Exhibit (h) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K
AGREEMENT
for
FUND ACCOUNTING SERVICES,
ADMINISTRATIVE SERVICES,
TRANSFER AGENCY SERVICES
and
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of December 1, 2001, between Federated Core Trust II,
L.P., having its principal office and place of business at 0000 Xxxxxxxxx
Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000 (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
ADMINISTRATIVE SERVICES, INC., a Pennsylvania corporation, having its
principal office and place of business at Federated Investors Tower,
Pittsburgh, Pennsylvania 15222-3779 on behalf of itself and its
subsidiaries (the "Company").
WHEREAS, the Investment Company is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended
(the "1940 Act"), with authorized and issued shares of capital stock or
beneficial interest ("Shares");
WHEREAS, the Investment Company may desire 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") if so indicated on Exhibit 1, and the Company desires to accept
such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as its
administrator to provide it with administrative services (as herein
defined), if so indicated on Exhibit, and the Company desires to accept
such appointment;
WHEREAS, the Investment Company may desire to appoint the Company as its
transfer agent and dividend disbursing agent to provide it with transfer
agency services (as herein defined) if so indicated on Exhibit 1, and agent
in connection with certain other activities, 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 from an
approved list of qualified banks if so indicated on Exhibit 1, 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 Investment Company 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.
Article 2. The Company's Duties.
Subject to the supervision and control of the Investment Company's Board
of Trustees or Directors ("Board"), the Company will assist the Investment
Company with regard to fund accounting for the Investment Company, and/or
the Funds, and/or the Classes, and in connection therewith undertakes to
perform the following specific services;
A. 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 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 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 Investment Company, including for each Fund, and/or
Class, as required under Section 31(a) of the 1940 Act and the
Rules thereunder in connection with the services provided by the
Company;
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/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, Prospectuses, reports and notices;
administrative expenses; interest on borrowed money; brokerage
commissions; taxes and fees payable to federal, state and other
governmental agencies; fees of Trustees or Directors of the
Investment Company; independent auditors expenses; legal and audit
department expenses billed to the Company for work performed related
to the Investment Company, the Funds, or the Classes; law firm
expenses; organizational expenses; or other expenses not specified in
this Article 3 which may be properly payable by the Funds and/or
Classes.
C. The compensation and out-of-pocket expenses attributable to the Fund
shall be accrued by the Fund and shall be paid to the Company no less
frequently than monthly, and shall be paid daily upon request of the
Company. The Company will maintain detailed information about the
compensation and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be adjusted
from time to time, shall be dated and signed by a duly authorized
officer of the Investment Company and/or the Funds and a duly
authorized officer of the Company.
E. The fee for the period from the effective date of this Agreement with
respect to a Fund or a Class to the end of the initial month shall be
prorated according to the proportion that such period bears to the
full month period. Upon any termination of this Agreement before the
end of any month, the fee for such period shall be prorated according
to the proportion which such period bears to the full month period.
For purposes of determining fees payable to the Company, the value of
the Fund's net assets shall be computed at the time and in the manner
specified in the Fund's Prospectus.
F. The Company, in its sole discretion, may from time to time
subcontract to, employ or associate with itself such person or
persons as the Company may believe to be particularly suited to
assist it in performing Fund Accounting Services. Such person or
persons may be affiliates of the Company, third-party service
providers, or they may be officers and employees who are employed
by both the Company and the Investment Company; provided, however,
that the Company shall be as fully responsible to each Fund for the
acts and omissions of any such subcontractor as it is for its own
acts and omissions. The compensation of such person or persons
shall be paid by the Company and no obligation shall be incurred on
behalf of the Investment Company, the Funds, or the Classes in such
respect.
SECTION TWO: ADMINISTRATIVE SERVICES.
Article 4. Appointment.
