Exhibit 9(i) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
TRANSFER AGENCY SERVICES
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of , 1996, by and between those investment
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companies listed on Exhibit 1 as may be amended from time to time, having their
principal office and place of business at Federated Investors Tower,
Pittsburgh, PA 15222-3779 (the "Investment Company"), on behalf of the
portfolios (individually referred to herein as a "Fund" and collectively as
"Funds") of the Investment Company, and FEDERATED SERVICES COMPANY, a
Pennsylvania corporation, having its principal office and place of business at
Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779, on behalf of
itself and its subsidiaries (the "Company").
WHEREAS, the Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"), with authorized and issued shares of capital stock or beneficial
interest ("Shares");
WHEREAS, the Fund is a Spoke in a Hub and Spoke investment structure;
WHEREAS, the Investment Company may desire to appoint the Company as fund
accountant to provide fund accounting services (as herein defined) including
certain accounting and recordkeeping services for each of the Funds, including
any classes of shares issued by any Fund ("Classes") if so indicated on Exhibit
1, and the Company desires to accept such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as
administrator to provide it with administrative services (as herein defined),
if so indicated on Exhibit 1, and the Company desires to accept such
appointment;
WHEREAS, the Investment Company may desire to appoint the Company as its
transfer agent and dividend disbursing agent to provide it with transfer
agency services (as herein defined) and agent in connection with certain other
activities, if so indicated on Exhibit 1, and the Company desires to accept
such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as its
agent to select, negotiate and subcontract for custodian services, and the
Company desires to accept such appointment; and
WHEREAS, from time to time the Investment Company may desire and may
instruct the Company to subcontract for the performance of certain of its
duties and responsibilities hereunder to another agent (the "Agent").
NOW THEREFORE, in consideration of the premises and mutual covenants herein
contained, and intending to be legally bound hereby, the parties hereto agree
as follows:
SECTION ONE: FUND ACCOUNTING SERVICES.
ARTICLE 1. APPOINTMENT.
The Investment Company hereby appoints the Company as its fund accountant to
provide certain fund accounting services to the Funds, and/or the Classes, for
the period and on the terms set forth in this Agreement. The Company accepts
such appointment and agrees to furnish the services set forth in Article 2 of
this Agreement in return for the compensation set forth in Article 3 of this
Agreement.
ARTICLE 2. THE COMPANY'S DUTIES.
Subject to the supervision and control of the Investment Company's Board of
Trustees or Directors ("Board"), the Company will assist the Investment Company
with regard to fund accounting for the Investment Company, and/or the Funds,
and/or the Classes, and in connection therewith undertakes to perform the
following specific services:
A. determine the net asset value per share of each Fund and/or Class, at the
time and in the manner from time to time determined by the Board and as
set forth in the Prospectus and Statement of Additional Information
("Prospectus") of each Fund;
B. calculate the net income of each Fund, if any;
C. maintain the general ledger and other accounts, books and financial
records of the Investment Company, including for each Fund, and/or Class,
as required under Section 31(a) of the 1940 Act and the Rules thereunder
in connection with the services provided by the Company;
D. preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records to be maintained under Rule 31a-1 of the 1940 Act in connection
with the services provided by the Company. The Company further agrees
that all such records it maintains for the Investment Company are the
property of the Investment Company and further agrees to surrender
promptly to the Investment Company such records upon the Investment
Company's request;
E. calculate dividend and capital gains distributions for each Fund as set
forth in the Prospectus, if any;
F. at the request of the Investment Company, prepare various reports or
other financial documents, in accordance with generally accepted
accounting principles, as required by federal, state and other applicable
laws and regulations; and
G. such other similar services as may be reasonably requested by the
Investment Company.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Investment Company under this Section One,
shall hereafter be referred to as "Fund Accounting Services."
ARTICLE 3. COMPENSATION AND ALLOCATION OF EXPENSES.
A. The Funds will compensate the Company for Fund Accounting Services in
accordance with the fees agreed upon from time to time between the
parties hereto. Such fees do not include out-of-pocket disbursements of
the Company for which the Funds shall reimburse the Company 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. The Fund and/or the Class, and not the Company, shall bear the cost of:
custodial expenses; membership dues in the Investment Company Institute
or any similar organization; transfer agency expenses; investment
advisory expenses; costs of printing and mailing stock certificates,
Prospectuses, reports and notices; administrative expenses; interest on
borrowed money; brokerage commissions; taxes and fees payable to federal,
state and other governmental agencies; fees of Trustees or Directors of
the Investment Company; independent auditors expenses; legal and audit
department expenses billed to the Company for work performed related to
the Investment Company, the Funds, or the Classes; law firm expenses;
organizational expenses; or other expenses not specified in this Article
3 which may be properly payable by the Funds and/or Classes.
C. The compensation and out-of-pocket expenses attributable to the Fund
shall be accrued by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon request of the
Company. The Company will maintain detailed information about the
compensation and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted from
time to time, shall be dated and signed by a duly authorized officer of
the Investment Company and/or the Funds and a duly authorized officer of
the Company.
