Exhibit h(vii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
FINANCIAL ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
THIS AGREEMENT dated as of January 1, 2004 is made, severally and not jointly
(except that the parties jointly agree to the provisions of Section XII
hereunder) by each of the investment companies listed on Exhibit A hereto (each,
a "Trust") and State Street Bank and Trust Company ("State Street").
WHEREAS, each Trust is registered as a management investment company under the
Investment Company Act of 1940, as amended (the "1940 Act") with authorized and
issued shares of capital stock or beneficial interest (the "Shares");
WHEREAS, certain Trusts subject to this Agreement are "series companies" as
defined in Rule 18f-2(a) under the 1940 Act and, as used in this Agreement, the
term "Portfolio" refers to either (i) an individual portfolio of such a series
company or (ii) an investment company that is not organized as a series company,
and the term "Portfolios" refers to all such portfolios and investment
companies, collectively;
WHEREAS, Shares of each Portfolio may be subdivided into "classes" as provided
in Rule 18f-3 under the 1940 Act;
WHEREAS, the Trust desires to retain State Street as financial administrator
(the "Financial Administrator") to furnish certain financial administrative
services on behalf of the Portfolios;
WHEREAS, the Trust desires to retain State Street as accounting agent (the
"Accounting Agent") to perform certain accounting and recordkeeping services on
behalf of the Portfolios; and
WHEREAS, State Street is willing to perform such services on the terms provided
herein.
NOW, THEREFORE, the parties agree as follows:
I. APPOINTMENT
A. Of State Street as the Financial Administrator
The Trust hereby appoints State Street to act as Financial Administrator with
respect to the Trust for purposes of providing certain financial administrative
services for the period and on the terms set forth in this Agreement. State
Street accepts such appointment and agrees to render the financial
administrative services stated herein.
The Trust will initially consist of the Portfolios identified on Exhibit A
hereto. In the event that the Trust establishes one or more additional
Portfolios with respect to which it wishes to retain the Financial Administrator
to act as financial administrator hereunder, the Trust shall notify the
Financial Administrator in writing (including by facsimile or electronic mail
communication). Upon such notification, such Portfolio shall become subject to
the provisions of this Agreement to the same extent as the existing Portfolios,
except to the extent that such provisions (including those relating to
compensation and expenses payable by the Trust and its Portfolios) may be
modified with respect to each additional Portfolio in writing by the Trust and
the Financial Administrator at the time of the addition of the Portfolio.
B. Of State Street as the Accounting Agent
The Trust hereby appoints State Street to act as Accounting Agent with respect
to the Portfolios for purposes of providing certain accounting and recordkeeping
services for the period and on the terms set forth in this Agreement. State
Street accepts such appointment and agrees to render the accounting and
recordkeeping services stated herein.
The Trust will initially consist of the Portfolios identified on Exhibit A. In
the event that the Trust establishes one or more additional Portfolios with
respect to which it wishes to retain the Accounting Agent to act as accounting
agent hereunder, the Trust shall notify the Accounting Agent in writing
(including by facsimile or electronic mail communication). Upon such
notification, such Portfolio shall become subject to the provisions of this
Agreement to the same extent as the existing Portfolios, except to the extent
that such provisions (including those relating to compensation and expenses
payable by the Trust and its Portfolios) may be modified with respect to each
additional Portfolio in writing by the Trust and the Accounting Agent at the
time of the addition of the Portfolio.
II. REPRESENTATIONS and WARRANTIES
A. By State Street. State Street represents and warrants that:
1. It is a Massachusetts trust company, duly organized and existing under the
laws of The Commonwealth of Massachusetts;
2. It has the corporate power and authority to carry on its business in The
Commonwealth of Massachusetts;
3. All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement;
4. No legal or administrative proceedings have been instituted or threatened
which would impair State Street's ability to perform its duties and
obligations under this Agreement;
5. Its entrance into this Agreement shall not cause a material breach or be in
material conflict with any other agreement or obligation of State Street or
any law or regulation applicable to it; and
6. It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.
B. By the Trust. The Trust represents and warrants that:
1. It is duly organized, existing and in good standing under the laws of the
jurisdiction in which it was formed;
2. It has the power and authority under applicable laws and by its
organizational documents to enter into and perform this Agreement;
3. All requisite proceedings have been taken to authorize it to enter into and
perform this Agreement;
4. With respect to each Portfolio, it is an investment company properly
registered under the 1940 Act;
5. A registration statement under the 1940 Act (and if Shares of the Portfolio
are offered publicly, under the Securities Act of 1933, as amended (the
"1933 Act")) has been filed and will be effective and remain effective
during the term of this Agreement. The Trust also warrants that as of the
effective date of this Agreement, all necessary filings under the
securities laws of the states in which the Trust offers or sells its Shares
have been made;
6. No legal or administrative proceedings have been instituted or threatened
which would impair the Trust's ability to perform its duties and
obligations under this Agreement;
7. Its entrance into this Agreement will not cause a material breach or be in
material conflict with any other agreement or obligation of the Trust or
any law or regulation applicable to it; and
8. As of the close of business on the date of this Agreement, the Trust is
authorized to issue its Shares.
III. DUTIES of STATE STREET
A. As the Financial Administrator. The Financial Administrator shall provide
the following services, in each case, subject to the control, supervision
and direction of the respective Trust and its Board of Trustees/Directors
(the "Board") and the review and comment by the Trust's auditors,
administrator and legal counsel and in accordance with procedures which may
be established from time to time between the Trust and the Financial
Administrator:
1. Compile, review and deliver to the Trust, fund performance statistics
including Securities and Exchange Commission (the "SEC") yields,
distribution yields and total returns;
2. Prepare and submit for approval by officers of the Trust a fund expense
budget, review expense calculations and arrange for payment of the Trust's
expenses;
3. Prepare for review and approval by officers of the Trust financial
information required for the Trust's annual and semi-annual reports, proxy
statements and other communications required or otherwise to be sent to
shareholders; review text of "President's Letter to Shareholders" and
"Management's Discussion of Financial Performance" as included in
shareholder reports (which shall also be subject to review by the Trust's
legal counsel);
4. Prepare for review by an officer of and legal counsel for the Trust the
Trust's periodic financial reports required to be filed with the SEC on
Form N-SAR and financial information required by Form N-1A, Form N-14 and
Form 24F-2 and such other reports, forms or filings as may be mutually
agreed upon;
5. Prepare reports relating to the business and affairs of the Trust as may be
mutually agreed upon and not otherwise prepared by the Trust's investment
adviser, custodian, legal counsel or independent accountants;
6. Oversee and review calculations of fees paid to State Street and to the
Trust's investment adviser, shareholder servicing agent, distributor,
custodian, fund administrator, fund accountant and transfer and dividend
disbursing agent ("Transfer Agent"), in addition to the oversight and
review of all asset based fee calculations;
7. Prepare fund income forecasts and submit for approval by officers of the
Trust, recommendations for fund income dividend distributions;
8. Maintain continuing awareness of significant emerging regulatory and
legislative developments which may affect the Trust, and provide related
planning assistance where requested or appropriate;
9. Complete monthly preferred shares "asset coverage" test (as that term is
defined in Section 18(h) of the 1940 Act) (the "1940 Act Test") following
the compliance procedures contained in Exhibit C attached hereto, as such
Exhibit may be amended from time to time by mutual agreement of the parties
(the "Compliance Procedures");
10. Complete monthly preferred shares basic maintenance amount test for Fitch
Ratings, Ltd. ("Fitch") preferred rate auction (the "Fitch Preferred Shares
Basic Maintenance Test") following the Compliance Procedures; and
11. Complete monthly preferred shares basic maintenance amount test for Xxxxx'x
Investors Service, Inc. ("Xxxxx'x") preferred rate auction (the "Xxxxx'x
Preferred Shares Basic Maintenance Test") following the Compliance
Procedures.
The Financial Administrator shall provide the office facilities and the
personnel required by it to perform the services contemplated herein.
B. As the Accounting Agent.
1. Books of Account. The Accounting Agent shall maintain the books of account
of the Trust and shall perform the following duties in the manner
prescribed by the respective Trust's currently effective prospectus,
statement of additional information or other governing document, certified
copies of which have been supplied to the Accounting Agent (a "Governing
Document"):
a. Value the assets of each Portfolio using: primarily, market quotations
(including the use of matrix pricing) supplied by the independent
pricing services selected by the Accounting Agent in consultation with
the Trust's investment adviser (the "Adviser") and approved by the
Board; secondarily, if a designated pricing service does not provide a
price for a security that the Accounting Agent believes should be
available by market quotation, the Accounting Agent may obtain a price
by calling brokers designated by the Adviser, or if the Adviser does
not supply the names of such brokers, the Accounting Agent will
attempt on its own to find brokers to price the security, subject to
approval by the Adviser; thirdly, for securities for which no market
price is available, the Valuation Committee of the Board (the
"Committee") will determine a fair value in good faith; or fourthly,
such other procedures as may be adopted by the Board. Consistent with
Rule 2a-4 under the 1940 Act, estimates may be used where necessary or
appropriate. The Accounting Agent is not the guarantor of the accuracy
of the securities prices received from such pricing agents and the
Accounting Agent is not liable to the Trust for errors in valuing a
Portfolio's assets or calculating the net asset value (the "NAV") per
share of such Portfolio or class when the calculations are based upon
inaccurate prices provided by pricing agents. The Accounting Agent
will provide daily to the Adviser the security prices used in
calculating the NAV of each Portfolio, for its use in preparing
exception reports for those prices on which the Adviser has a comment.
Further, upon receipt of the exception reports generated by the
Adviser, the Accounting Agent will diligently pursue communication
regarding exception reports with the designated pricing agents;
b. Determine the NAV per share of each Portfolio and/or class, at the
time and in the manner from time to time determined by the Board and
as set forth in the Prospectus of such Portfolio;
c. Calculate the net income of each of the Portfolios, if any;
d. Calculate realized capital gains or losses of each of the Portfolios
resulting from sale or disposition of assets, if any;
e. Maintain the general ledger and other accounts, books and financial
records of the Trust, including for each Portfolio, as required under
Section 31(a) of the 1940 Act and the rules thereunder in connection
with the services provided by State Street;
f. At the request of the Trust, prepare various reports or other
financial documents in accordance with generally accepted accounting
principles as required by federal, state and other applicable laws and
regulations; and
g. Such other similar services as may be reasonably requested by the
Trust.
The Trust shall provide timely prior notice to the Accounting Agent of any
modification in the manner in which such calculations are to be performed as
prescribed in any revision to the Trust's Governing Document. The Accounting
Agent shall not be responsible for any revisions to the manner in which such
calculations are to be performed unless such revisions are communicated in
writing to the Accounting Agent.
2. Records. The Accounting Agent shall create and maintain all records
relating to its activities and obligations under this Agreement in
such a manner as will meet the obligations of the Trust under the 1940
Act, specifically Section 31 thereof and Rules 31a-1 and 31a-2
thereunder. All such records shall be the property of the Trust and
shall at all times during the regular business hours of the Accounting
Agent be open for inspection by duly authorized officers, employees or
agents of the Trust and employees and agents of the SEC. Subject to
Section XVI.B below, the Accounting Agent shall preserve for the
period required by law the records required to be maintained
thereunder.
IV. DUTIES of the TRUST
A. Delivery of Documents. The Trust will promptly deliver to the Financial
Administrator copies of each of the following documents and all future
amendments and supplements, if any:
1. The Trust's organizational documents;
2. The Trust's currently effective registration statements under the 1933 Act
(if applicable) and the 1940 Act and the Trust's Prospectus(es) and
Statement(s) of Additional Information (collectively, the "Prospectus")
relating to all Portfolios and all amendments and supplements thereto as in
effect from time to time;
3. Certified copies of resolutions of the Board authorizing (a) the Trust to
enter into this Agreement and (b) certain individuals on behalf of the
Trust and its third-party agents to (i) give instructions to the Financial
Administrator pursuant to this Agreement and (ii) sign checks and pay
expenses;
4. The investment advisory agreements between the Trust and the Advisers; and
5. Such other certificates, documents or opinions which the Financial
Administrator may, in its reasonable discretion, deem necessary or
appropriate in the proper performance of its duties.