The Investment Company hereby appoints the Company as
Administrator for the period 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
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. 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
Shareholders;
B. prepare and file with the Securities and Exchange Commission
and the appropriate state securities authorities the
registration statements for the Investment Company and the
Investment Company's shares and all amendments thereto,
reports to regulatory authorities and shareholders,
prospectuses, proxy statements, and such other documents all
as may be necessary to enable the Investment Company to make
a continuous offering of its shares;
C. prepare, negotiate, and administer contracts (if any) on
behalf of the Investment Company with, among others, the
Investment Company's investment advisers and distributors,
subject to any applicable restrictions of the Board or the
1940 Act;
D. calculate performance data of the Investment Company for
dissemination to information services covering the
investment company industry;
E. prepare and file the Investment Company'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 Investment
Company;
H. assist with the design, development, and operation of the
Investment Company and the Funds;
I. provide individuals reasonably acceptable to the Board for
nomination, appointment, or election as officers of the
Investment Company, who will be responsible for the
management of certain of the Investment Company's affairs as
determined by the Investment Company's Board; and
J. consult with the Investment Company and its Board on matters
concerning the Investment Company and its affairs.
The foregoing, along with any additional services that the
Company shall agree in writing to perform for the Investment
Company under this Section Two, shall hereafter be referred to as
"Administrative Services."
Article 6. Records.
The Company shall create and maintain all necessary books and
records in accordance with all applicable laws, rules and
regulations, including but not limited to records required by
Section 31(a) of the Investment Company act of 1940 and the rules
thereunder, as the same may be amended from time to time,
pertaining to the Administrative Services performed by it and not
otherwise created and maintained by another party pursuant to
contract with the Investment Company. Where applicable, such
records shall be maintained by the Company for the periods and in
the places required by Rule 31a-2 under the 1940 Act. The books
and records pertaining to the Investment Company which are in the
possession of the Company shall be the property of the Investment
Company. 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 Investment Company, including the compensation of the Company
employees who serve as trustees or directors or officers of the
Investment Company. The Investment Company shall be responsible
for all other expenses incurred by the Company on behalf of the
Investment Company, 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 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 Fund, as specified below.
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, 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 Funds
.150% on the first $250 million
.125% on the next $250 million
.100% on the next $250 million
.075% on assets in excess of $750
million
(Average Daily Net Asset break-points are on a complex-wide 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 $125,000 per Fund and $30,000 per Class.
The minimum fee set forth above in this Article 9 may increase
annually upon each March 1 anniversary of this Agreement over the
minimum fee during the prior 12 months, as calculated under this
agreement, in an amount equal to the increase in Pennsylvania
Consumer Price Index (not to exceed 6% annually) as last reported
by the U.S. Bureau of Labor Statistics for the twelve months
immediately preceding such anniversary.
Article 10. Responsibility of Administrator.
A. The Company shall not be liable for any error of judgment or
mistake of law or for any loss suffered by the Investment
Company in connection with the matters to which this
Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on its part in
the performance of its duties or from reckless disregard by
it of its obligations and duties under this Agreement. The
Company shall be entitled to rely on and may act upon advice
of counsel (who may be counsel for the Investment Company)
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
hold the Company harmless, the Investment Company shall be fully
and promptly advised of all pertinent facts concerning the
situation in question, and it is further understood that the
Company will use all reasonable care to identify and notify the
Investment Company promptly concerning any situation which presents
or appears likely to present the probability of such a claim for
indemnification against the Investment Company. The Investment
Company shall have the option to defend the Company against any
claim which may be the subject of this indemnification. In the
event that the Investment Company so elects, it will so notify the
Company and thereupon the Investment Company shall take over
complete defense of the claim, and the Company shall in such
situation initiate no further legal or other expenses for which it
shall seek indemnification under this Article. The Company shall
in no case confess any claim or make any compromise in any case in
which the Investment Company will be asked to indemnify the Company
except with the Investment Company's written consent.
SECTION THREE: Transfer Agency Services.
