Federated Muni and Stock Advantage Fund – A Class 2020-10-31 FEDERATED HERMES INCOME SECURITIES TRUST 2020-12-31 0000789281 false 2020-12-28 2020-12-29 N-1A 485BPOS FMUAX FMNBX FMUCX FMUFX FMUIX highest quarterly return 2011-12-31 lowest quarterly return 2018-12-31 The Fund's A class total return for the nine-month period 2020-09-30 0.0007 0.0007 0.0007 0.0007 0.0007 0.6800 653 872 1108 1784 735 973 1185 1940 285 573 985 2137 308 537 684 1393 84 262 455 1014 653 872 1108 1784 185 573 985 1940 185 573 985 2137 208 437 684 1393 84 262 455 1014 0.0461 0.1167 0.0907 0.0879 0.0700 0.0097 0.0623 0.1109 0.0524 0.1319 0.0679 0.0628 0.0091 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:C000024657Member 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:C000024658Member 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:C000024659Member 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:C000051328Member 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:C000098257Member 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:C000024657Member fhist:ReturnAfterTaxesonDistributionsMember 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:C000024657Member fhist:ReturnAfterTaxesonDistributionsandSaleofFundSharesMember 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:SPMunicipalBondIndexMember 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:Russell1000ValueIndexMember 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:BlendedIndexMember 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:SP500IndexMember 2020-12-31 2020-12-31 0000789281 fhist:ClassABCFandISSharesMember fhist:S000009076Member fhist:MorningstarAllocationFundsAverag30t050EquityMember 2020-12-31 2020-12-31 0000789281 2020-12-31 2020-12-31 0000789281 fhist:S000009076Member fhist:C000024657Member 2020-12-31 2020-12-31 0000789281 fhist:S000009076Member fhist:C000024658Member 2020-12-31 2020-12-31 0000789281 fhist:S000009076Member fhist:C000024659Member 2020-12-31 2020-12-31 0000789281 fhist:S000009076Member fhist:C000051328Member 2020-12-31 2020-12-31 0000789281 fhist:S000009076Member fhist:C000098257Member 2020-12-31 2020-12-31 xbrli:pure iso4217:USD
1933 Act File No. 33-3164
1940 Act File No. 811-4577
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
☒
Pre-Effective Amendment No.
☐
Post-Effective Amendment No. 225
☒
and/or
REGISTRATION STATEMENT
UNDER
THE INVESTMENT COMPANY ACT OF 1940
☒
Amendment No. 218
☒
Federated Hermes Income Securities Trust
(Exact name of Registrant as Specified in Charter)
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
(Address of Principal Executive Offices)
(412) 288-1900
(Registrant’s Telephone Number, including Area Code)
Peter J. Germain, Esquire
1001 Liberty Avenue
Pittsburgh, Pennsylvania 15222-3779
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box):
☐
immediately upon filing pursuant to paragraph (b)
☒
On December 29, 2020 pursuant to paragraph (b)
☐
60 days after filing pursuant to paragraph (a)(1)
☐
On __________ pursuant to paragraph (a)(1)
☐
75 days after filing pursuant to paragraph (a)(2)
☐
On __________ pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following:
☐
This post-effective amendment designates a new effective date for a previously filed post-effective amendment.
Prospectus
December 31, 2020
 
Disclosure contained herein relates to all classes of the Fund, as listed below, unless otherwise noted.  
Share Class  |  Ticker
A  |  FMUAX
B  |  FMNBX
C  |  FMUCX
F  |  FMUFX
Institutional  |  FMUIX
Federated Hermes Muni and Stock Advantage Fund
(formerly, Federated Muni and Stock Advantage Fund)
A Portfolio of Federated Hermes Income Securities Trust
(formerly, Federated Income Securities Trust)
A mutual fund seeking to primarily provide tax-advantaged income, with a secondary objective of capital appreciation, by investing in both tax-exempt (or municipal) securities and equity securities. Thus, the Fund is not entirely a “tax-exempt” or “municipal” fund. Although a portion of the dividends paid by the Fund will consist of exempt-interest dividends that are exempt from federal regular income tax, some distributions will be subject to federal income tax. Additionally, most distributions will be subject to applicable state and local personal income tax.
As with all mutual funds, the Securities and Exchange Commission (SEC) has not approved or disapproved these securities or passed upon the adequacy of this Prospectus. Any representation to the contrary is a criminal offense.
IMPORTANT NOTICE TO SHAREHOLDERS
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the Fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from the Fund or from your financial intermediary, such as a broker-dealer or bank. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change and you need not take any action. You may elect to receive shareholder reports and other communications from the Fund or your financial intermediary electronically by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4.
You may elect to receive all future reports in paper free of charge. You can inform the Fund or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by contacting your financial intermediary (such as a broker-dealer or bank); other shareholders may call the Fund at 1-800-341-7400, Option 4. Your election to receive reports in paper will apply to all funds held with the Fund complex or your financial intermediary.
Not FDIC Insured ▪ May Lose Value ▪ No Bank Guarantee
CONTENTS 
Fund Summary Information
Federated Hermes Muni and Stock Advantage Fund (the “Fund”)
RISK/RETURN SUMMARY: INVESTMENT OBJECTIVE
The Fund’s primary investment objective is to provide tax-advantaged income with a secondary objective of capital appreciation. The Fund is not entirely a “tax-exempt” or “municipal” fund. Although a portion of the dividends paid by the Fund will consist of exempt-interest dividends that are exempt from regular federal income tax, some distributions will be subject to federal income tax. Additionally, most distributions will be subject to applicable state and local personal income tax.
RISK/RETURN SUMMARY: FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy, hold and sell Class A Shares (A),Class B Shares (B),Class C Shares (C),Class F Shares (F) or Institutional Shares (IS) of the Fund. You may qualify for certain sales charge discounts if you and your family invest, or agree to invest in the future, at least $50,000 in the A class or $1,000,000 in the F class of Federated Hermes Funds. More information about these and other discounts is available from your financial professional, in the “What Do Shares Cost?” section of the Prospectus on page 23 and in “Appendix B” to this Prospectus. If you purchase the Fund’s IS shares through a broker acting as an agent on behalf of its customers, you may be required to pay a commission to such broker; such commissions, if any, are not reflected in the Example below.
Shareholder Fees (fees paid directly from your investment)  
 
A
B
C
F
IS
Maximum Sales Charge (Load)
5.50%
5.50%
1.00%
2.00%
None
Maximum Sales Charge (Load) Imposed on Purchases (as a percentage of offering price)
5.50%
None
None
1.00%
None
Maximum Deferred Sales Charge (Load) (as a percentage of original purchase price or redemption proceeds,
as applicable)
0.00%
5.50%
1.00%
1.00%
None
Maximum Sales Charge (Load) Imposed on Reinvested Dividends (and other Distributions) (as a percentage of
offering price)
None
None
None
None
None
Redemption Fee (as a percentage of amount redeemed, if applicable)
None
None
None
None
None
Exchange Fee
None
None
None
None
None
 
Annual Fund Operating Expenses (expenses that you pay each year as a percentage of the value of your investment)  
 
A
B
C
F
IS
Management Fee
0.65%
0.65%
0.65%
0.65%
0.65%
Distribution (12b-1) Fee
10.00%
0.75%
0.75%
None
None
Other Expenses
0.42%
0.42%
0.42%
0.42%
0.17%
Total Annual Fund Operating Expenses
1.07%
1.82%
1.82%
1.07%
0.82%
Fee Waivers and/or Expense Reimbursements2
(0.07)%
(0.07)%
(0.07)%
(0.07)%
(0.07)%
Total Annual Fund Operating Expenses After Fee Waivers and/orExpense Reimbursements
1.00%
1.75%
1.75%
1.00%
0.75%
1
 The Fund has adopted a Distribution (12b-1) Plan for its Class A Shares pursuant to which the A class of the Fund may incur and pay a Distribution (12b-1) Fee of up to a maximum amount of 0.05%. No such fee is currently incurred and paid by the A class of the Fund. The A class of the Fund will not incur and pay such a Distribution (12b-1) Fee until such time as approved by the Fund’s Board of Trustees (the “Trustees”).
2
 The Adviser and certain of its affiliates on their own initiative have agreed to waive certain amounts of their respective fees and/or reimburse expenses. Total annual fund operating expenses (excluding acquired fund fees and expenses, interest expense, extraordinary expenses, and proxy-related expenses, paid by the Fund, if any) paid by the Fund’s A, B, C, F and IS classes (after the voluntary waivers and/or reimbursements) will not exceed 1.00%, 1.75%, 1.75%, 1.00% and 0.75%, (the “Fee Limit”) respectively, up to but not including the later of (the “Termination Date”): (a) January 1, 2022; or (b) the date of the Fund’s next effective Prospectus. While the Adviser and its affiliates currently do not anticipate terminating or increasing these arrangements prior to the Termination Date, these arrangements may only be terminated or the Fee Limit increased prior to the Termination Date with the agreement of the Trustees.
Example
This Example is intended to help you compare the cost of investing in the Fund with the cost of investing in other mutual funds.
1
The Example assumes that you invest $10,000 for the time periods indicated and then redeem all of your Shares at the end of those periods. Expenses assuming no redemption are also shown. The Example also assumes that your investment has a 5% return each year and that the Fund’s operating expenses are as shown in the table above and remain the same. Although your actual costs and returns may be higher or lower, based on these assumptions your costs would be:  
Share Class
1 Year
3 Years
5 Years
10 Years
A:
 
 
 
 
Expenses assuming redemption
$653
$872
$1,108
$1,784
Expenses assuming no redemption
$653
$872
$1,108
$1,784
B:
 
 
 
 
Expenses assuming redemption
$735
$973
$1,185
$1,940
Expenses assuming no redemption
$185
$573
$985
$1,940
C:
 
 
 
 
Expenses assuming redemption
$285
$573
$985
$2,137
Expenses assuming no redemption
$185
$573
$985
$2,137
F:
 
 
 
 
Expenses assuming redemption
$308
$537
$684
$1,393
Expenses assuming no redemption
$208
$437
$684
$1,393
IS:
 
 
 
