Exhibit 9(ii) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
TRANSFER AGENCY SERVICES,
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of , 1995, by and between Federated Investment
Portfolios ("FIP"), on behalf of its portfolio the Bond Index Portfolio ("Hub
Fund"), and Federated Investment Trust ("FIT") on behalf of its portfolio
Federated Bond Index Fund and its classes ("Spoke Fund"), (severally and not
jointly referred to herein as "Funds" and individually as "Fund"), having
their principal office and place of business at Federated Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000-0000, and FEDERATED SERVICES COMPANY, a Delaware business
trust, having its principal office and place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779 (the "Company").
WHEREAS, FIP is registered as an open-end management investment company
under the Investment Company Act of 1940, as amended (the "1940 Act"), with
authorized and issued beneficial partnership interests ("HubInterest(s)");
WHEREAS, FIT is registered as an open-end management investment company
under the 1940 Act with authorized and issued shares of beneficial interest
("SpokeShare(s)");
WHEREAS, the Spoke Fund invests all of its investable assets in a
HubInterest in the Hub Fund, which has the same investment objective as the
Spoke Fund;
WHEREAS, each Fund desires to retain the Company to provide certain pricing
and/or accounting and recordkeeping services, and the Company is willing to
furnish such services;
WHEREAS, each Fund desires to appoint the Company as its transfer agent,
dividend disbursing agent, and agent in connection with certain other
activities, and the Company desires to accept such appointment;
WHEREAS, each Fund desires to appoint the Company as its agent to select,
negotiate and contract for custodian services from an approved list of
qualified financial institutions, and the Company desires to accept such
appointment; and
WHEREAS, from time to time on or both of the Funds may desire and may
instruct the Company to subcontract for the performance of certain of its
duties and responsibilities hereunder to another agent (the "Agent").
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree
as follows:
SECTION ONE: FUND ACCOUNTING.
ARTICLE 1. APPOINTMENT.
Each Fund hereby appoint the Company to provide certain pricing and/or
accounting services, for the period and on the terms set forth in this
Agreement. The Company accepts such appointment and agrees to furnish the
services herein set forth in return for the compensation as provided in
Article 4 of this Section.
ARTICLE 2. THE COMPANY'S DUTIES WITH REGARD TO THE HUB FUND.
Subject to the supervision and control of the Hub Fund's Board of Trustees
("Hub Board"), the Company will assist the Hub Fund with regard to fund
accounting for the Hub Fund, and in connection therewith undertakes to perform
the following specific services;
A. Value each HubInterest in the Hub Fund using, with respect to portfolio
securities: primarily, market quotations, including the use of matrix
pricing, supplied by the independent pricing services selected by the
Company in consultation with the adviser (which includes any sub-
advisers), or sources selected by the adviser, and reviewed by the Hub
Board; secondarily, if a designated pricing service does not provide a
price for a security which the Company believes should be readily
available by market quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the Hub Fund, or if the
adviser does not supply the names of such brokers, the Company will
attempt on its own to find brokers to price those securities; thirdly,
for securities for which no market price is readily available, the
Pricing Committee of the Hub Board will determine a fair value in good
faith. Consistent with Rule 2a-4 of the 40 Act, estimates may be used
where necessary or appropriate. The Company's obligations with regard
to the prices received from outside pricing services and designated
brokers or other outside sources, is to exercise reasonable care in the
supervision of the pricing agent. The Company is not the guarantor of
the securities prices received from such agents and the Company is not
liable to the Hub Fund for potential errors in valuing each HubInterest
or calculating the net asset value of such HubInterests when the
calculations are based upon such prices. All of the above sources of
prices used as described are deemed by the Company to be authorized
sources of security prices. The Company provides daily to the adviser
the securities prices used in calculating the net asset value of the Hub
Fund, for its use in preparing exception reports for those prices on
which the adviser has comment. Further, upon receipt of the exception
reports generated by the adviser, the Company diligently pursues
communication regarding exception reports with the designated pricing
agents.
B. Determine the net asset value of each HubInterest in the Hub Fund, at
the time and in the manner from time to time determined by the Hub Board
and as set forth in the Hub Fund's offering document;
C. Calculate the net income of the Hub Fund, if any;
D. Calculate realized capital gains or losses of the Hub Fund, if any,
resulting from the sale or disposition of its portfolio securities;
E. Maintain the general ledger and other accounts, books and financial
records of the Hub Fund, as required under the applicable provisions of
the Internal Revenue Code and Section 31(a) of the 1940 Act and the
Rules thereunder in connection with the services provided by the
Company;
F. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records to be maintained by Rule 31a-1 under the 1940 Act in connection
with the services provided by the Company. The Company further agrees
that all such records it maintains for the Hub Fund are the property of
the Hub Fund and further agrees to surrender promptly to the Hub Fund
such records upon the Hub Fund's request;
G. At the request of the Hub Fund, prepare various reports or other
financial documents, in accordance with generally accepted accounting
principles, as required by federal, state and other applicable laws and
regulations; and
H. Such other similar services as may be reasonably requested by the Hub
Fund.
