MASTER AGREEMENT
FOR
ADMINISTRATION SERVICES
AGREEMENT made as of (DATE), by and between the DEUTSCHE FAMILY OF FUNDS,
INC. as may be amended from time to time, having its 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 Fund is a Spoke(R) in a Hub(R) and Spoke(R) investment structure
which requires that the Fund recognize and operate in accordance with complex
operational and regulatory requirements;
WHEREAS, the Investment Company desires that the Company assist the Fund in
addressing these novel, complex issues and hereby desires to appoint the Company
as its agent to perform all of the requisite services for the administration of
the Fund and to compensate the Company for such services in addition to those
out-of-pocket and third party expenses incurred by the Company. Such services
shall include: developmental support , administrative , and transfer agency ,
(all herein defined) ; provided however, that such services shall not include
advisory, shareholder, custody or distribution services; and the Company desires
to accept such appointment.
WHEREAS, from time to time the Investment Company may desire and may instruct
the Company to subcontract for the performance of certain of its duties and
responsibilities hereunder to another agent (the "Agent").
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: DEVELOPMENTAL SUPPORT SERVICES
ARTICLE 1. APPOINTMENT
The Investment Company hereby appoints the Company to provide, or cause
to be provided, to the Fund(s) those developmental support services that are
necessary to establish and operate the Fund within a Hub and Spoke(R) investment
structure. The Company accepts such appointment and agrees to provide, or cause
to be provided those services set forth in Article 2 of this Agreement in return
for the compensation set forth in Article 12 of this Agreement.
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ARTICLE 2. THE COMPANY'S DUTIES
Subject to the supervision and control of the Investment Company's
Board of Directors ("Board"), and in furtherance of the Investment Company's
desire to have the Company assist the Fund in adapting to the complexities of
the Hub and Spoke(R) investment structure, the Company undertakes and agrees to
provide, or cause to be provided, to the Fund(s) developmental, organizational,
administrative, and compliance and allied services that are unique to the Hub
and Spoke(R) investment structure, such services to be provided within the scope
of applicable Federal and State regulations.
The foregoing, along with any additional services that the Company
shall from time to time agree to provide for the Investment Company under this
Section One shall hereinafter be referred to as "Developmental Support
Services."
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 3. APPOINTMENT.
The Investment Company hereby appoints the Company as Administrator for the
period and on the terms and conditions set forth in this Agreement. The Company
accepts such appointment and agrees to furnish the services set forth in Article
4 of this Agreement in return for the compensation set forth in Article 12 of
this Agreement.
ARTICLE 4. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of the Board,
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 the Funds and/or their classes:
A. following the organization of the Investment Company, prepare, file,
and maintain the Investment Company's governing documents and any
amendments thereto, including the Articles of Incorporation (which
have already been prepared and filed), the By-laws and minutes of
meetings of the Board and Shareholders;
B. following the Investment Company's effectiveness with the Securities
and Exchange Commission, prepare the registration statements for the
Investment Company and the Investment Company's Shares and all
amendments thereto, submit the registration statements to the Hub
Fund for approval, and file the registration statements with the
Securities and Exchange Commission and the appropriate state
securities authorities;
C. prepare and file 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;
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D. plan and prepare for meetings of the Investment Company's Board,
including maintaining the Board's agenda, preparing materials for
the Board's review and consideration and disstributing such
materials to the Board in advance of Board meetings;
E. attend in person, and record the minutes of meetings of, the
Investment Company's Board;
F. plan and prepare for meetings of the Investment Company's
shareholders and record the minutes of such meetings;
G. maintain the Investment Company's calendar of reporting and filing
obligations;
H. prepare expense projections for the Funds and provide such
projections to the Fund's portfolio accountant; monitor expenses
incurred by the Funds; forward invoices to the Investment Company's
Treasurer for payment authorization;
I. monitor the declaration and payment of dividends and other
distributions;
J. monitor and supervise the collection of tax reclaims;
K. coordinate the layout and printing of publicly disseminated
prospectuses and reports;
L. perform internal audit examinations;
M. obtain EIN and CUSIP number for each Fund;
N. consult with the Fund and its Board on matters concerning the Fund
and its affairs; and
O. coordinate the activities of all service providers to the Investment
Company. By way of example, the Company will, in conjunction with
item (G) above, communicate to the other service providers to the
Investment Company lists of information and materials needed for
filing obligations, as well as deadlines for the receipt of such
materials. The Company does not take responsibility for the failure
of other service providers to provide such materials to the
Investment Company in a timely fashion or for the performance of
functions for which other service providers are responsible.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Fund under this Section Two, shall hereafter
be referred to as "Administrative Services."