Article 11. Terms of Appointment.
Subject to the terms and conditions set forth in this Agreement, the
Investment Company 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 12. 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 Investment
Company as to any Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase
of shares and promptly deliver payment and appropriate
documentation therefore 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) In the event that any check or other order for the purchase
of Shares of the Fund and/or Class is returned unpaid for any
reason, the Company shall debit the Share account of the
Shareholder by the number of Shares that had been credited to
its account upon receipt of the check or other order,
promptly mail a debit advice to the Shareholder, and notify
the Fund and/or Class of its action. In the event that the
amount paid for such Shares exceeds proceeds of the
redemption of such Shares plus the amount of any dividends
paid with respect to such Shares, the Fund and/the Class or
its distributor will reimburse the Company on the amount of
such excess.
B. Distribution
(1) Upon notification by the Funds of the declaration of any
distribution to Shareholders, the Company shall act as
Dividend Disbursing Agent for the Funds in accordance with
the provisions of its governing document and the then-current
Prospectus of the Fund. The Company shall prepare and mail or
credit income, capital gain, or any other payments to
Shareholders. As the Dividend Disbursing Agent, the Company
shall, on or before the payment date of any such
distribution, notify the Custodian 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; and
(2) The Company shall maintain records of account for each Fund
and Class and advise the Investment Company, each Fund and
Class and its Shareholders as to the foregoing.
C. Redemptions and Transfers
(1) The Company shall receive redemption requests and redemption
directions and, if such redemption requests comply with the
procedures as may be described in the Fund Prospectus or set
forth in Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The Company shall
notify the 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, based upon data provided to it by the Fund, and
issued and outstanding. The Company shall also provide the
Fund on a regular basis or upon reasonable request with the
total number of Shares which are authorized and issued and
outstanding, but shall have no obligation when recording the
issuance of Shares, except as otherwise set forth herein, to
monitor the issuance of such Shares or to take cognizance of
any laws relating to the issue or sale of such Shares, which
functions shall be the sole responsibility of the Funds.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by
the Investment Company or the Fund to include a record for
each Shareholder's account of the following:
(a) Name, address and tax identification number (and
whether such number has been certified);
(b) Number of Shares held;
(c) Historical information regarding the account, including
dividends paid and date and price for all transactions;
(d) Any stop or restraining order placed against the
account;
(e) Information with respect to withholding in the case of
a foreign account or an account for which withholding
is required by the Internal Revenue Code;
(f) Any dividend reinvestment order, plan application,
dividend address and correspondence relating to the
current maintenance of the account;
(g) Certificate numbers and denominations for any
Shareholder holding certificates;
(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 check forms and facsimile
signature imprinting devices, if any; and for the preparation
or use, and for keeping account of, such forms and devices.
The foregoing, along with any additional services that the
Company shall agree in writing to perform for the Investment
Company under this Section Three, shall hereafter be referred to as
"Transfer Agency Services."
Article 13. Duties of the Investment Company.
A. Compliance
The Investment Company or Fund assume full responsibility for the
preparation, contents and distribution of their own and/or their
classes' Prospectus and for complying with all applicable
requirements of the Securities Act of 1933, as amended (the "1933
Act"), the 1940 Act and any laws, rules and regulations of
government authorities having jurisdiction.
B. Distributions
The Fund shall promptly inform the Company of the declaration of
any dividend or distribution on account of any Fund's shares.
Article 14. Compensation and Expenses.
A. Annual Fee
For performance by the Company pursuant to Section Three of this
Agreement, the Investment Company 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 Investment Company 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 7A above, the Investment
Company and/or Fund agree to reimburse the Company for
out-of-pocket expenses or advances incurred by the Company for the
items agreed upon between the parties, as may be added to or
amended from time to time. In addition, any other expenses incurred
by the Company at the request or with the consent of the Investment
Company and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
Fund and shall be paid to the Company no less frequently than
monthly, and shall be paid daily upon request of the Company. The
Company will maintain detailed information about the compensation
and out-of-pocket expenses by Fund and Class.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Investment Company and/or the Funds and a
duly authorized officer of the Company.