ARTICLE 3. THE COMPANY'S DUTIES WITH REGARD TO THE SPOKE FUND.
Subject to the supervision and control of the Spoke Fund's Board of
Trustees ("Spoke Board"), the Company will assist the Spoke Fund with regard
to fund accounting for the Spoke Fund, and in connection therewith undertakes
to perform the following specific services;
A. Determine the net asset value of the SpokeShares of the Spoke Fund based
upon the assets allocated to it by the Hub Fund, at the time and in the
manner from time to time determined by the Board and as set forth in the
Spoke Fund's Prospectus and Statement of Additional Information
("Prospectus");
B. Calculate the net income of the Spoke Fund, if any;
C. Calculate capital gains or losses of the Spoke Fund, if any;
D. Maintain the general ledger and other accounts, books and financial
records of the Spoke Fund, as required under Section 31(a) of the 1940
Act and the Rules thereunder in connection with the services provided by
the Company;
E. Preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records to be maintained by Rule 31a-1 under the 1940 Act in connection
with the services provided by the Company. The Company further agrees
that all such records it maintains for the Spoke Fund are the property
of the Spoke Fund and further agrees to surrender promptly to the Spoke
Fund such records upon the Spoke Fund's request;
F. At the request of the Spoke Fund, prepare various reports or other
financial documents required by federal, state and other applicable laws
and regulations; and
G. Such other similar services as may be reasonably requested by the Spoke
Fund.
ARTICLE 4. COMPENSATION AND ALLOCATION OF EXPENSES.
A. Each Fund will compensate the Company for the services rendered to it
pursuant to Section One of this Agreement in accordance with the fees
agreed upon from time to time between the parties hereto. Such fees do
not include out-of-pocket disbursements of the Company for which the
appropriate Fund shall reimburse the Company upon receipt of a separate
invoice. Out-of-pocket disbursements shall include, but shall not be
limited to, the items agreed upon between the parties from time to time.
B. Each Fund, and not the Company, shall bear its respective portion of the
cost of: custodial expenses; membership dues in the Investment Company
Institute or any similar organization; transfer agency expenses;
investment advisory expenses; costs of printing and mailing offering
documents, Prospectuses, reports and notices; administrative expenses;
interest on borrowed money; brokerage commissions; taxes and fees
payable to federal, state and other governmental agencies; fees of
Trustees of the Fund; independent auditors expenses; legal and audit
department expenses billed to Federated Services Company for work
performed related to the Fund; law firm expenses; or other expenses not
specified in this Article 4 which may be properly payable by the Funds.
C. The compensation and out-of-pocket expenses attributable to each Fund
shall be accrued by the appropriate Fund and shall be paid to the
Company no less frequently than monthly, and shall be paid, by the
appropriate Fund, daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the appropriate Fund and a duly authorized officer of the
Company.
E. The fee for the period from the effective date of this to the end of the
initial month shall be prorated according to the proportion that such
period bears to the full month period. Upon any termination of this
Agreement before the end of any month, the fee for such period shall be
prorated according to the proportion which such period bears to the full
month period. For purposes of determining fees payable to the Company,
the value of HubInterests and SpokeShares shall be computed at the time
and in the manner specified in the Hub Fund's offering document or the
Spoke Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time subcontract
to, employ or associate itself with such person or persons as the
Company may believe to be particularly suited to assist it in performing
services under this Section One. SUCH PERSON OR PERSONS MAY BE THIRD-
PARTY SERVICE PROVIDERS, OR THEY MAY BE OFFICERS AND EMPLOYEES WHO ARE
EMPLOYED BY BOTH THE COMPANY AND ONE OR BOTH OF THE FUNDS; provided,
however, that the Company shall be as fully responsible to each Fund for
the acts and omissions of any subcontractor as it is for its own acts
and omissions. The compensation of such person or persons shall be paid
by the Company, and no obligation shall be incurred on behalf of the
Funds in such respect.
SECTION TWO: TRANSFER AGENCY SERVICES.