E. The fee for the period from the effective date of this Agreement with
respect to a Fund or a Class to the end of the initial month shall be
prorated according to the proportion that such period bears to the full
month period. Upon any termination of this Agreement before the end of
any month, the fee for such period shall be prorated according to the
proportion which such period bears to the full month period. For purposes
of determining fees payable to the Company, the value of the Fund's net
assets shall be computed at the time and in the manner specified in the
Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time subcontract
to, employ or associate with itself such person or persons as the Company
may believe to be particularly suited to assist it in performing Fund
Accounting Services. Such person or persons may be affiliates of the
Company, third-party service providers, or they may be officers and
employees who are employed by both the Company and the Investment
Company; provided, however, that the Company shall be as fully
responsible to each Fund for the acts and omissions of any such
subcontractor as it is for its own acts and omissions. The compensation
of such person or persons shall be paid by the Company and no obligation
shall be incurred on behalf of the Investment Company, the Funds, or the
Classes in such respect.
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 4. APPOINTMENT.
The Investment Company hereby appoints the Company as Administrator for the
period and on the terms and conditions set forth in this Agreement. The
Company accepts such appointment and agrees to furnish the services set forth
in Article 5 of this Agreement in return for the compensation set forth in
Article 9 of this Agreement.
ARTICLE 5. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of the Board,
the Company will provide facilities, equipment, and personnel to carry out the
following administrative services for operation of the business and affairs of
the Investment Company and the Funds and/or Classes:
A. prepare, file, and maintain the Investment Company's governing documents
and any amendments thereto, including the Articles of Incorporation or
Declaration of Trust (which has already been prepared and filed), the By-
laws and minutes of meetings of the Board and Shareholders;
B. prepare and file with the Securities and Exchange Commission and the
appropriate state securities authorities the registration statements for
the Investment Company and the Investment Company's shares and all
amendments thereto, reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents all as may be
necessary to enable the Investment Company to make a continuous offering
of its shares;
C. prepare, negotiate, and administer contracts on behalf of the Investment
Company with, among others, the Investment Company's investment advisers
(if any), distributors, and transfer agents, subject to any applicable
restrictions of the Board or the 1940 Act;
D. calculate performance data of Funds for dissemination to information
services covering the investment company industry;
E. prepare and file Funds' tax returns;
F. examine and review the operations of the Investment Company's transfer
agents;
G. coordinate the layout and printing of publicly disseminated prospectuses
and reports;
H. perform internal audit examinations in accordance with a charter to be
adopted by the Company and the Investment Company;
I. assist with the design, development, and operation of the Investment
Company and the Funds;
J. provide individuals reasonably acceptable to the Board for nomination,
appointment, or election as officers of the Investment Company and the
Funds, who will be responsible for the management of certain of the
Investment Company's and the Funds' affairs as determined by the Board;
K. direct the Investment Company's custodian banks to daily transfer the
proceeds from payment for the purchase of Shares by Shareholders to the
custodian bank for the registered investment company in which the Fund
owns an interest ("Hub Fund") and at the same time notify the Hub Fund's
administrator of such transfers;
L. request the administrator for the Hub Fund to direct the custodian bank
for the Hub Fund to timely deposit cash in the custodian account of the
Fund's custodian bank as needed to meet redemptions of Shares by
Shareholders, dividend or distribution payments to Shareholders or
payment of Fund expenses;
M. reconcile the amounts so requested and transferred, as described in L.
and M. above, with the Fund's custodian, transfer agent and the Hub
Fund's administrator; and
N. consult with the Fund and its Board on matters concerning the Fund and
its affairs.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Fund under this Section Two, shall
hereafter be referred to as "Administrative Services."
ARTICLE 6. RECORDS.
The Company shall create and maintain all necessary books and records in
accordance with all applicable laws, rules and regulations, including but not
limited to records required by Section 31(a) of the Investment Company Act of
1940 and the rules thereunder, as the same may be amended from time to time,
pertaining to the Administrative Services performed by it and not otherwise
created and maintained by another party pursuant to contract with the
Investment Company. Where applicable, such records shall be maintained by the
Company for the periods and in the places required by Rule 31a-2 under the 1940
Act. The books and records pertaining to the Investment Company which are in
the possession of the Company shall be the property of the Fund. The
Investment Company, or the Investment Company's authorized representatives,
shall have access to such books and records at all times during the Company `s
normal business hours. Upon the reasonable request of the Investment Company,
copies of any such books and records shall be provided promptly by the Company
to the Investment Company or the Investment Company's authorized
representatives.
ARTICLE 7. DUTIES OF THE FUND.
The Fund assumes full responsibility for the preparation, contents and
distribution of its own offering document and for complying with all applicable
requirements the 1940 Act, the Internal Revenue Code, and any other laws, rules
and regulations of government authorities having jurisdiction.