SECTION FOUR: Custody Services Procurement.
Article 15. Appointment.
The Investment Company hereby appoints Company as its agent to evaluate
and obtain custody services from a financial institution that (i) meets the
criteria established in Section 17(f) of the 1940 Act and (ii) has been
approved by the Board as eligible for selection by the Company as a
custodian (the "Eligible Custodian"). The Company accepts such appointment.
Article 16. The Company and Its Duties.
Subject to the review, supervision and control of the Board, the Company
shall:
A. evaluate and obtain custody services from a financial institution that
meets the criteria established in Section 17(f) of the 1940 Act and
has been approved by the Board as being eligible for selection by the
Company as an Eligible Custodian;
B. negotiate and enter into agreements with Eligible Custodians for the
benefit of the Investment Company, with the Investment Company as a
party to each such agreement. The Company may, as paying agent, be a
party to any agreement with any such Eligible Custodian;
C. establish procedures to monitor the nature and the quality of the
services provided by Eligible Custodians;
D. monitor and evaluate the nature and the quality of services provided
by Eligible Custodians;
E. periodically provide to the Investment Company (i) written reports on
the activities and services of Eligible Custodians; (ii) the nature
and amount of disbursements made on account of the each Fund with
respect to each custodial agreement; and (iii) such other information
as the Board shall reasonably request to enable it to fulfill its
duties and obligations under Sections 17(f) and 36(b) of the 1940 Act
and other duties and obligations thereof;
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; and
The foregoing, along with any additional services that Company shall
agree in writing to perform for the Fund under this Section Four, shall
hereafter be referred to as "Custody Services Procurement."
Article 17. Fees and Expenses.
A. Annual Fee
For the performance of Custody Services Procurement by the Company
pursuant to Section Four of this Agreement, the Investment Company
and/or the Fund agree to compensate the Company in accordance with
the fees agreed upon from time to time.
B. Reimbursements
In addition to the fee paid under Section 11A above, the Investment
Company and/or Fund agree to reimburse the Company for
out-of-pocket expenses or advances incurred by the Company for the
items agreed upon between the parties, as may be added to or
amended from time to time. In addition, any other expenses incurred
by the Company at the request or with the consent of the Investment
Company and/or the Fund, will be reimbursed by the appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
Fund and shall be paid to the Company no less frequently than
monthly, and shall be paid daily upon request of the Company. The
Company will maintain detailed information about the compensation
and out-of-pocket expenses by Fund.
D. Any schedule of compensation agreed to hereunder, as may be
adjusted from time to time, shall be dated and signed by a duly
authorized officer of the Investment Company and/or the Funds and a
duly authorized officer of the Company.
Article 18. Representations.
The Company represents and warrants that it has obtained all required
approvals from all government or regulatory authorities necessary to enter
into this arrangement and to provide the services contemplated in Section
Four of this Agreement.
SECTION FIVE: General Provisions.
Article 19. Proper Instructions.
As used throughout this Agreement, a "Proper Instruction" means a writing
signed or initialed by one or more person or persons as the Board shall have
from time to time authorized. Each such writing shall set forth the specific
transaction or type of transaction involved. Oral instructions will be deemed
to be Proper Instructions if (a) the Company reasonably believes them to have
been given by a person previously authorized in Proper Instructions to give
such instructions with respect to the transaction involved, and (b) the
Investment Company, or the Fund, and the Company promptly cause such oral
instructions to be confirmed in writing. Proper Instructions may include
communications effected directly between electro-mechanical or electronic
devices provided that the Investment Company, or the Fund, and the Company
are satisfied that such procedures afford adequate safeguards for the Fund's
assets. Proper Instructions may only be amended in writing.