ARTICLE 5. TERMS OF APPOINTMENT BY HUB FUND.
Subject to the terms and conditions set forth in this Agreement, the Hub Fund
hereby appoints the Company to act as, and the Company agrees to act as,
transfer agent with regard to HubInterests for the partners in the Hub Fund
(i.e., the Spoke Fund).
ARTICLE 6 TERMS OF APPOINTMENT BY SPOKE FUND.
Subject to the terms and conditions set forth in this Agreement, Spoke Fund
hereby appoints the Company to act as, and the Company agrees to act as,
transfer agent and dividend disbursing agent for the Spoke Fund's SpokeShares,
and agent in connection with any accumulation, open-end account, or similar
plans provided the shareholders of the Spoke Fund ("Shareholder(s)"),
including without limitation, any periodic investment plan or periodic
withdrawal.
ARTICLE 7. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed
to be Proper Instructions if (a) the Company reasonably believes them to have
been given by a person previously authorized in Proper Instructions to give
such instructions with respect to the transaction involved, and (b) the Funds,
and the Company promptly cause such oral instructions to be confirmed in
writing. Proper Instructions may include communications effected directly
between electro-mechanical or electronic devices provided that the Funds, and
the Company are satisfied that such procedures afford adequate safeguards for
the Funds' assets. Proper Instructions may only be amended in writing.
ARTICLE 8. DUTIES OF THE COMPANY WITH REGARD TO THE HUB FUND.
The Company shall perform the following services in accordance with Proper
Instructions as may be provided from time to time by the Hub Fund:
A. Purchases
(1) The Company shall receive orders and payment from the Spoke Fund
for the initial purchase of and subsequent investments in
HubInterest ("Purchases") and promptly deliver payment and
appropriate documentation therefore to the custodian of the Hub
Fund (the "Hub Custodian"). The Company shall notify the Hub
Custodian on a daily basis of the total amount of orders and
payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Hub
Fund's current offering document, the Company shall compute and
issue the appropriate number of Interests of the Hub Fund and hold
such Interests in the appropriate Spoke Fund accounts.
B. Full or Fractional Sale of a HubInterest
(1) The Company shall receive requests and directions from the Spoke
Fund regarding the full or fractional sale of the Spoke Fund's
HubInterest and, if such requests comply with the procedures as may
be described in the Hub Fund's offering document or set forth in
Proper Instructions, deliver the appropriate instructions therefor
to the Hub Custodian.
(2) At the appropriate time, upon receiving the proceeds from a full or
fractional sale of a HubInterest from the Hub Custodian, the
Company shall pay, or cause to be paid, the proceeds in the manner
instructed by the selling Spoke Fund, pursuant to procedures
described in the then-current offering document of the Hub Fund.
The Company shall reconcile the amounts so requested and the
amounts actually distributed by the Hub Custodian on a daily basis
with the Hub Custodian and with the Spoke Fund or its designated
agent.
(3) If any request for the full or fractional sale of an Spoke Fund's
HubInterest does not comply with the procedures for such a sale
approved by the Hub Fund, the Company shall promptly notify the
Spoke Fund of such fact, together with the reason therefor, and
shall effect such sale at the price applicable to the date and time
of receipt of the documents necessary to comply with said
procedures.
C. Recordkeeping
(1) The Company shall record Purchases and provide such records to the
Hub Fund on a regular basis or upon reasonable request, but shall
have no obligation when recording Purchases, except as otherwise
set forth herein, to take cognizance of any laws relating to such
Purchases, which functions shall be the sole responsibility of the
Hub Fund.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder and in the form and manner as agreed to by the
Hub Fund to include a record for the Spoke Fund of the following:
(a) Name, address and tax identification number (and whether such
number has been certified);
(b) Historical information regarding the Spoke Fund's HubInterest,
including the date and price for all transactions;
(c) Any correspondence relating to the current maintenance of the
Spoke Fund's HubInterest.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such record
retention shall be at the expense of the Company, and such records
may be inspected by the Hub Fund at reasonable times. The Company
may, at its option at any time, and shall forthwith upon the Hub
Fund's demand, turn over to the Hub Fund and cease to retain in the
Company's files, records and documents created and maintained by
the Company pursuant to this Agreement, which are no longer needed
by the Company in performance of its services or for its
protection. If not so turned over to the Hub Fund, such records and
documents will be retained by the Company for six years from the
year of creation, during the first two of which such documents will
be in readily accessible form. At the end of the six year period,
such records and documents will either be turned over to the Hub
Fund or destroyed in accordance with Proper Instructions.
