Exhibit (h)(iii) under Form N-1A
Exhibit (10) under Item 601/Reg. S-K
SECOND AMENDED AND RESTATED SERVICES AGREEMENT
THIS AGREEMENT, amended and restated as of December 1, 2001, is entered
into between each Fund listed on Schedule 1, as may be amended from time to
time, severally and not jointly, and Federated Shareholder Services Company,
("FSSC"). Unless otherwise defined herein, Section 10 sets forth the definition
of capitalized terms used in this Agreement.
WHEREAS, Schedule 1 to this Agreement sets forth the classes of Shares for
which the Funds will compensate persons who agree to provide services to
Shareholders and assist in the maintenance of Shareholder accounts ("Services");
WHEREAS, FSSC and certain of the Funds entered into a Shareholder Services
Agreement dated March 1, 1994 and amended September 1, 1995, (the "Prior
Agreement") which provided for FSSC to enter into agreements for Services with
third parties ("Third-Party Agreements") and to utilize fees received under the
Prior Agreement to compensate third parties pursuant to such Third-Party
Agreements;
WHEREAS, it is contemplated that hereafter, the Funds will compensate
third-parties for Services directly, and that FSSC will no longer enter into
Third-Party Agreements;
WHEREAS, FSSC will continue to compensate third parties pursuant to any
Third-Party Agreements and the Funds will continue to make payments to FSSC to
fund those obligations; and
WHEREAS, FSSC will also receive fees for Services it provides to
Shareholders under this Agreement.
NOW THEREFORE, the parties agree to amend and restate the Agreement as follows:
Agreement to Provide Services
Services. FSSC agrees to provide Services for Shareholders of the Funds
that have fully-disclosed accounts in the Funds for which either (i) Federated
Securities Corp. or any other affiliate of FSSC is the dealer of record; or (ii)
for which the dealer of record does not provide Services (collectively, the
"FSSC Accounts"). FSSC shall also provide Services or cause Services to be
provided to Shareholders whose accounts are subject to Third-Party Agreements.
Services shall include, but are not limited to, telephone, mail or electronic
communications with Shareholders.
Delivery of Disclosure Documents. Upon request by a customer that is a
Shareholder of the Funds, FSSC will send a copy of the current Prospectus (and,
if expressly requested, Statement of Additional Information), annual report or
semi-annual report for any Fund ("Disclosure Documents") to the customer within
three (3) business days of such request.
The Funds will furnish to FSSC at the Funds' own expense such number of
copies of the then-current Disclosure Documents as FSSC requests to satisfy its
obligations under this paragraph. FSSC covenants to the Funds that it will not
make any representations concerning any Shares other than those contained in the
Disclosure Documents of the applicable Fund. The parties may agree from time to
time to set appropriate security procedures and to perform electronically
certain of their obligations under this Agreement, including without limitation
the delivery of requested Disclosure Documents. FSSC shall not have any
obligation to pay the cost of producing or delivering Disclosure Documents or
any other costs incurred by the Funds in connection with the Services provided
hereunder.
Service Fees Payable to FSSC
During the term of this Agreement, FSSC will be entitled to receive from
each Fund as full compensation for Services rendered hereunder a fee calculated
daily at an annual rate, as set forth Schedule 1 to this Agreement, of up to
0.25% of average net assets held in FSSC Accounts of each Fund. Service fees
paid by the Funds are in addition to other fees paid by the Funds such as those
paid pursuant to an Agreement for Fund Accounting Services, Administrative
Services, Transfer Agency Services and Custody Services Procurement and fees
paid pursuant to each Fund's Distributor's Contract.
For so long as any Third-Party Agreement remains in effect, FSSC shall be
entitled to receive fees from the Funds calculated daily at an annual rate, as
set forth in Schedule 1 to this Agreement, of up to 0.25% on the average net
assets held in accounts of each Fund for which Services are provided by such
third-parties which amount shall be paid by FSSC in accordance with such
Third-Party Agreements.