The Trust shall provide, or shall cause its third-party agent to provide, timely
notice to the Accounting Agent of all data reasonably required by the Accounting
Agent for performance of its duties described in Section III.B hereunder. The
Trust's failure to provide such timely notice shall excuse the Accounting Agent
from the performance of such duties, but only to the extent the Accounting
Agent's performance is prejudiced by the Trust's failure.
State Street is authorized and instructed to rely upon any and all information
it receives from the Trust or its third-party agent that it reasonably believes
to be genuine. State Street shall have no responsibility to review, confirm or
otherwise assume any duty with respect to the accuracy or completeness of any
data supplied to it by or on behalf of the Trust.
State Street shall value the Trust's securities and other assets utilizing
prices obtained from sources designated by the Trust, or the Trust's
duly-authorized agent, on a Price Source Authorization substantially in the form
attached hereto as Exhibit B or otherwise designated by means of Proper
Instructions (as such term is defined herein) (collectively, the "Authorized
Price Sources"). State Street shall not be responsible for any revisions to the
methods of calculation adopted by the Trust unless and until such revisions are
communicated in writing to State Street.
B. Proper Instructions. The Trust and its third-party agents shall communicate
to State Street by means of Proper Instructions. Proper Instructions shall mean
(i) a writing signed or initialed by one or more persons as the Board shall have
from time to time authorized or (ii) a communication effected directly between
the Trust or its third-party agent and State Street by electro-mechanical or
electronic devices, provided that the Trust and State Street have approved such
procedures. State Street may rely upon any Proper Instruction believed by it to
be genuine and to have been properly issued by or on behalf of the Trust. Oral
instructions shall be considered Proper Instructions if State Street reasonably
believes them to have been given by a person authorized to give such
instructions. The Trust and its third-party agents shall cause all oral
instructions to be confirmed in accordance with clauses (i) or (ii) above, as
appropriate. The Trust and its third-party agents shall give timely Proper
Instructions to State Street in regard to matters affecting accounting practices
and State Street's performance pursuant to this Agreement.
V. COMPLIANCE WITH GOVERNMENTAL RULES and REGULATIONS; RECORDS
The Trust assumes full responsibility for its compliance with all securities,
tax, commodities and other laws, rules and regulations applicable to it.
VI. WARRANTIES
If, prior to the Accounting Agent's calculation of the current NAV, the Trust or
its third-party agent notifies the Accounting Agent that any of its accounting
services are erroneous in any material respect, the Accounting Agent shall
endeavor in a timely manner to correct such failure. Third-parties that are
selected by and approved by the Trust and from which the Accounting Agent may
obtain certain data included in the accounting services are solely responsible
for the contents of such data and the Trust agrees to make no claim against the
Accounting Agent arising out of the contents of such third-party data including,
but not limited to, the accuracy thereof.
VII. FORCE MAJEURE
If any party is unable to carry out any of its obligations under this Agreement
because of conditions beyond its reasonable control, including, but not limited
to, acts of war or terrorism, work stoppages, fire, civil disobedience, delays
associated with hardware malfunction or availability, riots, rebellions, storms,
electrical failures, acts of God, and similar occurrences ("Force Majeure"),
this Agreement will remain in effect and the non-performing party's obligations
shall be suspended without liability for a period equal to the period of the
continuing Force Majeure (which such period shall not exceed fifteen (15)
business days), provided that:
(1) where reasonably practicable, the non-performing party gives the other
party prompt notice describing the Force Majeure, including the nature of
the occurrence and its expected duration and, where reasonably practicable,
continues to furnish regular reports with respect thereto during the period
of Force Majeure;
(2) the suspension of obligations is of no greater scope and of no longer
duration than is required by the Force Majeure;
(3) no obligations of any party that accrued before the Force Majeure are
excused as a result of the Force Majeure; and
(4) the non-performing Party uses reasonable efforts to remedy its inability to
perform as quickly as possible.
VIII. INSTRUCTIONS and ADVICE
At any time, State Street may apply to any officer of the Trust for instructions
and may consult with its own legal counsel with respect to any matter arising in
connection with the services to be performed by State Street under the terms of
this Agreement. At any time, State Street may consult with outside counsel for
the Trust or the independent accountants for the Trust ("Trust Advisers") at the
expense of the Trust, provided that State Street first obtains consent of the
Trust which shall not be unreasonably withheld, with respect to any matter
arising in connection with the services to be performed by State Street under
the terms of this Agreement. In its capacity as the Financial Administrator or
as the Accounting Agent under the terms of this Agreement, State Street shall
not be liable, and shall be indemnified by the Trust or appropriate Portfolio
for any action taken or omitted by it in good faith reliance upon any
instructions or advice provided to State Street by a Trust Adviser or upon any
paper or document reasonably believed by it to be genuine and to have been
signed by the proper person or persons. State Street shall not be held to have
notice of any change of authority of any person until receipt of written notice
thereof from the Trust. Nothing in this paragraph shall be construed as imposing
upon State Street any obligation to seek such instructions or advice, or to act
in accordance with such advice when received.
IX. NOTICES
All notices shall be in writing and deemed given when delivered in person, by
facsimile, by overnight delivery through a commercial courier service, or by
registered or certified mail, return receipt requested. Notices shall be
addressed to each party at its address set forth below, or such other address as
the recipient may have specified by earlier notice to the sender:
If to State Street: LaFayette Corporate Center
0 Xxxxxx xx XxXxxxxxx, 0 Xxxxx
Xxxxxx, XX 00000
ATTN: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: State Street Bank and Trust Company
One Xxxxxxx Xxxxxx, 0xx Xxxxx (B02/9)
X.X. Xxx 0000
Xxxxxx, XX 00000-0000
ATTN: Xxxx Xxxxx Zeven, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trust: 0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000-0000
ATTN: Xxxxxxx X. Xxxxxx, Treasurer with a copy to the
General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
X. CONFIDENTIALITY
State Street agrees that, except as otherwise required by law or in connection
with any required disclosure to a banking or other regulatory authority, it will
keep confidential all records and information in its possession relating to the
Trust or its beneficiaries and will not disclose the same to any person except
at the request or with the written consent of the Trust.
XI. LIMITATION of LIABILITY and INDEMNIFICATION
State Street shall be held to a standard of reasonable care in carrying out its
duties under this Agreement. State Street shall be responsible for the
performance of only such duties as are set forth in this Agreement and, except
as otherwise provided under Section XV, shall have no responsibility for the
actions or activities of any other party, including other service providers.
State Street shall have no liability for any error of judgment or mistake of law
or for any loss or damage resulting from the performance or nonperformance of
its duties hereunder unless caused by or resulting from the negligence, reckless
misconduct, willful malfeasance or lack of good faith of State Street, its
officers or employees and, in such event, such liability will be subject to the
limitations set forth in Section XII herein. State Street shall not be liable
for any special, INdirect, incidental, or consequential damages of any kind
whatsoever (including, without limitation, attorneys' fees) in any way due to
the Trust's use of the services described herein or the performance of or
failure to perform State Street's obligations under this Agreement. This
disclaimer applies without limitation to claims regardless of the form of
action, whether in contract (including negligence), strict liability, or
otherwise and regardless of whether such damages are foreseeable.
The Trust will indemnify and hold harmless State Street and its stockholders,
directors, officers, employees, agents, and representatives (collectively, the
"Trust Indemnified Persons") for, and will pay to the Trust Indemnified Persons
the amount of, any actual and direct damages, whether or not involving a
third-party claim (collectively, the "Damages"), arising from or in connection
with (i) any act or omission by State Street (or any of its affiliates) pursuant
to this Agreement which does not constitute negligence, reckless misconduct,
willful malfeasance or lack of good faith in fulfilling the terms and
obligations of this Agreement, (ii) any act or omission by the Trust (or any of
its affiliates) which constitutes a breach of any representation, warranty,
term, or obligation contained in this Agreement, or (iii) any act or omission by
the Trust (or any of its affiliates) which constitutes negligence, reckless
misconduct, willful malfeasance, or lack of good faith in fulfilling the terms
and obligations of this Agreement. The remedies provided in this paragraph are
not exclusive of or limit any other remedies that may be available to State
Street or any other Trust Indemnified Person.
State Street will indemnify and hold harmless the Trust, and its respective
shareholders, trustees, directors, officers, agents, and representatives
(collectively, the "State Street Indemnified Persons") for, and will pay to the
State Street Indemnified Persons the amount of, any Damages, arising from or in
connection with (i) any act or omission by State Street (or any of its
affiliates) which constitutes a breach of any representation, warranty, term, or
obligation contained in this Agreement or (ii) any act or omission by State
Street (or any of its affiliates) which constitutes negligence, reckless
misconduct, willful malfeasance, or lack of good faith in fulfilling the terms
and obligations of this Agreement; provided, however, that State Street shall
not be required to provide indemnification for damages arising from errors
caused by inaccurate prices received from independent pricing services and
reasonably relied upon by State Street. In the event that State Street is
required to provide indemnification under this Section XI, its liability shall
be limited as described under Section XII below. The remedies provided in this
paragraph are not exclusive of or limit any other remedies that may be available
to the Trust or any other State Street Indemnified Person.
The indemnification and limitation of liability contained herein shall survive
the termination of this Agreement.
XII. EXCLUSIVE REMEDY
State Street's total cumulative liability under this Agreement for all of the
Trusts in the aggregate during any calendar year shall be limited to actual or
direct damage up to the aggregate amount of two (2) times the fees earned by
State Street under Section XV hereunder during the calendar year (or annualized
period) preceding the event giving rise to liability.
XIII. SERVICES NOT EXCLUSIVE
The services of State Street to the Trust are not to be deemed exclusive and
State Street shall be free to render similar services to others. State Street
shall be deemed to be an independent contractor and shall, unless otherwise
expressly provided herein or authorized by the Trust from time to time, have no
authority to act or represent the Trust in any way or otherwise be deemed an
agent of the Trust.
XIV. TERM; TERMINATION; AMENDMENT
A. Term. This Agreement shall become effective on the date first written above
and shall remain in full force and effect for a period of two (2) years from the
effective date (the "Initial Term") and shall automatically continue in full
force and effect after such Initial Term unless either party terminates this
Agreement by written notice to the other party at least six (6) months prior to
the expiration of the Initial Term.
B. Termination. Either party may terminate this Agreement at any time after the
Initial Term upon at least six (6) months' prior written notice to the other
party. Termination of this Agreement with respect to any given Portfolio shall
in no way affect the continued validity of this Agreement with respect to any
other Portfolio. Upon termination of this Agreement, the Trust shall pay to
State Street such compensation and any reimbursable expenses as may be due under
the terms hereof as of the date of such termination, including reasonable
out-of-pocket expenses associated with such termination.
C. Amendment. This Agreement may be modified or amended from time to time by the
mutual agreement of the parties hereto. No amendment to this Agreement shall be
effective unless it is in writing and signed by a duly authorized representative
of each party. The term "Agreement", as used herein, includes all schedules and
attachments hereto and any future written amendments, modifications, or
supplements made in accordance herewith.