 
Expenses assuming redemption
$84
$262
$455
$1,014
Expenses assuming no redemption
$84
$262
$455
$1,014
Portfolio Turnover
The Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when Fund Shares are held in a taxable account. These costs, which are not reflected in Annual Fund Operating Expenses or in the Example, affect the Fund’s performance. During the most recent fiscal year, the Fund’s portfolio turnover rate was 68% of the average value of its portfolio.
RISK/RETURN SUMMARY: INVESTMENTS, RISKS and PERFORMANCE
What are the Fund’s Main Investment Strategies?
The Fund invests in a diversified portfolio that is allocated between tax-exempt securities and equity securities. In seeking to provide investors with a high level of tax advantaged income, the Fund will invest at least 50% of its total assets in tax-exempt securities; under current federal tax law, this strategy will enable interest earned on tax-exempt securities to retain its tax-exempt nature when paid to the Fund’s shareholders as dividends. The Fund normally will invest most of its remaining assets in domestic and foreign equity securities that the Fund’s investment adviser or subadviser (as applicable, “Adviser”) believes will be primarily income producing, with those dividends intended to be eligible for any reduced federal income tax rate that may be available with respect to qualified dividends. Shareholders should note that federal income tax laws with respect to qualified dividends may change, and any applicable reduced income tax rate may change or be eliminated for some or all individual taxpayers.
The Fund intends that the income it receives from the portion of its portfolio invested in tax-exempt securities will be exempt from regular federal income tax when distributed to shareholders. The Fund will invest primarily in securities whose interest is not subject to (or not a specific preference item for purposes of) the federal alternative minimum income tax for individuals (AMT). While the Fund may invest in securities of any maturity, the Adviser generally seeks to manage the Fund so that at least a majority of the Fund’s tax-exempt portfolio will be invested in intermediate (i.e., securities with stated maturities of more than three years but less than 10 years)and/or long-term (i.e., securities with stated maturities of 10 or more years) tax-exempt securities. The allocation between intermediate and long-term securities generally will be driven by the Adviser’s assessment of income opportunities, as well as the Adviser’s expectations of likely price performance for different maturities along the yield curve. The Fund may invest in tax-exempt securities rated as low as “B” (including modifiers, sub-categories or gradations) by a nationally recognized statistical rating organization (NRSRO), or unrated securities of comparable quality. The presence of a ratings modifier, sub-category or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the
2
security credit rating for purposes of the Fund’s investment parameters. Tax-exempt securities rated below “BBB” by an NRSRO, such as Standard and Poor’s, are considered noninvestment-grade securities, which are also known as junk bonds. In addition to the other risks described in this Prospectus that are applicable to tax-exempt securities, noninvestment-grade securities are subject to the risks of investing in noninvestment-grade securities as described in the Fund’s Prospectus.
Regarding the equity securities portion of the Fund’s portfolio, the Fund will invest primarily in income producing, domestic and foreign common stocks and other securities, the dividends from which are intended to be eligible for any reduced federal income tax rate that may be available with respect to qualified dividends. The Fund will focus on intrinsic value in seeking to select primarily equity securities of mid- to large-capitalization companies that are characterized by sound management, have the ability to finance expected growth and may offer superior total return prospects. The Adviser’s focus on dividend paying securities strives to create an equity portfolio whose income levels are higher than the yield of applicable general market indices, such as the S&P 500 Index.
The securities in which the Fund may principally invest include tax-exempt securities, which may include, for example, general obligation bonds, special revenue bonds, private activity bonds, tax increment financing bonds, municipal leases, zero-coupon securities, inverse floaters, municipal mortgage-backed securities and planned amortization classes (or PACs). Certain of the tax-exempt securities in which the Fund invests may be subject to credit enhancement. The equity securities in which the Fund may principally invest include, for example, common stocks, preferred stocks, foreign securities, American Depositary Receipts (ADRs) and domestically traded securities of foreign issuers. The Fund also may invest principally in convertible securities and securities of other investment companies.
The Fund also may principally invest in derivative contracts (such as, for example, futures contracts, option contracts and swap contracts) and hybrid instruments to implement elements of its investment strategies. For example, the Fund may use derivative contracts or hybrid instruments in an attempt to benefit from changes in the value of the underlying instrument(s), to gain exposure to the municipal bond sector, to increase or decrease the effective duration of the Fund’s portfolio or to hedge against potential losses.
The Fund has fundamental investment policies under which the Fund will attempt: (a) to invest its assets so that the income derived from municipal securities (or tax-exempt securities) that it distributes will be exempt from federal income tax (including AMT), except when investing for “defensive” purposes; and (b) to invest so that dividends received for equity securities will qualify for federal income taxation at the 15% rate. For purposes of this policy, shareholders should note that federal income tax laws with respect to qualified dividends change, and any applicable reduced income tax rate may change or be eliminated for some or all individual taxpayers. For example, taxpayers earning above specified income levels will pay federal income tax rates on qualified dividends above 15%. At least 80% of the Fund’s assets will be invested in municipal bonds and equity securities at all times.
What are the Main (or Principal) Risks of Investing in the Fund?
All mutual funds take investment risks. Therefore, it is possible to lose money by investing in the Fund. The primary factors that may reduce the Fund’s returns include:
■  Tax-Exempt Securities Risk. The amount of public information available about tax-exempt securities is generally less than for corporate equities or bonds. The secondary market for tax-exempt securities also tends to be less well-developed and less liquid than many other securities markets, which may limit the Fund’s ability to sell its tax-exempt securities at attractive prices. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the Fund’s investments in tax-exempt securities. Tax-exempt issuers can and have defaulted on obligations, been downgraded or commenced insolvency proceedings. Like other issuers and securities, the likelihood that the credit risk associated with such issuers and such securities will increase is greater during times of economic stress and financial instability.
■  Interest Rate Risk. Prices of fixed-income securities (including tax-exempt securities) generally fall when interest rates rise. The longer the duration of a fixed-income security, the more susceptible it is to interest rate risk. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates.
■  Issuer Credit Risk. It is possible that interest or principal on securities will not be paid when due. Noninvestment-grade securities generally have a higher default risk than investment-grade securities. Such non-payment or default may reduce the value of the Fund’s portfolio holdings, its share price and its performance.
■  Counterparty Credit Risk. A party to a transaction involving the Fund may fail to meet its obligations. This could cause the Fund to lose money or to lose the benefit of the transaction or prevent the Fund from selling or buying other securities to implement its investment strategies.
3
■  Liquidity Risk. Certain securities in which the Fund invests may be less readily marketable and may be subject to greater fluctuation in price than other securities. These features may make it more difficult to sell or buy a security at a favorable price or time. Noninvestment-grade securities generally have less liquidity than investment-grade securities. Liquidity risk also refers to the possibility that the Fund may not be able to sell a security or close out a derivative contract when it wants to. Over-the-counter derivative contracts generally carry greater liquidity risk than exchange-traded contracts.
■  Tax Risk. In order to be tax-exempt, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed by the Fund to shareholders to be taxable. The federal income tax treatment of payments in respect of certain derivative contracts is unclear. Consequently, the Fund may receive payments, and make distributions, that are treated as ordinary income for federal income tax purposes.
■  Leverage Risk. Leverage risk is created when an investment, which includes, for example, a derivative contract, exposes the Fund to a level of risk that exceeds the amount invested. Changes in the value of such an investment magnify the Fund’s risk of loss and potential for gain. Investments can have these same results if their returns are based on a multiple of a specified index, security or other benchmark.
■  Call Risk. The Fund’s performance may be adversely affected by the possibility that an issuer of a security held by the Fund may redeem the security prior to maturity at a price below or above its current market value.
■  Sector Risk. It is possible that a certain sector of the securities market may underperform other sectors or the market as a whole. As the Adviser allocates more of the Fund’s portfolio holdings to a particular sector, the Fund’s performance will be more susceptible to any economic, business, political or other developments which generally affect that sector.
■  Prepayment and Extension Risk. When homeowners prepay their mortgages in response to lower interest rates, the Fund will be required to reinvest the proceeds at the lower interest rates available. Also, when interest rates fall, the price of municipal mortgage-backed securities may not rise to as great an extent as that of other fixed-income securities. When interest rates rise, homeowners are less likely to prepay their mortgages. A decreased rate of prepayments lengthens the expected maturity of a mortgage-backed security, and the price of mortgage-backed securities may decrease more than the price of other fixed income securities when interest rates rise.
■  Credit Enhancement Risk. The securities in which the Fund invests may be subject to credit enhancement (for example, guarantees, letters of credit or bond insurance). If the credit quality of the credit enhancement provider (for example, a bank or bond insurer) is downgraded, the rating on a security credit enhanced by such credit enhancement provider also may be downgraded. Having multiple securities credit enhanced by the same enhancement provider will increase the adverse effects on the Fund that are likely to result from a downgrading of, or a default by, such an enhancement provider. Adverse developments in the banking or bond insurance industries also may negatively affect the Fund.
■  Risk Associated with Noninvestment-Grade Securities. Securities rated below investment-grade may be subject to greater interest rate, credit and liquidity risks than investment-grade securities. These securities are considered speculative with respect to the issuer’s ability to pay interest and repay principal.
■  Risk Related to the Economy. The value of the Fund’s portfolio may decline in tandem with a drop in the overall value of the markets in which the Fund invests and/or other markets. Economic, political and financial conditions, industry or economic trends and developments or public health risks, such as epidemics or pandemics, may, from time to time, and for varying periods of time, cause the Fund to experience volatility, illiquidity, shareholder redemptions or other potentially adverse effects. Among other investments, lower-grade bonds may be particularly sensitive to changes in the economy.
■  Risk of Investing in Derivative Contracts and Hybrid Instruments. Derivative contracts and hybrid instruments involve risks different from, or possibly greater than, risks associated with investing directly in securities and other traditional investments. Specific risk issues related to the use of such contracts and instruments include valuation and tax issues, increased potential for losses and/or costs to the Fund, and a potential reduction in gains to the Fund. Each of these issues is described in greater detail in this Prospectus. Derivative contracts and hybrid instruments may also involve other risks described in this Prospectus, such as stock market, interest rate, credit, currency, liquidity and leverage risks.
■  Reinvestment Risk. Income from the Fund’s tax-exempt security portfolio will decline if and when the Fund invests the proceeds from matured, traded or called fixed-income securities (including tax-exempt securities) at market interest rates that are below the portfolio’s current earnings rate. A decline in income could affect the overall return of Shares.
■  Risk of Foreign Investing. Because the Fund invests in securities issued by foreign companies, the Fund’s Share price may be more affected by foreign economic and political conditions, taxation policies and accounting and auditing standards than could otherwise be the case.
4
■  Risk of Investing in ADRs and Domestically Traded Securities of Foreign Issuers. Because the Fund may invest in American Depositary Receipts (ADRs) and other domestically traded securities of foreign companies, the Fund’s Share price may be more affected by foreign economic and political conditions, taxation policies and accounting and auditing standards than would otherwise be the case.
■  Currency Risk. Exchange rates for currencies fluctuate daily. Accordingly, the Fund may experience increased volatility with respect to the value of its Shares and its return as a result of its exposure to foreign currencies through direct holding of such currencies or holding of non-U.S. dollardenominated securities.
■  European Union and Eurozone Related Risk. A number of countries in the European Union (EU), including certain countries within the EU that have adopted the euro (Eurozone), have experienced, and may continue to experience, severe economic and financial difficulties. Additional countries within the EU may also fall subject to such difficulties. These events could negatively affect the value and liquidity of the Fund’s investments in euro-denominated securities and derivatives contracts, securities of issuers located in the EU or with significant exposure to EU issuers or countries.
■  Stock Market Risk. The value of equity securities in the Fund’s portfolio will fluctuate and, as a result, the Fund’s Share price may decline suddenly or over a sustained period of time. Information publicly available about a company, whether from the company’s financial statements or other disclosures or from third parties, or information available to some but not all market participants, can affect the price of a company’s shares in the market. Among other factors, equity securities may decline in value because of an increase in interest rates or changes in the stock market. Recent and potential future changes in industry and/or economic trends, as well as changes in monetary policy made by central banks and/or their governments, also can affect the level of interest rates and contribute to the development of or increase in volatility, illiquidity, shareholder redemptions and other adverse effects (such as a decline in a company’s stock price), which could negatively impact the Fund’s performance.
■  Large-Cap Company Risk. The Fund may invest in large capitalization (or “large-cap”) companies. In addition, large cap companies may have fewer opportunities to expand the market for their products or services, may focus their competitive efforts on maintaining or expanding their market share, and may be less capable of responding quickly to competitive challenges. These factors could result in the share price of large companies not keeping pace with the overall stock market or growth in the general economy, and could have a negative effect on the Fund’s portfolio, performance and Share price.
■  Mid-Cap Company Risk. The Fund may invest in mid-capitalization (or “mid-cap”) companies. Mid-cap companies often have narrower markets, limited managerial and financial resources, more volatile performance and greater risk of failure, compared to larger, more established companies. These factors could increase the volatility of the Fund’s portfolio, performance and Share price.
■  Risk Related to Investing for Value. Due to their relatively low valuations, value stocks are typically less volatile than growth stocks. For instance, the price of a value stock may experience a smaller increase on a forecast of higher earnings, a positive fundamental development, or positive market development. Further, value stocks tend to have higher dividends than growth stocks. This means they depend less on price changes for returns and may lag behind growth stocks in certain up markets. There is no guarantee that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The value approach to stock selection also carries the risk that the market will not recognize a security’s intrinsic value for a long time (if ever), or that a stock judged to be undervalued may actually be appropriately priced.
■  Strategy Risk. Securities and investment strategies with different characteristics tend to shift in and out of favor depending upon market and economic conditions as well as investor sentiment. A fund may outperform or underperform other funds that employ a different style or strategy. The Fund may employ a combination of styles that impact its risk characteristics.
■  Custodial Services and Related Investment Costs. Custodial services and other costs relating to investment in international securities markets generally are more expensive than in the United States. Such markets have settlement and clearance procedures that differ from those in the United States. In certain markets there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of the Fund to make intended securities purchases due to settlement problems could cause the Fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result in losses to the Fund due to a subsequent decline in value of the portfolio security. In addition, security settlement and clearance procedures in some emerging countries may not fully protect the Fund against loss of its assets.
5
■  Technology Risk. The Adviser uses various technologies in managing the Fund, consistent with its investment objective(s) and strategy described in this Prospectus. For example, proprietary and third-party data and systems are utilized to support decision making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance.
The Shares offered by this Prospectus are not deposits or obligations of any bank, are not endorsed or guaranteed by any bank and are not insured or guaranteed by the U.S. government, the Federal Deposit Insurance Corporation, the Federal Reserve Board or any other government agency.
Performance: Bar Chart and Table
Risk/Return Bar Chart
The bar chart and performance table below reflect historical performance data for the Fund and are intended to help you analyze the Fund’s investment risks in light of its historical returns. The bar chart shows the variability of the Fund’s A class total returns on a calendar year-by-year basis. The Average Annual Total Return Table shows returns for each class averaged over the stated periods, and includes comparative performance information.The Fund’s performance will fluctuate, and past performance (before and after taxes) is not necessarily an indication of future results.Updated performance information for the Fund is available under the “Products” section at FederatedInvestors.com or by calling 1-800-341-7400.
  
 
The total returns shown in the bar chart do not reflect the payment of any sales charges or recurring shareholder account fees. If these charges or fees had been included, the returns shown would have been lower.
The Fund’s A class total return for the nine-month period from January 1, 2020 to September 30, 2020, was 0.91%.
Within the periods shown in the bar chart, the Fund’s A class highest quarterly return was 6.79% (quarter ended December 31, 2011). Its lowest quarterly return was (6.28)% (quarter ended December 31, 2018).
Average Annual Total Return Table
The Fund’s IS class start of performance was December 29, 2010. For the period prior to the commencement of operations of the IS class, the performance information shown is for the Fund’s A class. The performance of the A class has not been adjusted to reflect the expenses of the IS class, since the IS class had a lower expense ratio than the expense ratio of the A class. The performance of the A class has been adjusted to reflect the absence of sales charges and adjusted to remove any voluntary waiver of fund expenses related to the A class during the period prior to commencement of the IS class.
In addition to Return Before Taxes, Return After Taxes is shown for the Fund’s A class to illustrate the effect of federal taxes on Fund returns. After-tax returns are shown only for A class, and after-tax returns for B, C, F and IS classes will differ from those shown for A class. Actual after-tax returns depend on each investor’s personal tax situation, and are likely to differ from those shown. After-tax returns are calculated using a standard set of assumptions. The stated returns assume the highest historical federal income and capital gains tax rates. These after-tax returns do not reflect the effect of any applicable state and local taxes.After-tax returns are not relevant to investors holding Shares through tax-deferred programs, such as a 401(k) plan, an Individual Retirement Account or other tax-advantaged investment plan.
6
(For the Period Ended December 31, 2019)  
 
1 Year
5 Years
10 Years
A:
 
 
 
Return Before Taxes
6.95%
3.45%  
5.80%
Return After Taxes on Distributions
6.70%
2.90%  
5.34%
Return After Taxes on Distributions and Sale of Fund Shares
4.88%
2.88%
4.92%
B:
 
 
 
Return Before Taxes
6.94%
3.51%  
5.76%
C:
 
 
 
Return Before Taxes
11.45%
3.85%  
5.61%
F:
 
 
 
Return Before Taxes
11.18%
4.41%  
6.29%
IS:
 
 
 
