EXHIBIT 9(A)
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
AND
TRANSFER AGENCY SERVICES
AGREEMENT made as of October 1, 1996, by and between Battery Park Funds,
Inc., a Maryland corporation, having its principal office and place of
business at 2 World Financial Center, New York, New York 10281-1198 (the
"Corporation"), on behalf of the portfolios listed on Exhibit 1 as may be
amended from time to time (individually referred to herein as a "Fund" and
collectively as "Funds") of the Corporation, 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 Corporation 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 ("Shares");
WHEREAS, the Corporation desires to retain the Company as fund
accountant to provide fund accounting services (as herein defined) including
certain pricing, accounting and recordkeeping services for each of the Funds,
including any classes of shares issued by any Fund ("Classes"), and the
Company desires to accept such appointment;
WHEREAS, the Corporation desires to appoint the Company as its
administrator to provide it with administrative services (as herein defined),
and the Company desires to accept such appointment;
WHEREAS, the Corporation desires 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, and the Company desires to accept such appointment; and
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.
The Corporation hereby appoints the Company to provide certain pricing
and 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 herein set forth in return for the compensation as
provided in Article 3 of this Section One.
ARTICLE 2. THE COMPANY'S DUTIES.
Subject to the supervision and control of the Corporation's Directors
("Board"), the Company will assist the Corporation with regard to fund
accounting for the Corporation, and/or the Funds, and/or the Classes, and in
connection therewith undertakes to perform the following specific services;
A. Value the assets of the Funds using: primarily, market quotations,
including the use of matrix pricing, supplied by the independent
pricing services selected by the Company in consultation with the
adviser, or sources selected by the adviser, and reviewed by the
board; secondarily, if a designated pricing service does not
provide a price for a security which the Company believes should be
available by market quotation, the Company may obtain a price by
calling brokers designated by the investment adviser of the fund
holding the security, 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 available, the Pricing Committee of the
Board will determine a fair value in good faith. Consistent with
Rule 2a-4 of the 1940 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 Fund for potential errors in valuing a Fund's
assets or calculating the net asset value per share of such Fund or
Class 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 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 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;
C. Calculate the net income of each of the Funds, if any;
D. Calculate realized capital gains or losses of each of the Funds
resulting from sale or disposition of assets, if any;
E. Maintain the general ledger and other accounts, books and financial
records of the Corporation, 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;
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
Corporation are the property of the Corporation and further agrees
to surrender promptly to the Corporation such records upon the
Corporation's request;
G. At the request of the Corporation, 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;
H. Prepare and file with the Securities and Exchange Commission
filings required under Rule 24f-2 and Section 24(e) of the 1940
Act, as applicable; and
I. Such other similar services as may be reasonably requested by the
Corporation.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Corporation 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. Out-of-pocket disbursements shall consist of the
items set forth on Schedule A attached hereto.
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
Directors of the Corporation; independent auditors expenses; 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. 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 Corporation 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 Corporation; 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 Corporation, the Funds, or the Classes in such respect.
SECTION TWO: ADMINISTRATIVE SERVICES.
ARTICLE 4. APPOINTMENT.
The Corporation hereby appoints the Company as Administrator for the
period on the terms and conditions set forth in this Agreement. The Company
hereby accepts such appointment and agrees to furnish the services set forth
in Article 5 of this Section Two in return for the compensation set forth in
Article 8 of this Section Two.
ARTICLE 5. THE COMPANY'S DUTIES.
As Administrator, and subject to the supervision and control of the
Board and in accordance with Proper Instructions (as defined hereafter) from
the Corporation, the Company will provide facilities, equipment, and
personnel to carry out the following administrative services for operation of
the business and affairs of the Corporation and each of its portfolios:
A. prepare, file, and maintain the Corporation's governing documents
and any amendments thereto, including the Charter (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 Corporation and the Corporation's shares and all
amendments thereto, reports to regulatory authorities and
shareholders, prospectuses, proxy statements, filings on Form
N-SAR, and such other documents as may be necessary to enable the
Corporation to make a continuous offering of its shares;
C. prepare, negotiate, and administer contracts on behalf of the
Corporation with, among others, the Corporation's investment
advisers and distributors, subject to any applicable restrictions
of the Board or the 1940 Act;
D. calculate performance data of the Corporation for dissemination to
information services covering the investment company industry;
E. prepare and file the Corporation's tax returns;
F. coordinate the layout and printing of publicly disseminated
prospectuses and reports;
G. perform internal audit examinations in accordance with a charter to
be adopted by the Company and the Corporation;
H. assist with the design, development, and operation of the
Corporation and the Funds;
I. provide individuals reasonably acceptable to the Board for
nomination, appointment, or election as officers of the
Corporation, who will be responsible for the management of certain
of the Corporation's affairs as determined by the Corporation's
Board; and
J. consult with the Corporation and its Board on matters concerning
the Corporation and its affairs.
The foregoing, along with any additional services that the Company shall
agree in writing to perform for the Corporation 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 1940 Act 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 Corporation. 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 Corporation which are in the possession of the
Company shall be the property of the Corporation. The Corporation, or the
Corporation'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 Corporation, copies of any such books and records
shall be provided promptly by the Company to the Corporation or the
Corporation's authorized representatives.
ARTICLE 7. 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 Corporation, including the
compensation of the Company employees who serve as trustees or directors or
officers of the Corporation. The Corporation shall be responsible for all
other expenses incurred by the Company on behalf of the Corporation,
including without limitation postage and courier expenses, printing expenses,
travel expenses, registration fees, filing fees, fees of outside counsel and
independent auditors, or other professional services, organizational
expenses, insurance premiums, fees payable to persons who are not the
Company's employees, trade association dues, and other expenses properly
payable by the Funds and/or the Classes.
ARTICLE 8. COMPENSATION.
For the Administrative Services provided, the Corporation hereby agrees
to pay and the Company hereby agrees to accept as full compensation for its
services rendered hereunder fees as set forth in Schedule B attached hereto.
The compensation and out of pocket expenses attributable to the Fund shall be
accrued by the Fund and paid to the Company no less frequently than monthly.
The Company will maintain detailed information about the compensation and out
of pocket expenses by Fund and Class.
ARTICLE 9. 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 Corporation in
connection with performing Administrative Services, 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 Section
Two. The Company shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Corporation) 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 Corporation, shall be deemed,
when rendering services to the Corporation or acting on any
business of the Corporation (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 Corporation 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 Corporation and be
without liability for any action taken by it in performing
Administrative Services 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. In order that the
indemnification provisions contained in this Article 9 shall apply,
however, it is understood that if in any case the Corporation may
be asked to indemnify or hold the Company harmless, the Corporation
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 Corporation promptly concerning any situation which
presents or appears likely to present the probability of such a
claim for indemnification against the Corporation. The Corporation
shall have the option to defend the Company against any claim which
may be the subject of this indemnification. In the event that the
Corporation so elects, it will so notify the Company and thereupon
the Corporation 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 9. The Company shall in no case confess any claim or make
any compromise in any case in which the Corporation will be asked
to indemnify the Company except with the Corporation's written
consent.
SECTION THREE: TRANSFER AGENCY SERVICES.
ARTICLE 10. TERMS OF APPOINTMENT.
Subject to the terms and conditions set forth in this Agreement, the
Corporation hereby appoints the Company to act as, and the Company agrees 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 11. DUTIES OF THE COMPANY.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Corporation
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 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's 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 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 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 Corporation, 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 Funds 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 under the Corporation's Articles of Incorporation
and are 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 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
Corporation 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;
(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;
(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.
ARTICLE 12. DUTIES OF THE CORPORATION.
A. Share Certificates
The Corporation 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 Corporation and shall bear the seal of the Corporation or
facsimile thereof; and notwithstanding the death, resignation or
removal of any officer of the Corporation 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 Corporation.
B. Distributions
The Fund shall promptly inform the Company of the declaration of
any dividend or distribution on account of any Fund's shares.
ARTICLE 13. COMPENSATION AND EXPENSES.
A. Annual Fee
For performance by the Company pursuant to Section Three of this
Agreement, the Corporation and/or the Fund agree to pay the Company
an annual maintenance fee for each Shareholder account as agreed
upon between the parties and as may be added to or amended from
time to time. Such fees may be changed from time to time subject
to written agreement between the Corporation and the Company.
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 13A above, the
Corporation 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
Corporation 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 Corporation and/or the Funds and a duly
authorized officer of the Company.
SECTION FOUR: GENERAL PROVISIONS.
ARTICLE 14. DUTIES OF THE FUND.
The Fund assumes ultimate responsibility for the preparation, contents
and distribution of its own offering document and for complying with all
applicable requirements of the 1940 Act, the Internal Revenue Code, and any
other laws, rules and regulations of government authorities having
jurisdiction.
ARTICLE 15. 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 Corporation, 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 Corporation, 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 16. 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, in
consultation with the Corporation, 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 Corporation for
the acts and omissions of any subcontractor as it is for its own
acts and omissions.
C. With regard to Fund Accounting Services and Administrative
Services, the Company may without further consent on the part of
the Corporation 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 Corporation subcontract
for the performance of services under this Agreement with an Agent
selected by the Corporation, other than as described in B. and C.
above; provided, however, that the Company shall in no way be
responsible to the Corporation for the acts and omissions of the
Agent.
ARTICLE 17. DOCUMENTS.
A. In connection with the appointment of the Company under this
Agreement, the Corporation shall file with the Company the
following documents:
(1) A copy of the Charter and By-Laws of the Corporation and all
amendments thereto;
(2) A copy of the resolution of the Board of the Corporation
authorizing this Agreement;
(3) Specimens of all forms of outstanding Share certificates of
the Corporation or the Funds in the forms approved by the
Board of the
Corporation with a certificate of the Secretary of the
Corporation as to such approval;
(4) All account application forms and other documents relating to
a Shareholder's account; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Corporation 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 Corporation;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian and
agents for fund accountant, custody services procurement, and
shareholder recordkeeping or transfer agency services;
(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 18. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Fund 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 Articles of
Incorporation 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 an administrator and fund accountant.
B. Representations and Warranties of the Corporation
The Corporation 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 the State of Maryland;
(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 Corporation 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 19. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
With regard to Sections One and Three, the Company shall be held to
a standard of reasonable care in carrying out the provisions of
this Contract. The Company shall be entitled to rely on and may
act upon advice of counsel (who may be counsel for the Corporation)
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 Corporation
The Company shall not be responsible for and the Corporation 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 Corporation 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 Corporation or
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
Corporation.
(3) The reliance on, or the carrying out by the Company or its
agents or subcontractors of Proper Instructions of the
Corporation or the Fund.
(4) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations.
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 or 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 the Corporation
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 Corporation 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 Corporation or the Fund, and the
proper countersignature of any former transfer agent or registrar,
or of a co-transfer agent or co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 19 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of
such assertion, and shall keep the other party advised with respect
to all developments concerning such claim. The party who may be
required to indemnify shall have the 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. TERM AND TERMINATION OF AGREEMENT.
This Agreement shall be effective from October 1, 1996 and shall
continue until August 31, 1999 ("Initial Term"). Thereafter, the Agreement
will continue for one year terms. After the expiration of the Initial Term,
the Agreement can be terminated by either party upon one hundred twenty (120)
days written notice to be effective as of the end of such one hundred twenty
(10) day period. In the event, however, of willful misfeasance, bad faith,
negligence or reckless disregard of its duties by the Company, the
Corporation has the right to terminate the Agreement upon sixty (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 Funds which are, or become,
a party to this Agreement shall be coterminous. Funds that merge or dissolve
during the Term, shall cease to be a party on the effective date of such
merger or dissolution.
Should the Corporation exercise its rights to terminate other than as a
result of willful misfeasance, bad faith, negligence or reckless disregard of
its duties by the Company, all out-of-pocket expenses associated with the
movement of records and materials will be borne by the Corporation or the
appropriate Fund and the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of
Articles 9, 19 and 20 shall survive the termination of this Agreement.
ARTICLE 21. AMENDMENT.
This Agreement may be amended or modified by a written agreement
executed by both parties.
ARTICLE 22. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Corporation 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 Charter. No interpretive 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 Pennsylvania.
ARTICLE 24. NOTICES.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Corporation at 2 World
Financial Center, Building B, 25th Floor, New York, New York, 10281-1198, or
to the Company at Federated Investors Tower, Pittsburgh, Pennsylvania,
15222-3779, or to such other address as the Corporation 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
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 appropriate
property of the Fund, or Class, as provided in the Declaration of Trust.
ARTICLE 27. 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 28. SUCCESSOR AGENT.
If a successor agent for the Corporation shall be appointed by the
Corporation, the Company shall upon termination of this Agreement deliver to
such successor agent at the office of the Company all properties of the
Corporation 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. Thereafter, such bank or trust company shall be the successor of
the Company under this Agreement.
ARTICLE 29. 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, that in each case is not under the
Company's direct control, or natural disaster, governmental action,
communication disruption or other impossibility of performance.
ARTICLE 30. 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 30 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
ARTICLE 31. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
ARTICLE 32. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF THE
CORPORATION.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Corporation and signed by an authorized officer of the
Corporation, 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 Corporation, but bind only the 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.
BATTERY PARK FUNDS, INC.
By:____________________________________
Xxxxxx Xxxxxx
President
FEDERATED SERVICES COMPANY
By:____________________________________
Xxxxxx X. Xxxx
Secretary
EXHIBIT 1
TO THE
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
AND
TRANSFER AGENCY SERVICES
BATTERY PARK FUNDS, INC.
BATTERY PARK HIGH YIELD FUND
CLASS A SHARES
CLASS Y SHARES
SCHEDULE A
TO THE
AGREEMENT
FOR
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
AND
TRANSFER AGENCY SERVICES
BATTERY PARK FUNDS, INC.
FUND ACCOUNTING
FEE SCHEDULE
Max. Annual Fee Average Daily Net Assets of the Funds
.03 of 1% on the first $100 million
.02 of 1% on the next $100 to $300 million
.01 of 1% on the next $300 to $500 million
.005 of 1% on assets in excess of $500 million
Minimum fee per fund $39,000
Additional per class charge $12,000
Plus pricing charges and out-of-pocket expenses
Out-of-pocket expenses include the following: postage (including
overnight courier service), statement stock, envelopes, telephones,
telecommunication charges (including FAX), travel, duplicating, forms,
supplies, microfiche, computer access charges, client specific system
enhancements, access to the shareholder recordkeeping system, variable rate
change notification services, and paydown factor notification services.
SCHEDULE B
TO THE
AGREEMENT
FOR
ADMINISTRATIVE SERVICES,
AND
TRANSFER AGENCY SERVICES
BATTERY PARK FUNDS, INC.
ADMINISTRATIVE SERVICES
FEE SCHEDULE
Maximum Average Aggregate Daily
Administrative Fee Net Assets of the Trust
------------------ -----------------------
.100 of 1% on the first $150 million
.075 of 1% on assets in excess of $150 million
Annual minimum fee per Fund: $50,000
SCHEDULE C
TO THE
AGREEMENT
FOR
ADMINISTRATIVE SERVICES,
AND
TRANSFER AGENCY SERVICES
BATTERY PARK FUNDS, INC.
TRANSFER AGENCY SERVICES
FEE SCHEDULE
Annual Base Fee Per Class: $20,000, plus the greater of .02 of 1% or $10,000.
Per Account Charges: $16.00
Plus out-of-pocket expenses
Out-of-pocket expenses include the following: postage (including
overnight courier service), statement stock, envelopes, telephones,
telecommunication charges (including FAX), travel, duplicating, forms,
supplies, microfiche, computer access charges, client specific system
enhancements, access to the shareholder recordkeeping system, variable rate
change notification services, and paydown factor notification services.
BATTERY PARK HIGH YIELD FUND
SUMMARY OF FUND EXPENSES
CLASS A CLASS B
--------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as
a percentage of offering price) 4.50% None
Maximum Sales Load Imposed on Reinvested
Dividends (as a percentage of offering price) None None
Deferred Sales Load (as a percentage of
original purchase price or redemption
proceeds, as applicable None None
Redemption Fees (as a percentage of amount
redeemed, if applicable) None None
Exchange Fee None None
ANNUAL FUND OPERATING EXPENSES
(As a percentage of projected average net assets)
Management Fees (after waiver)(1) 0.37% 0.37%
12b-1 Fees 0.25% None
Total Other Expenses 0.63% 0.63%
Total Annual Fund Operating Expenses (2) 1.25% 1.00%
(1) The management fee has been reduced to reflect the voluntary waiver of a
portion of the management fee by the investment adviser. The adviser can
terminate this voluntary waiver at any time at its sole discretion. The
maximum management fee is 0.65%.
(2) Total Annual Fund Operating Expenses for the Class A and Class Y Shares
are estimated to be 1.53% and 1.28% respectively, absent the voluntary waiver
of management fees.
*Annual Fund Operating Expenses are estimated based on average expenses
expected to be incurred during the fiscal year ending September 30, 1997.
During the course of this period, expenses may be more or less than the
average amount shown.
The purpose of this table is to assist an investor in understanding the
various costs and expenses that a shareholder will bear either directly or
indirectly. For more complete descriptions of the various costs and expenses,
see "Investing in the Fund."
EXAMPLE
-------
You would pay the following expenses on a $1,000 investment assuming (1) 5%
annual return; (2) redemption at the end of each time period; and (3) payment
of the maximum sales charge, if applicable. The Fund charges no redemption
fees.
Class A Class Y
1 Year $57 $10
3 Years $83 $32
The above example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown. This
example is based on estimated data for the Fund's fiscal year ending
September 30, 1997.