ARTICLE 8. EXPENSES.
The Company shall be responsible for expenses incurred in providing office
space, equipment, and personnel as may be necessary or convenient to provide
the Administrative Services to the Fund, including the compensation of the
Company employees who serve as or officers of the Fund. The Fund shall be
responsible for all other expenses incurred by the Company on behalf of the
Fund, including without limitation postage and courier expenses, printing
expenses, travel expenses, registration fees, filing fees, fees of outside
counsel and independent auditors and other professional services,
organizational expenses, insurance premiums, fees payable to persons who are
not the Company employees, trade association dues, and other expenses properly
payable by the Funds and/or Classes.
ARTICLE 9. COMPENSATION.
For the Administrative Services provided, the Investment Company hereby
agrees to pay and the Company hereby agrees to accept as full compensation for
its services rendered hereunder an administrative fee at an annual rate per
portfolio of the Investment Company's shares, as specified below.
The compensation and out-of-pocket expenses attributable to the Fund shall
be accrued by the Fund and shall be paid to the Company no less frequently than
monthly, and shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket expenses
by the Fund.
MAX. ADMIN. AVERAGE DAILY NET ASSETS
FEE OF THE FUND
.100% $0-250 Million
.0875% $250-500 Million
.075% $500-750 Million
.070% $750+ Million
(Average Daily Net Asset break-points are on a per Spoke Fund basis.)
However, in no event shall the administrative fee received during any year
of the Agreement be less than, or be paid at a rate less than would aggregate
$60,000 per Fund and $30,000 per Class. A one-time, non-recurring origination
fee of $75,000 may be charged to the Fund. The minimum fee set forth above in
this Article 9 may increase annually upon each March 1 anniversary of this
Agreement over the minimum fee during the prior 12 months, as calculated under
this agreement, in an amount equal to the increase in Pennsylvania Consumer
Price Index (not to exceed 6% annually) as last reported by the U.S. Bureau of
Labor Statistics for the twelve months immediately preceding such anniversary.
ARTICLE 10. RESPONSIBILITY OF ADMINISTRATOR.
A. The Company shall not be liable for any error of judgment or mistake of
law or for any loss suffered by the Investment Company in connection with
the matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement. The Company shall be
entitled to rely on and may act upon advice of counsel (who may be
counsel for the Fund) on all matters, and shall be without liability for
any action reasonably taken or omitted pursuant to such advice. Any
person, even though also an officer, director, trustee, partner, employee
or agent of the Company, who may be or become an officer, director,
trustee, partner, employee or agent of the Investment Company, shall be
deemed, when rendering services to the Investment Company or acting on
any business of the Investment Company (other than services or business
in connection with the duties of the Company hereunder) to be rendering
such services to or acting solely for the Investment Company and not as
an officer, director, trustee, partner, employee or agent or one under
the control or direction of the Company even though paid by the Company.
B. The Company shall be kept indemnified by the Investment Company and be
without liability for any action taken or thing done by it in performing
the Administrative Services in accordance with the above standards. In
order that the indemnification provisions contained in this Article 10
shall apply, however, it is understood that if in any case the Investment
Company may be asked to indemnify or save the Company harmless, the
Investment Company shall be fully and promptly advised of all pertinent
facts concerning the situation in question, and it is further understood
that the Company will use all reasonable care to identify and notify the
Investment Company promptly concerning any situation which presents or
appears likely to present the probability of such a claim for
indemnification against the Investment Company. The Investment Company
shall have the option to defend the Company against any claim which may
be the subject of this indemnification. In the event that the Investment
Company so elects, it will so notify the Company and thereupon the
Investment Company shall take over complete defense of the claim, and the
Company shall in such situation initiate no further legal or other
expenses for which it shall seek indemnification under this Article. The
Company shall in no case confess any claim or make any compromise in any
case in which the Investment Company will be asked to indemnify the
Company except with the Investment Company's written consent.
SECTION THREE: TRANSFER AGENCY SERVICES.
ARTICLE 11. TERMS OF APPOINTMENT.
The Investment Company hereby appoints the Company to act as transfer agent
and dividend disbursing agent for each Fund's Shares, and agent in connection
with any accumulation, open-account or similar plans provided to the
shareholders of any Fund ("Shareholder(s)"), including without limitation any
periodic investment plan or periodic withdrawal program.
ARTICLE 12. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with Proper
Instructions (as defined in Article 19) as may be provided from time to time by
the Investment Company as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase of
shares and promptly deliver payment and appropriate documentation
therefor to the custodian of the relevant Fund (the "Custodian").
The Company shall notify the Fund, the Administrator for the Fund
and the Custodian on a daily basis of the total amount of orders and
payments so delivered.
(2) Pursuant to purchase orders and in accordance with the Fund's
current Prospectus, the Company shall compute and issue the
appropriate number of Shares of each Fund and/or Class and hold such
Shares in the appropriate Shareholder accounts.