ARTICLE 5. 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
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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 6. 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 of the 1940 Act, the Internal Revenue Code, and any other laws,
rules and regulations of government authorities having jurisdiction.
ARTICLE 7. 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 Fund) 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 7 shall apply, however, it is understood that if in
any case the Investment Company may be asked to indemnify or save
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
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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 8. TERMS OF APPOINTMENT.
The Investment Company hereby appoints the Company 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 9. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with Proper
Instructions (as defined in Article 13) 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 therefor to the custodian of the
relevant Fund (the "Custodian"). The Company shall notify
the Fund, the Administrator for 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.
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(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 and the Fund's Administrator 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 and the Fund's Administrator 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 Fund and the Fund's Administrator 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
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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;
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(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; and
(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 Investment Company 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 Investment Company or 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 Investment Company or the Fund or destroyed
in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Investment Company or 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; and
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(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 Investment
Company to monitor the total number of Shares of each
Fund and/or Class sold in each state ("blue sky
reporting"). The Investment Company 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 Investment Company as provided above.
F. Other Duties
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(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.
(4) Mail information, such as prospectuses or reports, to
prospective shareholders or third party financial
intermediaries.
All of the foregoing as described in this Article 9, 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 10. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company or Fund assume full responsibility for the
preparation, contents and distribution of its own and/or its Classes'
Prospectuses 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
If the Investment Company has authorized the issuance of 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 11. REPRESENTATIONS.
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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 Three of this
Agreement.
SECTION FOUR: GENERAL PROVISIONS.
ARTICLE 12. COMPENSATION AND EXPENSES.
A. The Funds will compensate the Company for the Developmental Support
Services, Administrative Services, and Transfer Agency Services in
accordance with the fees agreed upon between the parties hereto on
the applicable schedule. Such fees do not include out-of-pocket and
other third party disbursements of the Company for which the Funds
shall reimburse the Company separately. Examples of out-of-pocket
expenses are included as exhibits to this Agreement. 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 Fund, including the
compensation of the Company employees who serve as officers of the
Investment Company. The Investment Company shall be responsible for
all other reasonable and documented 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 employees, trade association dues, and other expenses
properly payable by the Funds and/or Classes.
B. 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.
C. 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 any of the services under this Agreement.
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. Except as herein provided, 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.
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ARTICLE 13. 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 14. 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 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)").
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 Administrative 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. 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.
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.
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ARTICLE 15. 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 its Board 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 Investment Company will also furnish from time to time the
following documents:
(1) each resolution of the Board 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 persons
to give Proper Instructions;
(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 16. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Investment Company that:
(1) it is a corporation duly organized and existing and in good
standing under the laws of the Commonwealth of Pennsylvania;
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(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 charter and
by-laws to enter into and perform this Agreement;
(4) all requisite corporate proceedings, including obtaining
necessary licenses, 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; and
(6) it is in compliance with federal securities law requirements and
in good standing as a transfer agent.
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 17. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One and Three, 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
Deutsche Family of Funds Page 14 1997
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, counsel fees,
and liabilities (collectively, "Losses") 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 good faith 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;
(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;
or
(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; or
(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 17.B from liability for any losses 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 17.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
Deutsche Family of Funds Page 15 1997
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 19 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 right to assume 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 18. TERM AND TERMINATION OF AGREEMENT.
The initial term of this Agreement shall commence on the date hereof, and
extend for a period of three years following the date of the commencement of the
public offering of the Fund's shares. Following the initial term of this
Agreement, the Agreement will be terminable on not less than 90 days' notice by
either the Company or the Investment Company, subject to the payment of all
deferred expenses and unamortized expenses. 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 30
days written notice, if Company has not cured such willful misfeasance, bad
faith, negligence or reckless disregard of its duties within that same 30 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 right to terminate, all reasonable
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 unless such termination is caused by the
Company's willful misfeasance, bad faith, negligence or reckless disregard of
its duties. The provisions of Articles 7 and 17 shall survive the termination of
this Agreement.
Deutsche Family of Funds Page 16 1997
ARTICLE 19. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by a written agreement executed by both parties.
Deutsche Family of Funds Page 17 1997
ARTICLE 20. 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 organizational documents. No interpretive or
additional provisions made as provided in the preceding sentence shall be deemed
to be an amendment of this Agreement.
ARTICLE 21. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted under
and in accordance with the laws of the State of New York.
ARTICLE 22. 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, with a copy to Deutsche
Fund Management, Inc. at 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attn:
President 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 23. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 24. 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 25. 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.