D. Confirmations/Reports
(1) The Company shall furnish to the Hub Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Investors, such notices for reporting dividends
and distributions paid as are required to be so filed and mailed
and shall withhold such sums as are required to be withheld under
applicable federal and state income tax laws, rules and
regulations.
(2) In addition to, and not in lieu of the services set forth above,
the Company shall:
(a) Perform all of the customary services of a transfer agent,
including but not limited to: maintaining all identification
and of record information for the Spoke Fund; communicating to
the Spoke Fund ???????financial reports, Form K-1, other
required tax reports and offering documents of the Hub Fund;
preparing and communicating confirmation forms and statements
of account to the Spoke Fund for all Purchases and full or
fractional sales of HubInterests and other confirmable
transactions; and preparing and mailing activity statements
for the Spoke Fund.
F. Other Duties
The Company shall answer correspondence from the Spoke Fund
relating to the duties described above and such other
correspondence as may from time to time be addressed to the
Company;
ARTICLE 9. DUTIES OF THE COMPANY WITH REGARD TO THE SPOKE FUND.
The Company shall perform the following services in accordance with Proper
Instructions as may be provided from time to time by the Spoke Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase of
SpokeShares and promptly deliver payment and appropriate
documentation therefore to the custodian of the Spoke Fund, (the
"Spoke Custodian"). The Company shall notify the Spoke Custodian
on a daily basis of the total amount of orders and payments so
delivered. If the Hub Custodian and the Spoke Custodian are not
the same bank, the Company will direct the Spoke Custodian to
transfer the payment proceeds to the Hub Custodian on a daily
basis.
(2) Pursuant to purchase orders and in accordance with the Spoke Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of SpokeShares of the Spoke Fund and hold such
SpokeShares in the appropriate Shareholder accounts.
(3) In the event that any check or other order for the purchase of
SpokeShares of the Spoke Fund is returned unpaid for any reason,
the Company shall debit the account of the Shareholder by the
number of SpokeShares that had been credited to its account upon
receipt of the order, promptly mail a debit advice to the
Shareholder, and notify the Spoke Fund. In the event that the
amount paid for such SpokeShares exceeds proceeds of the redemption
of such SpokeShares plus the amount of any dividends paid with
respect to such SpokeShares, the Spoke Fund will reimburse the
Company for the amount of such excess.
B. Distribution
(1) Upon notification by the Spoke Fund of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Spoke Fund in accordance with the
provisions of its governing document and the then-current
Prospectus of the Spoke Fund. The Company shall credit income,
capital gain, or any other payments to Shareholders. As the
Dividend Disbursing Agent, the Company shall, on or before the
payment date of any such distribution, notify the Hub Fund, or such
agent as it shall designate, of the estimated amount required to
pay any portion of said distribution which is payable in cash and
request the Hub Fund, or its designated agent, to make available
sufficient funds for the cash amount to be paid out, which amounts
will be placed in the distribution demand deposit account for the
Spoke at the Spoke Custodian. The Company shall reconcile the
amounts so requested and the amounts actually received by the Spoke
Custodian on a daily basis with the Spoke Custodian and with the
Hub Fund or its designated agent. If a Shareholder is entitled to
receive additional SpokeShares by virtue of any such distribution
or dividend, appropriate credits shall be made to the Shareholder's
account; and
(2) The Company shall maintain records of account for the Spoke Fund
and advise the Spoke Fund and its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests from the
Shareholders, and if such redemption requests comply with the
procedures as may be described in the Spoke Fund Prospectus or set
forth in Proper Instructions, notify the Hub Fund, or such agent as
it shall designate, of the redemption request. The Hub Fund, or
such agent as it shall designate, shall make available sufficient
funds for the cash proceeds of such redemption to be paid out,
which amounts will be placed in the redemption demand deposit
account for the Spoke Fund maintained by the Company at the Spoke
Custodian. The Company shall notify the Spoke Fund on a daily basis
of the total amount of redemption requests processed and redemption
proceeds placed in the redemption demand deposit account . The
Company shall reconcile the amounts so requested and the amounts
actually received by the Spoke Custodian on a daily basis with the
Spoke Custodian and with the Hub Fund or its designated agent.
(2) At the appropriate time upon receiving redemption proceeds from the
Hub Fund, or such agent as it shall designate, with respect to any
redemption, the Company shall pay, or cause to be paid, the
redemption proceeds in the manner instructed by the redeeming
Shareholders, pursuant to procedures described in the then-current
Prospectus of the Spoke Fund.