XV. FEES, EXPENSES and EXPENSE REIMBURSEMENT
State Street shall receive from the Trust such compensation for its services
provided pursuant to this Agreement as may be agreed to from time to time in a
written fee schedule approved by the parties. In the event of substantial change
in the mix of types of Portfolios or in the event of new types of Portfolios
offered by the Trust or modifications or changes to the service delivery
requirements, the parties shall review the existing fee structure and an
appropriate adjustment to the fee, if any, shall be negotiated by the parties
within ninety (90) days. The fees are accrued daily and billed monthly and shall
be due and payable upon receipt of the invoice. Upon the termination of this
Agreement before the end of any month, the fee for the part of the month before
such termination shall be prorated according to the proportion which such part
bears to the full monthly period and shall be payable upon the date of
termination of this Agreement. In addition, the Trust shall reimburse State
Street for its out-of-pocket costs and expenses incurred in connection with this
Agreement with respect to reasonable attorney's fees incurred by State Street to
collect any charges due under this Agreement.
The Trust agrees to promptly reimburse State Street for any equipment and
supplies specially ordered by or for the Trust (with the Trust's consent)
through State Street and for any other expenses not contemplated by this
Agreement that State Street may incur on the Trust's behalf at the Trust's
request and with the Trust's consent.
Each party will bear all expenses that are incurred in its operation and not
specifically assumed by the other party. Expenses to be borne by the Trust
include, but are not limited to: Organization expenses; cost of services of
independent accountants and outside legal and tax counsel (including such
counsel's review of the Trust's registration statement, proxy materials, federal
and state tax qualification as a regulated investment company and other reports
and materials prepared by State Street under this Agreement); cost of any
services contracted for by the Trust directly from parties other than State
Street; cost of trading operations and brokerage fees, commissions and transfer
taxes in connection with the purchase and sale of securities for the Trust;
investment advisory fees; taxes, insurance premiums and other fees and expenses
applicable to its operation; costs incidental to any meetings of shareholders
including, but not limited to, legal and accounting fees, proxy filing fees and
the costs of preparation, printing and mailing of any proxy materials; costs
incidental to Board meetings, including fees and expenses of Board members; the
salary and expenses of any officer, director/trustee or employee of the Trust;
costs incidental to the preparation, printing and distribution of the Trust's
registration statements and any amendments thereto and shareholder reports; cost
of typesetting and printing of prospectuses; cost of preparation and filing of
the Trust's tax returns, Form N-1A or N-2, Form N-14 and Form N-SAR, and all
notices, registrations and amendments associated with applicable federal and
state tax and securities laws; fidelity bond and directors' and officers'
liability insurance; and cost of independent pricing services used in computing
the Trust's NAV.
State Street is authorized to and may employ or associate with such person or
persons as it may deem desirable to assist it in performing its duties under
this Agreement; provided, however, that the compensation of such person or
persons shall be paid by State Street and State Street shall be as fully
responsible to the Trust for the acts and omissions of any such person or
persons as it is for its own acts and omissions.
XVI. ASSIGNMENT; SUCCESSOR AGENT
A. Assignment. This Agreement shall not be assigned by either party without the
prior written consent of the other party, except that either party may assign to
a successor all of or a substantial portion of its business, or to a party
controlling, controlled by, or under common control with such party.
B. Successor Agent. This Agreement shall be binding on and shall inure to the
benefit of each party and to their successors and permitted assigns. If a
successor agent for the Trust shall be appointed by the Trust, State Street
shall upon termination deliver to such successor agent all properties of the
Trust held by it hereunder.
In the event that no written order designating a successor agent or Proper
Instructions shall have been delivered to State Street on or before the date
when such termination shall become effective, then State Street shall have the
right to deliver to a bank or trust company, which is a "bank" as defined in the
1940 Act, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$100,000,000, all properties held by State Street under this Agreement.
Thereafter, such bank or trust company shall be the successor of State Street
under this Agreement.
XVII. ENTIRE AGREEMENT
This Agreement (including all schedules and attachments hereto) constitutes the
entire Agreement between the parties with respect to the subject matter hereof
and terminates and supersedes all prior agreements, representations, warranties,
commitments, statements, negotiations and undertakings with respect to such
services to be performed hereunder whether oral or in writing.
XXIII. WAIVER
The failure of a party to insist upon strict adherence to any term of this
Agreement on any occasion shall not be considered a waiver nor shall it deprive
such party of the right thereafter to insist upon strict adherence to that term
or any term of this Agreement. Any waiver must be in writing signed by the
waiving party.
XIX. HEADINGS NOT CONTROLLING
Headings used in this Agreement are for reference purposes only and shall not be
deemed a part of this Agreement.
XX. SURVIVAL
After expiration or termination of this Agreement, all provisions relating to
payment (Section XV and the fee schedule) shall survive until completion of
required payments. In addition, all provisions regarding termination (Section
XIV), indemnification, warranty, liability and limits thereon (Section XI and
Section XII) shall survive, unless and until the expiration of any time period
specified elsewhere in this Agreement with respect to the provision in question.
XXI. SEVERABILITY
In the event any provision of this Agreement is held illegal, invalid, void or
unenforceable, the balance shall remain in effect, and if any provision is
inapplicable to any person or circumstance it shall nevertheless remain
applicable to all other persons and circumstances.
XXII. GOVERNING LAW; JURISDICTION
This Agreement shall be deemed to have been made in The Commonwealth of
Massachusetts and shall be governed by and construed under and in accordance
with the laws of The Commonwealth of Massachusetts without giving effect to its
conflict of laws principles and rules. The parties agree that any dispute
arising herefrom shall be subject to the exclusive jurisdiction of courts
sitting in The Commonwealth of Massachusetts.
XXIII. REPRODUCTION OF DOCUMENTS
This Agreement and all schedules, exhibits, attachments and amendments hereto
may be reproduced by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process. The parties hereto each agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
XXIV. REMOTE ACCESS SERVICES ADDENDUM
State Street and the Trust agree to be bound by the terms of the Remote Access
Services Addendum attached hereto.
XXV. MISCELLANEOUS
The execution and delivery of this Agreement have been authorized by the Board
of the Trust and signed by an authorized officer of the Trust, acting as such,
and neither such authorization by the Board nor such execution and delivery by
such officer shall be deemed to have been made by any of them individually or to
impose any liability on any of them personally, and the obligations of this
Agreement are not binding upon any member of the Board or shareholders of the
Trust, but bind only the property of the Trust, or Portfolio, as provided in the
organizational documents.
Each party agrees to promptly sign all documents and take any additional actions
reasonably requested by the other to accomplish the purposes of this Agreement.
[Remainder of Page Intentionally Blank]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx (12/29/03)
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
INVESTMENT COMPANIES
(Listed on Exhibit A hereto)
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President - Treasurer
EXHIBIT A
FUNDS
FUND NAME
Capital Preservation Fund
Federated GNMA Trust
Federated U.S. Government Securities Fund: 2-5 Years
Federated Income Trust
Xxxxxx X. Xxxxx Money Market Fund
Federated Government Income Securities, Inc.
Federated High Yield Trust
Federated Limited Duration Government Fund
Federated Total Return Government Bond Fund
Federated U.S. Government Securities Fund: 1-3 Years
Federated American Leaders Fund, Inc.
Federated High Income Bond Fund, Inc.
Federated Municipal Securities Fund, Inc.
Federated Fund for US Government Securities
Federated Adjustable Rate Securities Fund
Federated Municipal Opportunities Fund, Inc.
Federated Muni and Stock Advantage Fund
Federated Stock Trust
Federated U.S. Government Bond Fund
Federated Equity Income Fund, Inc.
Federated Stock & Bond Fund, Inc.
Federated Income Securities Trust:
Federated Intermediate Income Fund
Federated Short-Term Income Fund
Federated Short-Term Municipal Trust
Federated Capital Income Fund
Intermediate Municipal Trust:
Federated Intermediate Municipal Trust
Cash Trust Series, Inc.:
Government Cash Series
Municipal Cash Series
Prime Cash Series
Treasury Cash Series
Cash Trust Series II:
Municipal Cash Series II
Treasury Cash Series II
Federated Institutional Trust:
Federated Government Ultrashort Duration Fund
Federated Municipal Securities Income Trust:
Federated California Municipal Income Fund
Federated Michigan Intermediate Municipal Trust
Federated New York Municipal Income Fund
Federated Ohio Municipal Income Fund
Federated Pennsylvania Municipal Income Fund
Federated North Carolina Municipal Income Fund
Federated Total Return Series, Inc.:
Federated Limited Duration Fund
Federated Mortgage Fund
Federated Ultrashort Bond Fund
Federated Fixed Income Securities, Inc.:
Federated Municipal Ultrashort Fund
Federated Institutional Trust:
Federated Institutional High Yield Bond Fund
Federated Equity Funds:
Federated Capital Appreciation Fund
Federated Communications Technology Fund
Federated Growth Strategies Fund
Federated Large Cap Growth Fund
Federated Market Opportunity Fund
Federated Xxxxxxxx Fund
Federated Xxxxxxxx Small Cap Fund
Federated Index Trust:
Federated Max-Cap Index Fund
Federated Mid-Cap Index Fund
Federated Mini-Cap Index Fund
Federated Premier Municipal Income:
Federated Premier Intermediate Municipal Income Fund
Federated Premier Municipal Income Fund
Federated Core Trust II, LP:
Emerging Markets Fixed Income Core Fund*
Capital Appreciation Core Fund
Federated Fixed Income Securities, Inc.:
Federated Limited Term Fund
Federated Limited Term Municipal Fund
Federated Strategic Income Fund
Federated Investment Series Funds, Inc.:
Federated Bond Fund
Federated Managed Allocation Portfolios:
Federated Growth Allocation Fund
Federated Conservative Allocation Fund
Federated Moderate Allocation Fund
Federated Total Return Series, Inc.:
Federated Total Return Bond Fund
Federated International Series Inc.:*
Federated International Bond Fund
Federated International Equity Fund
Federated World Investment Series, Inc.:*
Federated European Equity Fund
Federated Global Equity Fund
Federated Global Value Fund
Federated International Capital Appreciation Fund
Federated International High Income Fund
Federated International Small Company Fund
Federated International Value Fund
Federated Core Trust:
Federated Mortgage Core Portfolio
High Yield Bond Portfolio
Federated Insurance Series:
Federated American Leader Fund II
Federated Capital Appreciation Fund II
Federated Capital Income Fund II
Federated Equity Income Fund II
Federated Fund for U.S. Government Securities II
Federated Growth Strategies Fund II
Federated High Income Bond Fund II
Federated International Equity Fund II*
Federated Xxxxxxxx Fund II
Federated Prime Money Fund II
Federated Quality Bond Fund II
Federated Total Return Bond Fund II
Money Market Obligations Trust:
Tax-free Instruments Trust
Automated Government Cash Reserves
Automated Treasury Cash Reserves
U.S. Treasury Cash Reserves
Automated Cash Management Trust
Federated Master Trust
Government Obligations Fund
Government Obligations Tax-Managed Fund
Liquid Cash Trust
Municipal Obligations Fund
Prime Cash Obligations Fund
Prime Obligations Fund
Prime Value Obligations Fund
Tax-Free Obligations Fund
Treasury Obligations Fund
Trust for Government Cash Reserves
Trust for Short Term U.S. Government Securities
Automated Government Money Trust
Federated Short-Term U.S. Government Trust
Liberty U.S. Government Money Market Trust
Money Market Management
Money Market Trust
Trust for U.S. Treasury Obligations
Alabama Municipal Cash Trust
Arizona Municipal Cash Trust
California Municipal Cash Trust
Connecticut Municipal Cash Trust
Florida Municipal Cash Trust
Georgia Municipal Cash Trust
Maryland Municipal Cash Trust
Massachusetts Municipal Cash Trust
Michigan Municipal Cash Trust
Minnesota Municipal Cash Trust
New Jersey Municipal Cash Trust
New York Municipal Cash Trust
North Carolina Municipal Cash Trust
Ohio Municipal Cash Trust
Pennsylvania Municipal Cash Trust
Virginia Municipal Cash Trust
Federated Tax-Free Trust
*As of the date of this Agreement, the Trust has provided proper notice under
Section XIV.B of the Agreement that the Agreement may be terminated solely with
respect to such Trust by May 31, 2004.