The Funds shall pay service fees to FSSC in accordance with their regular
payment schedules. For the payment period in which this Agreement becomes
effective or terminates with respect to any Fund, there shall be an appropriate
proration of the fee on the basis of the number of days that this Agreement is
in effect with respect to such Fund during the period.
Agreements with Other Service Providers
Each Fund hereby appoints FSSC as the Fund's agent to enter into agreements
with financial intermediaries that are not registered as broker/dealers under
the 1934 Act (each an "Unregistered Intermediary") to provide Services to their
customers that are Shareholders of the Fund. Each Fund agrees to pay Service
Fees at an annual rate as set forth in Schedule 1 to this Agreement of up to
0.25% of the average net assets held in Fund accounts for which an Unregistered
Intermediary has agreed to provide Services. Any such accounts shall not be
treated as FSSC Accounts for purposes of this Agreement.
Representations
Each party represents and warrants to the other party that:
Status. It is duly organized and validly existing under the laws of the
jurisdiction of its organization or incorporation and, if relevant under such
laws, in good standing. Powers. It has the power to execute this Agreement and
any other documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this Agreement
that it is required by this Agreement to deliver and to perform its obligations
under this Agreement and has taken all necessary action to authorize such
execution, delivery and performance. No Violation or Conflict. Such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its constitutional documents, any order or judgment of any
court or other agency of government applicable to it or any contractual
restriction binding on or affecting it. Obligations Binding. Its obligations
under this Agreement constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to equitable
principles of general application regardless of whether enforcement is sought in
a proceeding in equity or law). Compliance with Laws. It will comply in all
material respects with all applicable laws and orders to which it may be subject
if failure to so comply would materially impair its ability to perform its
obligations under this Agreement. Indemnification and Limitation of Liability
In the absence of willful misfeasance, bad faith, gross negligence or
reckless disregard of obligations or duties hereunder on the part of FSSC and
its trustees, officers, employees, agents and representatives, the Funds agree
to indemnify FSSC and its trustees, officers, employees, agents and
representatives against any and all claims, demands, liabilities and reasonable
expenses (including attorneys' fees), related to or otherwise connected with (i)
any breach by the Funds of any provision of this Agreement; or (ii) any action
by a Fund's Shareholder against FSSC.
FSSC shall not be liable for any error of judgment or mistake of law or for
any loss suffered by any Fund 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. In
no event shall FSSC be liable for indirect or consequential damages.
Any person, even though also an officer, trustee, partner, employee or
agent of FSSC, who may be or become an officer, employee or agent of any Fund or
a member of a Fund's Board, shall be deemed, when rendering services to such
Fund or acting on any business of such Fund (other than services or business in
connection with the duties of FSSC hereunder) to be rendering such services to
or acting solely for such Fund and not as an officer, trustee, partner, employee
or agent or one under the control or direction of FSSC even though paid by FSSC.
FSSC is expressly put on notice of the limitation of liability as set forth
in the Declaration of Trust of each Fund that is a Massachusetts business trust
and agrees that the obligations assumed by each such Fund pursuant to this
Agreement shall be limited in any case to such Fund and its assets and that FSSC
shall not seek satisfaction of any such obligations from the Shareholders of
such Fund, the Trustees, Officers, Employees or Agents of such Fund, or any of
them.
The provisions of this Section shall survive the termination of this Agreement.