(3) The Company shall effect transfers of SpokeShares by the registered
Shareholder owners thereof.
(4) If any request for redemption does not comply with the procedures
for redemption approved by the Spoke Fund, the Company shall
promptly notify the Shareholder of such fact, together with the
reason therefor, and shall effect such redemption at the price
applicable to the date and time of receipt of documents complying
with said procedures.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual basis
and report such actions to the Spoke Fund.
D. Recordkeeping
(1) The Company shall record the issuance of SpokeShares of the Spoke
Fund, and maintain pursuant to applicable rules of the Securities
and Exchange Commission ("SEC") a record of the total number of
SpokeShares of the Spoke Fund which are authorized, based upon data
provided to it by the Spoke Fund, and issued and outstanding. The
Company shall also provide the Spoke Fund on a regular basis or
upon reasonable request with the total number of SpokeShares which
are authorized and issued and outstanding, but shall have no
obligation when recording the issuance of SpokeShares, except as
otherwise set forth herein, to monitor the issuance of such
SpokeShares or to take cognizance of any laws relating to the issue
or sale of such SpokeShares, which functions shall be the sole
responsibility of the Spoke Fund.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Spoke Fund to include a record for each Shareholder 's account of
the following:
(a) Name, address and tax identification number (and whether such
number has been certified);
(b) Number of SpokeShares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the account;
(e) Information with respect to withholding in the case of a
foreign account or an account for which withholding is
required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance
of the account;
(g) Any information required in order for the Company to perform
the calculations contemplated or required by this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such record
retention shall be at the expense of the Company, and such records
may be inspected by the Spoke Fund at reasonable times. The Company
may, at its option at any time, and shall forthwith upon the Spoke
Fund's demand, turn over to the Spoke Fund and cease to retain in
the Company's files, records and documents created and maintained
by the Company pursuant to this Agreement, which are no longer
needed by the Company in performance of its services or for its
protection. If not so turned over to the Spoke Fund, such records
and documents will be retained by the Company for six years from
the year of creation, during the first two of which such documents
will be in readily accessible form. At the end of the six year
period, such records and documents will either be turned over to
the Spoke Fund or destroyed in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Spoke Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) Shareholder lists and statistical information;
(d) Payments to third parties relating to distribution agreements,
allocations of sales loads, redemption fees, or other
transaction- or sales-related payments;
(e) Such other information as may be agreed upon from time to
time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Shareholders, such notices for reporting
dividends and distributions paid as are required to be so filed and
mailed and shall withhold such sums as are required to be withheld
under applicable federal and state income tax laws, rules and
regulations.
(3) In addition to and not in lieu of the services set forth above, the
Company shall:
(a) Perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in
connection with accumulation, open-account or similar plans
(including without limitation any periodic investment plan or
periodic withdrawal program), including but not limited to:
maintaining all Shareholder accounts, mailing Shareholder
reports and Prospectuses to current Shareholders, withholding
taxes on accounts subject to back-up or other withholding
(including non-resident alien accounts), preparing and filing
reports on U.S. Treasury Department Form 1099 and other
appropriate forms required with respect to dividends and
distributions by federal authorities for all Shareholders,
preparing and mailing confirmation forms and statements of
account to Shareholders for all purchases and redemptions of
SpokeShares and other conformable transactions in Shareholder
accounts, preparing and mailing activity statements for
Shareholders, and providing Shareholder account information;
and
(b) provide a system which will enable the Fund to monitor the
total number of SpokeShares of the Spoke Fund sold in each
state ("blue sky reporting"). The Spoke Fund shall by Proper
Instructions (i) identify to the Company those transactions
and assets to be treated as exempt from the blue sky reporting
for each state and (ii) verify the classification of
transactions for each state on the system prior to activation
and thereafter monitor the daily activity for each state. The
responsibility of the Company for the Spoke Fund's state blue
sky registration status is limited solely to the recording of
the initial classification of transactions or accounts with
regard to blue sky compliance and the reporting of such
transactions and accounts to the Spoke Fund as provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders relating
to their SpokeShare accounts and such other correspondence as may
from time to time be addressed to the Company;
(2) The Company shall prepare Shareholder meeting lists, mail proxy
cards and other material supplied to it by the Spoke Fund in
connection with Shareholder Meetings of the Spoke Fund; receive,
examine and tabulate returned proxies, and certify the vote of the
Shareholders;
(3) The Company shall establish and maintain facilities and procedures
for safekeeping of, check forms and facsimile signature imprinting
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devices, if any; and for the preparation or use, and for keeping
account of, such forms and devices.
