(d) For purposes of this Section 3.4, each person, if any,
who controls the Fund or the Portfolio within the meaning of Section 15 of the
1933 Act or Section 20 of the Securities Exchange Act of 1934, as amended, shall
have the same rights to contribution as the Fund or the Portfolio, as the case
may be, and each director or trustee, officer, or employee of the Fund or the
Portfolio and each officer thereof who signed a registration statement shall
have the same rights to contribution as the Fund or the Portfolio, as the case
may be.
IV
ADDITIONAL AGREEMENTS
4.1 Each party agrees that it shall hold in strict confidence all
data and information obtained from the other party (unless such information is
or becomes readily ascertainable from public or published information or trade
sources) and shall ensure that its officers, employees and authorized
representatives do not disclose such information to others without the prior
written consent of the party from whom it was obtained, except if disclosure is
required by the SEC, any other regulatory body or the Fund's or Portfolio's
respective auditors, or in the opinion of counsel such disclosure is required by
law, and then only with as much prior written notice to the other party as is
practical under the circumstances.
4.2 No party shall issue any press release or otherwise make any
public statements with respect to the matters covered by this Agreement without
the prior consent of the other parties hereto, which consent shall not be
unreasonably withheld; provided, however, that consent shall not be required if,
in the opinion of counsel, such disclosure is required by law, provided further,
however, that the party making such disclosure shall provide the other parties
hereto with as much prior written notice of such disclosure as is practical
under the circumstances.
V
TERMINATION, AMENDMENT AND WAIVER
5.1 Termination.
(a) This Agreement may be terminated by the Fund upon five
(5) business days notice to the Portfolio.
(b) This Agreement may be terminated at any time by the Fund
by withdrawing all of the Fund's Interest in the Portfolio.
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(c) This Agreement may be terminated on not less than 120
days' prior written notice by the Portfolio to the Fund.
(d) This Agreement may be terminated at any time immediately
upon written notice to the other parties in the event that formal proceedings
are instituted against another party to this Agreement by the SEC or any other
regulatory body, provided that the terminating party has a reasonable belief
that the institution of the proceeding is not without foundation and will have a
material adverse impact on the terminating party.
(e) The indemnification obligations set forth in Article III
and the confidentiality provisions in Section 4.1 shall survive the termination
of this Agreement.
5.2 This Agreement may be amended, modified or supplemented at any
time in such manner as may be mutually agreed upon in writing by the parties.
VI
GENERAL PROVISIONS
6.1 All notices and other communications given or made pursuant
hereto shall to in writing and shall be deemed to have been duly given or made
when actually received in person or by fax, or three days after being sent by
certified or registered United States mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Fund: Homestead Funds, Inc.
c/o National Rural Electric Cooperative Association
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxxx
If to the Portfolio: Xxxxx Xxxxxx Xxxxxx Xxxxx
x/x Xxxxx Xxxxxx Xxxx and Trust Company
Xxx Xxxxxx xx Xxxxxxxxx
Xxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Either party to this Agreement may change the identity of the person to receive
notice by providing written notice thereof to all other parties to the
Agreement.
6.2 Unless stated otherwise herein, all costs and expenses
associated with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such costs and expenses.
6.3 The headings and captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
6.4 If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law, or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner adverse to any
party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely
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as possible in an acceptable manner to the end that the transactions
contemplated hereby are fulfilled to the extent possible.
6.5 This Agreement and the agreements and other documents delivered
pursuant hereto set forth the entire understanding between the parties
concerning the subject matter of this Agreement and incorporate or supersede all
prior negotiations and understandings. There are no covenants, promises,
agreements, conditions or understandings, either oral or written, between them
relating to the subject matter of this Agreement other than those set forth
herein.
6.6 Each and all of the provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and, except as
otherwise specifically provided in this Agreement, their respective successors
and assigns. Notwithstanding the foregoing, no party shall make any assignment
of this Agreement or any rights or obligations hereunder without the written
consent of all other parties.
6.7 This Agreement shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts without giving effect to the
choice of law or conflicts of law provisions thereof.
6.8 This Agreement may be executed in any number of counterparts,
all of which shall constitute one and the same instrument, and any party hereto
may execute this Agreement by signing one or more counterparts.
6.9 Nothing herein expressed or implied is intended or shall be
construed to confer upon or give any person, other than the parties hereto and
their successors or assigns, any rights or remedies under or by reason of this
Agreement.
6.10 Any uncertainty or ambiguity existing herein shall not
presumptively be interpreted against any party, but shall be interpreted
according to the application of the rules of interpretation for arm's length
agreements.
6.11 Each party expressly acknowledges the provision in the
Declaration of Trust of each of the Fund and the Portfolio limiting the personal
liability of shareholders and the officers and trustees of the Fund and the
Portfolio.
6.12 The parties hereto agree and acknowledge that (a) the Fund has
entered into this Agreement solely on its own behalf and that no other party
shall have any obligation hereunder with respect to any liability of the Fund
arising hereunder; (b) the Portfolio has entered into this Agreement solely on
its own behalf and that no other series of the State Street Master Funds shall
have any obligation hereunder with respect to any liability of the Portfolio
arising hereunder; and (c) no series or feeder participant of the Portfolio
shall be liable to any other series or feeder participant of the Portfolio.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers, thereunto duly authorized, as of the date
first written above.
HOMESTEAD FUNDS, INC.
By: /s/ XXXXX XXXX
---------------------------------
Xxxxx Xxxx, President
STATE STREET MASTER FUNDS
By: /s/ XXXXXXXX XXXXXXX
---------------------------------
Xxxxxxxx Xxxxxxx, President
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