Privacy Policy
The parties acknowledge that:
The Securities and Exchange Commission has adopted Regulation S-P at 17 CFR
Part 248 to protect the privacy of individuals who obtain a financial product or
service for personal, family or household use; Regulation S-P permits financial
institutions, such as the Funds, to disclose "nonpublic personal information"
("NPI") of its "customers" and "consumers" (as those terms are therein defined
in Regulation S-P) to affiliated and nonaffiliated third parties of the Funds,
without giving such customers and consumers the ability to opt out of such
disclosure, for the limited purposes of processing and servicing transactions
(17 CFR ss. 248.14); for specified law enforcement and miscellaneous purposes
(17 CFR ss. 248.15); and to service providers or in connection with joint
marketing arrangements (17 CFRss.248.13); and Regulation S-P provides that the
right of a customer and consumer to opt out of having his or her NPI disclosed
pursuant to 17 CFR ss. 248.7 and 17 CFR ss. 248.10 does not apply when the NPI
is disclosed to service providers or in connection with joint marketing
arrangements, provided the Fund and third party enter into a contractual
agreement that prohibits the third party from disclosing or using the
information other than to carry out the purposes for which the Fund disclosed
the information (17 CFR ss. 248.13). The parties agree that the Funds may
disclose Shareholder NPI to FSSC as agent of the Funds and solely in furtherance
of fulfilling FSSC's contractual obligations under the Agreement in the ordinary
course of business to support the Funds and their Shareholders.
FSSC hereby agrees to be bound to use and redisclose such NPI only for the
limited purpose of fulfilling its duties and obligations under the Agreement,
for law enforcement and miscellaneous purposes as permitted in 17 CFR ss.248.15,
or in connection with joint marketing arrangements that the Funds may establish
with FSSC in accordance with the limited exception set forth in 17 CFR 248.13.
FSSC represents and warrants that, in accordance with 17 CFR ss. 248.30, it
has implemented, and will continue to carry out for the term of the Agreement,
policies and procedures reasonably designed to:
Insure the security and confidentiality of records and NPI of Fund
customers; Protect against any anticipated threats or hazards to the security or
integrity of Fund customer records and NPI; and Protect against unauthorized
access or use of such Fund customer records or NPI that could result in
substantial harm or inconvenience to any Fund customer. FSSC may redisclose
Section 248.13 NPI only to: (a) the Funds and affiliated persons of the Funds
("Fund Affiliates"); (b) affiliated persons of FSSC ("Service Provider
Affiliates") (which in turn may disclose or use the information only to the
extent permitted under the original receipt); (c) a third party not affiliated
with FSSC or the Funds ("Nonaffiliated Third Party") under the service and
processing (ss.248.14) or miscellaneous (ss.248.15) exceptions, but only in the
ordinary course of business to carry out the activity covered by the exception
under which FSSC received the information in the first instance; and (d) a
Nonaffiliated Third Party under the service provider and joint marketing
exception (ss.248.13), provided FSSC enters into a written contract with the
Nonaffiliated Third Party that prohibits the Nonaffiliated Third Party from
disclosing or using the information other than to carry out the purposes for
which the Funds disclosed the information in the first instance.
FSSC may redisclose Section 248.14 NPI and Section 248.15 NPI to: (a) the
Funds and Fund Affiliates; (b) Service Provider Affiliates (which in turn may
disclose the information to the same extent permitted under the original
receipt); and (c) a Nonaffiliated Third Party to whom the Funds might lawfully
have disclosed NPI directly.
The provisions of this Section shall survive the termination of the
Agreement.
Notices
All notices of any kind to be given hereunder shall be given in writing and
delivered by personal delivery or by postage prepaid, registered or certified
United States first class mail, return receipt requested, overnight courier
services, or by fax or e-mail (with confirming copy by mail).
Unless otherwise notified in writing, all notices to any Fund shall be
given or sent to such Fund at:
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: President
Unless otherwise notified in writing, all notices to FSSC shall be given or
sent to:
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: President
Assignments and No Third-Party Rights
Except for any Third-Party Agreements entered into prior to the date of
this Agreement, this Agreement will not be assigned or subcontracted by either
party, without prior written consent of the other party, except that either
party may assign or subcontract this Agreement to an affiliate controlled,
controlled by, or under common control with the assigning or subcontracting
party without such consent. Subject to the preceding, this Agreement will apply
to, be binding in all respects upon, and inure to the benefit of permitted
assigns and subcontractors of the parties. In no event shall the Funds be
obligated to make any payment under this Agreement to any person other than
FSSC.
Nothing expressed or referred to in this Agreement will be construed to
give anyone other than the parties to this Agreement any legal or equitable
right, remedy or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the parties to this Agreement and their
permitted assigns and subcontractors.