(3) For certificated Funds and/or Classes, if a Shareholder or its agent
requests a certificate, the Company, as Transfer Agent, shall
countersign and mail by first class mail, a certificate to the
Shareholder at its address as set forth on the transfer books of the
Funds, and/or Classes, subject to any Proper Instructions regarding
the delivery of certificates.
(4) In the event that any check or other order for the purchase of
Shares of the Fund and/or Class is returned unpaid for any reason,
the Company shall debit the Share account of the Shareholder by the
number of Shares that had been credited to its account upon receipt
of the check or other order, promptly mail a debit advice to the
Shareholder, and notify the Fund and/or Class of its action. In the
event that the amount paid for such Shares exceeds proceeds of the
redemption of such Shares plus the amount of any dividends paid with
respect to such Shares, the Fund and/the Class or its distributor
will reimburse the Company on the amount of such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Funds in accordance with the provisions of
its governing document and the then-current Prospectus of the Fund.
The Company shall prepare and mail or credit income, capital gain,
or any other payments to Shareholders. As the Dividend Disbursing
Agent, the Company shall, on or before the payment date of any such
distribution, notify the Custodian and the Fund's Administrator of
the estimated amount required to pay any portion of said
distribution which is payable in cash and request the Custodian to
make available sufficient funds for the cash amount to be paid out.
The Company shall reconcile the amounts so requested and the amounts
actually received with the Custodian and the Fund's Administrator on
a daily basis. If a Shareholder is entitled to receive additional
Shares by virtue of any such distribution or dividend, appropriate
credits shall be made to the Shareholder's account, for certificated
Funds and/or Classes, delivered where requested; and
(2) The Company shall maintain records of account for each Fund and
Class and advise the Investment Company, each Fund and Class and its
Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set forth
in Proper Instructions, deliver the appropriate instructions
therefor to the Custodian. The Company shall notify the Fund and the
Fund's Administrator on a daily basis of the total amount of
redemption requests processed and monies paid to the Company by the
Custodian for redemptions.
(2) At the appropriate time upon receiving redemption proceeds from the
Custodian with respect to any redemption, the Company shall pay or
cause to be paid the redemption proceeds in the manner instructed by
the redeeming Shareholders, pursuant to procedures described in the
then-current Prospectus of the Fund.
(3) If any certificate returned for redemption or other request for
redemption does not comply with the procedures for redemption
approved by the Fund, the Company shall promptly notify the
Shareholder of such fact, together with the reason therefor, and
shall effect such redemption at the price applicable to the date and
time of receipt of documents complying with said procedures.
(4) The Company shall effect transfers of Shares by the registered
owners thereof.
(5) The Company shall identify and process abandoned accounts and
uncashed checks for state escheat requirements on an annual basis
and report such actions to the Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shares of each Fund, and/or
Class, and maintain pursuant to applicable rules of the Securities
and Exchange Commission ("SEC") a record of the total number of
Shares of the Fund and/or Class which are authorized, based upon
data provided to it by the Fund, and issued and outstanding. The
Company shall also provide the Fund on a regular basis or upon
reasonable request with the total number of Shares which are
authorized and issued and outstanding, but shall have no obligation
when recording the issuance of Shares, except as otherwise set forth
herein, to monitor the issuance of such Shares or to take cognizance
of any laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be performed
hereunder in the form and manner as agreed to by the Investment
Company or the Fund to include a record for each Shareholder's
account of the following:
(a) name, address and tax identification number (and whether such
number has been certified);
(b) number of Shares held;
(c) historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) any stop or restraining order placed against the account;
(e) information with respect to withholding in the case of a
foreign account or an account for which withholding is required
by the Internal Revenue Code;
(f) any dividend reinvestment order, plan application, dividend
address and correspondence relating to the current maintenance
of the account;
(g) certificate numbers and denominations for any Shareholder
holding certificates; and
(h) any information required in order for the Company to perform
the calculations contemplated or required by this Agreement.
(3) The Company shall preserve any such records required to be
maintained pursuant to the rules of the SEC for the periods
prescribed in said rules as specifically noted below. Such record
retention shall be at the expense of the Company, and such records
may be inspected by the Fund at reasonable times. The Company may,
at its option at any time, and shall forthwith upon the Fund's
demand, turn over to the Fund and cease to retain in the Company's
files, records and documents created and maintained by the Company
pursuant to this Agreement, which are no longer needed by the
Company in performance of its services or for its protection. If not
so turned over to the Fund, such records and documents will be
retained by the Company for six years from the year of creation,
during the first two of which such documents will be in readily
accessible form. At the end of the six year period, such records and
documents will either be turned over to the Fund or destroyed in
accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Fund periodically the following
information:
(a) a copy of the transaction register;
(b) dividend and reinvestment blotters;
(c) the total number of Shares issued and outstanding in each state
for "blue sky" purposes as determined according to Proper
Instructions delivered from time to time by the Fund to the
Company;
(d) Shareholder lists and statistical information;
(e) payments to third parties relating to distribution agreements,
allocations of sales loads, redemption fees, or other
transaction- or sales-related payments; and
(f) such other information as may be agreed upon from time to time.