EXHIBIT B
PRICE SOURCE AUTHORIZATION
To: State Street Bank and Trust Company
From: Federated Investors
Client Name: Federated Investors
Client Address: Federated Investors
Federated Investors Tower
Xxxxxxxxxx, XX 00000
Date: 12/29/2003
Re: PRICE SOURCE AUTHORIZATION
Reference is made to the Financial Administration and Accounting Services
Agreement dated January 1, 2004 between Federated Services Company ("FSCo") and
State Street Bank and Trust Company ("State Street"). Capitalized terms used in
this Price Source Authorization or in any attachment or supplement shall have
the meanings provided in the Financial Administration and Accounting Services
Agreement unless otherwise specified. Pursuant to the Financial Administration
and Accounting Services Agreement, FSCo hereby directs State Street to calculate
the net asset value ("NAV") of the Funds or, if applicable, its Series, in
accordance with the terms of each Fund's or Series' currently effective
Prospectus. State Street will perform the NAV calculation subject to the terms
and conditions of the Financial Administration and Accounting Services Agreement
and this Authorization.
FSCo hereby authorizes State Street to use the pricing sources specified on the
attached Authorization Matrix (as amended from time to time) as sources for
prices of assets in calculating the net asset value of the Funds. FSCo
understands that State Street does not assume responsibility for the accuracy of
the quotations provided by the specified pricing sources and that State Street
shall have no liability for any incorrect data provided by the pricing sources
specified by FSCo or a Fund, except as provided under the Portfolio Accounting
and Administration Services Agreement (including agreed upon tolerance checks as
to the data furnished and calculating the net asset value of the Fund in
accordance with the data furnished to State Street). FSCo also acknowledges that
prices supplied by the Funds or an affiliate may be subject to approval of the
Fund's Board and are not the responsibility of State Street.
FSCo agrees to indemnify and hold State Street harmless as provided under the
Financial Administration and Accounting Services Agreement.
State Street agrees that written notice of any change in the name of any
specified pricing source will be sent to FSCo as such information is available
to State Street.
Kindly acknowledge your acceptance of the terms of this letter in the space
provided below.
(CLIENT/FUND NAME)
By: /s/ Xxxxxxx X. Xxxxxx The foregoing terms are hereby accepted.
Title: Senior Vice President - Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxx X'Xxxxxxx
Vice President
[OBJECT OMITTED] Authorization Matrix
As of: 03/30/2004
AUTHORIZATION MATRIX to be attached to Price Source Authorization dated December 29, 2003
Effective Date: January 1 2004(supersedes prior Authorization Matrices)
Note: [Please submit Client Name, Fund Name and/or List of Funds with this form]
-----------------------------------------------------------------------------------------------------------------------
------------------------------ Primary Source Secondary Source Tertiary Source Pricing Pricing Valuation
Security Type Logic Default Logic Point
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
EQUITIES
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
U. S. Listed Equities MARKET CLOSE
(NYSE, AMEX) REUTERS BRIDGE FT Interactive LAST MEAN
Data
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
U.S. OTC Equities REUTERS BRIDGE FT Interactive NOCP MEAN MARKET CLOSE
(Nasdaq) Data
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Foreign Equities REUTERS BRIDGE FT Interactive LAST MEAN MARKET CLOSE
Data
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Listed ADR's REUTERS BRIDGE FT Interactive LAST MEAN MARKET CLOSE
Data
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
FIXED INCOME
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Municipal Bonds XX XXXXX FT Interactive BLOOMBERG MEAN EVALUATED
Data
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
US Bonds (Treasuries, REUTERS FT Interactive BLOOMBERG MEAN EVALUATED
MBS, ABS, Data
Corporates)
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Eurobonds/Foreign Bonds FT Interactive FRI CORP BLOOMBERG LAST BID
Data
---------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
OTHER ASSETS
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Options REUTERS BRIDGE BLOOMBERG LAST MEAN MARKET CLOSE
---------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Futures REUTERS BRIDGE BLOOMBERG LAST MEAN SETTLEMENT
---------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
Non - Listed ADR's FT Interactive BLOOMBERG LAST MEAN
Data
---------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
EXCHANGE RATES
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
REUTERS FT Interactive BLOOMBERG SNAPSHOT 12:00 NOON
Data
-----------------------------------------------------------------------------------------------------------------------
FORWARD POINTS
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
PRICE SOURCE AND METHODOLOGY AUTHORIZATION
INSTRUCTIONS: FOR EACH SECURITY TYPE ALLOWED BY THE FUND PROSPECTUS, PLEASE
INDICATE THE PRIMARY, SECONDARY AND TERTIARY SOURCE TO BE USED IN CALCULATING
NET ASSET VALUE FOR THE FUNDS IDENTIFIED. NOTE: IF INVESTMENT MANAGER IS A
PRICING SOURCE, PLEASE SPECIFY EXPLICITLY.
STATE STREET PERFORMS A DATA QUALITY REVIEW PROCESS AS SPECIFIED IN THE SOURCES
STATUS PRICING MATRIX ON THE NAVIGATOR PRICING SYSTEM WHICH SPECIFIES PRICING
TOLERANCE THRESHOLDS, INDEX AND PRICE AGING DETAILS. THE SOURCES STATUS PRICING
MATRIX WILL BE PROVIDED FOR YOUR INFORMATION AND REVIEW.
AUTHORIZED BY: /S/ XXXXXXX X. XXXXXX ACCEPTED: _/S/ XXX X'XXXXXXX
FUND OFFICER STATE STREET VICE PRESIDENT
--------------------------------------------------------------------------------------------------------------------
Explanation of Fields
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Client: Indicate the name of the Client and the Fund name or if multiple funds, attach a list of fund
names
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Primary Source: Indicate the primary source for prices for the security type. If an Investment Manager is a
pricing source, please specify explicitly.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Secondary Source: Indicate the secondary source for prices for the security type. If an Investment Manager is
a pricing source, please specify explicitly.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Tertiary Source: Indicate the tertiary (3rd level) source for prices for the security type. If an Investment
Manager is a pricing source, please specify explicitly.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Pricing Logic: Indicate the price type to be referenced for the security type: Ask, Bid, Close, Evaluated,
Last, Official Close etc.- Please note that the closing price reported by an exchange (which
may sometimes be referred to by the exchange or one or more pricing agents as the "official
close", the "official closing price" or other similar term) will be taken to be the "most
recent sale price" for purposes of this section. In these instances, it is believed to be
representative of the value at the close of the exchange.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Pricing Default Indicate the price type to be referenced for the security type: Ask, Bid, Close, Evaluated, Last,
Logic: etc. in the instance where the preferred price type is not available.
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Authorized By: Provide the signature of the person authorizing the completion of the Price Source
Authorization
--------------------------------------------------------------------------------------------------------------------
--------------------------------------------------------------------------------------------------------------------
Date: Indicate the date the Price Source Authorization was completed
--------------------------------------------------------------------------------------------------------------------
To: State Street Bank and Trust Company
From: Federated Investors
Fund Entity Name: Federated Investors
Fund Entity Address: Federated Investors Tower, Pittsburgh, PA. 15222
Date: 12/29/2003
Re: FAIR VALUE PRICING AUTHORIZATION
Reference is made to the Financial Administration and Accounting Services
Agreement dated January 1, 2004 between Federated Investors (the "Fund") and
State Street Bank and Trust Company ("State Street"). Capitalized terms used in
this Fair Value Pricing Authorization or in any attachment or supplement shall
have the meanings provided in the Financial Administration and Accounting
Services Agreement unless otherwise specified. Pursuant to the Financial
Administration and Accounting Services Agreement, the Fund hereby directs State
Street to calculate the net asset value ("NAV") of the Fund or, if applicable,
its Portfolios, in accordance with the terms of the Fund's or Portfolio's
currently effective Prospectus or other governing documents. State Street will
perform the NAV calculation subject to the terms and conditions of the Financial
Administration and Accounting Services Agreement, Price Source Authorization,
and this Authorization.
The Fund's Board of Directors/Trustees has approved the vendor and fair value
procedures as detailed on the Fair Value Pricing Authorization Form on page 2.
The Fund hereby authorizes State Street to use the Fair Value pricing source
specified on the attached Fair Value Authorization Form to obtain adjustment
factors to be applied to the closing prices of the securities of the Fund or the
Fund's portfolio(s) to calculate a fair-value-adjusted market value to be used
in the calculation of the net asset value of the Fund or its Portfolios. The
Fund understands that State Street does not assume responsibility for the
accuracy of the adjustment factors or other fair value pricing information
provided by the specified fair value vendor and that State Street shall have no
liability for any incorrect data provided by said vendor specified by the Fund,
except as may arise from State Street's lack of reasonable care in applying any
adjustment factors to the closing prices of the Fund's or Portfolio's securities
and/or (if applicable) calculating the fair value adjusted net asset value of
the Fund or Portfolio in accordance with the data furnished to State Street.
The Fund agrees to indemnify and hold State Street harmless from any claim, loss
or damage arising as a result of using Fair Value adjustment factors or prices
furnished by any specified Fair Value pricing source.
The Fund agrees to notify State Street promptly in writing if the fair value
pricing procedures authorized by the Fund's Board have been changed.
Kindly acknowledge your acceptance of the terms of this letter in the space
provided below.
By: /s/ Xxxxxxx X. Xxxxxx The foregoing terms are hereby accepted.
[Authorized Officer of the Fund]
Title: Senior Vice President - Treasurer
STATE STREET BANK AND TRUST COMPANY
By: /s/ Xxx X'Xxxxxxx
Vice President
Fund Entity Name: Federated Investors
(Attach list, if required, of funds and portfolios, if applicable, or create
separate forms if multiple triggers apply)
Effective Date: 1-1-2004
Vendor: ITG
Market Trigger(s): Monitored by Client
Timing of Trigger(s): 4:30 p.m.
Threshold to Invoke Fair Value (+ or -) Monitored by Client*%
*(Fair Value invoked when client notification is received)
Filter on Confidence Interval (FT Interactive Only):
Yes_________ No___________
Minimum Confidence Interval ___________%
Authorized By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President - Treasurer
Officer of the Fund
Accepted By: /s/ Xxx X'Xxxxxxx
Name: Xxx X'Xxxxxxx
Vice President
State Street Bank and Trust Company
---------------------------------------------------------------------------
Fund Entity Indicate fund name or if multiple funds or portfolios of
Name a fund, attach a complete list
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Effective Date Date the funds are to begin using Fair Value vendor feed
at SSC
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Vendor Name of Fair Value vendor to be used
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Market Name of Trigger used to determine when to invoke Fair
Trigger(s) Value Pricing procedures, i.e., S&P 500, Nikkei
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Timing of A specific time at which the Trigger determines Fair
Trigger(s) Value Pricing procedures should be initiated, i.e., Japan
close to 4 PM EST (Nikkei Futures), 4 PM EST prior day to
4 PM EST current day (S&P500)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Threshold to Minimum percentage of movement of designated Trigger to
Invoke Fair determine that Fair Value should be invoked
Value
---------------------------------------------------------------------------
---------------------------------------------------------------------------
FT Interactive
Only
Filter on Indicate "Yes" if the fund should impose a confidence
Confidence interval filter to determine which securities should be
Interval Fair Valued
Minimum
Confidence Minimum confidence interval percentage used to apply Fair
Interval Value Adjustment Factors
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Authorized By Provide signature of the Fund Officer authorizing the
completion of the Fair Value Pricing Authorization Form
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Accepted By Provide signature of a Vice President from State Street
Fund Group accepting the completion of the Fair Value
Pricing Authorization Form
---------------------------------------------------------------------------
EXHIBIT C
Compliance Procedures
1940 Act Preferred Shares Asset Coverage
Section 18(h) of the Investment Company Act of 1940
"Asset coverage" of a class of senior security of an issuer which is a stock
means the ratio which the value of the total assets of such issuer, less all
liabilities and indebtedness not represented by senior securities, bears to the
aggregate amount of senior securities representing indebtedness of such issuer
plus the aggregate of the involuntary liquidation preference of such class of
senior security which is a stock. The involuntary liquidation preference of a
class of senior security which is a stock shall be deemed to mean the amount to
which such class of senior security would be entitled on involuntary liquidation
of the issuer in preference to a security junior to it.