(space intentionally left bank)
ARTICLE 10. DUTIES OF THE HUB FUND
A. Compliance
The Hub Fund assumes full responsibility for the preparation, contents
and distribution of its own offering document and for complying with all
applicable requirements the 1940 Act, the Internal Revenue Code, and any
other laws, rules and regulations of government authorities having
jurisdiction.
ARTICLE 11. DUTIES OF THE SPOKE FUND.
A. Compliance
The Spoke Fund assumes full responsibility for the preparation, contents
and distribution of its own Prospectus and for complying with all
applicable requirements of the Securities Act of 1933, as amended (the
"1933 Act"), the 1940 Act and any laws, rules and regulations of
government authorities having jurisdiction.
B. Distributions
The Spoke Fund shall promptly inform the Company of the declaration of
any dividend or distribution.
ARTICLE 12. COMPENSATION AND EXPENSES.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, each Fund agrees to pay the Company an annual maintenance fee
for each Spoke Fund or Shareholder account as agreed upon between the
parties and as may be added to or amended from time to time. Such fees
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may be changed from time to time subject to written agreement between
each Fund and the Company.
B. Reimbursements
In addition to the fee paid under Article 12A above, each Fund agrees to
reimburse the Company for out-of-pocket expenses or advances incurred by
the Company for the items agreed upon between the parties, as may be
added to or amended from time to time. In addition, any other expenses
incurred by the Company at the request or with the consent of a Fund,
will be reimbursed by the such Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
appropriate Fund and shall be paid to the Company no less frequently
than monthly, and shall be paid daily upon request of the Company. The
Company will maintain detailed information about the compensation and
out-of-pocket expenses by such Fund.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the appropriate Fund and a duly authorized officer of the
Company.
ARTICLE 13. ASSIGNMENT OF SHAREHOLDER RECORDKEEPING.
Except as provided below, no right or obligation under this Section Two may
be assigned by either party without the written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. The Company may without further consent on the part of either Fund
subcontract for the performance hereof with such other provider of
services duly registered as a transfer agent under Section 17A(c)(1) as
Company shall select; provided, however, that the Company shall be as
Error! Reference source not found.Error! Reference source not found.
fully responsible to each Fund for the acts and omissions of any
subcontractor as it is for its own acts and omissions.
C. The Company shall upon instruction from a Fund subcontract for the
performance hereof with an Agent selected by such Fund, or a provider of
services selected by Company, as described above; provided, however,
that the Company shall in no way be responsible to such Fund for the
acts and omissions of the Agent.
SECTION THREE: CUSTODY SERVICES PROCUREMENT.
ARTICLE 14. APPOINTMENT.
Each Fund hereby appoint Company as its agent to evaluate and obtain
custody services from a financial institution that (i) meets the criteria
established in Section 17(f) of the 1940 Act and (ii) has been approved by the
Boards of the Funds as being eligible for selection by the Company as a
custodian (the "Eligible Custodian"). The Company accepts such appointment.
ARTICLE 15. THE COMPANY AND ITS DUTIES.
Subject to the review, supervision and control of each Fund's Board, the
Company shall:
A. evaluate the nature and the quality of the custodial services provided
by the Eligible Custodian;
B. employ an Eligible Custodian to serve on behalf of one or both of the
Funds in accordance with the terms approved by the respective Fund's
Board;
C. negotiate and enter into an agreement with an Eligible Custodian for
the benefit of one or both of the Funds, with the appropriate Fund as a
party to such agreement. The Company shall not be a party to any
agreement with any such Custodian;
D. establish procedures to monitor the nature and the quality of the
services provided by the Eligible Custodian;
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E. continuously monitor the nature and the quality of services provided by
the Eligible Custodians;
F. periodically provide to the appropriate Fund (i) written reports on the
activities and services of the Eligible Custodian; (ii) the nature and
amount of disbursements made on account of the respective Fund with
respect to each custodial agreement; and (iii) such other information as
each Fund's Board shall reasonably request to enable it to fulfill its
duties and obligations under Sections 17(f) and 36(b) of the 1940 Act
and other duties and obligations thereof; and
G. periodically provide recommendations to each Fund's Board to enhance
Eligible Custodian's customer services capabilities and improve upon
fees being charged to the Funds by Eligible Custodian.
ARTICLE 16. FEES AND EXPENSES.
A. Annual Fee
For the performance by the Company pursuant to Section Three of this
Agreement, each Fund agrees to pay the Company an annual fee as agreed
upon between the parties.
