Exhibit 9(ii) under Form N-1A
AGREEMENT
FOR
FUND ACCOUNTING,
SHAREHOLDER RECORDKEEPING,
AND
CUSTODY SERVICES PROCUREMENT
AGREEMENT made as of , 1995, by and between Federated
Investment Portfolios ("FIP"), on behalf of its portfolio the Bond Index
Portfolio ("Hub Fund"), and Federated Investment Trust ("FIT") on behalf of
its portfolio Federated Bond Index Fund ("Spoke Fund") and its Classes,
(collectively referred to herein as the "Funds"), having their principal
office and place of business at Federated Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX
00000-0000, and FEDERATED SERVICES COMPANY, a Delaware business trust,
having its principal office and place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779 (the "Company").
WHEREAS, FIP 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 interests ("Interests");
WHEREAS, FIT is registered as an open-end management investment company
under the 1940 Act with authorized and issued shares of beneficial interest
("Shareholder Interests");
WHEREAS, the Spoke Fund invests all of its investable assets in the
Interests of the Hub Fund which has the same investment objective as the
Spoke Fund;
WHEREAS, the Spoke Fund invests in the Hub Fund through Signature
Financial Group, Inc.'s Hub and Spoke(R) master-feeder mutual fund
investment system;
WHEREAS, the Funds may desire to retain the Company to provide certain
pricing and/or accounting and recordkeeping services for each of the Funds,
and the Company is willing to furnish such services;
WHEREAS, the Funds may desire to appoint the Company as their transfer
agent, dividend disbursing agent, and agent in connection with certain
other activities, and the Company desires to accept such appointment;
WHEREAS, the Funds may desire to appoint the Company as their agent to
select, negotiate and subcontract for custodian services from an approved
list of qualified banks, and the Company desires to accept such
appointment; and
WHEREAS, from time to time the Funds 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.
ARTICLE 1. APPOINTMENT.
The Funds hereby appoint the Company to provide certain pricing and/or
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 herein set forth in return for the compensation as
provided in Article 4 of this Section.
ARTICLE 2. THE COMPANY'S DUTIES WITH REGARD TO THE HUB FUND.
Subject to the supervision and control of the Hub Fund's Board of
Trustees ("Hub Board"), the Company will assist the Hub Fund with regard to
fund accounting for the Hub Fund, and in connection therewith undertakes to
perform the following specific services;
A. Value the Interests of the Hub Fund 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 Hub 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 Hub
Fund, 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 Hub 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 Hub Fund for
potential errors in valuing the Hub Fund's Interests or calculating
the net asset value of such Interests 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 Hub
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 of the Interests of the Hub Fund, at
the time and in the manner from time to time determined by the Hub
Board and as set forth in the Hub Fund's Prospectus and Statement of
Additional Information ("Prospectus");
C. Calculate the net income of the Hub Fund, if any;
D. Calculate capital gains or losses of the Hub Fund resulting from
the sale or disposition of Interests, if any;
E. Maintain the general ledger and other accounts, books and financial
records of the Hub Fund, 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 Hub Fund
are the property of the Hub Fund and further agrees to surrender
promptly to the Trust such records upon the Hub Fund's request;
G. At the request of the Hub Fund, prepare various reports or other
financial documents required by federal, state and other applicable
laws and regulations; and
H. Such other similar services as may be reasonably requested by the
Hub Fund.
ARTICLE 3. THE COMPANY'S DUTIES WITH REGARD TO THE SPOKE FUND.
Subject to the supervision and control of the Spoke Fund's Board of
Trustees ("Spoke Board"), the Company will assist the Spoke Fund with
regard to fund accounting for the Spoke Fund, and in connection therewith
undertakes to perform the following specific services;
A. Determine the net asset value of the Shareholder Interests of the
Spoke Fund based upon the assets allocated to it by the Hub Fund, at
the time and in the manner from time to time determined by the Board
and as set forth in the Spoke Fund's Prospectus and Statement of
Additional Information ("Prospectus");
B. Calculate the net income of the Spoke Fund, if any;
C. Calculate capital gains or losses of the Spoke Fund resulting from
sale or disposition of Shareholder Interests, if any;
D. Maintain the general ledger and other accounts, books and financial
records of the Spoke Fund, as required under Section 31(a) of the
1940 Act and the Rules thereunder in connection with the services
provided by the Company;
E. 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 Spoke Fund
are the property of the Spoke Fund and further agrees to surrender
promptly to the Spoke Fund such records upon the Spoke Fund's
request;
F. At the request of the Spoke Fund, prepare various reports or other
financial documents required by federal, state and other applicable
laws and regulations; and
G. Such other similar services as may be reasonably requested by the
Spoke Fund.