Return Before Taxes
13.57%
4.90%  
6.61%
S&P Municipal Bond Index 1
(reflects no deduction for fees, expenses or taxes)
7.26%
3.50%
4.41%
Russell 1000® Value Index 2
(reflects no deduction for fees, expenses or taxes)
26.54%
8.29%
11.80%
Blended Index 3 (reflects no deduction for fees, expenses or taxes)
14.90%
5.60%
7.55%
S&P 500® Index 4
(reflects no deduction for fees, expenses or taxes)
31.49%
11.70%
13.56%
Morningstar Allocation Funds Average–30% to 50% Equity 5
14.81%
4.66%
6.19%
1
 The S&P Municipal Bond Index, one of the Fund’s broad-based securities market indices, is a broad, market value-weighted index that seeks to measure the performance of the U.S. municipal bond market. It tracks fixed-rate tax-free bonds and bonds subject to the alternative minimum tax (AMT). The index includes bonds of all quality—from “AAA” to non-rated, including defaulted bonds—from all sectors of the municipal bond market.
2
 The Russell 1000® Value Index, one of the Fund’s broad-based securities market indices, measures the performance of the large-cap value segment of the U.S. equity universe.
3
 The Blended Index is a custom blend of 60% S&P Municipal Bond Index and 40% Russell 1000® Value Index.
4
 The S&P 500® Index is an unmanaged capitalization weighted index of 500 stocks designated to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.
5
 Morningstar figures represent the average of the total returns reported by all the mutual funds designated by Morningstar as falling into the respective category indicated. They do not reflect sales charges.
Fund Management
The Fund’s Investment Adviser is Federated Equity Management Company of Pennsylvania. The Fund’s Sub-Adviser is Federated Investment Management Company.
Linda Bakhshian, CA and CPA, Senior Portfolio Manager, has been the Fund’s portfolio manager since November of 2009.
R.J. Gallo, CFA, Senior Portfolio Manager, has been the Fund’s portfolio manager since its inception in September of 2003.
Ann Ferentino, CFA, Portfolio Manager, has been the Fund’s portfolio manager since December of 2013.
Michael Jura, Portfolio Manager, has been the Fund’s portfolio manager since December of 2020.
purchase and sale of fund shares
Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
Please disregard any further references to purchases of Class B Shares with the exception of Class BShare exchanges.
You may purchase, redeem or exchange Shares of the Fund on any day the New York Stock Exchange is open. Shares may be purchased through a financial intermediary firm that has entered into a Fund selling and/or servicing agreement with the Distributor or an affiliate (“Financial Intermediary”) or directly from the Fund, by wire or by check. Please note that certain purchase restrictions may apply. Redeem or exchange Shares through a financial intermediary or directly from the Fund by telephone at 1-800-341-7400 or by mail.
7
A, B, C & F Classes
The minimum investment amount for the Fund’s A class, B class, C class and F class is generally $1,500 for initial investments and $100 for subsequent investments. The minimum initial and subsequent investment amounts for Individual Retirement Accounts are generally $250 and $100, respectively. There is no minimum initial or subsequent investment amount for employer-sponsored retirement plans. Certain types of accounts are eligible for lower minimum investments. The minimum investment for Systematic Investment Programs is $50.
IS Class
The minimum initial investment amount for the Fund’s IS class is generally $1,000,000 and there is no minimum subsequent investment amount. Certain types of accounts are eligible for lower minimum investments. The minimum investment amount for Systematic Investment Programs is $50.
Tax Information
The Fund intends to distribute dividends exempt from federal regular income tax, although a portion of the Fund’s dividends may not be tax-exempt. Dividends may be subject to state and local taxes. Any Fund distributions of capital gains are taxable at applicable capital gains rates.
Payments to Broker-Dealers and Other Financial Intermediaries
If you purchase the Fund through a broker-dealer or other financial intermediary (such as a bank), the Fund and/or its related companies may pay the intermediary for the sale of Fund Shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the Fund over another investment. Ask your salesperson or visit your financial intermediary’s website for more information.
What are the Fund’s Investment Strategies?
The Fund’s primary investment objective is to provide tax-advantaged income with a secondary objective of capital appreciation. While there is no assurance that the Fund will achieve its investment objective, it endeavors to do so by following the strategies and policies described in this Prospectus. The Fund’s Statement of Additional Information (SAI) provides information about the Fund’s non-principal strategies.
The Fund pursues its primary investment objective of tax-advantaged income, with a secondary objective of capital appreciation, by investing in both tax-exempt (or municipal) securities and equity securities. At least 80% of the Fund’s assets will be invested in municipal bonds and equity securities at all times.
The Fund is not entirely a “tax-exempt” or “municipal” fund. Although a portion of the dividends paid by the Fund will consist of exempt-interest dividends that are exempt from federal regular income tax, some distributions will be subject to federal income tax. Additionally, most distributions will be subject to applicable state and local personal income tax.
In seeking to provide investors with a relatively high level of tax-advantaged income, the Fund will invest at least 50% of its total assets in tax-exempt securities; under current federal tax law, this strategy will enable all interest earned on tax-exempt securities to retain its tax-exempt nature when paid to the Fund’s shareholders as dividends.
Subject to this requirement, the Adviser allocates the Fund’s portfolio between tax-exempt securities and equity securities based on the Adviser’s expectations for the performance and risks of the tax-exempt securities and equity securities in which the Fund invests, while taking into account the Fund’s objective of providing tax advantaged income. During periods of stock market instability or decline, the Adviser may decrease the allocation of the Fund’s assets invested in equity securities and invest significantly more than 50% of the Fund’s assets in tax-exempt securities.
The Adviser also seeks to minimize short-term capital gain distributions resulting from the sale of portfolio securities which are taxed at non-preferential ordinary federal income tax rates. To the extent that short-term capital gains are recognized, the Adviser may sell depreciated securities, in order to recognize losses to offset these gains. There is no guarantee that the Adviser will be able to recognize losses sufficient to fully offset short-term gains; in that event, the Fund will make a distribution to shareholders.
Descriptions of the various types of securities in which the Fund principally invests, and their risks, immediately follow this strategy section.
TAX-EXEMPT SECURITIES
Regarding the tax-exempt securities portion of the Fund’s portfolio, the Fund will invest its tax-exempt portfolio so that, normally, distributions of annual interest income are exempt from federal income tax. The Fund also will invest this portion of its portfolio primarily in securities whose interest is not subject to (or not a specific preference item for purposes of) AMT.
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While the Fund may invest in securities of any maturity, at least a majority of the Fund’s tax-exempt portfolio will be invested in intermediate (i.e., securities with stated maturities of more than 3 years but less than 10 years)and/or long-term (i.e., securities with stated maturities of 10 or more years) tax-exempt securities. The allocation between intermediate and long-term securities generally will be driven by the Adviser’s assessment of income opportunities, as well as the Adviser’s expectations of likely price performance for different maturities along the yield curve.
The Fund may invest in tax-exempt securities that are:
■ high quality (i.e., securities rated in the first or second highest rating category by an NRSRO or unrated securities of comparable quality). For example, securities rated “AAA” or “AA” by Standard & Poor’s, an NRSRO, would be rated in the first and second highest rating category, respectively;
■ medium quality (i.e., securities rated in the third or fourth highest rating category by an NRSRO or unrated securities of comparable quality). For example, securities rated “A” or “BBB” by Standard & Poor’s, an NRSRO, would be rated in the third and fourth highest rating category, respectively; or
■ noninvestment-grade (i.e., securities that are not rated in one of the four highest rating categories by an NRSRO or unrated securities of comparable quality). For example, securities rated “B” or “BB” by Standard & Poor’s, an NRSRO, would be noninvestment-grade securities. The Fund may not invest in securities rated below “B” or unrated securities of comparable quality.
The ratings of the securities in which the Fund invests may include modifiers, sub-categories or gradations. The presence of a ratings modifier, sub-category or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund’s investment parameters.
The high-quality and medium-quality, tax-exempt securities in which the Fund invests are subject to interest rate, issuer credit, counterparty credit, liquidity, tax, leverage, call, sector, prepayment and extension, credit enhancement, economic, tax-exempt securities market, reinvestment, strategy and technology risk, all as described in the Fund’s Prospectus. The noninvestment-grade, tax-exempt securities (which are also known as junk bonds) in which the Fund invests are subject to these risks, as well as the risks of investing in noninvestment-grade securities as described in the Fund’s Prospectus.
The Adviser manages credit risk through portfolio diversification and by performing a fundamental credit analysis on tax-exempt securities before the Fund purchases such securities. The Adviser considers various factors, including (among others) the following: the economic feasibility of revenue bond financings and general purpose financings; the financial condition of the issuer or guarantor; and political developments that may affect credit quality. The Adviser monitors the credit risks of all tax-exempt securities in the portfolio on an ongoing basis by reviewing, as the Adviser considers necessary or appropriate in accordance with its procedures, periodic financial data and ratings of NRSROs.
The Adviser performs a more intensive credit analysis on noninvestment-grade, tax-exempt securities. In addition to the review process described above, the Adviser may, for example, and when appropriate, visit the site that the issuer is developing with the proceeds of the offering and may engage in detailed discussions with the issuer regarding the offering.
The Adviser attempts to provide high levels of income while taking prudent levels of interest rate risk by investing in tax-exempt securities of various maturities and managing the duration of the Fund. The Adviser may lengthen or shorten duration from time to time based on its interest rate outlook. “Duration” measures the price sensitivity of a fixed-income security to changes in interest rates. The greater a portfolio’s duration, the greater the potential change in the portfolio’s value in response to a change in market interest rates. When the Adviser expects interest rates to fall, it maintains a longer portfolio duration. When the Adviser expects interest rates to increase, it shortens the portfolio duration. The Adviser may use hedging transactions for purposes of duration management. The Adviser considers a variety of factors in formulating its interest rate outlook, such as (among others): current and expected U.S. economic growth; current and expected interest rates and inflation; the Federal Reserve’s monetary policy; and supply and demand factors related to the tax-exempt municipal market and the effect that they may have on the returns offered for various bond maturities. Duration may be less important when a greater portion of the Fund is allocated to noninvestment-grade, tax-exempt securities, because the market values of such securities are driven by changes in credit spreads and idiosyncratic credit factors, in addition to general changes in interest rates.
The Adviser also may attempt to augment income by investing a portion of the portfolio in noninvestment-grade, tax-exempt securities, which generally provide higher yields. The percentage of the Fund’s portfolio that the Adviser allocates to noninvestment-grade securities will vary depending on the supply of noninvestment-grade, tax-exempt securities and the credit spread between investment-grade, tax-exempt securities and noninvestment-grade, tax-exempt securities. If the credit spread narrows, the Adviser may increase its allocation to investment-grade securities; if the credit spread broadens, the Adviser may increase its allocation to noninvestment-grade securities.
The Fund will attempt to invest its assets so that the income derived from municipal securities that it distributes will be exempt from federal income tax (including AMT), except when investing for “defensive” purposes.
9
EQUITY SECURITIES
Regarding the equity securities portion of the Fund’s portfolio, the Fund will invest primarily in income producing domestic and foreign common stocks and other securities that are intended to be eligible for any applicable reduced federal income tax rate that may be available with respect to qualified dividends. Shareholders should note that federal income tax laws with respect to qualified dividends may change, and any applicable reduced income tax rate may be changed or be eliminated for some or all individual taxpayers. The Fund will focus on intrinsic value in seeking to select primarily equity securities of mid- to large-capitalization companies that pay dividends, are characterized by sound management and have the ability to finance expected growth. The Adviser’s focus on dividend paying securities strives to create an equity portfolio whose income levels are higher than the yield of applicable general market indices, such as the
S&P 500 Index.
The Adviser attempts to identify solid, long-term values through disciplined investing and careful fundamental research. The Adviser attempts to identify primarily dividend paying investment opportunities within mature, high quality, mid- to large-capitalization, domestic and international companies. By investing in these types of companies, the Adviser seeks to reduce the downside risk and volatility of the Fund’s portfolio and to purchase undervalued stocks that may significantly increase in price as the market recognizes the company’s true intrinsic value. The Adviser performs traditional fundamental research and analysis to select securities for the Fund that exhibit the most promising long-term opportunity for the Fund’s portfolio. In selecting securities, the Adviser focuses on the current financial condition of the issuing company, in addition to examining each issuer’s business and product strength, competitive position and management expertise. Further, the Adviser considers current economic, financial market and industry factors, which may affect the issuing company. The Adviser focuses on intrinsic value in selecting securities of companies which are trading at discounts to their historic relationship to the market as well as to their expected growth. Value stocks tend to pay higher dividends than other segments of the market under normal market conditions. Because the Adviser focuses primarily on value in selecting dividend paying securities, the price of the securities held by the Fund may not, under certain market conditions, increase as rapidly as stocks selected primarily for their growth attributes.
DERIVATIVES AND HYBRID INSTRUMENTS
The Fund may use derivative contracts and/or hybrid instruments to implement elements of its investment strategy. For example, the Fund may use derivative contracts or hybrid instruments to increase or decrease the portfolio’s exposure to the investment(s) underlying the derivative or hybrid instrument in an attempt to benefit from changes in the value of the underlying investment(s) or to gain exposure to the municipal bond sector. Additionally, by way of example, the Fund may use derivative contracts to:
■ increase or decrease the effective duration of the Fund portfolio;
■ obtain premiums from the sale of derivative contracts;
■ realize gains from trading a derivative contract; or
■ hedge against potential losses.
There can be no assurance that the Fund’s use of derivative contracts or hybrid instruments will work as intended.
TEMPORARY INVESTMENTS
The Fund may temporarily depart from its principal investment strategies by investing in taxable securities, shorter-term debt securities, or similar obligations or holding cash. It may do this in response to unusual circumstances, such as adverse market, economic or other conditions (for example, to help avoid potential losses, or during periods when there is a shortage of appropriate securities); to maintain liquidity to meet shareholder redemptions; or to accommodate cash inflows. It is possible that such temporary investments could affect the Fund’s investment returns. Such temporary investments may cause the Fund to receive and distribute taxable income or income that is taxable at full federal income tax rates, to investors and to that extent fail to meet its investment objectives.
What are the Fund’s Principal Investments?
The following provides general information on the Fund’s principal investments. The Fund’s Statement of Additional Information (SAI) provides information about the Fund’s non-principal investments and may provide additional information about the Fund’s principal investments.
10
TAX-EXEMPT SECURITIES
Tax-exempt securities are fixed-income securities that, in the opinion of bond counsel to the issuer or on the basis of another authority believed by the Adviser to be reliable, pay interest that is not subject to federal income taxes. Fixed-income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or adjusted periodically. In addition, the issuer of a fixed-income security must repay the principal amount of the security, normally within a specified time.
Typically, states, counties, cities and other political subdivisions and authorities issue tax-exempt securities. The market categorizes tax-exempt securities by their source of repayment. Certain of these tax-exempt securities may be subject to credit enhancement.
The following describes the principal types of tax-exempt securities in which the Fund may invest:
General Obligation Bonds (A Type of Tax-Exempt Security)
General obligation bonds are supported by the issuer’s power to exact property or other taxes. The issuer must impose and collect taxes sufficient to pay principal and interest on the bonds. However, the issuer’s authority to impose additional taxes may be limited by its charter or state law.
Special Revenue Bonds (A Type of Tax-Exempt Security)
Special revenue bonds are payable solely from specific revenues received by the issuer such as specific taxes, assessments, tolls or fees. Bondholders may not collect from the municipality’s general taxes or revenues. For example, a municipality may issue bonds to build a toll road and pledge the tolls to repay the bonds. Therefore, a shortfall in the tolls normally would result in a default on the bonds, or in certain cases, may result in a reduction in payments received in respect of the bonds.
Private Activity Bonds (A Type of Special Revenue Bond)
Private activity bonds are special revenue bonds used to finance private projects. A certain percentage of the proceeds from a private activity bond is used for a private business use or a certain percentage of the debt service regarding a private activity bond is paid directly or indirectly from a private business use. A private business use is a trade or business carried on by any person or entity other than a governmental unit. Private activity bonds are secured primarily by revenues derived from loan repayments or lease payments due from the private entity, which may or may not be guaranteed by a parent company or otherwise secured. Private activity bonds generally are not secured by a pledge of the taxing power of the issuer of such bonds. For example, a municipality may issue bonds to finance a new factory to improve its local economy. The municipality would lend the proceeds from its bonds to the company using the factory, and the company would agree to make loan payments sufficient to cover interest and principal payments on the bonds. The bonds would be payable from the company’s loan payments, and generally not from any other revenues of the municipality. Therefore, any default of the loan normally would result in a default on the bonds.
Types of private activity bonds include, for example: bonds issued to obtain funds to provide water, sewage and solid waste facilities, qualified residential rental projects, certain local electric, gas and other heating and cooling facilities, qualified hazardous waste facilities, high speed intercity rail facilities, certain airports, docks, wharves and mass transportation facilities and qualified mortgages; qualified student loan bonds; qualified redevelopment bonds; and bonds used for certain organizations exempt from federal income taxation (qualified 501(c)(3) bonds).
The interest on many types of private activity bonds is subject to the AMT. However, issues are available in the marketplace that are not subject to the AMT due to qualifying tax rules.
Tax Increment Financing Bonds (A Type of Tax-Exempt Security)
Tax increment financing (TIF) bonds are payable from increases in taxes or other revenues attributable to projects within the TIF district. For example, a municipality may issue TIF bonds to redevelop a commercial area. The TIF bonds would be payable solely from any increase in sales taxes collected from the merchants in the area. The bonds could fail to pay principal or interest if merchants’ sales, and related tax collections, failed to increase as anticipated.
Municipal Leases (A Type of Tax-Exempt Security)
Municipalities may enter into leases for equipment or facilities. In order to comply with state public financing laws, these leases are typically subject to annual appropriation. In other words, a municipality may end a lease, without penalty, by not providing for the lease payments in its annual budget. After the lease ends, the lessor can resell the equipment or facility but may lose money on the sale.
The Fund may invest in securities supported by pools of municipal leases. The most common type of lease-backed securities is certificates of participation (COPs). However, the Fund may also invest directly in individual leases.
11
Zero-Coupon Securities (A Type of Fixed-Income, Tax-Exempt Security)
Zero-coupon securities do not pay interest or principal until final maturity unlike debt securities that provide periodic payments of interest (referred to as a coupon payment). Investors buy zero-coupon securities at a price below the amount payable at maturity. The difference between the purchase price and the amount paid at maturity represents interest on the zero-coupon security. Investors must wait until maturity to receive interest and principal, which increases the interest rate and credit risks of a zero-coupon security. A zero-coupon, step-up security converts to a coupon security before final maturity.
There are many forms of zero-coupon securities. Some are issued at a discount and are referred to as zero-coupon or capital appreciation bonds. In addition, some securities give the issuer the option to deliver additional securities in place of cash interest payments, thereby increasing the amount payable at maturity. These are referred to as pay-in-kind, PIK securities or toggle securities.
Inverse Floaters (A Type of Fixed-Income, Tax-Exempt Security)
An inverse floater has a floating or variable interest rate that moves in the opposite direction of market interest rates. Inverse floaters are used to enhance the income from a bond investment by employing leverage. When short-term market interest rates go up, the interest rate paid on the inverse floater goes down; when short-term market interest rates go down, the interest rate paid on the inverse floater goes up. Inverse floaters generally respond more rapidly to market interest rate changes than fixed-rate, tax-exempt securities. Inverse floaters are subject to interest rate risks and leverage risks.
Municipal Mortgage-Backed Securities (A Type of Fixed-Income, Tax-Exempt Security)
Municipal mortgage-backed securities are special revenue bonds, the proceeds of which may be used to provide mortgage loans for single family homes or to finance multifamily housing. Municipal mortgage-backed securities represent interests in pools of mortgages. The mortgages that comprise a pool normally have similar interest rates, maturities and other terms. Mortgages may have fixed or adjustable rates. Municipal mortgage-backed securities generally have fixed interest rates.
Municipal mortgage-backed securities come in a variety of forms. The simplest forms of municipal mortgage-backed securities are unstructured bonds backed by the net interest and principal payments and prepayments from the underlying mortgages. As a result, the holders assume all interest rate and prepayment risks of the underlying mortgages. Other municipal mortgage-backed securities may have more complicated financial structures.
Convertible Securities
Convertible securities are fixed-income securities that the Fund has the option to exchange for equity securities at a specified conversion price. The option allows the Fund to realize additional returns if the market price of the equity securities exceeds the conversion price. For example, the Fund may hold shares of preferred stock that are convertible into shares of common stock at a conversion price of $10 per share. If the market value of the shares of common stock reached $12, the Fund could realize an additional $2 per share by converting its fixed-income securities or convertible preferred stock.
Convertible securities have lower yields than comparable fixed-income securities. In addition, at the time a convertible security is issued the conversion price exceeds the market value of the underlying equity securities. Thus, convertible securities may provide lower returns than non-convertible, fixed-income securities or equity securities depending upon changes in the price of the underlying equity securities. However, convertible securities permit the Fund to realize some of the potential appreciation of the underlying equity securities with less risk of losing its initial investment. The Fund anticipates that it will invest only in convertible preferred stock or other convertible securities whose dividends or distributions are intended to be eligible for any applicable reduced federal income tax rate that may be available with respect to qualified dividends.
Equity Securities
Equity securities represent a share of an issuer’s earnings and assets, after the issuer pays its liabilities. The Fund cannot predict the income it will receive from equity securities because issuers generally have discretion as to the payment of any dividends or distributions. However, equity securities offer greater potential for appreciation than many other types of securities, because their value increases directly with the value of the issuer’s business.
The following describes the equity securities in which the Fund may principally invest.
Common Stocks