B. Reimbursements
In addition to the fee paid under Section 16A above, the Funds agree to
reimburse the Company for their respective portion of out-of-pocket
expenses or advances incurred by the Company for the items agreed upon
between the parties, as may be added to or amended from time to time.
In addition, any other expenses incurred by the Company at the request
or with the consent of the Funds, will be reimbursed by the appropriate
Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
appropriate Fund and shall be paid to the Company no less frequently
than monthly, and shall be paid daily upon request of the Company. The
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Company will maintain detailed information about such compensation and
out-of-pocket expenses.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the appropriate Funds and a duly authorized officer of the
Company.
SECTION FOUR: GENERAL PROVISIONS.
ARTICLE 17. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
each Fund shall file with the Company the following documents relating
to it:
(1) A copy of its Declaration of Trust and By-Laws and all amendments
thereto;
(2) A copy of the resolution of its Board authorizing this Agreement;
(3) All account application forms and other documents relating to Spoke
Fund or Shareholder accounts; and
(4) A copy of its current offering document or Prospectus.
B. Each Fund will also furnish from time to time the following documents
relating to it:
(1) A resolution of its Board authorizing the original issuance of its
HubInterests or SpokeShares ;
(2) A Registration Statement filed with the SEC and amendments thereof
and orders relating thereto in effect with respect to the sale of
its HubInterests or SpokeShares;
(3) A certified copy of each amendment to its governing document and
its By-Laws;
(4) Certified copies of each vote of its Board authorizing officers to
give Proper Instructions to an Eligible Custodian and agent for
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fund accountant, custody services procurement, and recordkeeping or
transfer agency services;
(5) Such other documents or opinions which the Company may, in its
discretion, deem necessary or appropriate in the proper performance
of its duties; and
(6) Revisions to its offering document or Prospectus.
ARTICLE 18. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Funds that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State of
Delaware.
(3) It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.
(4) All requisite corporate proceedings have been taken to authorize it
to enter into and perform its obligations under this Agreement.
(5) It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and
obligations under this Agreement.
(6) It is in compliance with federal securities law requirements and in
good standing as a transfer agent.
(7) It has obtained all required approvals from all government or
regulatory authorities necessary to enter into this arrangement and
to provide the services contemplated herein.
B. Representations and Warranties of the FIP
FIP represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and in good
standing under the laws of its state of organization;
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(2) It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform its obligations under
this Agreement;
(3) All corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform
its obligations under this Agreement; and
(4) It is an open-end investment company registered under the 1940 Act.
C. Representations and Warranties of FIT
FIP and FIT each represent and warrant to the Company that:
(1) It is an investment company duly organized and existing and in good
standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform its obligations under
this Agreement;
(3) All corporate proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform
its obligations under this Agreement; and
(4) It is an open-end investment company registered under the 0000 Xxx.
(5) A registration statement for the Spoke Fund under the 1933 Act will
be effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all
SpokeShares of the Spoke Fund being offered for sale.
ARTICLE 19. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
The Company shall be held to a standard of reasonable care in carrying
out the provisions of this Contract. The Company shall be entitled to
rely on and may act upon advice of counsel (who may be counsel for
either or both of the Funds) on all matters, and shall be without
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liability for any action reasonably taken or omitted pursuant to such
advice, provided that such action is not in violation of applicable
federal or state laws or regulations, and is in good faith and without
negligence.
B. Indemnification by each Fund
The Company shall not be responsible for and each Fund shall indemnify
and hold the Company, including its officers, directors, shareholders
and their agents employees and affiliates, harmless against any and all
losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributable to:
(1) The acts or omissions of any eligible custodian, adviser, sub-
adviser or other party contracted by or approved by such Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper form
which
(a) are received by the Company or its agents or subcontractors
and furnished to it by or on behalf of each Fund, its
shareholders or investors regarding account information, the
purchase, sale, redemption or transfer ownership, interests
(e.g., HubInterests in FIP or SpokeShares in FIT);
(b) are received by the Company from independent pricing services
or sources for use in valuing the assets of such Fund; or
(c) are received by the Company or its agents or subcontractors
from Advisers, Sub-advisers or other third parties contracted
by or approved by such Fund for use in the performance of
services under this Agreement;
(d) have been prepared and/or maintained by such Fund or its
affiliates or any other person or firm on behalf of such Fund.
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(3) The reliance on, or the carrying out by the Company or its agents
or subcontractors of Proper Instructions of such Fund.