Article 20. Assignment.
Except as provided below, neither this Agreement nor any of the rights or
obligations under this Agreement may be assigned by either party without the
written consent of the other party.
A. This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
B. With regard to Transfer Agency Services, the Company may without
further consent on the part of the Investment Company subcontract for
the performance of Transfer Agency Services with
(1) its subsidiary, Federated Shareholder Service Company, a
Delaware business trust, which is duly registered as a transfer
agent pursuant to Section 17A(c)(1) of the Securities Exchange
Act of 1934, as amended, or any succeeding statute ("Section
17A(c)(1)"); or
(2) such other provider of services duly registered as a transfer
agent under Section 17A(c)(1) as Company shall select.
The Company shall be as fully responsible to the Investment Company
for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
C. With regard to Fund Accounting Services, Administrative Services and
Custody Procurement Services, the Company may without further consent
on the part of the Investment Company subcontract for the performance
of such services with Federated Administrative Services, a
wholly-owned subsidiary of the Company.
D. The Company shall upon instruction from the Investment Company
subcontract for the performance of services under this Agreement with
an Agent selected by the Investment Company, other than as described
in B. and C. above; provided, however, that the Company shall in no
way be responsible to the Investment Company for the acts and
omissions of the Agent.
Article 21. Documents.
A. In connection with the appointment of the Company under this
Agreement, the Investment Company shall file with the Company the
following documents:
(1) A copy of the Charter and By-Laws of the Investment Company
and all amendments thereto;
(2) A copy of the resolution of the Board of the Investment
Company authorizing this Agreement;
(3) Printed documentation from the recordkeeping system
representing outstanding Share certificates of the Investment
Company or the Funds;
(4) All account application forms and other documents relating to
Shareholders accounts; and
(5) A copy of the current Prospectus for each Fund.
B. The Fund will also furnish from time to time the following
documents:
(1) Each resolution of the Board of the Investment Company
authorizing the original issuance of each Fund's, and/or
Class's Shares;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to
the sale of Shares of any Fund, and/or Class;
(3) A certified copy of each amendment to the governing document
and the By-Laws of the Investment Company;
(4) Certified copies of each vote of the Board authorizing
officers to give Proper Instructions to the Custodian and
agents for fund accountant, custody services procurement, and
shareholder recordkeeping or transfer agency services;
(5) Such other certifications, 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 Prospectus of each Fund.
Article 22. 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;
(6) it is in compliance with federal securities law requirements
and in good standing as an administrator and fund accountant;
and
B. Representations and Warranties of the Investment Company
The Investment Company represents and warrants to the Company that:
(1) It is an investment company duly organized and existing and
in good standing under the laws of its state of organization;
(2) It is empowered under applicable laws and by its Charter and
By-Laws to enter into and perform its obligations under this
Agreement;
(3) All corporate proceedings required by said Charter and
By-Laws have been taken to authorize it to enter into and
perform its obligations under this Agreement;
(4) The Investment Company is an open-end investment company
registered under the 1940 Act; and
(5) A registration statement under the 1933 Act will be
effective, and appropriate state securities law filings have
been made and will continue to be made, with respect to all
Shares of each Fund being offered for sale.
Article 23. Standard of Care and Indemnification.
--------------------------------------------------
A. Standard of Care
With regard to Sections One, Three and Four, the Company shall be
held to a standard of reasonable care in carrying out the
provisions of this Contract. The Company shall be entitled to rely
on and may act upon advice of counsel (who may be counsel for the
Investment Company) on all matters, and shall be without liability
for any action reasonably taken or omitted pursuant to such advice,
provided that such action is not in violation of applicable federal
or state laws or regulations, and is in good faith and without
negligence.