Force Majeure
If either party is unable to carry out any of its obligations under this
Agreement because of conditions beyond its reasonable control, including, but
not limited to, acts of war or terrorism, work stoppages, fire, civil
disobedience, delays associated with hardware malfunction or availability,
riots, rebellions, storms, electrical failures, acts of God, and similar
occurrences ("Force Majeure"), this Agreement will remain in effect and the
non-performing party's obligations shall be suspended without liability for a
period equal to the period of the continuing Force Majeure (which period shall
not exceed fifteen (15) business days), provided that:
the non-performing party gives the other party prompt notice describing the
Force Majeure, including the nature of the occurrence and its expected duration
and, where reasonably practicable, continues to furnish regular reports with
respect thereto during the period of Force Majeure; the suspension of
obligations is of no greater scope and of no longer duration than is required by
the Force Majeure; no obligations of either party that accrued before the Force
Majeure are excused as a result of the Force Majeure; the non-performing party
uses all reasonable efforts to remedy its inability to perform as quickly as
possible. Definition of Terms "1934 Act" means the Securities Exchange Act of
1934, and "1940 Act" means the Investment Company Act of 1940, in each case as
amended and in effect at the relevant time.
"Fund" means an investment company registered under the 1940 Act and, in
the case of a "series company" as defined in Rule 18f-2(a) under the 1940 Act,
each individual portfolio of the series company, set forth on Schedule 1 to this
Agreement from time to time. "Funds" means the Funds listed on Schedule 1
collectively.
"Prospectus" means, with respect to any Shares the most recent Prospectus
and Statement of Additional Information ("SAI") and any supplement thereto,
pursuant to which a Fund publicly offers the Shares; provided, however, that
this definition shall not be construed to require FSC, Dealer or any Fund to
deliver any SAI other than at the express request of Dealer's customer.
"Shares" means (1) shares of beneficial interest in a Fund organized as a
business trust; and (2) shares of capital stock in a Fund organized as a
corporation. With respect to a Fund that has established separate classes of
Shares in accordance with Rule 18f-3 under the 1940 Act, Shares refers to the
relevant class. "Shareholder" means the beneficial owner of any Share.
Miscellaneous
This Agreement may be terminated by either party by giving the other party
at least sixty (60) days' written notice thereof.
This Agreement may be amended only by a writing signed by both parties,
provided that, any Fund may amend Schedule 1 from time to time by sending a copy
of the amended Schedule to FSSC. Any such amendment shall be effective ten (10)
days after notice thereof.
This Agreement constitutes (along with its Schedules) a complete and
exclusive statement of the terms of the agreement between the parties and
supersedes any prior agreement with respect to its subject matter.
This Agreement has been entered into between FSSC and each Fund severally
and not jointly, and the provisions this Agreement shall apply separately to
each Fund. No Fund shall be obligated to make any payments to FSSC under this
Agreement other than with respect to its Shares. No breach of this Agreement by
a Fund, or by FSSC against a Fund, shall constitute a breach of this Agreement
with respect to any other Fund.
This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the same
instrument.
If any provision of this Agreement is held invalid or unenforceable, the
other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid and
unenforceable.
This Agreement will be governed by the laws of the Commonwealth of
Pennsylvania, without regard to conflicts of laws principles thereof. Any action
or proceeding seeking to enforce any provision of, or based on any right arising
out of, this Agreement may be brought against the parties in the courts of the
Commonwealth of Pennsylvania, County of Allegheny, or, if it has or can acquire
jurisdiction, in the United States District Court for the Western District of
Pennsylvania, and each of the parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or
proceeding and waives any objection to venue laid therein. Each party waives its
right to a jury trial.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Attest: Funds (listed on Schedule 1)
/s/ Xxxx X. XxXxxxxxx By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. XxXxxxxxx Xxxx X. Xxxxxxx
Secretary Chairman
Attest: Federated Shareholder Services Company
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxx, Xx.
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Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxx, Xx.
Secretary President