Common stocks are the most prevalent type of equity security. Common stocks receive the issuer’s earnings after the issuer pays its creditors and any preferred stockholders. As a result, changes in an issuer’s earnings directly influence the value of its common stock.
12
Preferred Stocks
Preferred stocks have the right to receive specified dividends or distributions before the issuer makes payments on its common stock. Some preferred stocks also participate in dividends and distributions paid on common stock. Preferred stocks may also permit the issuer to redeem the stock. The Fund may also treat such redeemable preferred stock as a fixed-income security.
Derivative Contracts
Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, currencies, indices or other assets or instruments including other derivative contracts (each a “Reference Instrument” and collectively, “Reference Instruments”). Each party to a derivative contract may sometimes be referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as “physically settled” derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as “cash-settled” derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.
Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the other party to the contract. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.
The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and a financial institution. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange-traded contracts, especially in times of financial stress.
The market for swaps and other OTC derivatives was largely unregulated prior to the enactment of federal legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Regulations enacted by the Commodity Futures Trading Commission (the CFTC) under the Dodd-Frank Act require the Fund to clear certain swap contracts through a clearing house or central counterparty (a CCP).
To clear a swap through the CCP, the Fund will submit the contract to, and post margin with, a futures commission merchant (FCM) that is a clearing house member. The Fund may enter into the swap with a financial institution other than the FCM and arrange for the contract to be transferred to the FCM for clearing, or enter into the contract with the FCM itself. If the Fund must centrally clear a transaction, the CFTC’s regulations also generally require that the swap be executed on a registered exchange or through a market facility that is known as a swap execution facility or SEF. Central clearing is presently required only for certain swaps and the CFTC is expected to impose a mandatory central clearing requirement for additional derivative instruments over time.
The CCP, SEF and FCM are all subject to regulatory oversight by the CFTC. In addition, most derivative market participants are now regulated as swap dealers or major swap participants and are subject to certain minimum capital and margin requirements and business conduct standards. Similar regulatory requirements are expected to apply to derivative contracts that are subject to the jurisdiction of the SEC, although the SEC has not yet finalized its regulations. In addition, uncleared OTC swaps will be subject to regulatory collateral requirements that could adversely affect the Fund’s ability to enter into swaps in the OTC market. These developments could cause the Fund to terminate new or existing swap agreements or to realize amounts to be received under such instruments at an inopportune time.
Until the mandated rulemaking and regulations are implemented completely, it will not be possible to determine the complete impact of the Dodd-Frank Act and related regulations on the Fund.
Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund’s exposure to the risks of the Reference Instrument, and may also expose the Fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract, although this risk may be mitigated by submitting the contract for clearing through a CCP.
Payment obligations arising in connection with derivative contracts are frequently required to be secured with margin (which is commonly called “collateral”). To the extent necessary to meet such requirements, the Fund may purchase U.S. Treasuryand/or government agency securities.
13
The Fund may invest in a derivative contract if it is permitted to own, invest in or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:
Futures Contracts (A Type of Derivative)
Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be commodity contracts. The Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore is not subject to registration or regulation with respect to the Fund. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures) as well as currency futures and currency forward contracts.
Option Contracts (A Type of Derivative)
Option contracts (also called “options”) are rights to buy or sell a Reference Instrument for a specified price (the “exercise price”) during, or at the end of, a specified period. The seller (or “writer”) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. A put option gives the holder the right to sell the Reference Instrument to the writer of the option. Options may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.
Swap Contracts (A Type of Derivative)
A swap contract (also known as a “swap”) is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Swaps do not always involve the delivery of the Reference Instruments by either party, and the parties might not own the Reference Instruments underlying the swap. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party’s payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names. Common types of swaps in which the Fund may invest include interest rate swaps, total return swaps, credit default swaps, currency swaps, and caps and floors.
FOREIGN SECURITIES
Foreign securities are securities of issuers based outside the United States. To the extent a Fund invests in securities included in its applicable broad-based securities market index, the Fund may consider an issuer to be based outside the United States if the applicable index classifies the issuer as based outside the United States. Accordingly, the Fund may consider an issuer to be based outside the United States if the issuer satisfies at least one, but not necessarily all, of the following:
■ it is organized under the laws of, or has its principal office located in, another country;
■ the principal trading market for its securities is in another country;
■ it (directly or through its consolidated subsidiaries) derived in its most current fiscal year at least 50% of its total assets, capitalization, gross revenue or profit from goods produced, services performed or sales made in another country; or
■ it is classified by an applicable index as based outside the United States.
Foreign securities are primarily denominated in foreign currencies. Along with the risks normally associated with domestic securities of the same type, foreign securities are subject to currency risks and risks of foreign investing. Trading in certain foreign markets is also subject to liquidity risks.
ADRs and Domestically Traded Securities of Foreign Issuers (Types of Foreign Equity Securities)
ADRs, which are traded in the U.S. markets, represent interests in underlying securities issued by a foreign company and not traded in the United States. ADRs provide a way to buy shares of foreign-based companies in the United States rather than in overseas markets. ADRs are also traded in U.S. dollars, eliminating the need for foreign exchange transactions. The Fund may also invest in securities issued directly by foreign companies and traded in U.S. dollars in
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U.S. markets. The Fund will invest primarily in ADRs that pay dividends that are intended to be eligible for any applicable reduced federal income tax rate that may be available with respect to qualified dividends (shareholders should note that federal income tax laws with respect to qualified dividends may change, and any applicable reduced income tax rate may change or be eliminated for some or all individual taxpayers).
OTHER INVESTMENTS, TRANSACTIONS, TECHNIQUES
Investing in Securities of Other Investment Companies
The Fund may invest its assets in securities of other investment companies, including the securities of affiliated money market funds, as an efficient means of implementing its investment strategies and/or managing its uninvested cash. These other investment companies are managed independently of the Fund and incur additional fees and/or expenses which would, therefore, be borne indirectly by the Fund in connection with any such investment. However, the Adviser believes that the benefits and efficiencies of this approach should outweigh the potential additional fees and/or expenses. The Fund may invest in money market securities directly.
Credit Enhancement
The Fund may invest in securities that have credit enhancement. Credit enhancement consists of an arrangement in which a company agrees to pay amounts due on a fixed-income security (including a tax-exempt security) if the issuer defaults. In some cases the company providing credit enhancement makes all payments directly to the security holders and receives reimbursement from the issuer. Normally, the credit enhancer has greater financial resources and liquidity than the issuer. For this reason, the Adviser may evaluate the credit risk of a fixed-income security based solely upon its credit enhancement.
Common types of credit enhancement include guarantees, letters of credit, bond insurance and surety bonds. Credit enhancement also includes arrangements where securities or other liquid assets secure payment of a fixed-income security. If a default occurs, these assets may be sold and the proceeds paid to the security’s holders. Either form of credit enhancement reduces credit risks by providing another source of payment for a fixed-income security.
Hybrid Instruments
Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, currency, index or other asset or instrument including a derivative contract). The Fund may use hybrid instruments only in connection with permissible investment activities. Hybrid instruments can take on many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, a hybrid instrument may also combine elements of a fixed-income security and an equity security. Third, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.
Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities, currencies, and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional investments or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional securities or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.
Delayed Delivery Transactions
Delayed delivery transactions, including when-issued transactions, are arrangements in which the Fund buys securities for a set price, with payment and delivery of the securities scheduled for a future time. During the period between purchase and settlement, no payment is made by the Fund to the issuer and no interest accrues to the Fund. The Fund records the transaction when it agrees to buy the securities and reflects their value in determining the price of its Shares. Settlement dates may be a month or more after entering into these transactions so that the market values of the securities bought may vary from the purchase prices. Therefore, delayed delivery transactions create interest rate risks for the Fund. Delayed delivery transactions also involve credit risks in the event of a counterparty default. These transactions create leverage risks.
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Asset Segregation
In order to secure its obligations in connection with derivative contracts or special transactions, the Fund will either own the underlying assets, enter into offsetting transactions or set aside cash or readily marketable securities in each case, as provided by the SEC or SEC staff guidance. This requirement may cause the Fund to miss favorable trading opportunities due to a lack of sufficient cash or readily marketable securities. This requirement may also cause the Fund to realize losses on offsetting or terminated derivative contracts or special transactions.
Investment Ratings for Investment-Grade Securities
The Adviser will determine whether a security is investment grade based upon the credit ratings given by one or more NRSROs. For example, Standard & Poor’s, an NRSRO, assigns ratings to investment-grade securities (AAA, AA, A and BBB including modifiers, sub-categories and gradations) based on their assessment of the likelihood of the issuer’s inability to pay interest or principal (default) when due on each security. Lower credit ratings correspond to higher credit risk. If a security has not received a rating, the Fund must rely entirely upon the Adviser’s credit assessment that the security is comparable to investment grade. The presence of a ratings modifier, sub-category, or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund’s investment parameters. If a security is downgraded below the minimum quality grade discussed above, the Adviser will reevaluate the security, but will not be required to sell it.
Investment Ratings for nonInvestment-Grade Securities
Noninvestment-grade securities are rated below BBB- by an NRSRO. These bonds have greater economic, credit and liquidity risks than investment-grade securities.
Additional Information Regarding the Security Selection Process
As part of analysis inherent in its security selection process, among other factors, the Adviser also evaluates whether environmental, social and governance factors could have a positive or negative impact on the risk profiles of many issuers in the universe of securities in which the Fund may invest. The Adviser may also consider information derived from active engagements conducted by its in-house stewardship team with certain issuers. This qualitative analysis does not automatically result in including or excluding specific securities but may be used by Federated Hermes as an additional input to improve portfolio risk/return characteristics.
What are the Specific Risks of Investing in the Fund?
The following provides general information on the risks associated with the Fund’s principal investments. Any additional risks associated with the Fund’s non-principal investments are described in the Fund’s SAI. The Fund’s SAI also may provide additional information about the risks associated with the Fund’s principal investments.
TAX-EXEMPT SECURITIES Risk
The securities in which the Fund invests may include those issued by state or local governments, other political subdivisions or authorities, or directly or indirectly supported by taxes, assessments, tolls, fees or other revenue collected by or otherwise derived from or through such issuers. The amount of public information available about tax-exempt securities is generally less than for corporate equities or bonds. The secondary market for tax-exempt securities also tends to be less well-developed and less liquid than many other securities markets, which may limit the Fund’s ability to sell its tax-exempt securities at attractive prices. Special factors, such as legislative changes, and state and local economic and business developments, may adversely affect the yield and/or value of the Fund’s investments in tax-exempt securities. Other factors include the general conditions of the tax-exempt securities market, the size of the particular offering, the maturity of the obligation and the rating of the issue. Like other issuers, there is no guarantee that the issuers of such securities will have sufficient revenues to satisfy their obligations (such as, for example, the payment of interest or principal when due). Legal, economic, political or other developments may raise impairments (such as, for example, limitations under applicable law on the issuer’s authority to raise taxes, prolonged budgetary processes, declining real estate values, increasing pension liabilities or declining tax revenues which may occur due to shifting demographics or other factors) to such issuer’s budgetary flexibility, liquidity and ability to satisfy its obligations. Such impairments may cause a downgrade in the credit ratings of such an issuer, or the securities issued or supported by it, and may cause such an issuer to defer payment of certain obligations, reduce or eliminate appropriations and/or default on its obligations.
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Tax-exempt issuers can and have defaulted on obligations, been downgraded or commenced insolvency proceedings. Financial difficulties of such issuers may continue or get worse. Like other issuers and securities, the likelihood that the credit risk associated with such issuers and such securities will increase is greater during times of economic stress and financial instability. As a result, in such situations, there would be heightened risk that there could be an interruption in payments to holders of tax-exempt securities in some cases. There also could be a reduction in the market value of the tax-exempt securities held by the Fund, which could adversely affect the Fund’s net asset value or the distributions paid by the Fund.
To the extent that the Fund invests a larger portion of its assets in the tax-exempt securities of a particular state or U.S. territory or possession, there is greater risk that political, regulatory, economic or other developments within that state or U.S. territory or possession may impact on the Fund’s investment performance.
INTEREST RATE RISK
Prices of fixed-income securities (including tax-exempt securities) rise and fall in response to changes in interest rates. Generally, when interest rates rise, prices of fixed-income securities fall. However, market factors, such as the demand for particular fixed-income securities, may cause the price of certain fixed-income securities to fall while the prices of other securities rise or remain unchanged.
The longer the duration of a fixed-income security, the more susceptible it is to interest rate risk. The duration of a fixed-income security may be equal to or shorter than the stated maturity of a fixed-income security. Recent and potential future changes in monetary policy made by central banks and/or their governments are likely to affect the level of interest rates. Duration measures the price sensitivity of a fixed-income security given a change in interest rates. For example, if a fixed-income security has an effective duration of three years, a 1% increase in general interest rates would be expected to cause the security’s value to decline about 3% while a 1% decrease in general interest rates would be expected to cause the security’s value to increase about 3%.
The impact of interest rate changes on the value of floating rate investments is typically reduced by periodic interest rate resets. Variable and floating rate securities generally are less sensitive to interest rate changes, but may decline in value if their interest rates do not rise as much or as quickly as interest rates in general. Conversely, variable and floating rate securities generally will not increase in value as much as fixed rate debt instruments if interest rates decline. Certain of the Fund’s investments may also be valued, in part, by reference to the relative relationship between interest rates on tax-exempt securities and taxable securities. With respect to the Fund’s investments described in the preceding sentence, the value of such Fund investments may be negatively affected (or positively affected) when the market for tax-exempt securities underperforms (or outperforms) the market for taxable securities.
ISSUER Credit Risk
It is possible that interest or principal on securities will not be paid when due. Noninvestment-grade securities generally have a higher default risk than investment-grade securities. Such non-payment or default may reduce the value of the Fund’s portfolio holdings, its share price and its performance.
Many fixed-income securities (including tax-exempt securities) receive credit ratings from NRSROs such as Fitch Rating Service, Moody’s Investor Services, Inc. and Standard & Poor’s that assign ratings to securities by assessing the likelihood of an issuer and/or guarantor default. Higher credit ratings correspond to lower perceived credit risk and lower credit ratings correspond to higher perceived credit risk. Credit ratings may be upgraded or downgraded from time to time as an NRSRO’s assessment of the financial condition of a party obligated to make payments with respect to such securities and credit risk changes. The impact of any credit rating downgrade can be uncertain. Credit rating downgrades may lead to increased interest rates and volatility in financial markets, which in turn could negatively affect the value of the Fund’s portfolio holdings, its share price and its investment performance. Credit ratings are not a guarantee of quality. Credit ratings may lag behind the current financial conditions of the issuer and/or guarantor and do not provide assurance against default or other loss of money. Credit ratings do not protect against a decline in the value of a security. If a security has not received a rating, the Fund must rely entirely upon the Adviser’s credit assessment.
Fixed-income securities generally compensate for greater credit risk by paying interest at a higher rate. The difference between the yield of a security and the yield of a U.S. Treasury security or other appropriate benchmark with a comparable maturity (the “spread”) measures the additional interest paid for risk. Spreads may increase generally in response to adverse economic or market conditions. A security’s spread may also increase if the security’s rating is lowered, or the security is perceived to have an increased credit risk. An increase in the spread will cause the price of the security to decline.
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COUNTERPARTY CREDIT RISK
Counterparty credit risk includes the possibility that a party to a transaction involving the Fund will fail to meet its obligations. This could cause the Fund to lose money or to lose the benefit of the transaction or prevent the Fund from selling or buying other securities to implement its investment strategy.
LIQUIDITY RISK
Trading opportunities are more limited for fixed-income securities (including tax-exempt securities) that have not received any credit ratings, have received any credit ratings below investment grade or are not widely held. Trading opportunities also are more limited for inverse floaters that have complex terms or that are not widely held. These features may make it more difficult to sell or buy a security at a favorable price or time. Consequently, the Fund may have to accept a lower price to sell a security, sell other securities to raise cash or give up an investment opportunity, any of which could have a negative effect on the Fund’s performance. Infrequent trading of securities may also lead to an increase in their price volatility. Noninvestment-grade securities generally have less liquidity than investment-grade securities.
Liquidity risk also refers to the possibility that the Fund may not be able to sell a security or close out a derivative contract when it wants to. If this happens, the Fund will be required to continue to hold the security or keep the position open, and the Fund could incur losses.
OTC derivative contracts generally carry greater liquidity risk than exchange-traded contracts. This risk may be increased in times of financial stress, if the trading market for OTC derivative contracts becomes restricted.
Tax Risk
In order to pay interest that is exempt from federal income tax, tax-exempt securities must meet certain legal requirements. Failure to meet such requirements may cause the interest received and distributed by the Fund to shareholders to be taxable.
Changes or proposed changes in federal or state tax laws may cause the prices of tax-exempt securities to fall and/or may affect the tax-exempt status of the securities in which the Fund invests.
The federal income tax treatment of payments in respect of certain derivative contracts is unclear. Additionally, the Fund may not be able to close out certain derivative contracts when it wants to. Consequently, the Fund may receive payments, and make distributions, that are treated as ordinary income for federal income tax purposes.
Leverage Risk
The tax-exempt securities, derivative contracts and hybrid instruments in which the Fund may invest can be principal investment strategies for the Fund and may be subject to leverage risk. Leverage risk is created when an investment, which includes, for example, an investment in a derivative contract, exposes the Fund to a level of risk that exceeds the amount invested. Changes in the value of such an investment magnify the Fund’s risk of loss and potential for gain. Investments can have these same results if their returns are based on a multiple of a specified index, security or other benchmark.
CALL RISK
The tax-exempt securities in which the Fund may invest can be principal investment strategies for the Fund and may be subject to call risk. Call risk is the possibility that an issuer may redeem a fixed-income security (including a tax-exempt security) before maturity (a “call”) at a price below or above its current market price. An increase in the likelihood of a call may reduce the security’s price. If a fixed-income security is called, the Fund may have to reinvest the proceeds in other fixed-income securities with lower interest rates, higher credit risks or other less favorable characteristics.
SECTOR RISK
It is possible that a certain sector of the securities market may underperform other sectors or the market as a whole. As the Adviser allocates more of the Fund’s portfolio holdings to a particular sector, the Fund’s performance will be more susceptible to any economic, business, political or other developments which generally affect that sector. The Fund may invest more than 25% of its total assets in tax-exempt securities of issuers in the same economic sector. In addition, a substantial part of the Fund’s portfolio may be comprised of securities issued or credit enhanced by companies in similar businesses or with other similar characteristics. As a result, the Fund will be more susceptible to any economic, business, political or other developments which generally affect these entities. Developments affecting companies with similar characteristics might include changes in interest rates, changes in economic cycle affecting credit losses and regulatory changes.
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PREPAYMENT AND EXTENSION RISK
Unlike traditional fixed-income securities (including tax-exempt securities), which pay a fixed rate of interest until maturity (when the entire principal amount is due), payments on municipal mortgage-backed securities include both interest and a partial payment of principal. Partial payment of principal may be comprised of scheduled principal payments as well as unscheduled payments from the voluntary prepayment, refinancing or foreclosure of the underlying loans. These unscheduled prepayments of principal create risks that can adversely affect a fund holding municipal mortgage-backed securities.
For example, when interest rates decline, the values of municipal mortgage-backed securities generally rise. However, when interest rates decline, unscheduled prepayments can be expected to accelerate, and the Fund would be required to reinvest the proceeds of the prepayments at the lower interest rates then available. Unscheduled prepayments would also limit the potential for capital appreciation on municipal mortgage-backed securities.
Conversely, when interest rates rise, the values of municipal mortgage-backed securities generally fall. Since rising interest rates typically result in decreased prepayments, this could lengthen the average lives of municipal mortgage-backed securities, and cause their value to decline more than traditional fixed-income securities.
