Exhibit 9(i) under Form N-1A
HubFA/Adm/csp
AGREEMENT
FOR
FUND ACCOUNTING,
ADMINISTRATIVE SERVICES
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of , 1996, by and between those investment
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 beneficial partnership interests
("Interest(s)");
WHEREAS, the Fund is a Hub in a Hub and Spoke investment structure; and
WHEREAS the Investment Company may desire to appoint 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,
if so indicated on Exhibit 1, and the Company desires to accept such
appointment; and
Error! Reference source not found.Error! Reference source not found.
WHEREAS, the Investment Company may desire to appoint the Company as its
administrator to provide it with administrative services (as herein defined),
if so indicated on Exhibit 1, and the Company desires to accept such
appointment; and
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 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 ("Board"), the Company will assist the Investment Company with regard
to fund accounting for the Investment Company, and/or the Funds, and in
connection therewith undertakes to perform the following specific services:
A. value each Interest in each Fund using, with respect to portfolio
securities: primarily, market quotations, including the use of matrix
pricing, supplied by the independent pricing services selected by the
Company in consultation with the adviser (which includes any sub-
advisers), or sources selected by the adviser, and reviewed by the
Board; secondarily, if a designated pricing service does not provide a
Error! Reference source not found.Error! Reference source not found.
price for a security which the Company believes should be readily
available by market quotation, the Company may obtain a price by calling
brokers designated by the investment adviser of the 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 readily
available, the Pricing Committee of the Board will determine a fair
value in good faith. Consistent with Rule 2a-4 of the 40 Act, estimates
may be used where necessary or appropriate. The Company's obligations
with regard to the prices received from outside pricing services and
designated brokers or other outside sources, is to exercise reasonable
care in the supervision of the pricing agent. The Company is not the
guarantor of the securities prices received from such agents and the
Company is not liable to the Fund for potential errors in valuing each
Interest or calculating the value of the net assets of such Interests of
such Fund 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 value of the
net assets 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. calculate the net income of the Fund, if any;
C. calculate realized capital gains or losses of the Fund, if any,
resulting from the sale or disposition of its portfolio securities;
D. determine the value of each Interest in the Fund on a book and tax
basis, at the time and in the manner from time to time determined by the
Board and as set forth in the Fund's offering document;
Error! Reference source not found.Error! Reference source not found.
E. maintain the general ledger and other accounts, books and financial
records of the Fund, as required under the applicable provisions of the
Internal Revenue Code and Section 31(a) of the 1940 Act and the Rules
thereunder in connection with the services provided by the Company;
F. preserve for the periods prescribed by Rule 31a-2 under the 1940 Act the
records to be maintained by Rule 31a-1 under the 1940 Act in connection
with the services provided by the Company. The Company further agrees
that all such records it maintains for the 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;
G. 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
H. 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. 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 not the Company, shall bear the cost of: custodial
expenses; membership dues in the Investment Company Institute or any
similar organization; investment advisory expenses; costs of printing
and mailing offering documents, reports and notices; administrative
Error! Reference source not found.Error! Reference source not found.
expenses; interest on borrowed money; brokerage commissions; taxes and
fees payable to federal, state and other governmental agencies; fees of
Trustees of the Investment Company; independent auditors expenses; legal
and audit department expenses billed to the Company for work performed
related to the Investment Company or the Funds; law firm expenses;
organizational expenses; or other expenses not specified in this Article
3 which may be properly payable by the Funds.
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.
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 Fund 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 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
Interests shall be computed at the time and in the manner specified in
the Fund's offering document.
F. The Company, in its sole discretion, may from time to time subcontract
to, employ or associate itself with such person or persons as the
Company may believe to be particularly suited to assist it in performing
Fund Accounting Services under this Section One. 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
Error! Reference source not found.Error! Reference source not found.
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 Funds 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,
and in accordance with Proper Instructions (as defined hereafter) from the
Investment Company 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 each of its portfolios:
A. Purchases
(1) The Company shall receive from the owners of Interests
("Investors") or their administrators orders for the initial
purchase of and subsequent investments in Interests ("Purchases").
The Company shall instruct the custodian of the Fund (the
"Custodian") through appropriate documentation to accept prompt
payment from the custodian of the Investor. The Company shall
instruct the Custodian on a daily basis of the total amount of
orders and payments expected to be delivered.
B. Full or Fractional Sale of Interests
(1) The Company shall receive from Investors or their administrators
orders regarding the full or fractional sale of Interests and, if
such requests comply with the procedures as may be described in the
Error! Reference source not found.Error! Reference source not found.