Frequency: Monthly, as of the last business day of each month
Calculation: Determine whether the Asset Coverage is at least 200%
----------------------------------------------------------------------
Total fund net assets / Value of senior securities
representing indebtedness
----------------------------------------------------------------------
----------------------------------------------------------------------
+ accrued unpaid dividends + +
on pfd shs
----------------------------------------------------------------------
----------------------------------------------------------------------
+ liquidation preference on pfd + liquidation preference on
shares pfd shs
----------------------------------------------------------------------
----------------------------------------------------------------------
+ value of senior securities + accrued unpaid dividends
representing indebtedness on pfd shs
----------------------------------------------------------------------
----------------------------------------------------------------------
= Asset Coverage Percentage
----------------------------------------------------------------------
----------------------------------------------------------------------
> 200% = Fund Passes Test
----------------------------------------------------------------------
----------------------------------------------------------------------
< 200% = Fund Fails Test
----------------------------------------------------------------------
Tolerance:
State Street Fund Administration (SSFA) will complete the test on a monthly
basis and report the results of the test to Federated Investors Inc. Once SSFA
has notified Federated of the test results, Federated may impose certain
restrictions on trading.
Cure Period:
Should the Fund fail to maintain the 1940 Act Preferred Shares Asset Coverage as
of a given Valuation Date (the last business day of each month), the cure date
is as of the last business day of the month following such Valuation Date.
Preferred Shares Basic Maintenance Amount:
Frequency: Monthly
Reporting Deadlines: As of the Closing Time (February 18, 2003), on a pro forma
basis assuming the receipt of the net proceeds from the sale of the AMPS
and using portfolio holdings and valuations as of the close of business on
any day not more than six business days prior to the Closing Time (provided
that the total net assets of the Fund as of the Closing Time have not
declined by more than 5% or more from such valuation date). [Note:
Compliance as of the Closing Time (using portfolio holdings and valuations
as of the Closing Time) with the Investment Company Act Preferred Shares
Asset Coverage is also required.
On the first business day after the date of original issue (i.e., February
18, 2003) of the preferred shares (by 5 pm ET); as of the close of business
on original issue date
On the seventh business day after each monthly Valuation Date (by 5 pm ET),
as of the Valuation Date
In instances of failure to satisfy Preferred Shares Basic Maintenance
Amount as of any Valuation Date, on the seventh business day after the
Preferred Shares Basic Maintenance Cure Date (Deadline = the 14th business
day after the failure Valuation Date) (by 5 pm ET), as of the Preferred
Shares Basic Maintenance Cure Date
On the seventh business day after the Fund has redeemed Common Shares (by 5
pm ET)
On the seventh business day after the ratio of the Discounted Value of
(Fitch or Xxxxx'x) Eligible Assets to the Preferred Shares Basic
Maintenance Amount as of any monthly Valuation Date is less than or equal
to 105% (by 5 pm ET) [Note: This adds nothing to the existing requirement
to furnish a report as of each Valuation Date].
On the seventh business day after a request by Moody's or Fitch (by 5pm
ET), as of the date of such request
On the second business day prior to the first day of a Special Rate Period
(by 11 am ET), as of the third business day prior to the first day of the
Special Rate Period and assuming for purposes of the calculation that (a)
the Maximum Rate is the Maximum Rate on such third business day as if such
day were the Auction date for the proposed Special Rate Period and (b) the
Moody's and Fitch Discount Factors are determined by reference to an
Exposure Period of 8 weeks.
Cure Period:
Should the Fund fail to satisfy the Preferred Shares Basic Maintenance Amount as
of a given Valuation Date (the last business day of each month), the cure date
is as of the seventh business day following such Valuation Date.
Calculation:
To ensure that the eligible assets (assets discounted based upon Fitch's and
Moody's ratings, as described below) of the Fund are greater than the Fund's
basic maintenance amount (as described below). If the eligible assets are less
than the basic maintenance amount, the Fund fails the test.
Basic Maintenance Amount (BMA):
The Fund's basic maintenance amount is the sum of the following:
---------------------------------------------------------------------------
BMA Component Calculation
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. Sum of:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
a. Liquidation Value of the
outstanding shares of Number of preferred shares
preferred stock outstanding * liquidation price of
The product of the number of preferred shares
Preferred Shares outstanding
on the Valuation Date Federated to inform SSFA of any
multiplied by the liquidation instance of a redemption premium.
price of $25,000 (plus the
product of the number of
shares of any other series of
preferred shares outstanding
on such date multiplied by the
liquidation preference of such
shares) plus any redemption
premium applicable to
Preferred Shares (or other
preferred shares) then subject
to redemption
---------------------------------------------------------------------------
---------------------------------------------------------------------------
b. Current period dividend
exposure For each series of preferred shares:
The aggregate amount of
dividends that will have Number of preferred shares
accumulated at the respective outstanding * $25,000 * Auction
Applicable Rates (whether or rate * (# of days in dividend
not earned or declared) to period / 365 [if dividend period =
(but not including) the first 7 days or 360 [for all other
respective Dividend Payment dividend periods])
Dates for Preferred Shares
outstanding that follows such
Valuation Date (plus the
aggregate amount of
dividends, whether or not
earned or declared, that will
have accumulated in respect of
other outstanding preferred
shares to, but not including,
the first respective dividend
payment dates for such other
shares that follow such
Valuation Date)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
c. Projected dividend amount
The aggregate amount of For each series of preferred shares:
dividends that would
accumulate on shares of each # of preferred shares outstanding *
series of Preferred Shares $25,000 * Maximum Rate* Volatility
Factor
* # of days from first Dividend
Payment Date following Valuation
Date through the 49th day after
Valuation Date
---------------------------------------------------------------------------
---------------------------------------------------------------------------
365 [if dividend period = 7 days] or
360 [for all other dividend
periods]
---------------------------------------------------------------------------
---------------------------------------------------------------------------
outstanding from such first Maximum rate= Rate Multiple (1.10
respective Dividend Payment if prevailing rating is Aa3 or
Date therefore through the higher for Xxxxx'x, and AA- or
49th day after such Valuation higher for Fitch) multiplied by (A)
Date, the "AA" Financial Composite
Commercial Paper Rate (in the case
of Minimum Rate Periods and Special
Rate Periods of fewer than 183 Rate
Period Days) or (B) the Treasury
Xxxx Rate in the case of Special
Rate Periods of more than 182 Rate
Period Days but fewer than 365 Rate
Period Days.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
at the Maximum Rate Federated to notify SSFA in case of
(calculated as if such :
Valuation Date were the |X| special rate period
Auction Date for the Rate |X| credit rating for preferred
Period commencing on such shares falls below Aa3 for
Dividend Payment Date) Moody's or AA- for Fitch
|X| if a Failure to Deposit occurs
|X| if all outstanding shares are
subject to Submitted Hold Orders
---------------------------------------------------------------------------
---------------------------------------------------------------------------
for a Minimum Rate Period of
shares of such series to
commence on such Dividend
Payment Date,
---------------------------------------------------------------------------
---------------------------------------------------------------------------
assuming, solely for purposes
of the foregoing, that if on
such Valuation Date the Fund
shall have delivered a Notice
of Special Rate Period to the
Auction Agent with respect to
shares of such series, such
Maximum Rate shall be the
higher of
---------------------------------------------------------------------------
---------------------------------------------------------------------------
i. the Maximum Rate for the
Special Rate Period of
shares of such series to
commence on such Dividend
Payment Date and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
ii. the Maximum Rate for a Minimum
Rate Period of shares of
such series to commence on
such Dividend Payment Date,
multipled by the greater of
---------------------------------------------------------------------------
---------------------------------------------------------------------------
iii. the Xxxxx'x Volatility Factor
(if Xxxxx'x is then rating SSFA will use a volatility rate of
the Preferred Shares) and 2.75 for conservatism.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
iv. the Fitch Volatility Factor
(if Fitch is then rating
the Preferred Shares)
applicable to a Minimum
Rate Period, or,
---------------------------------------------------------------------------
---------------------------------------------------------------------------
in the event the Fund shall
have delivered a Notice of
Special Rate Period to the
Auction Agent with respect to
such shares of such series
designating a Special Rate
Period consisting of 56 Rate
Period Days or more the
greater of
---------------------------------------------------------------------------
---------------------------------------------------------------------------
v. the Moody's Volatility Factor
and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
vi. Fitch Volatility Factor
applicable to a Special Rate
Period of that length
---------------------------------------------------------------------------
---------------------------------------------------------------------------
(plus the aggregate amount of
dividends that would
accumulate at the maximum
dividend rate or rates on any
other preferred stock
outstanding from such
respective dividend payment
dates through the 56th day
after such Valuation Date, as
established by or pursuant to
the respective statements
supplementary establishing and
fixing the rights and
preferences of such other
preferred shares), (except that
---------------------------------------------------------------------------
---------------------------------------------------------------------------
if such Valuation Date occurs
at a time when a Failure to
Deposit (or, in the case of
preferred stock other than
Preferred Shares, a failure
similar to a Failure to
Deposit) has occurred that has
not been cured, the dividend
for purposes of calculation
would accumulate at the
current dividend rate then
applicable to the shares in
respect of which such failure
has occurred and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
for those days during the
period described in this
subparagraph (C) in respect of
which the Applicable Rate in
effect immediately prior to
such Dividend Payment Date
will remain in effect (or, in
the case of preferred shares
other than Preferred Shares,
in respect of which the
dividend rate or rates in
effect immediately prior to
such respective dividend
payment dates will remain in
effect), the dividend for
purposes of calculation would
accumulate at such Applicable
Rate (or other rate or rates,
as the case may be) in respect
of those days)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
d. The amount of anticipated
expenses of the Fund for the Current daily expense accrual * 90
90 days subsequent to such days
Valuation Date.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
e. The amount of the Fund's
Maximum Potential Gross-up Federated to inform SSFA if such
Payment Liability situation exists.
in respect of Preferred Shares
(and similar amounts payable Estimated taxable distribution
in respect of other preferred (capital gain + taxable income) to
shares, as of such Valuation preferred shares * 38.6% federal
Date. tax.
MAXIMUM POTENTIAL GROSS-UP
PAYMENT LIABILITY as of any
Valuation Date, shall mean the
aggregate amount of Gross-up
Payments that would be due if
the Fund were to make Taxable
Allocations, with respect to
any taxable year, estimated
based upon dividends paid and
the amount of undistributed
realized net capital gains and
other taxable income earned by
the Fund, as of the end of the
calendar month immediately
preceding such Valuation Date,
and assuming such Gross-up
Payments are fully taxable.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
f. The amount of any indebtedness
or obligations of the Fund Federated to inform SSFA if such
senior in right of payment to situation exists.
the Preferred Shares; and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
g. Any current liabilities as of
such Valuation Date to the Liabilities from the trial balance.
extent not reflected in any of
1a through 1f (including,
without limitation, any
payables for Municipal
Obligations purchased as of
such Valuation Date and any
liabilities incurred for the
purpose of clearing securities
transactions)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. LESS:
the face value of Less:
(i.e., for purposes of current
Moody's guidelines, The value of any of the Fund's
a. cash, assets irrevocably deposited by the
b. short-term Municipal Fund for the payment of any of 1a
Obligations rated MIG-1, through 1g.