(2) The Company shall prepare in the appropriate form, file with the
Internal Revenue Service and appropriate state agencies, and, if
required, mail to Shareholders, such notices for reporting dividends
and distributions paid as are required to be so filed and mailed and
shall withhold such sums as are required to be withheld under
applicable federal and state income tax laws, rules and regulations.
(3) In addition to and not in lieu of the services set forth above, the
Company shall:
(a) perform all of the customary services of a transfer agent,
dividend disbursing agent and, as relevant, agent in connection
with accumulation, open-account or similar plans (including
without limitation any periodic investment plan or periodic
withdrawal program), including but not limited to: maintaining
all Shareholder accounts, mailing Shareholder reports and
Prospectuses to current Shareholders, withholding taxes on
accounts subject to back-up or other withholding (including
non-resident alien accounts), preparing and filing reports on
U.S. Treasury Department Form 1099 and other appropriate forms
required with respect to dividends and distributions by federal
authorities for all Shareholders, preparing and mailing
confirmation forms and statements of account to Shareholders
for all purchases and redemptions of Shares and other
conformable transactions in Shareholder accounts, preparing and
mailing activity statements for Shareholders, and providing
Shareholder account information; and
(b) provide a system which will enable the Fund to monitor the
total number of Shares of each Fund and/or Class sold in each
state ("blue sky reporting"). The Fund shall by Proper
Instructions (i) identify to the Company those transactions and
assets to be treated as exempt from the blue sky reporting for
each state and (ii) verify the classification of transactions
for each state on the system prior to activation and thereafter
monitor the daily activity for each state. The responsibility
of the Company for each Fund's and/or Class's state blue sky
registration status is limited solely to the recording of the
initial classification of transactions or accounts with regard
to blue sky compliance and the reporting of such transactions
and accounts to the Fund as provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholders relating
to their Share accounts and such other correspondence as may from
time to time be addressed to the Company.
(2) The Company shall prepare Shareholder meeting lists, mail proxy
cards and other material supplied to it by the Fund in connection
with Shareholder Meetings of each Fund; receive, examine and
tabulate returned proxies, and certify the vote of the Shareholders.
(3) The Company shall establish and maintain facilities and procedures
for safekeeping of stock certificates, check forms and facsimile
signature imprinting devices, if any; and for the preparation or
use, and for keeping account of, such certificates, forms and
devices.
All of the foregoing as described in this Article 12, along with any
additional services that the Company shall agree in writing to perform for the
Investment Company under this Section Three, shall hereafter be referred to as
"Transfer Agency Services."
ARTICLE 13. DUTIES OF THE INVESTMENT COMPANY.
A. Compliance
The Investment Company or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or their classes'
Prospectus and for complying with all applicable requirements of the
Securities Act of 1933, as amended (the "1933 Act"), the 1940 Act and any
laws, rules and regulations of government authorities having
jurisdiction.
B. Share Certificates
If the Investment Company has authorized the issuance of share
certificates, the Investment Company shall supply the Company with a
sufficient supply of blank Share certificates and from time to time shall
renew such supply upon request of the Company. Such blank Share
certificates shall be properly signed, manually or by facsimile, if
authorized by the Investment Company and shall bear the seal of the
Investment Company or facsimile thereof; and notwithstanding the death,
resignation or removal of any officer of the Investment Company
authorized to sign certificates, the Company may continue to countersign
certificates which bear the manual or facsimile signature of such officer
until otherwise directed by the Investment Company
C. Distributions
The Fund shall promptly inform the Company of the declaration of any
dividend or distribution on account of any Fund's shares.
ARTICLE 14. COMPENSATION AND EXPENSES.
A. Annual Fee
The Funds will compensate the Company for Transfer Agency Services in
accordance with an annual maintenance fee schedule for Shareholder
accounts as agreed upon from time to time between the parties hereto.
Pursuant to information in the Fund Prospectus or other information or
instructions from the Fund, the Company may sub-divide any Fund into
Classes or other sub-components for recordkeeping purposes. The Company
will charge the Fund the same fees for each such Class or sub-component
the same as if each were a Fund.
B. Reimbursements
In addition to the fee paid under Article 14A above, the Investment
Company and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items agreed upon
between the parties, as may be added to or amended from time to time. In
addition, any other expenses incurred by the Company at the request or
with the consent of the Investment Company and/or the Fund, will be
reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the Fund
and shall be paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted from
time to time, shall be dated and signed by a duly authorized officer of
the Investment Company and/or the Funds and a duly authorized officer of
the Company.
SECTION FOUR: CUSTODY SERVICES PROCUREMENT.
ARTICLE 15. APPOINTMENT.