Fund's offering document or set forth in Proper Instructions,
deliver the appropriate instructions therefor to the Custodian.
(2) At the appropriate time, Company will instruct the Custodian
through appropriate documentation to pay, or cause to be paid, the
proceeds from a full or fractional sale of Interests to the
Investor's custodian bank in the manner instructed by the Investor,
pursuant to procedures described in the then-current offering
document of the Fund. The Company shall reconcile the orders and
the amounts actually distributed by the Custodian on a daily basis
with the Custodian and with the Investor or its designated agent.
(3) If any request for the full or fractional sale of an Interest does
not comply with the procedures for such a sale approved by the
Fund, the Company shall promptly notify the Investor of such fact,
together with the reason therefor, and shall effect such sale at
the value applicable to the date and time of receipt of the
documents necessary to comply with said procedures.
C. Recordkeeping
(1) The Company shall record Purchases and provide such records to the
Fund on a regular basis or upon reasonable request.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder and in the form and manner as agreed to by the
Fund to include a record for the Investor of the following:
(a) Name, address and tax identification number (and whether such
number has been certified);
(b) Historical information regarding the Interests, including the
date and value for all transactions;
(c) Any correspondence relating to the current maintenance of the
Interests.
(3) The Company shall preserve any such records required to be
maintained pursuant to Rule 31a-2 under the 1940 Act and Rule 31a-1
Error! Reference source not found.Error! Reference source not found.
under the 1940 Act 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.
D. Transaction Register
The Company shall furnish to the Fund periodically a copy of the
transaction register and such other information as may be agreed
upon from time to time.
E. Other Duties
In addition to, and not in lieu of the services set forth above, the
Company shall:
(1) prepare, file, and maintain the Investment Company'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 Investors;
(2) prepare and file with the Securities and Exchange Commission
the registration statements for the Fund and all amendments
thereto, reports to regulatory authorities and Investors,
offering documents, proxy and/or information statements, and
Error! Reference source not found.Error! Reference source not found.
such other documents all as may be necessary to enable the
Investment Company to make a private offering of its shares;
(3) prepare, negotiate, and administer contracts on behalf of the
Investment Company with, among others, the Investment
Company's, investment advisers or placement agents, subject
to any applicable restrictions of the Board or the 0000 Xxx.
(4) prepare and file Funds' tax returns;
(5) coordinate the layout and printing of publicly disseminated
offering documents and reports;
(6) perform internal audit examinations in accordance with a
charter to be adopted by the Company and the Investment
Company;
(7) assist with the design, development, and operation of the
Investment Company and the Funds;
(8) 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
Fund's affairs as determined by the Board;
(9) consult with the Fund and its Board on matters concerning the
Fund and its affairs.
(10) maintain all identification and of record information for
Investors; communicate to the Investors financial reports,
Form K-1, other required tax reports and offering documents of
the Fund.
(11) answer correspondence from the Investors relating to the
duties described above and such other correspondence as may
from time to time be addressed to the Company;
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."
Error! Reference source not found.Error! Reference source not found.
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 or other professional services,
Error! Reference source not found.Error! Reference source not found.
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
.050 % $0-1 Billion
.045 % $1-2 Billion
.040 % $2-3 Billion
.025 % $3-4 Billion
.010 % $4-5 Billion
.005 % $5+ Billion
(Average Daily Net Asset break-points are on a per Hub 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. 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
Error! Reference source not found.Error! Reference source not found.
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
Error! Reference source not found.Error! Reference source not found.
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: CUSTODY SERVICES PROCUREMENT.
ARTICLE 11. 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 12. 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
Error! Reference source not found.Error! Reference source not found.
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 continuously monitor the nature and the quality
of services provided by Eligible Custodians;
D. monitor and evaluate the nature and the quality of the custodial 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 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 Three, shall hereafter
be referred to as "Custody Services Procurement."
ARTICLE 13. FEES AND EXPENSES.
A. Annual Fee
For the performance by the Company of Custody Services Procurement
pursuant to Section Three 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 13A 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
Error! Reference source not found.Error! Reference source not found.
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 14. 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
Three of this Agreement.
SECTION FOUR: GENERAL PROVISIONS.
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
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
Error! Reference source not found.Error! Reference source not found.
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 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.
C. 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. 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 17. DOCUMENTS.
A. In connection with the appointment of the Company under this Agreement,
the Investment Company shall file with the Company the following
documents relating to it:
(1) a copy of its Charter and By-Laws and all amendments thereto;
(2) a copy of the resolution of its Board authorizing this Agreement;
(3) all documents relating to the Fund or Investor accounts; and
(4) a copy of its current offering document.