VMIG-1 or P-1, and
c. short-term securities that are
the direct obligation of the
U.S. government, provided in
each case that such securities
mature on or prior to the date
upon which any of 1a through
1g become payable, otherwise
the Moody's Discounted Value)
of any of the Fund's assets
irrevocably deposited by the Fund
for the payment of any of 1a
through 1g
---------------------------------------------------------------------------
===========================================================================
FITCH
===========================================================================
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Fitch Eligible Assets:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Eligible Asset Component Calculation
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. Cash,
Cash per trial balance
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. Receivables for Municipal
Obligations Sold, or Receivable for Municipal
Obligations Sold per trial
balance. Ensure that the
receivables are due to settle
within five business days of the
Valuation Date.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. Unrealized Gain from Hedging
Transactions Unrealized Gain from Hedging
Transactions' shall mean, as of any
Valuation Date, (1) in the case of
a swap contract (including total
return swaps and interest rate
swaps), the amount, if any, that
the Fund would receive if the swap
contract were terminated as of the
Valuation Date, (2) in the case of
an interest rate futures contract,
the amount, if any, that the Fund
would receive if it were to
eliminate its open futures position
as of the Valuation Date by
entering into an offsetting
contract of the same specifications
or (3) in the case of an option on
interest rate futures contracts,
the Market Value thereof as of the
Valuation Date. For the purpose of
determining the Discounted Value of
any Unrealized Gain from Hedging
Transactions, (i) unrealized gain
from a swap contract shall be
treated in the same manner as a
Municipal Obligation, except that
the issuer rating assigned to the
swap counterparty shall be used,
and (ii) unrealized gain from an
interest rate futures contract or
an option on interest rate futures
contracts shall be deemed to have a
rating of A by Fitch. The amount
of any unrealized loss from hedging
transactions as of any Valuation
Date shall be treated as a
reduction to Fitch Eligible Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
4. Municipal Obligation that
---------------------------------------------------------------------------
---------------------------------------------------------------------------
a. Pays interest in cash,
Federated to inform SSFA in any
instance where interest is not paid
in cash.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
b. Does not have its Fitch rating
suspended by Fitch, and Federated to inform SSFA in any
instance where Fitch's ratings have
been suspended.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
c. Is part of an issue of
Municipal Obligations of at Issuer size from Bloomberg will be
least $10,000,000 used to determine eligibility.
SSFA to perform the analysis based
on cusip and notify Federated of
any issues below $10,000,000.
Federated will determine and
communicate to SSFA whether or not
the cusip is part of an overall
issue of at least $10,000,000.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
For purposes of applying the following requirements for Single Issuer
Concentration, State Concentration and applying the applicable Fitch
Discount Factor:
--------------------------------------------------------------------------
1. If a Municipal Obligation is not rated by Fitch but is rated by
Moody's and S&P, such Municipal Obligation (excluding short-term
Municipal Obligations) will be deemed to have the Fitch rating which
is the lower of the Moody's and S&P rating.
2. If a Municipal Obligation is not rated by Fitch but is rated by
Moody's or S&P, such Municipal Obligation (excluding short-term
Municipal Obligations) will be deemed to have such rating.
SSFA will obtain ratings from Bloomberg for new buys and for the entire
portfolio monthly.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
A. Single Issuer Concentration:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. Municipal Obligations issued
by any one issuer and rated BB or For purposes of identifying single
lower, or not rated, may comprise issuers, the first six digits of
no more than 4% of total Fitch the municipal security's cusip will
Eligible Assets. be considered the issuer
identifier. It is possible that
the six digit cusip may represent a
conduit rather than the true
issuer. Therefore, if any issuer
exceeds the set limit, SSFA will
research the true issuer on
Bloomberg and notify Federated.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. The total amount identified in
item 1 (above), together with any
Municipal Obligations issued by
the same issuer and rated BBB by
Fitch may comprise no more than
6% of total Fitch Eligible Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. The total amount identified in
item 2 (above) together with any
Municipal Obligations issued by
the same issuer and rated A by
Fitch may comprise no more than
10% of total Fitch Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
4. The total amount identified in
item 3 (above) together with any
Municipal Obligations issued by
the same issuer and rated AA by
Fitch may comprise no more than
20% of total Fitch Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
For purposes of the calculations For purposes of this test, SSFA
in items 1 - 4 (above), any will assume that the rating
Municipal Obligation backed by provided by Bloomberg is for the
the guaranty, letter of credit or obligation AND based solely on the
insurance issued by a third party underlying credit enhancement,
shall be deemed to be issued by unless information is supplied by
such third party if the issuance Federated.
of such third party credit is the
sole determinant of the rating on
such Municipal Obligations; and
any Municipal Obligation for
which the nominal issuer is a
conduit for a third party the
obligations of which are the sole
source of revenues for the
payment of such Municipal
Obligation shall be deemed to be
issued by such third party.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
B. State Concentration:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. Municipal Obligations issued
by issuers located within a
single state or territory and
rated BB or lower or not rated
may comprise no more than 12% of
total Fitch Eligible Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. The total amount identified in
item 1 (above), together with any
Municipal Obligations issued by
issuers located within the same
state or territory and rated BBB
by Fitch may comprise no more
than 20% of total Fitch Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. The total amount identified in
item 2 (above) together with any
Municipal Obligations issued by
issuers located within the same
state or territory and rated A by
Fitch may comprise no more than
40% of total Fitch Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
4. The total amount identified in
item 3 (above) together with any
Municipal Obligations issued by
issuers located within the same
state or territory and rated AA
by Fitch may comprise no more
than 60% of total Fitch Eligible
Assets
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
For purposes of applying the foregoing requirements for Single Issuer
Concentration and State Concentration:
1. Eligible Assets shall be calculated without including cash; and
2. Municipal Obligations rated F1 by Fitch or, if not rated by Fitch,
rated XXX-0, XXXX-0 or P-1 by Moody's; or, if not rated by Moody's,
rated A-1+/AA or SP-1+/AA by S&P shall be considered to have a
long-term rating of A.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Adjustments to Fitch's Eligible
Assets for Futures, Options and
Forward Commitments:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. For purposes of determining
whether the Fund has Fitch
Eligible Assets with an aggregate
Discounted Value that equals or
exceeds the Preferred Shares
Basic Maintenance Amount,
the Discounted Value of Fitch
Eligible Assets which the Fund is
obligated to deliver or receive
pursuant to an outstanding option
shall be as follows:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
a. assets subject to call options
written by the Fund which are SSFA will test whether the written
either exchange-traded and call options expire within 49 days
"readily reversible" or which after the Valuation Date.
expire within 49 days after
the date as of which such If the 49 day limit test is not
valuation is made shall be passed, SSFA will contact Federated
valued at the lesser of: to determine whether the written
call options are exchange-traded
and "readily reversible".
---------------------------------------------------------------------------
---------------------------------------------------------------------------
i. Discounted Value and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
ii. the exercise price of the call
option written by the Fund;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
b. assets subject to call options
written by the Fund not
meeting the requirements of
clause (a) of this sentence
shall have no value;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
c. assets subject to put options
written by the Fund shall be
valued at the lesser of:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
i. the exercise price and
ii. the Discounted Value of the
subject security; and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
d. where delivery may be made to
the Fund with any security of Federated to inform SSFA of the
a class of securities, the various securities of the class of
Fund shall assume it will take securities if such situation exists.
delivery of the security with
the lowest Discounted Value.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. For purposes of determining
whether the Fund has Fitch
Eligible Assets with an aggregate
Discounted Value that equals or
exceeds the Preferred Shares
Basic Maintenance Amount,
the following amounts shall be
subtracted from the aggregate
Discounted Value of the Fitch
Eligible Assets held by the Fund:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
a. 10% of the exercise price of a
written call option;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
b. the exercise price of any
written put option;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
c. the settlement price of the
underlying futures contract if
the Fund writes put options on
a futures contract
---------------------------------------------------------------------------
---------------------------------------------------------------------------
d. 105% of the Market Value of
the underlying futures
contracts if the Fund writes
call options on a futures
contract and does not own the
underlying contract.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. For purposes of determining
whether the Fund has Fitch
Eligible Assets with an aggregate
Discounted Value that equals or
exceeds the Preferred Shares Basic
Maintenance Amount,
the Discounted Value of Forward
Commitments will be the Discounted
Value as calculated by applying
the respective Fitch Discount
Factor.
---------------------------------------------------------------------------
Discounting Fitch's Assets: Once the above procedures have been performed,
determine the discounted market value for each security. Discount each security
as follows:
RATING CATEGORY
EXPOSURE PERIOD AAA* AA* A* BBB* F1** UNRATED***
7 weeks 151% 159% 166% 173% 136% 225%
8 weeks or less
but greater 154% 161% 168% 176% 137% 231%
than 7 weeks
9 weeks or less
but greater 158% 163% 170% 177% 138% 240%
than 8 weeks
* Fitch rating.
** Municipal Obligations rated F2 by Fitch, which do not mature or have a
demand feature at par exercisable in 30 days and which do not have a
long-term rating.
*** Municipal Obligations rated less than BBB by Fitch or unrated.
Notwithstanding the foregoing:
1. The Fitch Discount Factor for short-term Municipal Obligations will be
115%, so long as:
a. Such Municipal Obligations are rated at least F2 by Fitch (or, if not
rated by Fitch, rated XXX-0, XXXX-0 or P-1 by Moody's or at least A-1+
or SP-1+ by S&P) and
b. Mature or have a demand feature at par exercisable in 30 days or less, and
2. No Fitch Discount Factor will be applied to cash or to Receivables for
Municipal Obligations Sold.
---------------------------------------------------------------------------
When the Fund sells a Municipal
Obligation and agrees to repurchase
such Municipal Obligation at a
future date, such Municipal
Obligation shall be valued at its
Discounted Value for purposes of
determining Fitch Eligible Assets,
and the amount of the repurchase
price of such Municipal Obligation
shall be included as a liability for
purposes of calculating the
Preferred Shares Basic Maintenance
Amount.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
When the Fund purchases a Fitch
Eligible Asset and agrees to sell it
at a future date, such Fitch
Eligible Asset shall be valued at
the amount of cash to be received by
the Fund upon such future date,
provided that the counterparty to
the transaction has a long-term debt
rating of at least A by Fitch and
the transaction has a term of no
more than 30 days; otherwise, such
Fitch Eligible Asset shall be valued
at the Discounted Value of such
Fitch Eligible Asset.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Notwithstanding the foregoing, an SSFA will assume this paragraph is
asset will not be considered a Fitch not applicable unless information
Eligible Asset for purposes of is provided by Federated.
determining the Preferred Shares
Basic Maintenance Amount to the
extent it is
1. subject to any material lien,
mortgage, pledge, security
interest or security agreement of
any kind (collectively, "Liens"),
except for
a. Liens which are being
contested in good faith by
appropriate proceedings and
which Fitch (if Fitch is then
rating the Preferred Shares)
has indicated to the Fund will
not affect the status of such
asset as a Fitch Eligible
Asset,
b. Liens for taxes that are not
then due and payable or that
can be paid thereafter without
penalty,
c. Liens to secure payment for
services rendered or cash
advanced to the Fund by the
Fund's investment adviser,
custodian or the Auction
Agent,
d. Liens by virtue of any
repurchase agreement, and
e. Liens in connection with any
futures margin account or swap
contract; or
2. deposited irrevocably for the
payment of any liabilities.