The Investment Company hereby appoints Company as its agent to evaluate and
obtain custody services from a financial institution that (i) meets the
criteria established in Section 17(f) of the 1940 Act and (ii) has been
approved by the Board as eligible for selection by the Company as a custodian
(the "Eligible Custodian"). The Company accepts such appointment.
ARTICLE 16. THE COMPANY AND ITS DUTIES.
Subject to the review, supervision and control of the Board, the Company
shall:
A. evaluate and obtain custody services from a financial institution that
meets the criteria established in Section 17(f) of the 1940 Act and has
been approved by the Board as being eligible for selection by the Company
as an Eligible Custodian;
B. negotiate and enter into agreements with Eligible Custodians for the
benefit of the Investment Company, with the Investment Company as a party
to each such agreement. The Company may, as paying agent, be a party to
any agreement with any such Eligible Custodian;
C. establish procedures to monitor the nature and the quality of the
services provided by Eligible Custodians;
D. monitor and evaluate the nature and the quality of services provided by
Eligible Custodians;
E. periodically provide to the Investment Company (i) written reports on the
activities and services of Eligible Custodians; (ii) the nature and
amount of disbursements made on account of the each Fund with respect to
each custodial agreement; and (iii) such other information as the Board
shall reasonably request to enable it to fulfill its duties and
obligations under Sections 17(f) and 36(b) of the 1940 Act and other
duties and obligations thereof; and
F. periodically provide recommendations to the Board to enhance Eligible
Custodian's customer services capabilities and improve upon fees being
charged to the Fund by Eligible Custodian.
The foregoing, along with any additional services that Company shall agree
in writing to perform for the Fund under this Section Four, shall hereafter
be referred to as "Custody Services Procurement."
ARTICLE 17. FEES AND EXPENSES.
A. Annual Fee
For the performance Custody Services Procurement by the Company pursuant
to Section Four of this Agreement, the Investment Company and/or the Fund
agree to compensate the Company in accordance with the fees agreed upon
from time to time.
B. Reimbursements
In addition to the fee paid under Article 17A above, the Investment
Company and/or Fund agree to reimburse the Company for out-of-pocket
expenses or advances incurred by the Company for the items agreed upon
between the parties, as may be added to or amended from time to time. In
addition, any other expenses incurred by the Company at the request or
with the consent of the Investment Company and/or the Fund, will be
reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the Fund
and shall be paid to the Company no less frequently than monthly, and
shall be paid daily upon request of the Company. The Company will
maintain detailed information about the compensation and out-of-pocket
expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be adjusted from
time to time, shall be dated and signed by a duly authorized officer of
the Investment Company and/or the Funds and a duly authorized officer of
the Company.
ARTICLE 18. REPRESENTATIONS.
The Company represents and warrants that it has obtained all required
approvals from all government or regulatory authorities necessary to enter into
this arrangement and to provide the services contemplated in Section Four of
this Agreement.
SECTION FIVE: GENERAL PROVISIONS.
ARTICLE 19. PROPER INSTRUCTIONS.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed
to be Proper Instructions if (a) the Company reasonably believes them to have
been given by a person previously authorized in Proper Instructions to give
such instructions with respect to the transaction involved, and (b) the
Investment Company, or the Fund, and the Company promptly cause such oral
instructions to be confirmed in writing. Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Investment Company, or the Fund, and the Company are
satisfied that such procedures afford adequate safeguards for the Fund's
assets. Proper Instructions may only be amended in writing.
ARTICLE 20. ASSIGNMENT.
Except as provided below, neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by either party without the
written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. With regard to Transfer Agency Services, the Company may without further
consent on the part of the Investment Company subcontract for the
performance of Transfer Agency Services with
(1) its subsidiary, Federated Shareholder Service Company, a Delaware
business trust, which is duly registered as a transfer agent
pursuant to Section 17A(c)(1) of the Securities Exchange Act of
1934, as amended, or any succeeding statute ("Section 17A(c)(1)");
or
(2) such other provider of services duly registered as a transfer agent
under Section 17A(c)(1) as Company shall select.
The Company shall be as fully responsible to the Investment Company for
the acts and omissions of any subcontractor as it is for its own acts and
omissions.
C. With regard to Fund Accounting Services, Administrative Services and
Custody Procurement Services, the Company may without further consent on
the part of the Investment Company subcontract for the performance of
such services with Federated Administrative Services, a wholly-owned
subsidiary of the Company.
D. The Company shall upon instruction from the Investment Company
subcontract for the performance of services under this Agreement with an
Agent selected by the Investment Company, other than as described in B.
and C. above; provided, however, that the Company shall in no way be
responsible to the Investment Company for the acts and omissions of the
Agent.