With regard to Section Two and Three, 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,
Deutsche Family of Funds Page 18 1997
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 26. 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,
natural disaster, governmental action, loss or malfunction of utilities or other
impossibility of performance.
ARTICLE 27. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the prior
written consent of the other party. Such consent may not be unreasonably
withheld. However, 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 27 shall prevent the
Company from delegating its responsibilities to another entity to the extent
provided herein.
ARTICLE 28. SEVERABILITY.
In the event any provision of this Agreement or any interpretive additional
provisions described in Article 20 are held illegal, void or unenforceable, the
balance shall remain in effect.
ARTICLE 29. PROPERTY OF THE INVESTMENT COMPANY AND CONFIDENTIALITY.
The Investment Company's records, including all those maintained hereunder
by the Company, whether in magnetic media, hard copy, film form or other format,
shall be the Investment Company's property for all purposes, and the Company
shall treat confidentially and as proprietary information of the Investment
Company all such records and other information relative to the Investment
Company and its shareholders which is not independently available to the Company
or in the public domain and, in the case of a shareholder list, shall have not
interest therein and shall use such records only in connection with the
performance of its duties hereunder and for no other purpose. In particular, the
Company agrees:
(a) that all information and data so acquired by it or its employees,
agents or contractors under this Agreement, or in contemplation thereof, shall
be and shall remain the Investment Company's exclusive property;
(b) to inform its employees, agents or contractors engaged in handling
such information and data of the confidential nature of such information and
data;
(c) to limit access to such information and data to authorized
employees, agents or contractors of the Company and the Investment Company who
have a need to know and use such information and data in connection with this
Agreement and the services to be supplied herein;
Deutsche Family of Funds Page 19 1997
(d) to keep, and have their employees, agents and contractors keep, any
and all such information and data confidential;
(e) not to copy or publish or disclose such information and data to
others or authorize their employees, agents, contractors or anyone else, to copy
or publish or disclose such information and data to others without the other
party's written approval except if required by a State or Federal court or
agency and in such an event prompt written notice of such disclose requirement
shall be provided to the other party if permitted by law; and
(f) that upon termination of this Agreement, all records and other
confidential information of the Investment Company in the possession of the
Company shall be returned to the Investment Company or its designated successor
transfer agent, administrator, or distributor, as provided in Article 27.
The confidentiality provisions noted above will sruvive termination of
this Agreement for a period of 5 years.
ARTICLE 30. RELIEF.
The Company recognizes that the property and proprietary information of the
Investment Company is unique, and that the Investment Company cannot be fully
compensated by money damages and would be irreparably harmed by the disclosure
of its confidential information and data in violation of the provisions of
Article 29. The Company therefore agrees that the Investment Company may seek
immediate relief at equity for any fialure to company with Article 29 of this
Agreement, in addition to any othere remedies the Investment Company may have in
law or in equity.
ARTICLE 31. SERVICE LEVEL STANDARDS.
Subject to the non-occurrence of an event of force majeure and the performance
of the Investment Company's obligations described in this Agreement, the Company
agrees that the services will be provided in accordance with the service level
standards specified in Schedule A. The Company's fees will be adjusted based
upon performance-based reductions as described in Schedule A, aggregated up to a
maximum of 10% of all fees billed for the period indicated. The Company shall
provide in reasonable detail to the Investment Company's fund accountant and to
Deutsche Fund Management, Inc., the calculation of the performance-based fee
reductions and all amounts reduced thereunder. It will be the Company's sole
responsibility to compile the statistical information necessary to monitor the
performance standards enumerated in Schedule A.
Deutsche Family of Funds Page 20 1997
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.
DEUTSCHE FAMILY OF FUNDS, INC.
By:
President
FEDERATED SERVICES COMPANY
By:
Senior Vice President
Deutsche Family of Funds Page 21 1997
ADMINISTRATIVE OR OPERATIONAL AGENCY SERVICES
OUT-OF-POCKET EXPENSES SCHEDULE
Cost of preparing, printing and mailing stock certificates, prospectuses, sales
literature, proxies, reports and notices.
Interest on borrowed money
Taxes and fees payable to Federal, state and other governmental agencies
Fees of Trustees of the Funds
Outside auditing and legal expenses
Travel expenses incurred by employees of Federated Services Company and its
affiliates in connection with such employees' attendance at Fund Board meetings
or in performance of Internal Audit Department functions
Insurance premiums
Trade association dues
Other expenses which may be properly payable by a Fund, as
applicable
Deutsche Family of Funds Page 22 1997