ARTICLE 4. COMPENSATION AND ALLOCATION OF EXPENSES.
A. The Funds will compensate the Company for its services rendered
pursuant to Section One of this Agreement in accordance with the
fees agreed upon from time to time between the parties hereto. Such
fees do not include out-of-pocket disbursements of the Company for
which the Funds shall reimburse the Company upon receipt of a
separate invoice. Out-of-pocket disbursements shall include, but
shall not be limited to, the items agreed upon between the parties
from time to time.
B. The Funds, and not the Company, shall bear the cost of: custodial
expenses; membership dues in the Investment Company Institute or any
similar organization; transfer agency expenses; investment advisory
expenses; costs of printing and mailing 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 of the Funds;
independent auditors expenses; legal and audit department expenses
billed to Federated Services Company for work performed related to
the Funds; law firm expenses; or other expenses not specified in
this Article 4 which may be properly payable by the Funds.
C. The compensation and out-of-pocket expenses shall be accrued by the
Funds 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 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 the Funds 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 Funds' net Interests and Shareholder
Interests shall be computed at the time and in the manner specified
in the Funds' Prospectuses.
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 services under this Section One. Such
person or persons may be third-party service providers, or they may
be officers and employees who are employed by both the Company and
the Funds. 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: INVESTOR AND SHAREHOLDER RECORDKEEPING.
ARTICLE 5. TERMS OF APPOINTMENT BY HUB FUND.
Subject to the terms and conditions set forth in this Agreement, the Hub
Fund hereby appoints the Company to act as, and the Company agrees to act
as, transfer agent and dividend disbursing agent for the Interests of the
investors of the Hub Fund ("Investor(s)").
ARTICLE 6 TERMS OF APPOINTMENT BY SPOKE FUND.
Subject to the terms and conditions set forth in this Agreement, Spoke
Fund hereby appoints the Company to act as, and the Company agrees to act
as, transfer agent and dividend disbursing agent for the Spoke Fund's
Shareholder Interests, and agent in connection with any accumulation, open-
end account, or similar plans provided the shareholders of the Spoke Fund
("Shareholder(s)"), including without limitation, any periodic investment
plan or periodic withdrawal.
ARTICLE 7. 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 Funds, 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 Funds, and the Company are satisfied
that such procedures afford adequate safeguards for the Funds' assets.
Proper Instructions may only be amended in writing.
ARTICLE 8. DUTIES OF THE COMPANY WITH REGARD TO THE HUB FUND.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Hub Fund:
A. Purchases
(1) The Company shall receive orders and payment for the initial
purchase of and subsequent investments in Interests
("Purchases") and promptly deliver payment and appropriate
documentation therefore to the custodian of the Hub Fund, (the
"Custodian"). The Company shall notify the Hub 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 Hub
Fund's current Prospectus, the Company shall compute and issue
the appropriate number of Interests of the Hub Fund and hold
such Interests in the appropriate Investor accounts.
B. Distribution
(1) Upon notification by the Hub Fund of the declaration of any
distribution to Investors, the Company shall act as Dividend
Disbursing Agent for the Hub Fund in accordance with the
provisions of its governing document and the then-current
Prospectus of the Hub Fund. The Company shall credit income,
capital gain, or any other payments to Investors. 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 an Investor is entitled to receive additional
Interests by virtue of any such distribution or dividend,
appropriate credits shall be made to the Investor's account;
and
(2) The Company shall maintain records of account for the Hub Fund
and advise the Hub Fund and its Investors 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 Hub Fund Prospectus or
set forth in Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The Company shall
notify the Hub Fund 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 Investors, pursuant to procedures
described in the then-current Prospectus of the Hub Fund.
(3) If any request for redemption does not comply with the
procedures for redemption approved by the Hub Fund, the Company
shall promptly notify the Investor 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 Interests by the
registered Investor owners thereof.
D. Recordkeeping
(1) The Company shall record the issuance of Interests of the Hub
Fund, and maintain pursuant to applicable rules of the
Securities and Exchange Commission ("SEC") a record of the
total number of Interests of the Hub Fund which are authorized,
based upon data provided to it by the Hub Fund, and issued and
outstanding. The Company shall also provide the Hub Fund on a
regular basis or upon reasonable request with the total number
of Interests which are authorized and issued and outstanding,
but shall have no obligation when recording the issuance of
Interests, except as otherwise set forth herein, to monitor the
issuance of such Interests or to take cognizance of any laws
relating to the issue or sale of such Interests, which
functions shall be the sole responsibility of the Hub Fund.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Hub Fund to include a record for each Investor's account of the
following:
(a) Name, address and tax identification number (and whether
such number has been certified);
(b) Number of Interests 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) 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 Hub Fund at reasonable
times. The Company may, at its option at any time, and shall
forthwith upon the Hub Fund's demand, turn over to the Hub 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 Hub 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
Hub Fund or destroyed in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Hub Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) Investor lists and statistical information;
(d) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees,
or other transaction or sales-related payments;
(e) 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 Investors, 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.
(2) 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, including but not limited to:
maintaining all Investor accounts, mailing Investor
reports and Prospectuses to current Investors, withholding
taxes on accounts subject to back-up or other withholding,
preparing and filing appropriate forms required with
respect to dividends and distributions by federal
authorities for all Investors, preparing and mailing
confirmation forms and statements of account to Investors
for all purchases and redemptions of Interests and other
conformable transactions in Investor accounts, preparing
and mailing activity statements for Investors, and
providing Investor account information.
F. Other Duties
(1) The Company shall answer correspondence from Investors relating
to their Interest accounts and such other correspondence as may
from time to time be addressed to the Company;
(2) The Company shall prepare Investor meeting lists, mail proxy
cards and other material supplied to it by the Hub Fund in
connection with Investor Meetings of the Hub Fund; receive,
examine and tabulate returned proxies, and certify the vote of
the Investors;
(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.
ARTICLE 9. DUTIES OF THE COMPANY WITH REGARD TO THE SPOKE FUND.
The Company shall perform the following services in accordance with
Proper Instructions as may be provided from time to time by the Spoke Fund:
A. Purchases
(1) The Company shall receive orders and payment for the purchase
of Shareholder Interests and promptly deliver payment and
appropriate documentation therefore to the custodian of the
Spoke Fund, (the "Custodian"). The Company shall notify the
Spoke 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 Spoke
Fund's current Prospectus, the Company shall compute and issue
the appropriate number of Shareholder Interests of the Spoke
Fund and hold such Shareholder Interests in the appropriate
Shareholder accounts.
(4) In the event that any check or other order for the purchase of
Shareholder Interests of the Spoke Fund is returned unpaid for
any reason, the Company shall debit the account of the
Shareholder by the number of Shareholder Interests that had
been credited to its account upon receipt of the order,
promptly mail a debit advice to the Shareholder , and notify
the Spoke Fund. In the event that the amount paid for such
Shareholder Interests exceeds proceeds of the redemption of
such Shareholder Interests plus the amount of any dividends
paid with respect to such Shareholder Interests, the Spoke Fund
or its distributor will reimburse the Company on the amount of
such excess.
B. Distribution
(1) Upon notification by the Spoke Fund of the declaration of any
distribution to Shareholders, the Company shall act as Dividend
Disbursing Agent for the Spoke Fund in accordance with the
provisions of its governing document and the then-current
Prospectus of the Spoke Fund. The Company shall 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
Shareholder Interests 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 the Spoke
Fund and advise the Spoke Fund 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 Spoke Fund Prospectus or
set forth in Proper Instructions, deliver the appropriate
instructions therefor to the Custodian. The Company shall
notify the Spoke Fund 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
Spoke Fund.
(3) The Company shall effect transfers of Shareholder Interests by
the registered Shareholder owners thereof.
(4) If any request for redemption does not comply with the
procedures for redemption approved by the Spoke 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.
(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 Spoke Fund.
D. Recordkeeping
(1) The Company shall record the issuance of Shareholder Interests
of the Spoke Fund, and maintain pursuant to applicable rules of
the Securities and Exchange Commission ("SEC") a record of the
total number of Shareholder Interests of the Spoke Fund which
are authorized, based upon data provided to it by the Spoke
Fund, and issued and outstanding. The Company shall also
provide the Spoke Fund on a regular basis or upon reasonable
request with the total number of Shareholder Interests which
are authorized and issued and outstanding, but shall have no
obligation when recording the issuance of Shareholder
Interests, except as otherwise set forth herein, to monitor the
issuance of such Shareholder Interests or to take cognizance of
any laws relating to the issue or sale of such Shareholder
Interests, which functions shall be the sole responsibility of
the Spoke Fund.
(2) The Company shall establish and maintain records pursuant to
applicable rules of the SEC relating to the services to be
performed hereunder in the form and manner as agreed to by the
Spoke 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 Shareholder Interests 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) 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 Spoke Fund at reasonable
times. The Company may, at its option at any time, and shall
forthwith upon the Spoke Fund's demand, turn over to the Spoke
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 Spoke 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
Spoke Fund or destroyed in accordance with Proper Instructions.
E. Confirmations/Reports
(1) The Company shall furnish to the Spoke Fund periodically the
following information:
(a) A copy of the transaction register;
(b) Dividend and reinvestment blotters;
(c) Shareholder lists and statistical information;
(d) Payments to third parties relating to distribution
agreements, allocations of sales loads, redemption fees,
or other transaction- or sales-related payments;
(e) 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
Shareholder Interests 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 Shareholder Interests of the Spoke Fund
sold in each state ("blue sky reporting"). The Spoke 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 the Spoke Fund'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 Spoke Fund as provided above.
F. Other Duties
(1) The Company shall answer correspondence from Shareholder s
relating to their Shareholder Interest 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 Spoke Fund in
connection with Shareholder Meetings of the Spoke Fund;
receive, examine and tabulate returned proxies, and certify the
vote of the Shareholder s;
(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 certificates, forms
and devices.
ARTICLE 10. DUTIES OF THE HUB FUND.
A. Compliance
The Hub Fund assumes full responsibility for the preparation,
contents and distribution of its own Prospectus and for complying
with all applicable requirements the 1940 Act and any laws, rules
and regulations of government authorities having jurisdiction.
B. Distributions
The Hub Fund shall promptly inform the Company of the declaration of
any dividend or distribution on account of any of the Hub Fund's
Interests.
ARTICLE 11. DUTIES OF THE SPOKE FUND.
A. Compliance
The Spoke Fund assumes full responsibility for the preparation,
contents and distribution of its own 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 Spoke Fund shall promptly inform the Company of the declaration
of any dividend or distribution on account of any of the Spoke
Fund's Interests.
ARTICLE 12. COMPENSATION AND EXPENSES.
A. Annual Fee
For performance by the Company pursuant to Section Two of this
Agreement, the Funds agree to pay the Company an annual maintenance
fee for each Investor or 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 Funds and the Company.
B. Reimbursements
In addition to the fee paid under Article 12A above, the Funds 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 Funds, will be reimbursed by the
appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
Funds 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 Funds and a duly authorized officer of the Company.
ARTICLE 13. ASSIGNMENT OF SHAREHOLDER RECORDKEEPING.
Except as provided below, no right or obligation under this Section Two
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. The Company may without further consent on the part of the Funds
subcontract for the performance hereof with such other provider of
services duly registered as a transfer agent under Section 17A(c)(1)
as Company shall select; provided, however, that the Company shall
be as fully responsible to the Trust for the acts and omissions of
any subcontractor as it is for its own acts and omissions; or
C. The Company shall upon instruction from the Funds subcontract for
the performance hereof with an Agent selected by the Trust, or a
provider of services selected by Company, as described above;
provided, however, that the Company shall in no way be responsible
to the Funds for the acts and omissions of the Agent.
SECTION THREE: CUSTODY SERVICES PROCUREMENT.
ARTICLE 14. APPOINTMENT.
The Funds hereby appoint 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 Boards of the Funds as being eligible for selection by the Company as a
custodian (the "Eligible Custodian"). The Company accepts such appointment.
ARTICLE 15. THE COMPANY AND ITS DUTIES.
Subject to the review, supervision and control of each Fund's Board, the
Company shall:
A. evaluate the nature and the quality of the custodial services
provided by the Eligible Custodian;
B. employ the Eligible Custodian to serve on behalf of the Funds as
Custodian of the Funds' assets substantially on the terms approved
by the Fund Boards;
C. negotiate and enter into agreements with the Eligible Custodians for
the benefit of the Funds, with the Funds as a party to each such
agreement. The Company shall not be a party to any agreement with
any such Custodian;
D. establish procedures to monitor the nature and the quality of the
services provided by the Eligible Custodians;
E. continuously monitor the nature and the quality of services provided
by the Eligible Custodians; and
F. periodically provide to the Funds (i) written reports on the
activities and services of the Eligible Custodians; (ii) the nature
and amount of disbursement made on account of the Funds with respect
to each custodial agreement; and (iii) such other information as
each Fund's 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.
ARTICLE 16. FEES AND EXPENSES.
A. Annual Fee
For the performance by the Company pursuant to Section Three of this
Agreement, the Funds agree to pay the Company an annual fee as
agreed upon between the parties.
B. Reimbursements
In addition to the fee paid under Section 15A above, the Funds 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 Funds, will be reimbursed by the
appropriate Fund.
C. Payment
The compensation and out-of-pocket expenses shall be accrued by the
Funds 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 Funds.
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 Funds and a duly authorized officer of the Company.
SECTION FOUR: GENERAL PROVISIONS.
ARTICLE 17. DOCUMENTS.
A. In connection with the appointment of the Company under this
Agreement, the Funds shall file with the Company the following
documents:
(1) A copy of the Declarations of Trust and By-Laws of the Funds
and all amendments thereto;
(2) A copy of the resolution of the Boards of the Funds authorizing
this Agreement;
(3) All account application forms and other documents relating to
Investor and Shareholder accounts; and
(4) A copy of the current Prospectus for each Fund.
B. The Funds will also furnish from time to time the following
documents:
(1) Each resolution of the Boards of either Fund authorizing the
original issuance of each Fund's Interests or Shareholder
Interests ;
(2) Each Registration Statement filed with the SEC and amendments
thereof and orders relating thereto in effect with respect to
the sale of Interests or Shareholder Interests of the Funds;
(3) A certified copy of each amendment to the governing document
and the By-Laws of the Funds;
(4) Certified copies of each vote of either Board authorizing
officers to give Proper Instructions to the Eligible Custodians
and agents for fund accountant, custody services procurement,
and recordkeeping or transfer agency services;
(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 Prospectus of each Fund.
ARTICLE 18. REPRESENTATIONS AND WARRANTIES.
A. Representations and Warranties of the Company
The Company represents and warrants to the Funds that:
(1) It is a business trust duly organized and existing and in good
standing under the laws of the State of Delaware.
(2) It is duly qualified to carry on its business in the State of
Delaware.
(3) It is empowered under applicable laws and by its Declaration of
Trust 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 a transfer agent.
(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 FIP and FIT
FIP and FIT represent and warrant to the Company that:
(1) They are investment companies duly organized and existing and
in good standing under the laws of their state of organization;
(2) They are empowered under applicable laws and by their
Declarations of Trust and By-Laws to enter into and perform its
obligations under this Agreement;
(3) All corporate proceedings required by said Declarations of
Trust and By-Laws have been taken to authorize it to enter into
and perform its obligations under this Agreement;
(4) The Funds are open-end investment companies registered under
the 1940 Act; and
C. Representation and Warranty of the Spoke Fund
(5) The Spoke Fund represents and warrants that 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 Shareholder Interests of the
Spoke Fund being offered for sale.
ARTICLE 19. STANDARD OF CARE AND INDEMNIFICATION.
A. Standard of Care
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 either of the Funds) 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 Funds
The Company shall not be responsible for and the Funds 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 Eligible Custodian, Adviser, Sub-
adviser or other party contracted by or approved by the Funds,
(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
Funds, their Shareholders or Investors regarding the
purchase, redemption or transfer of Interests or
Shareholder Interests and Investor 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 Funds for use in
the performance of services under this Agreement;
(d) have been prepared and/or maintained by the Funds or their
affiliates or any other person or firm on behalf of the
Funds.
(3) The reliance on, or the carrying out by the Company or its
agents or subcontractors of Proper Instructions of the Funds.
(4) The offer or sale of Interests in violation of any requirement
under the federal securities laws or regulations; or the offer
or sale of Shareholder Interests in violation of such federal
securities laws or the securities laws of any state requiring
that Shareholder Interests 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 Shareholder Interests in such state.
Provided, however, that the Company shall not be protected by
this Article 18.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 18.A. above.
C. Reliance
At any time the Company may apply to any officer of the Funds 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
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.
D. Notification
In order that the indemnification provisions contained in this
Article 18 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. TERMINATION OF AGREEMENT.
This Agreement may be terminated by either party upon one hundred twenty
(120) days written notice to the other. Should the Funds exercise their
right to terminate, all out-of-pocket expenses associated with the movement
of records and materials will be borne by the appropriate Fund.
Additionally, the Company reserves the right to charge for any other
reasonable expenses associated with such termination. The provisions of
Article 19 shall survive the termination of this Agreement.
ARTICLE 21. AMENDMENT.
This Agreement may be amended or modified by a written agreement
executed by the parties.
ARTICLE 22. INTERPRETIVE AND ADDITIONAL PROVISIONS.
In connection with the operation of this Agreement, the Company and the
Funds 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 or state
regulations or any provision of their Declarations of Trust. 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 Funds 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 Trust or the Company may hereafter specify, shall be
deemed to have been properly delivered or given hereunder to the respective
address.
ARTICLE 25. COUNTERPARTS.
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.
ARTICLE 26. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE TRUST.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Funds and signed by an authorized officer of the Funds,
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, Investors or Shareholders of the Funds, but bind only the
appropriate property of the Funds, as provided in the Declaration of Trust.
ARTICLE 27. LIMITATIONS OF LIABILITY OF TRUSTEES AND SHAREHOLDERS OF
THE COMPANY.
The execution and delivery of this Agreement have been authorized by the
Trustees of the Company and signed by an authorized officer of the Company,
acting as such, and neither such authorization by such Trustees nor such
execution and delivery by such officer shall be deemed to have been made by
any of them individually or to impose any liability on any of them
personally, and the obligations of this Agreement are not binding upon any
of the Trustees or Shareholders of the Company, but bind only the property
of the Company as provided in the Declaration of Trust.
ARTICLE 28. ASSIGNMENT.
This Agreement and the rights and duties hereunder shall not be
assignable with respect to the Funds by any of the parties hereto except by
the specific written consent of the other party.
ARTICLE 29. 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 30. SUCCESSOR AGENT.
If a successor agent shall be appointed by for either of the Funds, the
Company shall upon termination of this Agreement deliver to such successor
agent at the office of the Company all properties of the Fund(s) 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 31. FORCE MAJEURE.
The Company shall have no liability for cessation of services hereunder
or any damages resulting therefrom to the Funds as a result of work
stoppage, power or other mechanical failure, natural disaster, governmental
action, communication disruption or other impossibility of performance.
ARTICLE 32. ASSIGNMENT; SUCCESSORS.
This Agreement shall not be assigned by any party without the prior
written consent of the other party, except that either party may assign to
a successor all of or a substantial portion of its business, or to a party
controlling, controlled by, or under common control with such party.
Nothing in this Article 31 shall prevent the Company from delegating its
responsibilities to another entity to the extent provided herein.
ARTICLE 33. SEVERABILITY.
In the event any provision of this Agreement is held illegal, void or
unenforceable, the balance shall remain in effect.
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
FEDERATED INVESTMENT TRUST
By
ATTEST: FEDERATED SERVICES COMPANY