ARTICLE 21. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
the Investment Company shall file with the Company the following
documents:
(1) a copy of the Charter and By-Laws of the Investment Company and all
amendments thereto;
(2) a copy of the resolution of its Board authorizing this Agreement;
(3) specimens of all forms of outstanding Share certificates of the
Investment Company or the Funds in the forms approved by the Board
of the Investment Company with a certificate of the Secretary of the
Investment Company as to such approval;
(4) all account application forms and other documents relating to
Shareholders' accounts; and
(5) a copy of the current Prospectus for each Fund.
B. The Investment Company will also furnish from time to time the following
documents:
(1) each resolution of the Board authorizing the original issuance of
each Fund's, and/or Class's Shares;
(2) each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to the
sale of Shares of any Fund, and/or Class;
(3) a certified copy of each amendment to the governing document and the
By-Laws of the Investment Company;
(4) certified copies of each vote of the Board authorizing persons to
give Proper Instructions;
(5) specimens of all new Share certificates representing Shares of any
Fund, accompanied by Board resolutions approving such forms;
(6) such other certificates, documents or opinions which the Company
may, in its discretion, deem necessary or appropriate in the proper
performance of its duties; and
(7) revisions to the Prospectus of each Fund.
ARTICLE 22. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Investment Company that:
(1) it is a corporation duly organized and existing and in good standing
under the laws of the Commonwealth of Pennsylvania;
(2) It is duly qualified to carry on its business in each jurisdiction
where the nature of its business requires such qualification, and in
the Commonwealth of Pennsylvania;
(3) it is empowered under applicable laws and by its charter and by-laws
to enter into and perform this Agreement;
(4) all requisite corporate proceedings have been taken to authorize it
to enter into and perform its obligations under this Agreement;
(5) it has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under
this Agreement; and
(6) it is in compliance with federal securities law requirements and in
good standing as a transfer agent.
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the Company that:
(1) it is an investment company duly organized and existing and in good
standing under the laws of its state of organization;
(2) it is empowered under applicable laws and by its Charter and By-Laws
to enter into and perform its obligations under this Agreement;
(3) all corporate proceedings required by said Charter and By-Laws have
been taken to authorize it to enter into and perform its obligations
under this Agreement;
(4) the Investment Company is an open-end investment company registered
under the 1940 Act; and
(5) a registration statement under the 1933 Act will be effective, and
appropriate state securities law filings have been made and will
continue to be made, with respect to all Shares of each Fund being
offered for sale.
ARTICLE 23. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One, Three and Four, the Company shall be held to
a standard of reasonable care in carrying out the provisions of this
Contract. The Company shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Investment Company) on all
matters, and shall be without liability for any action reasonably taken
or omitted pursuant to such advice, provided that such action is not in
violation of applicable federal or state laws or regulations, and is in
good faith and without negligence.
B. Indemnification by Investment Company
The Company shall not be responsible for and the Investment Company or
Fund shall indemnify and hold the Company, including its officers,
directors, shareholders and their agents employees and affiliates,
harmless against any and all losses, damages, costs, charges, counsel
fees, payments, expenses and liabilities arising out of or attributable
to:
(1) the acts or omissions of any Custodian, Adviser, Sub-adviser or
other party contracted by or approved by the Investment Company or
Fund;
(2) the reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper form
which
(a) are received by the Company or its agents or subcontractors and
furnished to it by or on behalf of the Fund, its Shareholders
or investors regarding the purchase, redemption or transfer of
Shares and Shareholder account information;
(b) are received by the Company from independent pricing services
or sources for use in valuing the assets of the Funds;
(c) are received by the Company or its agents or subcontractors
from Advisers, Sub-advisers or other third parties contracted
by or approved by the Investment Company of Fund for use in the
performance of services under this Agreement; or
(d) have been prepared and/or maintained by the Fund or its
affiliates or any other person or firm on behalf of the
Investment Company;
(3) the reliance on, or the carrying out by the Company or its agents or
subcontractors of Proper Instructions of the Investment Company or
the Fund; or
(4) the offer or sale of Shares in violation of any requirement under
the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such
state or in violation of any stop order or other determination or
ruling by any federal agency or any state with respect to the offer
or sale of such Shares in such state.
Provided, however, that the Company shall not be protected by this
Article 23.B from liability for any act or omission resulting from
the Company's willful misfeasance, bad faith, negligence or reckless
disregard of its duties of failure to meet the standard of care set
forth in 23.A above.
C. Reliance
At any time the Company may apply to any officer of the Investment
Company or Fund for instructions, and may consult with legal counsel with
respect to any matter arising in connection with the services to be
performed by the Company under this Agreement, and the Company and its
agents or subcontractors shall not be liable and shall be indemnified by
the Investment Company or the appropriate Fund for any action reasonably
taken or omitted by it in reliance upon such instructions or upon the
opinion of such counsel provided such action is not in violation of
applicable federal or state laws or regulations. The Company, its agents
and subcontractors shall be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper
manual or facsimile signatures of the officers of the Investment Company
or the Fund, and the proper countersignature of any former transfer agent
or registrar, or of a co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this Article 23
shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the
other party advised with respect to all developments concerning such
claim. The party who may be required to indemnify shall have the option
to participate with the party seeking indemnification in the defense of
such claim. The party seeking indemnification shall in no case confess
any claim or make any compromise in any case in which the other party may
be required to indemnify it except with the other party's prior written
consent.