(4) The offer or sale of HubInterests in violation of any requirement
under the federal securities laws or regulations; or the offer or
sale of SpokeShares in violation of such federal securities laws or
the securities laws of any state requiring that SpokeShares be
registered in such state; or in violation of any stop order or
other determination or ruling by any federal agency or any state
with respect to the offer or sale of such SpokeShares in such
state.
Provided, however, that the Company shall not be protected by this
Article 19.B. from liability for any act or omission resulting from
the Company's willful misfeasance, bad faith, negligence or
reckless disregard of its duties of failure to meet the standard of
care set forth in 19.A. above.
C. Reliance
At any time the Company may apply to any officer of a Fund for
instructions for matters realting to such Fund, and may consult with
legal counsel with respect to any matter arising in connection with the
services to be performed by the Company under this Agreement realting to
such Fund, and the Company and its agents or subcontractors shall not be
liable and shall be indemnified by such Fund for any action reasonably
taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel provided such action is not in violation of
applicable federal or state laws or regulations.
D. Notification
In order that the indemnification provisions contained in this Article
19 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification
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shall promptly notify the other party of such assertion, and shall keep
the other party advised with respect to all developments concerning such
claim. The party who may be required to indemnify shall have the option
to participate with the party seeking indemnification in the defense of
such claim. The party seeking indemnification shall in no case confess
any claim or make any compromise in any case in which the other party
may be required to indemnify it except with the other party's prior
written consent.
ARTICLE 20. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other. Should a Fund exercise its right to
terminate, all out-of-pocket expenses associated with the movement of records
and materials will be borne by such Fund. Additionally, the Company reserves
the right to charge for any other reasonable expenses associated with such
termination. The provisions of Article 20 shall survive the termination of
this Agreement.
ARTICLE 21. AMENDMENT.
This Agreement may be amended or modified by a written agreement executed
by the parties.
ARTICLE 22. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and each
Fund, as to itself, may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement as may in
their joint opinion be consistent with the general tenor of this Agreement.
Any such interpretive or additional provisions shall be in a writing signed by
all parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of their Declarations of Trust. No interpretive
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or additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Agreement.
ARTICLE 23. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts
ARTICLE 24. NOTICES.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to each Fund, as appropriate, at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the
Company at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or
to such other address as the Trust or the Company may hereafter specify, shall
be deemed to have been properly delivered or given hereunder to the respective
address.
ARTICLE 25. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 26. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE TRUST.
The execution and delivery of this Agreement have been authorized by the
Trustees of each Fund and signed by an authorized officer of each Fund, acting
as such, and neither such authorization by such Trustees nor such execution
and delivery by such officer shall be deemed to have been made by any of them
individually or to impose any liability on any of them personally, and the
obligations of this Agreement are not binding upon the Trustees, Spoke Fund or
Shareholders, but bind only the appropriate property of each Fund, as provided
in the Declaration of Trust.
ARTICLE 27. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Company and signed by an authorized officer of the Company,
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acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of them personally,
and the obligations of this Agreement are not binding upon any of the Trustees
or Shareholders of the Company, but bind only the property of the Company as
provided in the Declaration of Trust.
ARTICLE 28. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be assignable
with respect to either of the Funds by any of the parties hereto except by the
specific written consent of all parties.
ARTICLE 29. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
ARTICLE 30. SUCCESSOR AGENT.
If a successor agent shall be appointed by for either of the Funds, the
Company shall upon termination of this Agreement deliver to such successor
agent at the office of the Company all properties of the appropriate Fund held
by it hereunder. If no such successor agent shall be appointed, the Company
shall at its office upon receipt of Proper Instructions deliver such
properties in accordance with such instructions.
In the event that no written order designating a successor agent or Proper
Instructions shall have been delivered to the Company on or before the date
when such termination shall become effective, then the Company shall have the
right to deliver to a bank or trust company, which is a "bank" as defined in
the 1940 Act, of its own selection, having an aggregate capital, surplus, and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all properties held by the Company under this Agreement.
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Thereafter, such bank or trust company shall be the successor of the Company
under this Agreement.
ARTICLE 31. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to either of the Funds as a result of work
stoppage, power or other mechanical failure, natural disaster, governmental
action, communication disruption or other impossibility of performance.
ARTICLE 32. ASSIGNMENT; SUCCESSORS.
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. Nothing in this Article 32 shall prevent the Company
from delegating its responsibilities to another entity to the extent provided
herein.
ARTICLE 33. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: FEDERATED INVESTMENT PORTFOLIOS
FEDERATED INVESTMENT TRUST
By
ATTEST: FEDERATED SERVICES COMPANY
By:
