SUB-ITEM 77Q1 (E) (III)
Federated Income Securities Trust
Federated Muni and Stock Advantage Fund
SUB-ADVISORY AGREEMENT
THIS AGREEMENT is made between FEDERATED EQUITY
MANAGEMENT
COMPANY OF PENNSYLVANIA, a Delaware statutory trust
located in
Pittsburgh, Pennsylvania (hereinafter referred to as "Adviser")
and
FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory
trust
located in Pittsburgh, Pennsylvania (hereinafter referred
to as the
"Sub-Adviser").
WITNESSETH:
That the parties hereto, intending to be legally
bound hereby
agree as follows:
1. Sub-Adviser hereby agrees to furnish to
Adviser in its
capacity as investment adviser to each of the portfolios
("Funds") of
Federated Income Securities Trust ("Trust") for which Adviser
executes
an Exhibit to this Agreement, such investment advice,
statistical and
other factual information, as may from time to time be
reasonably
requested by Adviser for the Fund, which may be offered
in one or more
classes of shares ("Classes"). Both Adviser and Sub-Adviser
are
registered as investment advisers under the Investment
Advisers Act of
1940.
2. For its services under this Agreement
for each Fund, Sub-
Adviser shall receive from Adviser an annual fee, as
set forth in the
exhibit(s) hereto.
The Sub-Adviser may from time to time and for
such periods as it
deems appropriate, reduce its compensation for a Fund (and, if
appropriate, assume expenses of the Fund or Class of the Fund)
to the
extent that the Fund's expenses exceed such lower expense
limitation as
the Sub-Adviser may, by notice to the Trust on behalf of the
Fund,
voluntarily declare to be effective.
3. This Agreement shall begin for a Fund on
the date that the
parties execute an exhibit to this Agreement relating to such
Fund and
shall continue in effect for the Fund for two years from the
date of
its execution and from year to year thereafter, subject to the
provisions for termination and all of the other terms and
conditions
hereof if: (a) such continuation shall be specifically
approved at
least annually by the vote of a majority of the Trustees
of the Trust,
including a majority of the Trustees who are not parties
to this
Agreement or interested persons of any such party (other
than as
Trustees of the Trust) cast in person at a meeting called
for that
purpose; and (b) Adviser shall not have notified the Trust
in writing
at least sixty (60) days prior to the anniversary date of
this
Agreement in any year thereafter that it does not desire such
continuation with respect to the Fund.
4. Notwithstanding any provision in this Agreement,
it may be
terminated for any Fund at any time without the payment of
any penalty:
(a) by the Trustees of the Trust or by a vote of a majority
of the
outstanding voting securities (as defined in Section 2(a)(42)
of the
Investment Company Act of 1940 ("Act") of the Fund on sixty
(60) days'
written notice to Adviser; (b) by Sub-Adviser or Adviser
upon 120 days'
written notice to the other party to this Agreement.
5. This Agreement shall automatically terminate:
(a) in the event of its assignment (as defined in the Act);
or
(b) in the event of termination of the Investment Advisory
Contract for any reason whatsoever.
6. So long as both Adviser and Sub-Adviser shall be
legally
qualified to act as an investment adviser to a Fund, neither
Adviser
nor Sub-Adviser shall act as an investment adviser (as such
term is
defined in the Act) to the Fund except as provided herein and
in the
Investment Advisory Contract or in such other manner as may be
expressly agreed between Adviser and Sub-Adviser.
Provided, however, that if the Adviser or Sub-Adviser
shall
resign prior to the end of any term of this Agreement or for
any reason
be unable or unwilling to serve for a successive term which
has been
approved by the Trustees of the Trust pursuant to the provisions
of
Paragraph 3 of this Agreement or Paragraph 7 of the Investment
Advisory
Contract, the remaining party, Sub-Adviser or Adviser as the
case may
be, shall not be prohibited from serving as an investment
adviser to
such Fund by reason of the provisions of this Paragraph 6.
7. This Agreement may be amended from time to
time by agreement
of the parties hereto provided that such amendment shall be
approved
both by the vote of a majority of Trustees of the Trust,
including a
majority of Trustees who are not parties to this Agreement or
interested persons, as defined in Section 2(a)(19) of the Act,
of any
such party at a meeting called for that purpose, and, where
required by
Section 15(a)(2) of the Act, by the holders of a majority of
the
outstanding voting securities (as defined in Section 2(a)(42)
of
the
Act) of the Fund.
8. The services furnished by the Sub-Adviser
hereunder
are not to
be deemed exclusive and the Sub-Adviser shall be free to
furnish
similar services to others so long as its services under this
Agreement
are not impaired thereby.
9. Sub-Adviser agrees to maintain the security
and
confidentiality of nonpublic personal information ("NPI") of
Fund
customers and consumers, as those terms are defined in
Xxxxxxxxxx X-X,
00 XXX Part 248. Adviser agrees to use and redisclose such
NPI for the
limited purposes of processing and servicing transactions; for
specific
law enforcement and miscellaneous purposes; and to service
providers or
in connection with joint marketing arrangements directed by
the Fund,
in each instance in furtherance of fulfilling Adviser's
obligations
under this Agreement and consistent with the exceptions
provided in 17
CFR Sections 248.14, 248.15 and 248.13, respectively.
10. Adviser and Sub-Adviser agree that as between
Adviser and
Sub-Adviser, Adviser shall be solely responsible for the
allocation of
the Fund's investment portfolio between the equity portion to be
managed by Adviser and the fixed income portion to be managed by
Sub-
Adviser. Adviser shall indemnify and hold harmless the
Sub-Adviser
from and against any and all claims, damages, losses and
expenses
resulting from such allocation decisions and incurred by or
asserted
against by Sub-Adviser, including reasonable attorneys fees
and legal
expenses of investigating or defending against any such claims.
Exhibit A
Federated Income Securities Trust
Federated Muni and Stock Advantage Fund
Sub-Advisory Contract
For all services rendered by Sub-Adviser hereunder,
Adviser shall
pay Sub-Adviser a Sub-Advisory Fee equal to 0.25% of the fixed
income
portion of the average daily net assets of the above-mentioned
portfolio. The Sub-Advisory Fee shall be accrued Daily, and
paid Daily
as set forth in the primary Investment Advisory Contract dated
September 1, 2003.
This Exhibit duly incorporates by reference the
Sub-Advisory
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement
to be executed on their behalf by their duly authorized
officers
as of
the 1st day of January, 2004.
Federated Equity Management Company
of Pennsylvania
By: /s/ Xxxxx X. Xxxxxxxxx
Name: Xxxxx X. Xxxxxxxxx
Title: President
Federated Investment Management
Company
By: /s/ G. Xxxxxx Xxxxxxxxx
Name: G. Xxxxxx Xxxxxxxxx
Title: Vice President
LIMITED POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, dated as of
January 1, 2004, that
Federated Income Securities Trust, a business trust
duly organized
under the laws of the Commonwealth of Massachusetts (the "Trust"),
does
hereby nominate, constitute and appoint Federated Investment
Management
Company, a statutory trust duly organized under the laws
of the
Delaware (the "Sub-Adviser"), to act hereunder as the true
and lawful
agent and attorney-in-fact of the Trust, acting on behalf
of each of
the series portfolios for which the Sub-Adviser acts as
investment
adviser shown on Schedule 1 attached hereto and incorporated
by
reference herein (each such series portfolio being hereinafter
referred
to as a "Fund" and collectively as the "Funds"), for the specific
purpose of executing and delivering all such agreements,
instruments,
contracts, assignments, bond powers, stock powers, transfer
instructions, receipts, waivers, consents and other documents,
and
performing all such acts, as the Sub-Adviser may deem necessary
or
reasonably desirable, related to the acquisition, disposition
and/or
reinvestment of the funds and assets of a Fund of the Trust
in
accordance with Sub-Adviser's supervision of the investment,
sale and
reinvestment of the funds and assets of each Fund pursuant
to the
authority granted to the Adviser as investment adviser of
each Fund
under that certain investment advisory contract dated
January 1, 2004,
by and between the Sub-Adviser and the Trust (such
investment advisory
contract, as may be amended, supplemented or otherwise
modified from
time to time is hereinafter referred to as the
"Sub-Advisory
Contract").
The Sub-Adviser shall exercise or omit to exercise
the powers and
authorities granted herein in each case as the Adviser in
its sole and
absolute discretion deems desirable or appropriate under
existing
circumstances. The Trust hereby ratifies and confirms as
good and
effectual, at law or in equity, all that the Sub-Adviser,
and its
officers and employees, may do by virtue hereof. However,
despite the
above provisions, nothing herein shall be construed as
imposing a duty
on the Sub-Adviser to act or assume responsibility for
any matters
referred to above or other matters even though the
Sub-Adviser may have
power or authority hereunder to do so. Nothing in this
Limited Power
of Attorney shall be construed (i) to be an amendment or
modifications
of, or supplement to, the Investment Advisory Contract,
(ii) to amend,
modify, limit or denigrate any duties, obligations or liabilities
of
the Sub-Adviser under the terms of the Investment Advisory
Contract or
(iii) exonerate, relieve or release the Sub-Adviser any losses,
obligations, penalties, actions, judgments and suits and other
costs,
expenses and disbursements of any kind or nature whatsoever
which may
be imposed on, incurred by or asserted against the Sub-Adviser
(x)
under the terms of the Investment Advisory Contract or (y) at
law, or
in equity, for the performance of its duties as the investment
Sub-
Adviser of any of the Funds.
The Trust hereby agrees to indemnify and save harmless
the Sub-
Adviser and its trustees, officers and employees
(each of the
foregoing
an "Indemnified Party" and collectively the
"Indemnified Parties")
against and from any and all losses, obligations,
penalties, actions,
judgments and suits and other costs, expenses and
disbursements of any
kind or nature whatsoever which may be imposed on,
incurred by or
asserted against an Indemnified Party, other than as
a consequence of
gross negligence or willful misconduct on the part of
an Indemnified
Party, arising out of or in connection with this
Limited Power of
Attorney or any other agreement, instrument or
document executed in
connection with the exercise of the authority
granted to the Sub-
Adviser herein to act on behalf of the Trust,
including without
limitation the reasonable costs, expenses and
disbursements in
connection with defending such Indemnified Party
against any claim or
liability related to the exercise or performance of
any of the Sub-
Adviser's powers or duties under this Limited Power
of Attorney or any
of the other agreements, instruments or documents
executed in
connection with the exercise of the authority granted
to the Sub-
Adviser herein to act on behalf of the Trust, or
the taking of any
action under or in connection with any of the foregoing.
The
obligations of the Trust under this paragraph shall
survive the
termination of this Limited Power of Attorney with
respect to actions
taken by the Sub-Adviser on behalf of the Trust during
the term of this
Limited Power of Attorney. No Fund shall have any
joint or several
obligation with any other Fund to reimburse or indemnify
an Indemnified
Party for any action, event, matter or occurrence performed
or omitted
by or on behalf of the Sub-Adviser in its capacity as
agent or
attorney-in-fact of Trust acting on behalf of any other
Fund hereunder.
Any person, partnership, corporation or other
legal entity
dealing with the Sub-Adviser in its capacity as
attorney-in-fact
hereunder for the Trust is hereby expressly put on notice
that the Sub-
Adviser is acting solely in the capacity as an agent of
the Trust and
that any such person, partnership, corporation or other
legal entity
must look solely to the Trust in question for enforcement
of any claim
against the Trust, as the Sub-Adviser assumes no personal
liability
whatsoever for obligations of the Trust entered into by the
Sub-Adviser
in its capacity as attorney-in-fact for the Trust.
Each person, partnership, corporation or other
legal entity which
deals with a Fund of the Trust through the Sub-Adviser
in its capacity
as agent and attorney-in-fact of the Trust, is hereby
expressly put on
notice (i) that all persons or entities dealing with the
Trust must
look solely to the assets of the Fund of the Trust on
whose behalf the
Sub-Adviser is acting pursuant to its powers hereunder
for enforcement
of any claim against the Trust, as the Directors,
officers and/or
agents of such Trust, the shareholders of the various
classes of shares
of the Trust and the other Funds of the Trust assume no
personal
liability whatsoever for obligations entered into on
behalf of such
Fund of the Trust, and (ii) that the rights, liabilities
and
obligations of any one Fund are separate and distinct
from those of any
other Fund of the Trust.
The execution of this Limited Power of Attorney
by the Trust
acting on behalf of the several Funds shall not be
deemed to evidence
the existence of any express or implied joint undertaking or
appointment by and among any or all of the Funds. Liability
for or
recourse under or upon any undertaking of the Sub-Adviser
pursuant to
the power or authority granted to the Sub-Adviser under
this Limited
Power of Attorney under any rule of law, statute or
constitution or by
the enforcement of any assessment or penalty or by legal or
equitable
proceedings or otherwise shall be limited only to the assets
of the
Fund of the Trust on whose behalf the Sub-Adviser was
acting pursuant
to the authority granted hereunder.
The Trust hereby agrees that no person, partnership,
corporation
or other legal entity dealing with the Sub-Adviser shall be
bound to
inquire into the Sub-Adviser's power and authority hereunder
and any
such person, partnership, corporation or other legal entity
shall be
fully protected in relying on such power or authority unless
such
person, partnership, corporation or other legal entity has
received
prior written notice from the Trust that this Limited Power
of Attorney
has been revoked. This Limited Power of Attorney shall be
revoked and
terminated automatically upon the cancellation or termination
of the
Investment Advisory Contract between the Trust and the
Sub-Adviser.
Except as provided in the immediately preceding sentence,
the powers
and authorities herein granted may be revoked or terminated
by the
Trust at any time provided that no such revocation or termination
shall
be effective until the Sub-Adviser has received actual notice of
such
revocation or termination in writing from the Trust.
This Limited Power of Attorney constitutes the entire
agreement
between the Trust and the Sub-Adviser, may be changed only by a
writing
signed by both of them, and shall bind and benefit their
respective
successors and assigns; provided, however, the Sub-Adviser
shall have
no power or authority hereunder to appoint a successor or
substitute
attorney in fact for the Trust.
This Limited Power of Attorney shall be governed and
construed in
accordance with the laws of the Commonwealth of Pennsylvania
without
reference to principles of conflicts of laws. If any provision
hereof,
or any power or authority conferred upon the Sub-Adviser herein,
would
be invalid or unexercisable under applicable law, then such
provision,
power or authority shall be deemed modified to the extent
necessary to
render it valid or exercisable while most nearly preserving
its
original intent, and no provision hereof, or power or authority
conferred upon the Sub-Adviser herein, shall be affected by the
invalidity or the non-exercisability of another provision hereof,
or of
another power or authority conferred herein.
This Limited Power of Attorney may be executed in as
many
identical counterparts as may be convenient and by the different
parties hereto on separate counterparts. This Limited Power of
Attorney shall become binding on the Trust when the Trust shall
have
executed at least one counterpart and the Sub-Adviser shall
have
accepted its appointment by executing this Limited Power of
Attorney.
Immediately after the execution of a counterpart original of this
Limited Power of Attorney and solely for the convenience of the
parties
hereto, the Trust and the Sub-Adviser will execute sufficient
counterparts so that the Sub-Adviser shall have a counterpart
executed
by it and the Trust, and the Trust shall have a counterpart
executed by
the Trust and the Sub-Adviser. Each counterpart shall be deemed
an
original and all such taken together shall constitute but one and
the
same instrument, and it shall not be necessary in making proof of
this
Limited Power of Attorney to produce or account for more than one
such
counterpart.
IN WITNESS WHEREOF, the Trust has caused this Limited
Power of
Attorney to be executed by its duly authorized officer as of the
date
first written above.
Federated Income Securities
Trust
By: /s/ J. Xxxxxxxxxxx Xxxxxxx
Name: J. Xxxxxxxxxxx Xxxxxxx
Title: President
Accepted and agreed to this
January 1, 2004
Federated Investment Management Company
By: /s/ G. Xxxxxx Xxxxxxxxx
Name: G. Xxxxxx Xxxxxxxxx
Title: Vice President
Schedule 1
to Limited Power of Attorney
dated as of January 1, 2004
by Federated Income Securities Funds
(the Trust "), acting on
behalf of each of the series portfolios
listed below, and appointing
Federated Investment Management Company
the attorney-in-fact of the
Trust
List of Series Portfolios
Federated Muni and Stock Advantage Fund