B. Indemnification by Investment Company
The Company shall not be responsible for and the Investment Company
or Fund shall indemnify and hold the Company, including its
officers, directors, shareholders and their agents, employees and
affiliates, harmless against any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liabilities arising
out of or attributable to:
(1) The acts or omissions of any Custodian, Adviser, Sub-adviser
or other party contracted by or approved by the Investment
Company or Fund,
(2) The reliance on or use by the Company or its agents or
subcontractors of information, records and documents in
proper form which
(a) are received by the Company or its agents or
subcontractors and furnished to it by or on behalf of
the Fund, its Shareholders or investors regarding the
purchase, redemption or transfer of Shares and
Shareholder account information;
(b) are received by the Company from independent pricing
services or sources for use in valuing the assets of
the Funds; or
(c) are received by the Company or its agents or
subcontractors from Advisers, Sub-advisers or other
third parties contracted by or approved by the
Investment Company of Fund for use in the performance
of services under this Agreement;
(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.
(4) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the
securities laws or regulations of any state that such Shares
be registered in such state or in violation of any stop order
or other determination or ruling by any federal agency or any
state with respect to the offer or sale of such Shares in
such state.
Provided, however, that the Company shall not be protected by
this Article 23.B. from liability for any act or omission
resulting from the Company's willful misfeasance, bad faith,
negligence or reckless disregard of its duties or failure to
meet the standard of care set forth in 23.A. above.
C. Reliance
At any time the Company may apply to any officer of the Investment
Company or Fund for instructions, and may consult with legal
counsel with respect to any matter arising in connection with the
services to be performed by the Company under this Agreement, and
the Company and its agents or subcontractors shall not be liable
and shall be indemnified by the Investment Company or the
appropriate Fund for any action reasonably taken or omitted by it
in reliance upon such instructions or upon the opinion of such
counsel provided such action is not in violation of applicable
federal or state laws or regulations. The Company, its agents and
subcontractors shall be protected and indemnified in recognizing
stock certificates which are reasonably believed to bear the proper
manual or facsimile signatures of the officers of the Investment
Company or the Fund, and the proper countersignature of any former
transfer agent or registrar, or of a co-transfer agent or
co-registrar.
D. Notification
In order that the indemnification provisions contained in this
Article 23 shall apply, upon the assertion of a claim for which
either party may be required to indemnify the other, the party
seeking indemnification shall promptly notify the other party of
such assertion, and shall keep the other party advised with respect
to all developments concerning such claim. The party who may be
required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The
party seeking indemnification shall in no case confess any claim or
make any compromise in any case in which the other party may be
required to indemnify it except with the other party's prior
written consent.
Article 24. Term and Termination of Agreement.
This Agreement shall be effective from December 1, 2001, and shall
continue until November 31, 2004 (`Term"). Thereafter, the Agreement will
continue for 18 month terms. The Agreement can be terminated by either
party upon 18 months notice to be effective as of the end of such 18 month
period. In the event, however, of willful misfeasance, bad faith,
negligence or reckless disregard of its duties by the Company, the
Investment Company has the right to terminate the Agreement upon 60 days
written notice, if Company has not cured such willful misfeasance, bad
faith, negligence or reckless disregard of its duties within 60 days. The
termination date for all original or after-added Investment companies which
are, or become, a party to this Agreement. shall be coterminous.
Investment Companies that merge or dissolve during the Term, shall cease to
be a party on the effective date of such merger or dissolution.
Should the Investment Company exercise its rights to terminate, all
out-of-pocket expenses associated with the movement of records and
materials will be borne by the Investment Company or the appropriate Fund.
Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of
Articles 10 and 23 shall survive the termination of this Agreement.
Article 25. Amendment.
This Agreement may be amended or modified by a written agreement
executed by both parties.
Article 26. Interpretive and Additional Provisions.