ARTICLE 24. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from March 1, 1996 and shall continue
until February 28, 2003 (`Term"). Thereafter, the Agreement will continue for
18 month terms. The Agreement can be terminated by either party upon 18 months
notice to be effective as of the end of such 18 month period. In the event,
however, of willful misfeasance, bad faith, negligence or reckless disregard of
its duties by the Company, the Investment Company has the right to terminate
the Agreement upon 60 days written notice, if Company has not cured such
willful misfeasance, bad faith, negligence or reckless disregard of its duties
within 60 days. The termination date for all original or after-added
Investment companies which are, or become, a party to this Agreement. shall be
coterminous. Investment Companies that merge or dissolve during the Term,
shall cease to be a party on the effective date of such merger or dissolution.
Should the Investment Company exercise its right to terminate, all out-of-
pocket expenses associated with the movement of records and materials will be
borne by the Investment Company or the appropriate Fund. Additionally, the
Company reserves the right to charge for any other reasonable expenses
associated with such termination. The provisions of Articles 10 and 23 shall
survive the termination of this Agreement.
ARTICLE 25. AMENDMENT.
No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by a written agreement executed by both parties.
ARTICLE 26. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Investment Company may from time to time agree on such provisions interpretive
of or in addition to the provisions of this Agreement as may in their joint
opinion be consistent with the general tenor of this Agreement. Any such
interpretive or additional provisions shall be in a writing signed by both
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal or state
regulations or any provision of the organizational documents. No interpretive
or additional provisions made as provided in the preceding sentence shall be
deemed to be an amendment of this Agreement.
ARTICLE 27. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts
ARTICLE 28. NOTICES.
Except as otherwise specifically provided herein, Notices and other writings
delivered or mailed postage prepaid to the Investment Company at Federated
Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to the Company at
Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to such
other address as the Investment Company or the Company may hereafter specify,
shall be deemed to have been properly delivered or given hereunder to the
respective address.
ARTICLE 29. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original.
ARTICLE 30. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Company and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by any
of them individually or to impose any liability on any of them personally, and
the obligations of this Agreement are not binding upon any of the Trustees or
Shareholders of the Company, but bind only the property of the Company as
provided in the Declaration of Trust.
ARTICLE 31. MERGER OF AGREEMENT.
This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof whether
oral or written.
ARTICLE 32. SUCCESSOR AGENT.
If a successor agent for the Investment Company shall be appointed by the
Investment Company, the Company shall upon termination of this Agreement
deliver to such successor agent at the office of the Company all properties of
the Investment Company held by it hereunder. If no such successor agent shall
be appointed, the Company shall at its office upon receipt of Proper
Instructions deliver such properties in accordance with such instructions.
With regard to Section One and Two, in the event that no written order
designating a successor agent or Proper Instructions shall have been delivered
to the Company on or before the date when such termination shall become
effective, then the Company shall have the right to deliver to a bank or trust
company, which is a "bank" as defined in the 1940 Act, of its own selection,
having an aggregate capital, surplus, and undivided profits, as shown by its
last published report, of not less than $2,000,000, all properties held by the
Company under this Agreement. Thereafter, such bank or trust company shall be
the successor of the Company under this Agreement.
ARTICLE 33. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder or
any damages resulting therefrom to the Fund as a result of work stoppage, power
or other mechanical failure, natural disaster, governmental action,
communication disruption or other impossibility of performance.
ARTICLE 34. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign all of
or a substantial portion of its business to a successor, or to a party
controlling, controlled by, or under common control with such party. Nothing in
this Article 34 shall prevent the Company from delegating its responsibilities
to another entity to the extent provided herein.
ARTICLE 35. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
ARTICLE 36. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE INVESTMENT COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Investment Company and signed by an authorized officer of the
Investment Company, acting as such, and neither such authorization by such
Trustees nor such execution and delivery by such officer shall be deemed to
have been made by any of them individually or to impose any liability on any of
them personally, and the obligations of this Agreement are not binding upon any
of the Trustees or Shareholders of the Investment Company, but bind only the
appropriate property of the Fund, or Class, as provided in the Declaration of
Trust.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: INVESTMENT COMPANIES
(LISTED ON EXHIBIT 1)
By:
Xxxx X. XxXxxxxxx Xxxx X. Xxxxxxx
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
By:
Xxxxxx X. Xxxx Xxxxx X. Xxxxx
Secretary President
EXHIBIT 1
CONTRACT
DATE INVESTMENT COMPANY SERVICES
Portfolios Sections:
Classes
Federated Investment Trust
Federated Bond Index Fund 1,2,3,4,5