Generally, municipal mortgage-backed securities compensate for the increased risk associated with prepayments by paying a higher yield. The additional interest paid for risk is measured by the difference between the yield of a municipal mortgage-backed security and the yield of a U.S. Treasury security or other appropriate benchmark with a comparable maturity (the “spread”). An increase in the spread will cause the price of the municipal mortgage-backed security to decline. Spreads generally increase in response to adverse economic or market conditions. Spreads may also increase if the security is perceived to have an increased prepayment risk or is perceived to have less market demand.
Credit Enhancement Risk
The securities in which the Fund invests may be subject to credit enhancement (for example, guarantees, letters of credit or bond insurance). Credit enhancement is designed to help assure timely payment of the security; it does not protect the Fund against losses caused by declines in a security’s value due to changes in market conditions. Securities subject to credit enhancement generally would be assigned a lower credit rating if the rating were based primarily on the credit quality of the issuer without regard to the credit enhancement. If the credit quality of the credit enhancement provider (for example, a bank or bond insurer) is downgraded, the rating on a security credit enhanced by such credit enhancement provider also may be downgraded.
A single enhancement provider may provide credit enhancement to more than one of the Fund’s investments. Having multiple securities credit enhanced by the same enhancement provider will increase the adverse effects on the Fund that are likely to result from a downgrading of, or a default by, such an enhancement provider. Adverse developments in the banking or bond insurance industries also may negatively affect the Fund, as the Fund may invest in securities credit enhanced by banks or by bond insurers without limit. Bond insurers that provide credit enhancement for large segments of the fixed-income markets, including the municipal bond market, may be more susceptible to being downgraded or defaulting during recessions or similar periods of economic stress.
RISK ASSOCIATED WITH NONINVESTMENT-GRADE SECURITIES
Securities that are rated below investment grade or unrated securities of comparable quality (i.e., noninvestment-grade securities), also known as junk bonds, generally entail greater economic, credit and liquidity risks than investment-grade securities. For example, their prices are more volatile, economic downturns and financial setbacks may affect their prices more negatively, and their trading market may be more limited. These securities are considered speculative with respect to the issuer’s ability to pay interest and repay principal.
RISK RELATED TO THE ECONOMY
The value of the Fund’s portfolio may decline in tandem with a drop in the overall value of the markets in which the Fund invests and/or other markets based on negative developments in the U.S. and global economies. Economic, political and financial conditions, or industry or economic trends and developments, may, from time to time, and for varying periods of time, cause volatility, illiquidity or other potentially adverse effects in the financial markets, including the fixed-income market. The commencement, continuation or ending of government policies and economic stimulus programs, changes in monetary policy, increases or decreases in interest rates, or other factors or events that affect the financial markets, including the fixed-income markets, may contribute to the development of or increase in volatility, illiquidity, shareholder redemptions and other adverse effects which could negatively impact the Fund’s performance. For example, the value of certain portfolio securities may rise or fall in response to changes in interest rates, which could result from a change in government policies, and has the potential to cause investors to move out of certain portfolio securities,
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including fixed-income securities. This may increase redemptions from funds that hold large amounts of certain securities, and may result in decreased liquidity and increased volatility in the financial markets. Market factors, such as the demand for particular portfolio securities, may cause the price of certain portfolio securities to fall while the prices of other securities rise or remain unchanged. Among other investments, lower-grade bonds may be particularly sensitive to changes in the economy.
Epidemic and Pandemic Risk
An outbreak of respiratory disease caused by a novel coronavirus was first detected in China in late 2019 and subsequently spread globally (“COVID-19”). This coronavirus has resulted in closing borders, enhanced health screenings, healthcare service preparation and delivery, quarantines, cancellations, and disruptions to supply chains, workflow operations and consumer activity, as well as general concern and uncertainty. The impact of this coronavirus may be short-term or may last for an extended period of time and has resulted in a substantial economic downturn. Health crises caused by outbreaks, such as the coronavirus outbreak, may exacerbate other pre-existing political, social and economic risks. The impact of this outbreak, and other epidemics and pandemics that may arise in the future, could continue to negatively affect the worldwide economy, as well as the economies of individual countries, individual companies, including certain Fund service providers and issuers of the Fund’s investments, and the markets in general in significant and unforeseen ways. Any such impact could adversely affect the Fund’s performance.
The United States has responded to the COVID-19 pandemic and resulting economic distress with fiscal and monetary stimulus packages. In late March 2020, the government passed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), a stimulus package providing for over $2.2 trillion in resources to small businesses, state and local governments, and individuals that have been adversely impacted by the COVID-19 pandemic. In addition, in mid-March 2020 theU.S. Federal Reserve (“Fed”) cut interest rates to historically low levels and announced a new round of quantitative easing, including purchases of corporate and municipal government bonds. The Fed also enacted various programs to support liquidity operations and funding in the financial markets, including expanding its reverse repurchase agreement operations, adding $1.5 trillion of liquidity to the banking system; establishing swap lines with other major central banks to provide dollar funding; establishing a program to support money market funds; easing various bank capital buffers; providing funding backstops for businesses to provide bridging loans for up to four years; and providing funding to help credit flow in asset-backed securities markets. The Fed also plans to extend credit to small- and medium-sized businesses.
Risk of Investing in Derivative Contracts and Hybrid Instruments
The Fund’s exposure to derivative contracts and hybrid instruments (either directly or through its investment in another investment company) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, exposure to derivative contracts and hybrid instruments may have tax consequences to the Fund and its shareholders. For example, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for Federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. In addition, under certain circumstances certain derivative contracts and hybrid instruments may cause the Fund to: (a) incur an excise tax on a portion of the income related to those contracts and instruments; and/or (b) reclassify, as a return of capital, some or all of the distributions previously made to shareholders during the fiscal year as dividend income. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund’s total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund’s investments. Any such termination of the Fund’s OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs, and/or preventing the Fund from fully implementing its investment strategies). Sixth, the Fund may use a derivative contract to benefit from a decline in the value of a Reference Instrument. If the value of the Reference Instrument declines during the term of the contract, the Fund makes a profit on the difference (less any payments the Fund is required to pay under the terms of the contract). Any such strategy involves risk. There is no assurance that the Reference Instrument will decline in value during the term of the contract and make a profit for the Fund. The Reference Instrument may instead appreciate in value creating a loss for the Fund. Seventh, a
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default or failure by a CCP or an FCM (also sometimes called a “futures broker”), or the failure of a contract to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting derivative positions, accessing margin, or fully implementing its investment strategies. The central clearing of a derivative and trading of a contract over a SEF could reduce the liquidity in, or increase costs of entering into or holding, any contracts. Finally, derivative contracts and hybrid instruments may also involve other risks described in this Prospectus, such as stock market, interest rate, credit, currency, liquidity and leverage risks.
REINVESTMENT RISK
Income from the Fund’s tax-exempt security portfolio will decline if and when the Fund invests the proceeds from matured, traded or called fixed-income securities (including tax-exempt securities) at market interest rates that are below the portfolio’s current earnings rate. A decline in income could affect the overall return of Shares.
Risk of Foreign Investing
Foreign securities pose additional risks because foreign economic or political conditions may be less favorable than those of the United States. Securities in foreign markets may also be subject to taxation policies that reduce returns for U.S. investors.
Foreign companies may not provide information (including financial statements) as frequently or to as great an extent as companies in the United States. Foreign companies may also receive less coverage than U.S. companies by market analysts and the financial press. In addition, foreign countries may lack uniform accounting, auditing and financial reporting standards or regulatory requirements comparable to those applicable to U.S. companies. These factors may prevent the Fund and its Adviser from obtaining information concerning foreign companies that is as frequent, extensive and reliable as the information available concerning companies in the United States.
Foreign countries may have restrictions on foreign ownership of securities or may impose exchange controls, capital flow restrictions or repatriation restrictions which could adversely affect the liquidity of the Fund’s investments.
Risk of Investing in ADRs and Domestically Traded Securities of Foreign Issuers
Because the Fund may invest in ADRs and other domestically traded securities of foreign companies, the Fund’s Share price may be more affected by foreign economic and political conditions, taxation policies and accounting and auditing standards than would otherwise be the case.
Currency Risk
Exchange rates for currencies fluctuate daily. The combination of currency risk and market risks tends to make securities traded in foreign markets more volatile than securities traded exclusively in the United States. The Adviser attempts to manage currency risk by limiting the amount the Fund invests in securities denominated in a particular currency. However, diversification will not protect the Fund against a general increase in the value of the U.S. dollar relative to other currencies.
Investing in currencies or securities denominated in a foreign currency, entails risk of being exposed to a currency that may not fully reflect the strengths and weaknesses of the economy of the country or region utilizing the currency. Currency risk includes both the risk that currencies in which the Fund’s investments are traded, or currencies in which the Fund has taken an active investment position, will decline in value relative to the U.S. dollar and, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged. In addition, it is possible that a currency (such as, for example, the euro) could be abandoned in the future by countries that have already adopted its use, and the effects of such an abandonment on the applicable country and the rest of the countries utilizing the currency are uncertain but could negatively affect the Fund’s investments denominated in the currency. If a currency used by a country or countries is replaced by another currency, the Fund’s Adviser would evaluate whether to continue to hold any investments denominated in such currency, or whether to purchase investments denominated in the currency that replaces such currency, at the time. Such investments may continue to be held, or purchased, to the extent consistent with the Fund’s investment objective(s) and permitted under applicable law.
Many countries rely heavily upon export-dependent businesses and any strength in the exchange rate between a currency and the U.S. dollar or other currencies can have either a positive or a negative effect upon corporate profits and the performance of investments in the country or region utilizing the currency. Adverse economic events within such country or region may increase the volatility of exchange rates against other currencies, subjecting the Fund’s investments denominated in such country’s or region’s currency to additional risks.
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European Union and eurozone Related risk
A number of countries in the European Union (EU), including certain countries within the EU that have adopted the euro (Eurozone), have experienced, and may continue to experience, severe economic and financial difficulties. Additional countries within the EU may also fall subject to such difficulties. These events could negatively affect the value and liquidity of the Fund’s investments in euro-denominated securities and derivatives contracts, securities of issuers located in the EU or with significant exposure to EU issuers or countries. If the euro is dissolved entirely, the legal and contractual consequences for holders of euro-denominated obligations and derivative contracts would be determined by laws in effect at such time. Such investments may continue to be held, or purchased, to the extent consistent with the Fund’s investment objective(s) and permitted under applicable law. These potential developments, or market perceptions concerning these and related issues, could adversely affect the value of the Shares.
Certain countries in the EU have had to accept assistance from supra-governmental agencies such as the International Monetary Fund, the European Stability Mechanism (the ESM) or other supra-governmental agencies. The European Central Bank has also been intervening to purchase Eurozone debt in an attempt to stabilize markets and reduce borrowing costs. There can be no assurance that these agencies will continue to intervene or provide further assistance and markets may react adversely to any expected reduction in the financial support provided by these agencies. Responses to the financial problems by European governments, central banks and others including austerity measures and reforms, may not work, may result in social unrest and may limit future growth and economic recovery or have other unintended consequences.
In addition, one or more countries may withdraw from the EU, and one or more countries within the Eurozone may abandon the euro. The impact of these actions, especially if they occur in a disorderly fashion, could be significant and far-reaching. On January 31, 2020, the United Kingdom (UK) left the EU, commonly referred to as “Brexit,” and there commenced a transition period during which the EU and UK will negotiate and agree on the nature of their future relationship. There is significant market uncertainty regarding Brexit’s ramifications, and the range and potential implications of possible political, regulatory, economic and market outcomes are difficult to predict. This long-term uncertainty may affect other countries in the EU and elsewhere and may cause volatility within the EU, triggering prolonged economic downturns in certain countries within the EU. In addition, Brexit may create additional and substantial economic stresses for the UK, including a contraction of the UK economy and price volatility in UK stocks, decreased trade, capital outflows, devaluation of the British pound, wider corporate bond spreads due to uncertainty and declines in business and consumer spending as well as foreign direct investment. Brexit may also adversely affect UK-based financial firms, including certain subadvisers to the Federated Hermes Funds, that have counterparties in the EU or participate in market infrastructure (trading venues, clearing houses, settlement facilities) based in the EU. These events and the resulting market volatility may have an adverse effect on the performance of the Fund.
Stock Market Risk
The value of equity securities in the Fund’s portfolio will rise and fall over time. These fluctuations could be a sustained trend or a drastic movement. Historically, the equity market has moved in cycles, and the value of the Fund’s securities may fluctuate from day to day. The Fund’s portfolio will reflect changes in prices of individual portfolio stocks or general changes in stock valuations. Consequently, the Fund’s Share price may decline. The Adviser attempts to manage market risk by limiting the amount the Fund invests in each company’s equity securities. However, diversification will not protect the Fund against widespread or prolonged declines in the stock market.
Information publicly available about a company, whether from the company’s financial statements or other disclosures or from third parties, or information available to some but not all market participants, can affect the price of a company’s shares in the market. The price of a company’s shares depends significantly on the information publicly available about the company. The reporting of poor results by a company, the restatement of a company’s financial statements or corrections to other information regarding a company or its business may adversely affect the price of its shares, as would allegations of fraud or other misconduct by the company’s management. The Fund may also be disadvantaged if some market participants have access to material information not readily available to other market participants, including the Fund.
Large-Cap Company Risk
The Fund may invest in large-capitalization (or “large-cap”) companies. Market capitalization is determined by multiplying the number of a company’s outstanding shares by the current market price per share. Larger, more established, companies may have fewer opportunities to expand the market for their products or services, may focus their competitive efforts on maintaining or expanding their market share, and may be unable to respond quickly to new competitive challenges, like price competition, changes in consumer tastes or innovative products. These factors could result in the share price of larger companies not keeping pace with the overall stock market or growth in the general economy, and could have a negative effect on the Fund’s portfolio, performance and Share price.
22
Mid-Cap Company Risk
The Fund may invest in mid-capitalization (or “mid-cap”) companies. Market capitalization is determined by multiplying the number of a company’s outstanding shares by the current market price per share. Mid-cap companies often have narrower markets and limited managerial and financial resources compared to larger, more established companies. The performance of mid-cap companies can be more volatile and they face greater risk of business failure, compared to larger, more established companies, which could increase the volatility of the Fund’s portfolio and performance. Shareholders should expect that the value of the Fund’s Shares will be more volatile than a fund that invests exclusively in large-cap companies.
RISK RELATING TO INVESTING FOR VALUE
Due to their relatively low valuations, value stocks are typically less volatile than growth stocks. For instance, the price of a value stock may experience a smaller increase on a forecast of higher earnings, a positive fundamental development or positive market development. Further, value stocks tend to have higher dividends than growth stocks. This means they depend less on price changes for returns and may lag behind growth stocks in certain up markets. There is no guarantee that the issuers of the stocks held by the Fund will declare dividends in the future or that, if dividends are declared, they will remain at their current levels or increase over time. The value approach to stock selection also carries the risk that the market will not recognize a security’s intrinsic value for a long time (if ever), or that a stock judged to be undervalued may actually be appropriately priced.
STRATEGY RISK
Securities and investment strategies with different characteristics tend to shift in and out of favor depending upon market and economic conditions as well as investor securities. A fund may outperform or underperform other funds that employ a different style or strategy. The Fund may employ a combination of styles that impact its risk characteristics.
CUSTODIAL SERVICES AND RELATED INVESTMENT COSTS
Custodial services and other costs relating to investment in international securities markets generally are more expensive than in the United States. Such markets have settlement and clearance procedures that differ from those in the United States. In certain markets, there have been times when settlements have been unable to keep pace with the volume of securities transactions, making it difficult to conduct such transactions. The inability of the Fund to make intended securities purchases due to settlement problems could cause the Fund to miss attractive investment opportunities. Inability to dispose of a portfolio security caused by settlement problems could result in losses to the Fund due to a subsequent decline in value of the portfolio security. In addition, security settlement and clearance procedures in some emerging market countries may not fully protect the Fund against loss of its assets.
technology Risk
The Adviser uses various technologies in managing the Fund, consistent with its investment objective(s) and strategy described in this Prospectus. For example, proprietary and third-party data and systems are utilized to support decision-making for the Fund. Data imprecision, software or other technology malfunctions, programming inaccuracies and similar circumstances may impair the performance of these systems, which may negatively affect Fund performance.
What Do Shares Cost?
CALCULATION OF NET ASSET VALUE
When the Fund receives your transaction request in proper form (as described in this Prospectus under the sections entitled “How to Purchase Shares” and “How to Redeem and Exchange Shares”), it is processed at the next calculated net asset value of a Share (NAV) plus any applicable front-end sales charge (“public offering price”). A Share’s NAV is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time), each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share’s class, subtracting the liabilities allocated to each class and dividing the balance by the number of Shares of the class outstanding. The NAV for each class of Shares may differ due to the level of expenses allocated to each class as well as a result of the variance between the amount of accrued investment income and capital gains or losses allocated to each class and the amount actually distributed to shareholders of each class. The Fund’s current NAV and/or public offering price may be found at FederatedInvestors.com, via online news sources and in certain newspapers.
You can purchase, redeem or exchange Shares any day the NYSE is open.
When the Fund holds securities that trade principally in foreign markets on days the NYSE is closed, the value of the Fund’s assets may change on days you cannot purchase or redeem Shares. This may also occur when the U.S. markets for fixed-income securities are open on a day the NYSE is closed.
23
In calculating its NAV, the Fund generally values investments as follows:
■ Equity securities listed on an exchange or traded through a regulated market system are valued at their last reported sale price or official closing price in their principal exchange or market.
■ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Board of Trustees (“Board”).
■ Derivative contracts listed on exchanges are valued at their reported settlement or closing price, except that options are valued at the mean of closing bid and asked quotations.
■ Over-the-counter (OTC) derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the Fund uses the fair value of the investment determined in accordance with the procedures generally described below. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share.
Shares of other mutual funds are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.
Fair Valuation and Significant Events Procedures
The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund, the Adviser and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide fair value evaluations of the current value of certain investments for purposes of calculating the NAV. In the event that market quotations and price evaluations are not available for an investment, the Valuation Committee determines the fair value of the investment in accordance with procedures adopted by the Board. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures. The Fund’s SAI discusses the methods used by pricing services and the Valuation Committee to assist the Board in valuing investments.
Using fair value to price investments may result in a value that is different from an investment’s most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The application of the fair value procedures to an investment represent a good faith determination of such investment’s fair value. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value could be materially different.
The Board also has adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment’s value will change in response to the event and a reasonable basis for quantifying the resulting change in value.
Examples of significant events that may occur after the close of the principal market on which a security is traded, or after the time of a price evaluation provided by a pricing service or a dealer, include:
■  With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■ Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
■ Announcements concerning matters such as acquisitions, recapitalizations or litigation developments or a natural disaster affecting the issuer’s operations or regulatory changes or market developments affecting the issuer’s industry.
The Board has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the Valuation Committee will determine the fair value of the investment using another method approved by the Board. The Board has ultimate responsibility for any fair valuations made in response to a significant event.
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The fair valuation of securities following a significant event can serve to reduce arbitrage opportunities for short-term traders to profit at the expense of long-term investors in the Fund. For example, such arbitrage opportunities may exist when the market on which portfolio securities are traded closes before the Fund calculates its NAV, which is typically the case with Asian and European markets. However, there is no assurance that these significant event procedures will prevent dilution of the NAV by short-term traders. See “Account and Share Information–Frequent Trading Policies” for other procedures the Fund employs to deter such short-term trading.  
 