In connection with the operation of this Agreement, the Company and the
Investment Company may from time to time agree on such provisions
interpretive of or in addition to the provisions of this Agreement as may
in their joint opinion be consistent with the general tenor of this
Agreement. Any such interpretive or additional provisions shall be in a
writing signed by both parties and shall be annexed hereto, provided that
no such interpretive or additional provisions shall contravene any
applicable federal or state regulations or any provision of the Charter. No
interpretive or additional provisions made as provided in the preceding
sentence shall be deemed to be an amendment of this Agreement.
Article 27. Governing Law.
This Agreement shall be construed and the provisions hereof interpreted
under and in accordance with the laws of the Commonwealth of Massachusetts
Article 28. Notices.
Except as otherwise specifically provided herein, Notices and other
writings delivered or mailed postage prepaid to the Investment Company at
0000 Xxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000, or to the
Company at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779,
or to such other address as the Investment Company or the Company may
hereafter specify, shall be deemed to have been properly delivered or given
hereunder to the respective address.
Article 29. Counterparts.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
Article 30. Limitations of Liability of Trustees and Shareholders of the
Company.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Company and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any
of the Trustees or Shareholders of the Company, but bind only the
appropriate property of the Fund, or Class, as provided in the Declaration
of Trust.
Article 31. Merger of Agreement.
This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
Article 32. Successor Agent.
If a successor agent for the Investment Company shall be appointed by
the Investment Company, the Company shall upon termination of this
Agreement deliver to such successor agent at the office of the Company all
properties of the Investment Company held by it hereunder. If no such
successor agent shall be appointed, the Company shall at its office upon
receipt of Proper Instructions deliver such properties in accordance with
such instructions.
In the event that no written order designating a successor agent or
Proper Instructions shall have been delivered to the Company on or before
the date when such termination shall become effective, then the Company
shall have the right to deliver to a bank or trust company, which is a
"bank" as defined in the 1940 Act, of its own selection, having an
aggregate capital, surplus, and undivided profits, as shown by its last
published report, of not less than $2,000,000, all properties held by the
Company under this Agreement. Thereafter, such bank or trust company shall
be the successor of the Company under this Agreement.
Article 33. Force Majeure.
The Company shall have no liability for cessation of services hereunder
or any damages resulting therefrom to the Fund as a result of work
stoppage, power or other mechanical failure, natural disaster, governmental
action, communication disruption or other impossibility of performance.
Article 34. Assignment; Successors.
This Agreement shall not be assigned by either party without the prior
written consent of the other party, except that either party may assign all
of or a substantial portion of its business to a successor, or to a party
controlling, controlled by, or under common control with such party.
Nothing in this Article 34 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
Article 35. Severability.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
Article 36. Limitations of Liability of Trustees and Shareholders of
the Investment Company.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Investment Company and signed by an authorized officer of
the Investment Company, acting as such, and neither such authorization by
such Trustees nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this Agreement
are not binding upon any of the Trustees or Shareholders of the Investment
Company, but bind only the 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.
FEDERATED CORE TRUST II, L.P.
By:
------------------------------
Name: J. Xxxxxxxxxxx Xxxxxxx
Title: President
FEDERATED ADMINISTRATIVE
SERVICES, INC.
By:
------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President
Exhibit 1
Investment Company Name
Fund Name
Class Name
FEDERATED CORE TRUST II, L.P.
International High Income Core Fund
SCHEDULE A
STANDARD DOMESTIC FUNDS
Fund Accounting
Fee Schedule
I. Annual Fees for Portfolio Record Keeping/Fund Accounting Services
First $100 Million 3.0 Basis Points
$100 Million - $300 Million 2.0 Basis Points
$300 Million - $500 Million 1.0 Basis Points
Over $500 Million 0.5 Basis Points
Fund Minimum $39,000
Additional Class of Shares $12,000
(Plus pricing charges and other out-of-pocket expenses)
II. Out-of-Pocket Expenses
Out-of-pocket expenses include, but are not limited to, 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, security
pricing services, variable rate change notification services, paydown factor
notification services
III. Cost of Living Increase
The minimum fee set forth in this Schedule may increase annually upon
each March 1 anniversary of this Agreement over the minimum fee during the
prior 12 months, as calculated under this Schedule, in an amount equal to the
increase in Pennsylvania Consumer Price Index (not to exceed 6% annually) as
last reported by the U.S. Bureau of Labor Statistics for the twelve months
immediately preceding such anniversary.