---------------------------------------------------------------------------
===========================================================================
MOODY'S
===========================================================================
---------------------------------------------------------------------------
Moody's Eligible Assets:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Eligible Asset Component Calculation
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. Cash,
Cash per trial balance
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. Receivables for Municipal
Obligations Sold, or Receivable for Municipal
Obligations Sold per trial
balance. Ensure that the
receivables are due to settle
within five business days of the
Valuation Date.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. Unrealized Gain from Hedging
Transactions Unrealized Gain from Hedging
Transactions' shall mean, as of any
Valuation Date, (1) in the case of
a swap contract (including total
return swaps and interest rate
swaps), the amount, if any, that
the Fund would receive if the swap
contract were terminated as of the
Valuation Date, (2) in the case of
an interest rate futures contract,
the amount, if any, that the Fund
would receive if it were to
eliminate its open futures position
as of the Valuation Date by
entering into an offsetting
contract of the same specifications
or (3) in the case of an option on
interest rate futures contracts,
the Market Value thereof as of the
Valuation Date. For the purpose of
determining the Discounted Value of
any Unrealized Gain from Hedging
Transactions, (i) unrealized gain
from a swap contract shall be
treated in the same manner as a
Municipal Obligation, except that
the issuer rating assigned to the
swap counterparty shall be used,
and (ii) unrealized gain from an
interest rate futures contract or
an option on interest rate futures
contracts shall be deemed to have a
rating of A by Moody's. The amount
of any unrealized loss from hedging
transactions as of any Valuation
Date shall be treated as a
reduction to Moody's Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
4. Municipal Obligation that
---------------------------------------------------------------------------
---------------------------------------------------------------------------
a. Pays interest in cash,
Federated to inform SSFA in any
instance where interest is not paid
in cash.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
b. Does not have its Xxxxx'x
rating suspended by Moody's, Federated to inform SSFA in any
and instance where Moody's ratings have
been suspended.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
c. Is part of an issue of
Municipal Obligations of at Issuer size from Bloomberg will be
least $10,000,000 used to determine eligibility.
SSFA to perform the analysis based
on cusip and notify Federated of
any issues below $10,000,000.
Federated will determine and
communicate to SSFA whether or not
the cusip is part of an overall
issue of at least $10,000,000.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
For purposes of applying the following requirements for Single Issuer
Concentration, State Concentration and applying the applicable Moody's
Discount Factor, except as the Fund is otherwise advised in writing by
Moody's:
--------------------------------------------------------------------------
1. if a Municipal Obligation is not rated by Moody's but is rated by
Fitch and S&P, such Municipal Obligation (excluding short-term
Municipal Obligations) will be deemed to have the Xxxxx'x rating which
is equivalent to the lower of the Fitch and S&P ratings;
2. if a Municipal Obligation is not rated by Moody's but is rated by
Fitch or S&P, such Municipal Obligation (excluding short-term
Municipal Obligations) will be deemed to have the Moody's equivalent
of such rating.
SSFA will obtain ratings from Bloomberg for new buys and for the entire
portfolio monthly. Federated to inform SSFA in any instance where the
Fund is advised in writing by Moody's that the foregoing does not apply
to a Municipal Obligation held by the Fund
---------------------------------------------------------------------------
---------------------------------------------------------------------------
A. Single Issuer Concentration:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. Municipal Obligations issued
by any one issuer and rated Ba or For purposes of identifying single
lower by Moody's or not rated by issuers, the first six digits of
Moody's may comprise no more than the municipal security's cusip will
4% of total Moody's Eligible be considered the issuer
Assets. identifier. It is possible that
the six digit cusip may represent a
conduit rather than the true
issuer. Therefore, if any issuer
exceeds the set limit, SSFA will
research the true issuer on
Bloomberg and notify Federated.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. The total amount identified in
item 1 (above), together with any
Municipal Obligations issued by
the same issuer and rated Baa by
Moody's may comprise no more than
6% of total Moody's Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. The total amount identified in
item 2 (above) together with any
Municipal Obligations issued by
the same issuer and rated A by
Moody's may comprise no more than
10% of total Moody's Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
4. The total amount identified in
item 3 (above) together with any
Municipal Obligations issued by
the same issuer and rated Aa by
Moody's may comprise no more than
20% of total Moody's Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
For purposes of the calculations For purposes of this test, SSFA
in items 1 - 4 (above), any will assume that the rating
Municipal Obligation backed by provided by Bloomberg is for the
the guaranty, letter of credit or obligation AND NOT based solely on
insurance issued by a third party the underlying credit enhancement,
shall be deemed to be issued by unless information is supplied by
such third party if the issuance Federated.
of such third party credit is the
sole determinant of the rating on
such Municipal Obligations; and
any Municipal Obligation for
which the nominal issuer is a
conduit for a third party the
obligations of which are the sole
source of revenues for the
payment of such Municipal
Obligation shall be deemed to be
issued by such third party.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
B. State Concentration:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. Municipal Obligations issued
by issuers located within a
single state or territory and
rated Ba or lower by Moody's or
not rated by Moody's may comprise
no more than 12% of total Moody's
Eligible Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. The total amount identified in
item 1 (above), together with any
Municipal Obligations issued by
issuers located within a single
state or territory and rated Baa
by Moody's may comprise no more
than 20% of total Moody's
Eligible Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. The total amount identified in
item 2 (above) together with any
Municipal Obligations issued by
issuers located within a single
state or territory and rated A by
Moody's may comprise no more than
40% of total Moody's Eligible
Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
4. The total amount identified in
item 3 (above) together with any
Municipal Obligations issued by
issuers located within a single
state or territory and rated Aa
by Moody's may comprise no more
than 60% of total Moody's
Eligible Assets.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
For purposes of applying the foregoing requirements for Single Issuer
Concentration and State Concentration:
1. Eligible Assets shall be calculated without including cash; and
2. Municipal Obligations rated XXX-0, XXXX-0 or P-1 by Moody's or, if
not rated by Moody's, rated A-1+/AA or SP-1+/AA by S&P, or if not
rated by S&P, rated F1 by Fitch, shall be considered to have a
long-term rating of A.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Adjustments to Moody's Eligible
Assets for Futures, Options and
Forward Commitments:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
1. For purposes of determining
whether the Fund has Moody's
Eligible Assets with an aggregate
Discounted Value that equals or
exceeds the Preferred Shares
Basic Maintenance Amount,
the Discounted Value of Moody's
Eligible Assets which the Fund is
obligated to deliver or receive
pursuant to an outstanding option
shall be as follows:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
a. assets subject to call options
written by the Fund which are SSFA will test whether the written
either exchange-traded and call options expire within 49 days
"readily reversible" or which after the Valuation Date.
expire within 49 days after
the date as of which such If the 49 day limit test is not
valuation is made shall be passed, SSFA will contact Federated
valued at the lesser of: to determine whether the written
call options are exchange-traded
and "readily reversible".
---------------------------------------------------------------------------
---------------------------------------------------------------------------
i. Discounted Value and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
ii. the exercise price of the call
option written by the
Fund;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
b. assets subject to call options
written by the Fund not
meeting the requirements of
clause (A) of this sentence
shall have no value;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
c. assets subject to put options
written by the Fund shall be
valued at the lesser of:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
i. the exercise price and
ii. the Discounted Value of the
subject security; and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
d. where delivery may be made to
the Fund with any security of Federated to inform SSFA of the
a class of securities, the various securities of the class of
Fund shall assume it will take securities if such situation exists.
delivery of the security with
the lowest Discounted Value.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
2. For purposes of determining
whether the Fund has Moody's
Eligible Assets with an aggregate
Discounted Value that equals or
exceeds the Preferred Shares
Basic Maintenance Amount,
the following amounts shall be
subtracted from the aggregate
Discounted Value of the Moody's
Eligible Assets held by the
Fund:
---------------------------------------------------------------------------
---------------------------------------------------------------------------
a. 10% of the exercise price of a
written call option;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
b. the exercise price of any
written put option;
---------------------------------------------------------------------------
---------------------------------------------------------------------------
c. the settlement price of the
underlying futures contract if
the Fund writes put options on
a futures contract; and
---------------------------------------------------------------------------
---------------------------------------------------------------------------
d. 105% of the Market Value of
the underlying futures
contracts if the Fund writes
call options on a futures
contract and does not own the
underlying contract.
---------------------------------------------------------------------------
---------------------------------------------------------------------------
3. For purposes of determining
whether the Fund has Moody's
Eligible Assets with an aggregate
Discounted Value that equals or
exceeds the Preferred Shares
Basic Maintenance Amount,
the Discounted Value of all
Forward Commitments will be the
Discounted Value as calculated by
applying the respective Moody's
Discount Factor.
---------------------------------------------------------------------------
Discounting Moody's Assets: Once the above procedures have been performed,
determine the discounted market value for each security. Discount each security
as follows:
RATING CATEGORY
Exposure Period
Aaa* Aa* A* Baa* (V)MIG-1**UNRATED***
7 weeks............. 151% 159% 166% 173% 136% 225%
8 weeks or less but
greater than 7
weeks...............
154% 161% 168% 176% 137% 231%
9 weeks or less but
greater than 8
weeks...............
158% 163% 170% 177% 138% 240%
____________________
* Xxxxx'x rating (or, if not rated by Moody's, see above).
** Municipal Obligations rated MIG-1 or VMIG-1 (or, if not rated by
Moody's, see above), which do not mature or have a demand feature at
par exercisable in 30 days and which do not have a long-term rating.
*** Municipal Obligations rated less than Baa3 by Moody's (or, if not
rated by Moody's, see above) or unrated. Securities rated below Baa by
Moody's (or, if not rated by Moody's, see above) and unrated
securities, which are securities rated by neither Moody's, S&P or
Fitch, may not exceed 10% of Moody's Eligible Assets.
Notwithstanding the foregoing:
1. The Moody's Discount Factor for short-term Municipal Obligations will be
115%, so long as
a) such Municipal Obligations are rated at least XXX-0, XXXX-0 or P-1 by
Moody's (or if not rated by Moody's, rated at least F1 by Fitch or at
least A-1+/AA or SP-1+/AA by S&P) and
b) mature or have a demand feature at par exercisable in 30 days or less,
and
2. No Moody's Discount Factor will be applied to cash or to Receivables for
Municipal Obligations Sold.
---------------------------------------------------------------------------
When the Fund sells a Municipal
Obligation and agrees to repurchase
such Municipal Obligation at a
future date, such Municipal
Obligation shall be valued at its
Discounted Value for purposes of
determining Moody's Eligible Assets
and the amount of the repurchase
price of such Municipal Obligation
shall be included as a liability for
purposes of calculating the
Preferred Shares Basic Maintenance
Amount.
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When the Fund purchases a Moody's
Eligible Asset and agrees to sell it
at a future date, such Moody's
Eligible Asset shall be valued at
the amount of cash to be received by
the Fund upon such future date,
provided that the counterparty to
the transaction has a long-term debt
rating of at least A2 from Moody's
and the transaction has a term of no
more than 30 days; otherwise, such
Moody's Eligible Asset shall be
valued at the Discounted Value of
such Moody's Eligible Asset.
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Notwithstanding the foregoing, an SSFA will assume this paragraph is
asset will not be considered a not applicable unless information
Moody's Eligible Asset for purposes is provided by Federated.
of determining the Preferred Shares
Basic Maintenance Amount to the
extent it is
1. subject to any Liens, except
for
a. Liens which are being
contested in good faith by
appropriate proceedings and
which Moody's (if Xxxxx'x is
then rating the Preferred
Shares) has indicated to the
Fund will not affect the
status of such asset as a
Moody's Eligible Asset,
b. Liens for taxes that are not
then due and payable or that
can be paid thereafter without
penalty,
c. Liens to secure payment for
services rendered or cash
advanced to the Fund by the
Fund's investment adviser,
custodian or the Auction
Agent,
d. Liens by virtue of any
repurchase agreement, and
e. Liens in connection with any
futures margin account or swap
contract; or
2. deposited irrevocably for the
payment of any liabilities.