B. The Investment Company will also furnish from time to time the following
documents relating to it:
(1) a resolution of its Board authorizing the original offering of its
Interests;
Error! Reference source not found.Error! Reference source not found.
(2) a Registration Statement filed with the SEC and amendments thereof
and orders relating thereto in effect with respect to the sale of
its Interests;
(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) such other documents or opinions which the Company may, in its
discretion, deem necessary or appropriate in the proper performance
of its duties; and
(6) revisions to the offering document for 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 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;
(6) it is in compliance with federal securities law requirements and in
good standing as an administrator and fund accountant; and
(7) it has obtained all required approvals from all government or
regulatory authorities necessary to enter into this arrangement and
to provide the services contemplated herein.
B. Representations and Warranties of the Investment Company
Error! Reference source not found.Error! Reference source not found.
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 Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform
its obligations under this Agreement; and
(4) it is an open-end investment company registered under the 1940 Act.
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
Agreement. The Company shall be entitled to rely on and may act upon
advice of Fund counsel 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 the 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;
(2) the reliance on or use by the Company or its agents or
subcontractors of information, records and documents in proper form
which
Error! Reference source not found.Error! Reference source not found.
(a) are received by the Company or its agents or subcontractors
and furnished to it by or on behalf of the Fund, or its
Investors regarding account information, the purchase, sale,
redemption or transfer of Interests;
(b) are received by the Company from independent pricing services
or sources for use in valuing the Interests of the Fund;
(c) are received by the Company or its agents or subcontractors
from Advisers, Sub-advisers or other third parties contracted
by or approved by such Fund for use in the performance of
services under this Agreement; 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 Interests in violation of any requirement
under the federal securities laws or regulations; or in violation
of any stop order or other determination or ruling by any federal
agency respect to the offer or sale of such Interest.
Provided, however, that the Company shall not be protected by this
Article 19.B. from liability for any act or omission resulting from
the Company's willful misfeasance, bad faith, negligence or
reckless disregard of its duties of failure to meet the standard of
care set forth in 19.A. above.
C. Reliance
At any time the Company may apply to any officer of the Investment
Company or Fund for instructions for matters relating to the Investment
Company or Fund, and may consult with legal counsel with respect to any
matter arising in connection with the services to be performed by the
Company under this Agreement, and the Company and its agents or
Error! Reference source not found.Error! Reference source not found.
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 laws or regulations.
D. Notification
In order that the indemnification provisions contained in this Article
19 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification
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 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.
Error! Reference source not found.Error! Reference source not found.
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 Article 10 and Article 19
shall survive the termination of this Agreement.
ARTICLE 21. 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 22. 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 all
parties and shall be annexed hereto, provided that no such interpretive or
additional provisions shall contravene any applicable federal 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 23. GOVERNING LAW.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts.
ARTICLE 24. NOTICES.
Except as otherwise specifically provided herein, notices and other writings
delivered or mailed postage prepaid to 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.
Error! Reference source not found.Error! Reference source not found.
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 DIRECTORS AND SHAREHOLDERS OF
THE COMPANY.
The execution and delivery of this Agreement have been authorized by the
Directors of the Company and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such Directors 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
Directors or Shareholders of the Company, but bind only the property of the
Company as provided in the Articles of Incorporation.
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 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 Fund held by it
hereunder. If no such successor agent shall be appointed, the Company shall
at its office upon receipt of Proper Instructions deliver such properties in
accordance with such instructions.
With regard to Section One, 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
Error! Reference source not found.Error! Reference source not found.
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 Investment Company or 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 30. ASSIGNMENT; SUCCESSORS.
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 INVESTORS OF
THE INVESTMENT COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of 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
the Trustees, the Fund or Investors, but bind only the appropriate property of
the Investment Company, as provided in the Declaration of Trust.
Error! Reference source not found.Error! Reference source not found.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: FEDERATED INVESTMENT PORTFOLIOS
By:
Xxxx X. XxXxxxxxx Xxxx X. Xxxxxxx
Secretary Chairman
ATTEST: FEDERATED SERVICES COMPANY
By:
Xxxxxx X. Xxxx Xxxxx X. Xxxxx
Secretary President
Error! Reference source not found.Error! Reference source not found.
EXHIBIT 1
CONTRACT
DATE INVESTMENT COMPANY SERVICES
Portfolios Sections:
Classes
Federated Investment Portfolios
Bond Index Portfolio
1,2,3,4