IV. Payment
Payment is due thirty days after the date of the invoice.
V. Term of Schedule
The parties agree that this fee schedule shall become effective December 1,
2001 and will remain in effect until it is revised as a result of negotiations
initiated by either party; provided however, that the parties may agree to
review this fee schedule every twenty-four (24) months from the effective date
of the Agreement upon sixty days notice. If the parties have not agreed upon
changes during the 60 day notice period, this fee schedule will remain in
effect.
SCHEDULE B
Fees and Expenses
Transfer Agency
I. Annual Maintenance Charge
The annual maintenance charge includes the processing of all transactions
and correspondence. The fee is billable on a monthly basis at the rate of 1/12
of the annual fee. A charge is made for an account in the month that an account
opens or closes.
Basic Annual per Account Fees
The individual per account charges will be billed as follows:
- Money Market Fund/Daily Accrual $16.65
- Money Market Fund/Sweep Accounts:
o under 20,000 accounts $16.65
o 20,000 - 40,000 accounts $12.00
o 40,000 - 60,000 accounts $11.00
o Over 60,000 accounts $10.00
- Fluctuating NAV/Daily Accrual $16.65
- CDSC/Declared Dividend $13.75
- Declared Dividend $8.75
Minimum Charges
- The monthly maintenance charge for each fund will be the actual account
fees or $1000, whichever is greater.
- All funds will be subject to the minimum monthly fee of $1,000 except that
the minimum will be waived for the initial six months or until the fund's
net assets exceed $50,000,000, whichever occurs first.
- The "clone" funds will be subject to a monthly minimum fee of $600.
II. Out-of-Pocket Expenses
Out-of-pocket expenses include but are not limited to postage (including
overnight courier service), statement stock, envelopes, telecommunication
charges (including Fax), travel, duplicating, forms, supplies, microfiche,
computer access charges, client specific enhancements, disaster recovery, closed
account fees, processing fees (including check encoding), and expenses incurred
at the specific direction of the fund. Postage for mass mailings is due seven
days in advance of the mailing date.
III. Cost of Living Increase
The fees and expenses set forth in this Schedule may increase annually upon
each March 1 anniversary of this Agreement over the fees and expenses during the
prior 12 months, as calculated under this Schedule, in an amount equal to the
annual percentage increase of the Boston, Massachusetts 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.
IV. Payment
Payment is due thirty days after the date of the invoice.
V. Term of Schedule
The parties agree that this fee schedule shall become effective December 1,
2001 and will remain in effect until it is revised as a result of negotiations
initiated by either party; provided however, that the parties may agree to
review this fee schedule every twenty-four (24) months from the effective date
of the Agreement upon sixty days notice. If the parties have not agreed upon
changes during the 60 day notice period, this fee schedule will remain in
effect.
SCHEDULE C
Fees and Expenses
Custody Services Procurement
I. Annual Charge
For custody services procurement services provided to Funds by Company
as described in the Agreement, Company shall be paid a fee in the amount of
.1 basis points of the Fund assets held by the custodian, plus Company's
out-of-pocket expenses. Such fee shall accrue daily and be paid monthly.
The fee is billable on a monthly basis.
II. Out-of-Pocket Expenses
Out-of-pocket expenses include but are not limited to postage
(including overnight courier service), envelopes, telecommunication charges
(including FAX), travel, duplicating, forms, supplies, and expenses incurred
at the specific direction of the fund.
III. Payment
Payment is due thirty days after the date of the invoice.