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STATE STREET BANK AND TRUST COMPANY
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FEDERATED FUNDS
Fund Accounting and Financial Administration Fee Schedule
FUND ACCOUNTING AND FINANCIAL ADMINISTRATION SERVICES
Fund accounting and financial administration services provided by State Street
Bank and Trust Company ("State Street") shall be as set forth in Section III of
the Financial Administration and Accounting Services Agreement (the "Agreement")
dated as of January 1, 2004 between each of the investment companies listed on
Exhibit A to the Agreement and State Street.
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I. FEES
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Each fund will be required to pay an asset based fee as described below.
Type of fee Annual charge billed and payable monthly
Asset based fee per fund 0.0003 on first $100,000,000 assets, plus
0.0002 on next $200,000,000 assets, plus
0.0001 on next $200,000,000 assets, plus
0.00005 on assets over $500,000,000. The
per fund asset based fee is limited to a
minimum of $39,000 and a maximum
of $158,000.
Additional class fee $12,000 per class after the initial class
New funds will be billed at the above fees but waived during the first 6 months
or until the fund reaches $100,000,000, whichever is sooner. For funds with less
than $100,000,000 in assets, the following waivers apply:
0 - 3 months: 100% of fee waived
4 - 6 months: 50% of fee waived
This fee reduction is intended to provide relief to funds in the event that
assets do not grow during the initial 6 months. Assets from an "in kind"
transfer, common trust conversion or transferred from another Federated Fund
qualify as fund assets for purposes of the $100,000,000 asset base used to
determine applicability of the above fee waiver.
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II. SPECIFIC SERVICES PURCHASED
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In addition to the asset based fee, the following fees will be charged on an
annual basis for the services listed below when they are provided to a specific
fund.
Wash Sales Reporting $5,000 per fund
Closed end fund preferred shares testing $16,500 per fund
Qualified Dividend Report $500 per fund (includes three reports
for any period; $200 per report
thereafter)
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III. VALUATION FEE
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For billing purposes, the monthly quote charge will be billed at cost.
Type of quote Primary Vendors Secondary Vendors
Domestic Equities Reuters Bridge
International Equities Reuters Bridge
Domestic Fixed Income Reuters FT Interactive Data
International Fixed IncomeFT Interactive Data FRI Corp.
Municipal Bonds XX Xxxxx FT Interactive Data
Other Assets Reuters Bridge
(Options/Futures)
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IV. SPECIAL SERVICES
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Fees for activities of a non-recurring nature such as fund consolidations or
reorganizations, extraordinary security shipments and the preparation of special
reports will be subject to negotiation.
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V. PAYMENT
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The above fees will be invoiced monthly. Payment is due within 5 days following
calendar month-end through the auto debit process.
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VI. TERM OF CONTRACT
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The parties agree that this fee schedule shall become effective January 1, 2004.
Investment Companies State Street Bank and Trust Company
(Listed on Exhibit A the Financial Administration
and Accounting Services Agreement)
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxxx X Xxxxxxx
Title: Sr. Vice President - Treasurer Title: Senior Vice President
Date: 1/5/2004 Date: 12/29/2003
REMOTE ACCESS SERVICES ADDENDUM
TO
FINANCIAL ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
ADDENDUM to that certain Financial Administration and Accounting Services
Agreement dated as of January 1, 2004 (the "Services Agreement") between each of
the investment companies listed on Exhibit A to the Services Agreement (the
"Customer") and State Street Bank and Trust Company, including its subsidiaries
and affiliates ("State Street").
State Street has developed and utilizes proprietary accounting and other
systems in conjunction with the custodian services which State Street provides
to the Customer. In this regard, State Street maintains certain information in
databases under its control and ownership which it makes available to its
customers (the "Remote Access Services").
The Services
State Street agrees to provide the Customer, and its designated investment
advisors, consultants or other third parties authorized by State Street
("Authorized Designees") with access to In~SightSM as described in Exhibit A or
such other systems as may be offered from time to time (the "System") on a
remote basis.
Security Procedures
The Customer agrees to comply, and to cause its Authorized Designees to comply,
with remote access operating standards and procedures and with user
identification or other password control requirements and other security
procedures as may be issued from time to time by State Street for use of the
System and access to the Remote Access Services. The Customer agrees to advise
State Street immediately in the event that it learns or has reason to believe
that any person to whom it has given access to the System or the Remote Access
Services has violated or intends to violate the terms of this Addendum and the
Customer will cooperate with State Street in seeking injunctive or other
equitable relief. The Customer agrees to discontinue use of the System and
Remote Access Services, if requested, for any security reasons cited by State
Street.
Fees
Fees and charges for the use of the System and the Remote Access Services and
related payment terms shall be as set forth in the Financial Administration and
Accounting Services Fee Schedule in effect from time to time between the parties
(the "Fee Schedule"). The Customer shall be responsible for any tariffs, duties
or taxes imposed or levied by any government or governmental agency by reason of
the transactions contemplated by this Addendum, including, without limitation,
federal, state and local taxes, use, value added and personal property taxes
(other than income, franchise or similar taxes which may be imposed or assessed
against State Street). Any claimed exemption from such tariffs, duties or taxes
shall be supported by proper documentary evidence delivered to State Street.
Proprietary Information/Injunctive Relief
The System and Remote Access Services described herein and the databases,
computer programs, screen formats, report formats, interactive design
techniques, formulae, processes, systems, software, know-how, algorithms,
programs, training aids, printed materials, methods, books, records, files,
documentation and other information made available to the Customer by State
Street as part of the Remote Access Services and through the use of the System
and all copyrights, patents, trade secrets and other proprietary rights of State
Street related thereto are the exclusive, valuable and confidential property of
State Street and its relevant licensors (the "Proprietary Information"). The
Customer agrees on behalf of itself and its Authorized Designees to keep the
Proprietary Information confidential and to limit access to its employees and
Authorized Designees (under a similar duty of confidentiality) who require
access to the System for the purposes intended. The foregoing shall not apply to
Proprietary Information in the public domain or required by law to be made
public.
The Customer agrees to use the Remote Access Services only in connection with
the proper purposes of this Addendum. The Customer will not, and will cause its
employees and Authorized Designees not to, (i) permit any third party to use the
System or the Remote Access Services, (ii) sell, rent, license or otherwise use
the System or the Remote Access Services in the operation of a service bureau or
for any purpose other than as expressly authorized under this Addendum, (iii)
use the System or the Remote Access Services for any fund, trust or other
investment vehicle without the prior written consent of State Street, or (iv)
allow or cause any information transmitted from State Street's databases,
including data from third party sources, available through use of the System or
the Remote Access Services, to be published, redistributed or retransmitted for
other than use for or on behalf of the Customer, as State Street's customer.
The Customer agrees that neither it nor its Authorized Designees will modify the
System in any way; enhance or otherwise create derivative works based upon the
System; nor will the Customer or Customer's Authorized Designees reverse
engineer, decompile or otherwise attempt to secure the source code for all or
any part of the System.
The Customer acknowledges that the disclosure of any Proprietary Information, or
of any information which at law or equity ought to remain confidential, will
immediately give rise to continuing irreparable injury to State Street
inadequately compensable in damages at law and that State Street shall be
entitled to obtain immediate injunctive relief against the breach or threatened
breach of any of the foregoing undertakings, in addition to any other legal
remedies which may be available.
Limited Warranties
State Street represents and warrants that it is the owner of and has the right
to grant access to the System and to provide the Remote Access Services
contemplated herein. Because of the nature of computer information technology,
including but not limited to the use of the Internet, and the necessity of
relying upon third party sources, and data and pricing information obtained from
third parties, the System and Remote Access Services are provided "AS IS", and
the Customer and its Authorized Designees shall be solely responsible for the
investment decisions, results obtained, regulatory reports and statements
produced using the Remote Access Services. State Street and its relevant
licensors will not be liable to the Customer or its Authorized Designees for any
direct or indirect, special, incidental, punitive or consequential damages
arising out of or in any way connected with the System or the Remote Access
Services, nor shall either party be responsible for delays or nonperformance
under this Addendum arising out of any cause or event beyond such party's
control.
State Street will take reasonable steps to ensure that its products (and those
of its third-party suppliers) reflect the available state of the art technology
to offer products that are Year 2000 compliant, including, but not limited to,
century recognition of dates, calculations that correctly compute same century
and multi century formulas and date values, and interface values that reflect
the date issues arising between now and the next one-hundred years, and if any
changes are required, State Street will make the changes to its products at no
cost to you and in a commercially reasonable time frame and will require
third-party suppliers to do likewise. The Customer will do likewise for its
systems.
EXCEPT AS EXPRESSLY SET FORTH IN THIS ADDENDUM, STATE STREET, FOR ITSELF AND ITS
RELEVANT LICENSORS, EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES CONCERNING THE
SYSTEM AND THE SERVICES TO BE RENDERED HEREUNDER, WHETHER EXPRESS OR IMPLIED
INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTIBILITY OR FITNESS FOR A
PARTICULAR PURPOSE.
Infringement
State Street will defend or, at our option, settle any claim or action brought
against the Customer to the extent that it is based upon an assertion that
access to the System or use of the Remote Access Services by the Customer under
this Addendum constitutes direct infringement of any patent or copyright or
misappropriation of a trade secret, provided that the Customer notifies State
Street promptly in writing of any such claim or proceeding and cooperates with
State Street in the defense of such claim or proceeding. Should the System or
the Remote Access Services or any part thereof become, or in State Street's
opinion be likely to become, the subject of a claim of infringement or the like
under any applicable patent or copyright or trade secret laws, State Street
shall have the right, at State Street's sole option, to (i) procure for the
Customer the right to continue using the System or the Remote Access Services,
(ii) replace or modify the System or the Remote Access Services so that the
System or the Remote Access Services becomes noninfringing, or (iii) terminate
this Addendum without further obligation.
Termination
Either party to the Services Agreement may terminate this Addendum (i) for any
reason by giving the other party at least one-hundred and eighty (180) days'
prior written notice in the case of notice of termination by State Street to the
Customer or thirty (30) days' notice in the case of notice from the Customer to
State Street of termination, or (ii) immediately for failure of the other party
to comply with any material term and condition of the Addendum by giving the
other party written notice of termination. This Addendum shall in any event
terminate within ninety (90) days after the termination of the Services
Agreement. In the event of termination, the Customer will return to State Street
all copies of documentation and other confidential information in its possession
or in the possession of its Authorized Designees. The foregoing provisions with
respect to confidentiality and infringement will survive termination for a
period of three (3) years.
Miscellaneous
This Addendum and the exhibits hereto constitute the entire understanding of the
parties to the Services Agreement with respect to access to the System and the
Remote Access Services. This Addendum cannot be modified or altered except in a
writing duly executed by each of State Street and the Customer and shall be
governed by and construed in accordance with the laws of the Commonwealth of
Massachusetts.
By its execution of the Services Agreement, the Customer accepts responsibility
for its and its Authorized Designees' compliance with the terms of this
Addendum.
EXHIBIT A
to
REMOTE ACCESS SERVICES ADDENDUM TO
FINANCIAL ADMINISTRATION AND ACCOUNTING SERVICES AGREEMENT
IN~SIGHTSM
System Product Description
In~SightSM provides bilateral information delivery, interoperability, and
on-line access to State Street. In~SightSM allows users a single point of entry
into State Street's diverse systems and applications. Reports and data from
systems such as Investment Policy MonitorSM, Multicurrency HorizonSM, Securities
Lending, Performance & Analytics, and Electronic Trade Delivery can be accessed
through In~SightSM. This Internet-enabled application is designed to run from a
Web browser and perform across low-speed data lines or corporate high-speed
backbones. In~SightSM also offers users a flexible toolset, including an ad-hoc
query function, a custom graphics package, a report designer, and a scheduling
capability. Data and reports offered through In~SightSM will continue to
increase in direct proportion with the customer roll out, as it is viewed as the
information delivery system will grow with State Street's customers.