 
 
The following sections until “How is the Fund Sold?” relate to sales charge information in connection with the purchase of the A class, B class, C class
and F class.
SALES CHARGE INFORMATION
The following table summarizes the minimum investment amount and the maximum sales charge, if any, that you will pay on an investment in the Fund. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.  
 
Minimum
Initial/Subsequent
Investment
Amounts1
Maximum Sales Charges
Shares Offered
Front-End
Sales Charge2
Contingent
Deferred
Sales Charge3
A
$1,500/$100
5.50%
0.00%
B
$1,500/$100
None
5.50%
C
$1,500/$100
None
1.00%
F
$1,500/$100
1.00%
1.00%
1
 The minimum initial and subsequent investment amounts for Individual Retirement Accounts (IRAs) are generally $250 and $100, respectively. There is no minimum initial or subsequent investment amount required for employer-sponsored retirement plans; however, such accounts remain subject to the Fund’s policy on “Accounts with Low Balances” as discussed later in this Prospectus. Please see “By Systematic Investment Program” for applicable minimum investment. Financial intermediaries may impose higher or lower minimum investment requirements on their customers than those imposed by the Fund.
 
 To maximize your return and minimize the sales charges and marketing fees, purchases of the B class are generally limited to $100,000 and purchases of the C class are generally limited to $1,000,000. Purchases equal to or in excess of these limits may be made in the A class. If your Shares are held on the books of the Fund in the name of a financial intermediary, you may be subject to rules of your financial intermediary that differ from those of the Fund. See “Purchase Restrictions on B Class and C Class” below. After the B class has been held for eight years from the date of purchase, they will automatically convert to the A class. This conversion is a non-taxable event.
 
 After C Shares have been held for ten years from the date of purchase, they will automatically convert to A Shares on the next monthly conversion processing date, provided that certain conditions are satisfied. See “How is the Fund Sold?” This conversion is a non-taxable event.
2
 Front-End Sales Charge is expressed as a percentage of public offering price. See “Sales Charge When You Purchase.”
3
 See “Sales Charge When You Redeem.”
 
As shown in the table above, each class of Shares has a different sales charge structure. In addition, the ongoing annual operating expenses (“expense ratios”), as well as the compensation payable to financial intermediaries, also vary among the classes. Before you decide which class to purchase, you should review the different charges and expenses of each class carefully, in light of your personal circumstances, and consult with your financial intermediary.
Among the important factors to consider are the amount you plan to invest and the length of time you expect to hold your investment (for example, whether the investment is in connection with a long-term retirement program). You should also consider, for example, that it may be possible to reduce or eliminate, the front-end sales charges imposed on purchases of the A class and F class. Among other ways, the A class and F class have a series of “breakpoints,” which means that the front-end sales charges decrease (and can be eliminated entirely) as the amount invested increases. (The breakpoint schedule is set out below, along with detailed information on ways to reduce, or eliminate, front-end sales charges.) On the other hand, the B class does not have front-end sales charges, but the deferred sales charges imposed on redemptions of the B class do not vary at all in relation to the amounts invested. Rather, these charges decrease with the passage of time (ultimately going to zero after Shares have been held for six full years). Finally, the C class does not have front-end sales charges, but do impose a contingent deferred sales charge only if redeemed within one year after purchase; however, the asset-based 12b-1 fees charged to the C class are greater than those charged to the A class and F class and comparable to those charged to the B class.
You should also consider that the expense ratio for the A class will be lower than that for the B class or C class. Thus, the fact that no front-end charges are ever imposed on purchases of the B class and C class does not always make them preferable to the A class.
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SALES CHARGE WHEN YOU PURCHASE
The following tables list the sales charges which will be applied to your Share purchase, subject to the breakpoint discounts indicated in the tables and described below.  
A:
 
 
Purchase Amount
Sales Charge
as a Percentage
of Public
Offering Price
Sales Charge
as a Percentage
of NAV
Less than $50,000
5.50%
5.82%
$50,000 but less than $100,000
4.50%
4.71%
$100,000 but less than $250,000
3.75%
3.90%
$250,000 but less than $500,000
2.50%
2.56%
$500,000 but less than $1 million
2.00%
2.04%
$1 million or greater1
0.00%
0.00%
1
 A contingent deferred sales charge (CDSC) of 0.75% of the redemption amount applies to Shares originally purchased in an amount of $1 million or more and redeemed up to 24 months after purchase under certain investment programs where a financial intermediary received an advance payment on the transaction. CDSC exceptions may apply. See “Sales Charge When You Redeem.”
   
F:
 
 
Purchase Amount
Sales Charge
as a Percentage
of Public
Offering Price
Sales Charge
as a Percentage
of NAV
Less than $1 million
1.00%
1.01%
$1 million or greater
0.00%
0.00%
REDUCING THE SALES CHARGE WITH BREAKPOINT DISCOUNTS
Your investment may qualify for a reduction of the sales charge, also known as a breakpoint discount. The breakpoint discounts offered by the Fund are indicated in the tables above.
You or your financial intermediary must notify the Fund’s Transfer Agent of eligibility for any applicable breakpoint discount at the time of purchase.
In order to receive the applicable breakpoint discount, it may be necessary at the time of purchase for you to inform your financial intermediary or the Transfer Agent of the existence of other accounts in which there are holdings eligible to be aggregated to meet a sales charge breakpoint (“Qualifying Accounts”). Qualifying Accounts mean those share accounts in the Federated Hermes funds held directly or through a financial intermediary or through a single-participant retirement account by you, your spouse, your parents (if you are under age 21) and/or your children under age 21, which can be linked using tax identification numbers (TINs), social security numbers (SSNs) or broker identification numbers (BINs). Accounts held through 401(k) plans and similar multi-participant retirement plans, or through “Section 529” college savings plans or those accounts which cannot be linked using TINs, SSNs or BINs, are not Qualifying Accounts.
In order to verify your eligibility for a breakpoint discount, you will be required to provide to your financial intermediary or the Transfer Agent certain information on your New Account Form and may be required to provide account statements regarding Qualifying Accounts. If you purchase through a financial intermediary, you may be asked to provide additional information and records as required by the financial intermediary. Failure to provide proper notification or verification of eligibility for a breakpoint discount may result in your not receiving a breakpoint discount to which you are otherwise entitled. Breakpoint discounts apply only to your current purchase and do not apply retroactively to previous purchases. The sales charges applicable to the Shares offered in this Prospectus, and the breakpoint discounts offered with respect to such Shares, are described in full in this Prospectus. Because the Prospectus is available on FederatedInvestors.com free of charge, Federated Hermes does not disclose this information separately on the website.
Contingent upon notification to the Transfer Agent, the sales charge at purchase of the A class and F class only, may be reduced or eliminated by:
Larger Purchases
■ Purchasing A class or F class Shares in greater quantities to reduce the applicable sales charge;
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Concurrent and Accumulated Purchases
■ Excluding any Federated Hermes fund A class without a sales charge (“no-load A class”), combining concurrent purchases of and/or current investments in the A class, B class, C class, F class and R class of any Federated Hermes fund made or held by Qualifying Accounts; the purchase amount used in determining the sales charge on your additional Share purchase will be calculated by multiplying the respective maximum public offering price times the number of the A class, B class,C class,F class and R class shares of any Federated Hermes fund currently held in Qualifying Accounts and adding the dollar amount of your current purchase; or
Letter of Intent
■ Signing a letter of intent to purchase a qualifying amount of A class or F class Shares within 13 months. (Call your financial intermediary or the Fund for more information.) The Fund’s custodian will hold Shares in escrow equal to the maximum applicable sales charge. If you complete the Letter of Intent, the Custodian will release the Shares in escrow to your account. If you do not fulfill the Letter of Intent, the Custodian will redeem the appropriate amount from the Shares held in escrow to pay the sales charges that were not applied to your purchases.
PURCHASE RESTRICTIONS ON b class AND c class
In order to maximize shareholder returns and minimize sales charges and marketing fees, an investor’s purchases of B class are generally limited to $100,000 and an investor’s purchases of C class are generally limited to $1,000,000 (except for employer-sponsored retirement plans held in omnibus accounts with respect to C Shares). In applying the limit, the dollar amount of the current purchase is added to the product obtained by multiplying the respective maximum public offering price times the number of A class, B class, C class, F class and R class of any Federated fund currently held in linked Qualifying Accounts, as defined in the section entitled “Reducing the Sales Charge with Breakpoint Discounts.” If the sum of these two amounts would equal or exceed the limit, then the current purchase order will not be processed. Instead, the Distributor will attempt to contact the investor or the investor’s financial intermediary to offer the opportunity to convert the order to A class.
If your Shares are held on the books of the Fund in the name of a financial intermediary, you may be subject to rules of your financial intermediary that differ from those of the Fund.
ELIMINATING The SALES CHARGE
Your investment may qualify for a sales charge waiver. Sales charge waivers offered by the Fund are listed below. In order to receive a sales charge waiver, you must inform your financial intermediary or the Transfer Agent at the time of each purchase that your investment is eligible for a waiver. It is possible that your financial intermediary may not, in accordance with its policies, procedures and system limitations, be able to ensure your receipt of one or more of these waiver categories. In this situation, you would need to invest directly through the Fund’s Transfer Agent. If you do not let your financial intermediary or the Transfer Agent know that your investment is eligible for a sales charge waiver at the time of purchase, you may not receive the waiver to which you may otherwise be entitled.
Contingent upon notification to the Transfer Agent, the sales charge will be eliminated when you purchase or acquire Shares:
■ within 120 days of redeeming Shares of an equal or greater amount (see “120 Day Reinstatement Program” below);
■ through an eligible program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement or other fee-based program offered by the Financial Intermediary);
■ with reinvested dividends or capital gains;
■ issued in connection with the merger, consolidation or acquisition of the assets of another fund. Further, the sales charge will be eliminated on purchases of Shares made by a shareholder that originally became a shareholder of a Federated Hermes fund pursuant to the terms of an agreement and plan of reorganization which permits shareholders to acquire Shares at NAV, provided that such purchased Shares are held directly with the Fund’s transfer agent. If the Shares are held through a financial intermediary, the sales charge waiver will not apply (A class only);
■ as a Federated Life Member (Federated shareholders who originally were issued shares through the “Liberty Account,” which was an account for the Liberty Family of Funds on February 28, 1987, or who invested through an affinity group prior to August 1, 1987, into the Liberty Account) (A class only);
■ as a Trustee, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates, an employee of any financial intermediary that sells Shares according to a sales agreement with the Distributor, an immediate family member of these individuals or a trust, pension or profit-sharing plan for these individuals; or
■ pursuant to the exchange privilege.
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The sales charge will not be eliminated if you purchase Shares of the Fund through an exchange of shares of any no-load A class unless your no-load A class shares were acquired through an exchange of shares on which the sales charge had previously been paid.
120 Day reinstatement program
Within 120 days of redeeming Class A Shares, Class B Shares, Class C Shares and Class F Shares of the Fund, upon proper notification to the Fund’s Transfer Agent, you may reinvest all or a portion of the redemption proceeds in Class A Shares of the Fund at net asset value, without the imposition of a sales charge or CDSC. Please note:
■ The ownership of the account receiving the purchase is not required to be identical to that of the account in which the redemption was placed; however, the registration of the account receiving the purchase must include at least one registered shareholder of the account from which the redemption occurred.
■ You will not be reimbursed for any fees originally incurred on the redemption (e.g., CDSC or redemption fees) by subsequently participating in the 120 DayReinstatement Program.
■ The 120 Day Reinstatement Program does not supersede or override any restrictions placed on an account due to frequent trading and/or client contractual issues.
Additional operational restrictions may apply, please contact a Client Service Representative at 1-800-341-7400 for more information.
sales charge when you redeem
Your redemption proceeds may be reduced by a sales charge, commonly referred to as a contingent deferred sales charge (CDSC). Shares otherwise subject to a CDSC will not be charged a CDSC at the time of an exchange; however, the CDSC will continue to be measured from the date of your original purchase. The CDSC schedule applicable to your original purchase will continue to apply to the shares you receive in an exchange.
To keep the sales charge as low as possible, the Fund redeems your Shares in this order:
■ Shares that are not subject to a CDSC; and
■ Shares held the longest. (To determine the number of years your Shares have been held, include the time you held shares of other Federated Hermes funds that have been exchanged for Shares of this Fund.)
The CDSC is then calculated using the Share price at the time of purchase or redemption, whichever is lower.  
A:
 
 
If you make a purchase of the A class in the amount of $1 million or more and your financial intermediary received an advance commission on the sale, you will
pay a 0.75% CDSC on any such Shares redeemed within 24 months of the purchase.
B:
 
 
Shares Held Up To:
 
CDSC
1 Year
 
5.50%
2 Years
 
4.75%
3 Years
 
4.00%
4 Years
 
3.00%
5 Years
 
2.00%
6 Years
 
1.00%
7 Years or More
 
0.00%
C:
 
 
You will pay a 1.00% CDSC if you redeem Shares within 12 months of the purchase date.
F:
 
 
Purchase Amount
Shares Held
CDSC
Up to $2 million
4 years or less
1.00%
$2 million but less than $5 million
2 years or less
0.50%
$5 million or more
1 year or less
0.25%
Your redemption may qualify for a waiver of the CDSC. The CDSC waivers offered by the Fund are listed below. In order to receive a waiver of the CDSC, you must inform your financial intermediary or the Transfer Agent at the time of each redemption that your investment is eligible for a waiver. It is possible that your financial intermediary may not, in accordance with its policies, procedures and system limitations, be able to ensure your receipt of one or more of these waiver categories. In this situation, you would need to invest directly through the Fund’s Transfer Agent in order to take advantage of the waiver. If you do not let your financial intermediary or the Transfer Agent know that your redemption is eligible for a CDSC waiver at the time of redemption, you may not receive the waiver to which you may otherwise be entitled.
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Contingent upon notification to the Transfer Agent, you will not be charged a CDSC when redeeming Shares:
■ following the death of the last surviving shareholder on the account or the post-purchase disability of all registered shareholders, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986 (the beneficiary on an account with a Transfer on Death registration is deemed the last surviving shareholder on the account);
■ due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death;
■ representing minimum required distributions from an IRA or other retirement plan as required under the Internal Revenue Code;
■ purchased by Trustees, employees of the Fund, the Adviser, the Distributor and their affiliates, by employees of a financial intermediary that sells Shares according to a sales agreement with the Distributor, by the immediate family members of the above persons and by trusts, pension or profit-sharing plans for the above persons;
■ purchased through an eligible program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement or other fee-based program offered by the Financial Intermediary);
■ purchased with reinvested dividends or capital gains;
■ redeemed by the Fund when it closes an account for not meeting the minimum balance requirements;
■ purchased pursuant to the exchange privilege, if the Shares were held for the applicable CDSC holding period (the holding period on the Shares purchased in the exchange will include the holding period of the Shares sold in the exchange);
A Class Only
■ purchased in the amount of $1 million or more and redeemed within 24 months of purchase if the Shares were originally purchased through an eligible program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement or other fee-based program offered by the Financial Intermediary);
B Class Only
■ which are qualifying redemptions of the B class under a Systematic Withdrawal Program; or
F Class Only
■ representing a total or partial distribution from a qualified plan, which does not include account transfers, rollovers or redemptions for the purpose of reinvestment. For these purposes, qualified plan does not include an IRA, individual 401(k) or custodial account following retirement.
ADDITIONAL INFORMATION ON THE AVAILABILITY OF CERTAIN WAIVERS AND DISCOUNTS
The availability of certain sales charge waivers and discounts will depend on whether you purchase your shares directly from the Fund or through a financial intermediary. Certain financial intermediaries may have different policies and procedures regarding the availability of front-end sales load waivers or CDSC waivers which are discussed in Appendix B to this Prospectus.The information contained in Appendix B is based on information provided by these financial intermediaries. Please contact your financial intermediary to ensure that you have the most current information regarding the sales charge waivers and discounts available to you and that you understand the steps you must take to qualify for available waivers and discounts. In all instances, it is the shareholder’s responsibility to notify the Fund or the shareholder’s Financial Intermediary at the time of purchase of any relationship or other facts qualifying the investor for sales charge waivers or discounts. For waivers and discounts not available through a particular financial intermediary, shareholders will have to purchase Fund shares directly from the Fund or through another financial intermediary to receive these waivers or discounts.
COMMISSIONS ON CERTAIN SHARES
The Fund does not charge any front-end load, deferred sales charge or other asset-based fee for sales or distribution of IS Shares. However, if you purchase IS Shares through a broker acting solely as an agent on behalf of its customers, you may be required to pay a commission to the broker in an amount determined and separately disclosed to you by the broker.
Because the Fund is not a party to any such commission arrangement between you and your broker, any purchases and redemptions of IS Shares will be made at the applicable net asset value (before imposition of the sales commission). Any such commissions charged by a broker are not reflected in the fees and expenses listed in the “Risk/Return Summary: Fees and Expenses” section of the Fund’s Prospectus and described above nor are they reflected in the “Performance: Bar Chart and Table,” because they are not charged by the Fund.
Shares of the Fund are available in other share classes that have different fees and expenses.
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How is the Fund Sold?
The Fund offers the following Share classes: Class A Shares (A), Class B Shares (B),Class C Shares (C), Class F Shares (F) and Institutional Shares (IS), each representing interests in a single portfolio of securities. All Share classes have different sales charges and/or other expenses which affect their performance. Please note that certain purchase restrictions may apply.
Under the Distributor’s Contract with the Fund, the Distributor, Federated Securities Corp., offers Shares on a continuous, best-efforts basis. The Distributor is a subsidiary of Federated Hermes, Inc. (“Federated Hermes,” formerly, Federated Investors, Inc.). The Fund may not be a suitable investment for retirement plans because it invests a portion of its portfolio in tax-exempt securities.
Class BShare Closure
Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
A shareholder owning the Fund’s Class B Shares may continue to hold those shares until such shares automatically convert to Class A Shares under the Fund’s existing conversion schedule as described in the Fund’s prospectus, or until the shareholder redeems such Class B Shares, subject to any applicable contingent deferred sales charge (CDSC).
Reinvestment of dividends and capital gains will continue uninterrupted.
All other Class B Share features, including but not limited to distribution (12b-1) and service fees, CDSC, accumulation privileges and conversion features, will remain unchanged for Class B Shares.
A, B, C & F Classes
The Fund’s Distributor markets the A class, B class, C class and F class to institutions or to individuals, directly or through financial intermediaries.
IS Class
The Fund’s Distributor markets the IS class to Eligible Investors, as described below. In connection with a request to purchase the IS class, you should provide documentation sufficient to verify your status as an Eligible Investor. As a general matter, the IS class is not available for direct investment by natural persons.
The following categories of Eligible Investors are not subject to any minimum initial investment amount for the purchase of the IS class (however, such accounts remain subject to the Fund’s policy on “Accounts with Low Balances” as discussed later in this Prospectus):
■ An investor participating in a no-load platform, network or other fee-based program offered by a financial intermediary, for example, a wrap-account or retirement platform where Federated Hermes has entered into an agreement with the intermediary;
■ A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals or a trust, pension or profit-sharing plan for these individuals;
■ An employer-sponsored retirement plan;
■ A trust institution investing on behalf of its trust customers;
■ Additional sales to an investor (including a natural person) who owned the IS class of the Fund as of December 31, 2008;
■ A Federated Hermes Fund;
■ An investor (including a natural person) who acquired the IS class of a Federated Hermes fund pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such shares; and
■ In connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated Hermes or its investment advisory subsidiaries, an investor (including a natural person) who: (1) becomes a client of an investment advisory subsidiary of Federated Hermes; or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated Hermes investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.
The following categories of Eligible Investors are subject to applicable minimum initial investment amounts for the purchase of the IS class (see “How to Purchase Shares” below):
■ An investor, other than a natural person, purchasing the IS class directly from the Fund; and
■ In connection with an initial purchase of the IS class through an exchange, an investor (including a natural person) who owned the IS class of another Federated Hermes fund as of December 31, 2008.
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Intra-Fund Share Conversion Program
A shareholder in the Fund’s Shares may convert their Shares at net asset value to any other share class of the Fund if the shareholder meets the investment minimum and eligibility requirements for the share class into which the conversion is sought, as applicable. This share conversion program is not applicable to the Fund’s Class B Shares. The share conversion program is not applicable to the Fund’s Class A Shares, Class C Shares and Class F Shares subject to a contingent deferred sales charge, if applicable. For Class C Shares purchased through a financial intermediary after June 30, 2017, such shares may only be converted to another share class of the same Fund if: (i) the shares are no longer subject to a CDSC or the financial intermediary agrees to reimburse the Fund’s Distributor the CDSC otherwise payable upon the sale of such shares; (ii) the shareholder meets the investment minimum and eligibility requirements for the share class into which the conversion is sought, as applicable; and (iii) (a) the conversion is made to facilitate the shareholder’s participation in a self-directed brokerage (non-advice) account or a fee-based advisory program offered by the intermediary; or (b) the conversion is part of a multiple-client transaction through a particular financial intermediary as pre-approved by the Fund’s Administrator. Such conversion of classes should not result in a realization event for tax purposes. Contact your financial intermediary or call 1-800-341-7400 to convert your Shares.
Class B Share Automatic Conversion Feature
After Class B Shares have been held for eight years from the date of purchase, they will automatically convert into Class A Shares on the next monthly conversion processing date, provided that the Fund or financial intermediary has records confirming that the Class B Shares have been held for at least eight years and that the Class A Shares are available for purchase. For Class B Shares acquired in an exchange from another fund, the date of purchase will be based on the initial purchase of the Class B Shares of the prior fund. Certain financial intermediaries, record keepers and platforms do not track shareholder level share lot aging for certain types of accounts. These Class B Shares would not satisfy the conditions for the conversion. Contact your financial intermediary or call 1-800-341-7400 for more information.
Class C Share Automatic Conversion Feature
After Class C Shares have been held for ten years from the date of purchase, they will automatically convert into Class A Shares on the next monthly conversion processing date, provided that the Fund or financial intermediary has records confirming that the Class C Shares have been held for at least ten years and that the Class A Shares are available for purchase. For Class C Shares acquired in an exchange from another Federated Hermes fund, the date of purchase will be based on the initial purchase of the Class C Shares of the prior Federated Hermes fund. Certain financial intermediaries, record keepers and platforms do not track shareholder level share lot aging for certain types of accounts. These Class C Shares would not satisfy the conditions for the conversion. Contact your financial intermediary or call 1-800-341-7400 for more information.
Payments to Financial Intermediaries
The Fund and its affiliated service providers may pay fees as described below to financial intermediaries (such as broker-dealers, banks, investment advisers or third-party administrators) whose customers are shareholders of the Fund.
The services provided (and the fees and sales charges received) by financial intermediaries may vary.
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FRONT-END SALES CHARGE REALLOWANCES
The Distributor receives a front-end sales charge on certain Share sales. The Distributor pays a portion of this charge to financial intermediaries that are eligible to receive it (the “Dealer Reallowance”) and retains any remaining portion of the front-end sales charge.
When a financial intermediary’s customer purchases Shares, the financial intermediary may receive a Dealer Reallowance as follows:  
A:
 
Purchase Amount 
Dealer Reallowance
as a Percentage of
Public Offering Price
Less than $50,000
5.00%
$50,000 but less than $100,000
4.00%
$100,000 but less than $250,000
3.25%
$250,000 but less than $500,000
2.25%
$500,000 but less than $1 million
1.80%
$1 million or greater
0.00%
F:
 
Less than $1 million
1.00%
$1 million or greater
0.00%
ADVANCE COMMISSIONS
When a financial intermediary’s customer purchases Shares, the financial intermediary may receive an advance commission as follows:  
A (for purchases over $1 million):
 
Purchase Amount
Advance Commission
as a Percentage of
Public Offering Price
First $1 million - $5 million
0.75%
Next $5 million - $20 million
0.50%
Over $20 million
0.25%
Advance commissions are calculated on a year-by-year basis based on amounts invested during that year. Accordingly, with respect to additional purchase amounts, the advance commission breakpoint resets annually to the first breakpoint on the anniversary of the first purchase.
The A class purchases under this program may be made by Letter of Intent or by combining concurrent purchases. The above advance commission will be paid only on those purchases that were not previously subject to a front-end sales charge or dealer advance commission. Certain retirement accounts may not be eligible for this program.  
B:
 
 
Advance Commission
as a Percentage of
Public Offering Price
All Purchase Amounts
Up to 5.00%
 
C:
 
 
Advance Commission
as a Percentage of
Public Offering Price
All Purchase Amounts
1.00%
 
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F:
 
Purchase Amount
Advance Commission
as a Percentage of
Public Offering Price
Less than $2 million
1.00%
$2 million but less than $5 million
0.50%
$5 million or greater
0.25%
RULE 12b-1 FEES
A, B & C Classes
The Board has adopted a Rule 12b-1 Plan, which allows payment of marketing fees of up to 0.05% (A class) and 0.75% (for B class and C class) of average net assets to the Distributor for the sale, distribution, administration and customer servicing of the Fund’s A class, B class and C class. When the Distributor receives Rule 12b-1 fees, it may pay some or all of them to financial intermediaries whose customers purchase Shares. The A class of the Fund has no present intention of paying, accruing or incurring any Rule 12b-1 Fees until such time as approved by the Fund’s Board. In addition, in connection with the sale of the B class and C class, Federated Hermes and its subsidiaries make advance commission payments to financial intermediaries and in return may receive Rule 12b-1 fees and contingent deferred sales loads from the B class and C class. Federated Hermes and its subsidiaries may benefit or sustain losses from such arrangements. Because these Shares pay marketing fees on an ongoing basis, your investment cost may be higher over time than other shares with different sales charges and marketing fees.
service fees
A, B, C & F Classes
The A class, B class, C class and F class may pay Service Fees of up to 0.25% of average net assets to financial intermediaries or to Federated Shareholder Services Company (FSSC), a subsidiary of Federated Hermes, for providing services to shareholders and maintaining shareholder accounts. Intermediaries that receive Service Fees may include a company affiliated with management of Federated Hermes. If a financial intermediary receives Service Fees on an account, it is not eligible to also receive Account Administration Fees on that same account.
ACCOUNT ADMINISTRATION FEES
A, B, C & F Classes
The A class, B class, C class and F class may pay Account Administration Fees of up to 0.25% of average net assets to banks that are not registered as broker-dealers or investment advisers for providing administrative services to the Fund and its shareholders. If a financial intermediary receives Account Administration Fees on an account, it is not eligible to also receive Service Fees or Recordkeeping Fees on that same account.
RECORDKEEPING FEES
The Fund may pay Recordkeeping Fees on an average-net-assets basis or on a per-account-per-year basis to financial intermediaries for providing recordkeeping services to the Fund and its shareholders. If a financial intermediary receives Recordkeeping Fees on an account, it is not eligible to also receive Account Administration Fees or Networking Fees on that same account.
networking fees
The Fund may reimburse Networking Fees on a per-account-per-year basis to financial intermediaries for providing administrative services to the Fund and its shareholders on certain non-omnibus accounts. If a financial intermediary receives Networking Fees on an account, it is not eligible to also receive Recordkeeping Fees on that same account.
ADDITIONAL PAYMENTS TO FINANCIAL INTERMEDIARIES
The Distributor may pay out of its own resources amounts to certain financial intermediaries, including broker-dealers, banks, registered investment advisers, independent financial planners and retirement plan administrators, that support the sale of Shares or provide services to Fund shareholders. The amounts of these payments could be significant, and may create an incentive for the financial intermediary or its employees or associated persons to recommend or sell Shares of the Fund to you. Not all financial intermediaries receive such payments, and the amount of compensation may vary by intermediary. In some cases, such payments may be made by or funded from the resources of companies affiliated with the Distributor (including the Adviser). These payments are not reflected in the fees and expenses listed in the fee table section of the Fund’s Prospectus and described above because they are not paid by the Fund.
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These payments are negotiated and may be based on such factors as: the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; the level and types of services or support furnished by the financial intermediary; or the Fund’s and/or other Federated Hermes funds’ relationship with the financial intermediary. These payments may be in addition to payments, as described above, made by the Fund to the financial intermediary. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated Hermes funds, within the financial intermediary’s organization by, for example, placement on a list of preferred or recommended funds and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary’s organization. In addition, as discussed above in “Commissions on Certain Shares,” if you purchase IS Shares through a broker acting solely as an agent on behalf of its customers, you may be required to pay a commission to the broker in an amount determined and separately disclosed to you by the broker. You can ask your financial intermediary for information about any payments it receives from the Distributor or the Fund and any services provided, as well as about fees and/or commissions it charges.
How to Purchase Shares
As described in more detail in the section entitled “How is the Fund Sold?” under the subheading “Class B Share Closure,” the Fund’s Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Please disregard any further references to purchases of Class B Shares with the exception of Class B Share exchanges. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
You may purchase Shares of the Fund any day the NYSE is open. Shares will be purchased at the NAV next calculated after your investment is received by the Fund, or its agent, in proper form. The Fund reserves the right to reject any request to purchase or exchange Shares. New investors must submit a completed New Account Form. All accounts, including those for which there is no minimum initial investment amount required, are subject to the Fund’s policy on “Accounts with Low Balances” as discussed later in this Prospectus.
Where the Fund offers more than one Share class and you do not specify the class choice on your New Account Form or form of payment (e.g., Federal Reserve wire or check), you automatically will receive the A class.
For important account information, see the section “Security and Privacy Protection.”
A, B, C & F Classes
You may purchase Shares through a financial intermediary, directly from the Fund or through an exchange from another Federated Hermes fund.
IS Class
Eligible investors may purchase Shares through a financial intermediary, directly from the Fund or through an exchange from another Federated Hermes fund in the manner described above under “How is the Fund Sold?”
Where applicable, the required minimum initial investment for the IS class is generally $1,000,000. There is no minimum subsequent investment amount.
THROUGH A FINANCIAL INTERMEDIARY
■ Establish an account with the financial intermediary; and
■ Submit your purchase order to the financial intermediary before the end of regular trading on the NYSE (normally 4:00 p.m.Eastern time).
The Fund has authorized certain intermediaries to accept Share purchase orders on its behalf. When authorized intermediaries receive an order in proper form, the order is considered as being placed with the Fund, and Shares will be bought at the NAV next calculated after such an order is received by the authorized intermediary. If your financial intermediary is not an authorized intermediary, the Fund or its agent must receive the purchase order in proper form from your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time) in order for your transaction to be priced at that day’s NAV. In addition, your financial intermediary must forward your payment by the prescribed trade settlement date (typically within one to three business days) to the Fund’s transfer agent, State Street Bank and Trust Company (“Transfer Agent”). You will become the owner of Shares and receive dividends when your payment is received in accordance with these time frames (provided that, if payment is received in the form of a check, the check clears). If your payment is not received in accordance with these time frames, or a check does not clear, your purchase will be canceled and you could be liable for any losses, fees or expenses incurred by the Fund or the Fund’s Transfer Agent.
Financial intermediaries should send payments according to the instructions in the sections “By Wire” or “By Check.”
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Financial intermediaries may impose higher or lower minimum investment requirements on their customers than those imposed by the Fund. Keep in mind that financial intermediaries may charge you fees for their services in connection with your Share transactions.
Shareholders are encouraged to ask their financial intermediary if they are an authorized agent for the Fund and about any fees that may be charged by the financial intermediary.
DIRECTLY FROM THE FUND
■ Establish your account with the Fund by submitting a completed New Account Form; and
■ Send your payment to the Fund by Federal Reserve wire or check.
You will become the owner of Shares and your Shares will be priced at the next calculated NAV after the Fund receives your wire or your check. If your check does not clear, your purchase will be canceled and you could be liable for any losses or fees incurred by the Fund or the Fund’s Transfer Agent.
By Wire
To facilitate processing your order, please call the Fund before sending the wire. Send your wire to:
State Street Bank and Trust Company
Boston, MA
Dollar Amount of Wire
ABA Number 011000028
BNF: 23026552
Attention: Federated Hermes EDGEWIRE
Wire Order Number, Dealer Number or Group Number
Nominee/Institution Name
Fund Name and Number and Account Number
You cannot purchase Shares by wire on holidays when wire transfers are restricted.
By Check
Make your check payable to The Federated Hermes Funds, note your account number on the check, and send it to:
The Federated Hermes Funds
P.O. Box 219318
Kansas City, MO 64121-9318
If you send your check by a private courier or overnight delivery service that requires a street address, send it to:
The Federated Hermes Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
Payment should be made in U.S. dollars and drawn on a U.S. bank. The Fund reserves the right to reject any purchase request. For example, to protect against check fraud the Fund may reject any purchase request involving a check that is not made payable to The Federated Hermes Funds (including, but not limited to, requests to purchase Shares using third-party checks) or involving temporary checks or credit card checks.
By Direct Deposit
You may establish Payroll Deduction/Direct Deposit arrangements for investments into the Fund by either calling a Client Service Representative at 1-800-341-7400; or by completing the Payroll Deduction/Direct Deposit Form, which is available on FederatedInvestors.com under “Resources” and then “Literature and Forms,” then “Forms.” You will receive a confirmation when this service is available.
THROUGH AN EXCHANGE
You may purchase Fund Shares through an exchange from another Federated Hermes fund. To do this you must:
■ meet any applicable shareholder eligibility requirements;
■ ensure that the account registrations are identical;
■ meet any applicable minimum initial investment requirements; and
■ receive a prospectus for the fund into which you wish to exchange.
An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction. The Fund reserves the right to reject any request to purchase or exchange Shares. The Fund may modify or terminate the exchange privilege at any time.
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A, B, C & F Classes
You may purchase Shares through an exchange from the same share class of another Federated Hermes fund.
IS Class
You may purchase Shares through an exchange from any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Prime Value Obligations Fund, no-load Class A Shares and Class R Shares of any Fund.
By Online Account Services
You may access your accounts online to purchase shares through Federated Hermes’ Shareholder Account Access system once you have registered for access. This is only available for accounts held directly with the Fund. Online transactions may be subject to certain limitations including limitations as to the amount of the transaction. For more information about the services available through Shareholder Account Access, please visit FederatedInvestors.com and select “Sign In” and “Access and Manage Investments,” or call (800) 245-4770 to speak with a Client Service Representative.
BY SYSTEMATIC INVESTMENT PROGRAM (SIP)
Once you have opened an account, you may automatically purchase additional Shares on a regular basis by completing the SIP section of the New Account Form or by contacting the Fund or your financial intermediary. The minimum investment amount for SIPs is $50.
BY AUTOMATED CLEARING HOUSE (ACH)
Once you have opened an account, you may purchase additional Shares through a depository institution that is an ACH member. This purchase option can be established by completing the appropriate sections of the New Account Form.
RETIREMENT INVESTMENTS
A, B, C & F Classes
You may purchase Shares as retirement investments (such as qualified plans and IRAs or transfer or rollover of assets). Call your financial intermediary or the Fund for information on retirement investments. We suggest that you discuss retirement investments with your tax adviser. You may be subject to an account fee charged by your financial intermediary.
How to Redeem and Exchange Shares
Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund.
You should redeem or exchange Shares:
■ through a financial intermediary if you purchased Shares through a financial intermediary; or
■ directly from the Fund if you purchased Shares directly from the Fund.
Shares of the Fund may be redeemed for cash, or exchanged for shares of other Federated Hermes funds as described herein, on days on which the Fund computes its NAV. Redemption requests may be made by telephone or in writing.
Redemption proceeds normally are wired or mailed within one business day for each method of payment after receiving a timely request in proper form. Depending upon the method of payment, when shareholders receive redemption proceeds can differ. Payment may be delayed for up to seven days under certain circumstances (see “Limitations on Redemption Proceeds”).
For important account information, see the section “Security and Privacy Protection.”
THROUGH A FINANCIAL INTERMEDIARY
Submit your redemption or exchange request to your financial intermediary by the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time). The redemption amount you will receive is based upon the next calculated NAV after the Fund receives the order from your financial intermediary.
DIRECTLY FROM THE FUND
By Telephone
You may redeem or exchange Shares by simply calling the Fund at 1-800-341-7400.
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If you call before the end of regular trading on the NYSE (normally 4:00 p.m. Eastern time), you will receive a redemption amount based on that day’s NAV.
By Mail
You may redeem or exchange Shares by sending a written request to the Fund.
You will receive a redemption amount based on the next calculated NAV after the Fund receives your written request in proper form.
Send requests by mail to:
The Federated Hermes Funds
P.O. Box 219318
Kansas City, MO 64121-9318
Send requests by private courier or overnight delivery service to:
The Federated Hermes Funds
430 W 7th Street
Suite 219318
Kansas City, MO 64105-1407
All requests must include:
■ Fund name and Share class, account number and account registration;
■ amount to be redeemed or exchanged;
■  signatures of all shareholders exactly as registered; and
■  if exchanging , the Fund name and Share class, account number and account registration into which you are exchanging.
Call your financial intermediary or the Fund if you need special instructions.
Signature Guarantees
Signatures must be guaranteed by a financial institution which is a participant in a Medallion signature guarantee program if:
■ your redemption will be sent to an address other than the address of record;
■ your redemption will be sent to an address of record that was changed within the last 30 days;
■  a redemption is payable to someone other than the shareholder(s) of record; or
■ transferring into another fund with a different shareholder registration.
A Medallion signature guarantee is designed to protect your account from fraud. Obtain a Medallion signature guarantee from a bank or trust company, savings association, credit union or broker, dealer or securities exchange member. A notarypublic cannot provide a signature guarantee.
By Online Account Services
You may access your accounts online to redeem or exchange Shares through FederatedInvestors.com’s Shareholder Account Access system once you have registered for access. Online transactions may be subject to certain limitations including limitations as to the amount of the transaction. For more information about the services available through Shareholder Account Access, please visit FederatedInvestors.com and select “Sign In” and “Access and Manage Investments,” or call 1-800-245-4770 to speak with a Client Service Representative.
PAYMENT METHODS FOR REDEMPTIONS
Your redemption proceeds will be mailed by check to your address of record. The following payment options are available if you complete the appropriate section of the New Account Form or an Account Service Options Form. These payment options require a signature guarantee if they were not established when the account was opened:
■ An electronic transfer to your account at a financial institution that is an ACH member; or
■ Wire payment to your account at a domestic commercial bank that is a Federal Reserve System member.
Methods the Fund May Use to Meet Redemption Requests
The Fund intends to pay Share redemptions in cash. To ensure that the Fund has cash to meet Share redemptions on any day, the Fund typically expects to hold a cash or cash equivalent reserve or sell portfolio securities.
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In unusual or stressed circumstances, the Fund may generate cash in the following ways:
■  Inter-fund Borrowing and Lending. The SEC has granted an exemption that permits the Fund and all other funds advised by subsidiaries of Federated Hermes (“Federated Hermes funds”) to lend and borrow money for certain temporary purposes directly to and from other Federated Hermes funds. Inter-fund borrowing and lending is permitted only: (a) to meet shareholder redemption requests; (b) to meet commitments arising from “failed” trades; and (c) for other temporary purposes. All inter-fund loans must be repaid in seven days or less.
■  Committed Line of Credit. The Fund participates with certain other Federated Hermes funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to temporarily finance the repurchase or redemption of shares of the funds, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding.
■  Redemption in Kind. Although the Fund intends to pay Share redemptions in cash, it reserves the right to pay the redemption price in whole or in part by an “in-kind” distribution of the Fund’s portfolio securities. Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act, the Fund is obligated to pay Share redemptions to any one shareholder in cash only up to the lesser of $250,000 or 1% of the net assets represented by such Share class during any 90-day period. Redemptions in kind are made consistent with the procedures adopted by the Fund’s Board, which generally include distributions of a pro rata share of the Fund’s portfolio assets. Redemption in kind is not as liquid as a cash redemption. If redemption is made in kind, securities received may be subject to market risk and the shareholder could incur taxable gains and brokerage or other charges in converting the securities to cash.
LIMITATIONS ON REDEMPTION PROCEEDS
Redemption proceeds normally are wired or mailed within one business day after receiving a request in proper form. Payment may be delayed for up to seven days:
■ to allow your purchase to clear (as discussed below);
■ during periods of market volatility;
■ when a shareholder’s trade activity or amount adversely impacts the Fund’s ability to manage its assets; or
■ during any period when the Federal Reserve wire or applicable Federal Reserve banks are closed, other than customary weekend and holiday closings.
If you request a redemption of Shares recently purchased by check (including a cashier’s check or certified check), money order, bank draft or ACH, your redemption proceeds may not be made available for up to seven calendar days to allow the Fund to collect payment on the instrument used to purchase such Shares. If the purchase instrument does not clear, your purchase order will be canceled and you will be responsible for any losses incurred by the Fund as a result of your canceled order.
In addition, the right of redemption may be suspended, or the payment of proceeds may be delayed (including beyond seven days), during any period:
■ when the NYSE is closed, other than customary weekend and holiday closings;
■ when trading on the NYSE is restricted, as determined by the SEC;
■ in which an emergency exists, as determined by the SEC, so that disposal of the Fund’s investments or determination of its NAV is not reasonably practicable; or
■ as the SEC may by order permit for the protection of Fund shareholders.
You will not accrue interest or dividends on uncashed redemption checks from the Fund when checks are undeliverable and returned to the Fund.
redemptions from retirement accounts
A, B, C & F Classes
In the absence of your specific instructions, 10% of the value of your redemption from a retirement account in the Fund may be withheld for taxes. This withholding only applies to certain types of retirement accounts.
EXCHANGE PRIVILEGE
You may exchange Shares of the Fund. To do this, you must:
■ meet any applicable shareholder eligibility requirements;
■ ensure that the account registrations are identical;
■ meet any applicable minimum initial investment requirements; and
■ receive a prospectus for the fund into which you wish to exchange.
38
An exchange is treated as a redemption and a subsequent purchase, and is a taxable transaction. The Fund reserves the right to reject any request to purchase or exchange Shares. The Fund may modify or terminate the exchange privilege at any time.
In addition, the Fund may terminate your exchange privilege if your exchange activity is found to be excessive under the Fund’s frequent trading policies. See “Account and Share Information–Frequent Trading Policies.”
Financial intermediaries may have different policies and procedures regarding the availability of intra-fund exchanges (“automatic exchanges”). These exchanges which are directed by the financial intermediary and not the Fund are discussed in Appendix B to this Prospectus.
A, B, C & F Classes
You may exchange Shares into shares of the same class of another Federated Hermes fund.
IS Class
You may exchange Shares of the Fund for shares of any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Prime Value Obligations Fund, no-load Class A Shares and Class R Shares of any Fund.
Systematic Withdrawal/Exchange Program
You may automatically redeem or exchange Shares. The minimum amount for all new or revised systematic redemptions or exchanges of Shares is $50 per transaction per fund. Complete the appropriate section of the New Account Form or an Account Service Options Form or contact your financial intermediary or the Fund. Your account value must meet the minimum initial investment amount at the time the program is established. This program may reduce, and eventually deplete, your account. Payments should not be considered yield or income.
Generally, it is not advisable to continue to purchase Shares subject to a sales charge while redeeming Shares using this program.
Systematic Withdrawal Program (SWP) on B Class
You will not be charged a CDSC on SWP redemptions if:
■ you redeem 12% or less of your account value in a single year;
■ you reinvest all dividends and capital gains distributions;
■ your account has at least a $10,000 balance when you establish the SWP (You cannot aggregate multiple B class accounts to meet this minimum balance.); and
■ for all B class accounts established on or after August 2, 2010, the minimum SWP redemption amount is $50 per transaction, per fund, including transactions that qualify for a CDSC waiver as outlined in this Prospectus.
You will be subject to a CDSC on redemption amounts that exceed the 12% annual limit. In measuring the redemption percentage, your account is valued when you establish the SWP and then annually at calendar year-end. You can redeem monthly, quarterly or semi-annually.
ADDITIONAL CONDITIONS
Telephone Transactions
The Fund will record your telephone instructions. If the Fund does not follow reasonable procedures, it may be liable for losses due to unauthorized or fraudulent telephone instructions.
Share Certificates
The Fund does not issue share certificates.
Security and Privacy Protection
ONLINE ACCOUNT and TELEPHONE ACCESS SECURITY
Federated Hermes will not be responsible for losses that result from unauthorized transactions, unless Federated Hermes does not follow procedures designed to verify your identity. When initiating a transaction by telephone or online, shareholders should be aware that any person with access to your account and other personal information including PINs (Personal Identification Numbers) may be able to submit instructions by telephone or online. Shareholders are responsible for protecting their identity by using strong usernames and complex passwords which utilize combinations of mixed case letters, numbers and symbols, and change passwords and PINs frequently.
39
Using FederatedInvestors.com’s Account Access website means you are consenting to sending and receiving personal financial information over the Internet, so you should be sure you are comfortable with the risks. You will be required to accept the terms of an online agreement and to establish and utilize a password in order to access online account services. The Transfer Agent has adopted security procedures to confirm that internet instructions are genuine. The Transfer Agent will also send you written confirmation of share transactions. The Transfer Agent, the Fund and any of its affiliates will not be liable for losses or expenses that occur from fraudulent Internet instructions reasonably believed to be genuine.
The Transfer Agent or the Fund will employ reasonable procedures to confirm that telephone transaction requests are genuine, which may include recording calls, asking the caller to provide certain personal identification information, sending you written confirmation, or requiring other confirmation security procedures. The Transfer Agent, the Fund and any of its affiliates will not be liable for relying on instructions submitted by telephone that the Fund reasonably believes to be genuine.
ANTI-MONEY LAUNDERING COMPLIANCE
To help the government fight the funding of terrorism and money laundering activities, federal law requires financial institutions to obtain, verify, and record information that identifies each new customer who opens a Fund account and to determine whether such person’s name appears on governmental lists of known or suspected terrorists or terrorist organizations. Pursuant to the requirements under the USA PATRIOT Act, the information obtained will be used for compliance with the USA PATRIOT Act or other applicable laws, regulations and rules in connection with money laundering, terrorism or other illicit activities.
Information required includes your name, residential or business address, date of birth (for an individual), and other information that identifies you, including your social security number, tax identification number or other identifying number. The Fund cannot waive these requirements. The Fund is required by law to reject your Account Application if the required information is not provided. If, after reasonable effort, the Fund is unable to verify your identity or that of any other person(s) authorized to act on your behalf, or believes it has identified potentially suspicious, fraudulent or criminal activity, the Fund reserves the right to close your account and redeem your shares at the next calculated NAV without your permission. Any applicable contingent deferred sales charge (CDSC) will be assessed upon redemption of your shares.
The Fund has a strict policy designed to protect the privacy of your personal information. A copy of Federated Hermes’ privacy policy notice was given to you at the time you opened your account. The Fund sends a copy of the privacy notice to you annually. You may also obtain the privacy notice by calling the Fund, or through FederatedInvestors.com.
Account and Share Information
CONFIRMATIONS AND ACCOUNT STATEMENTS
You will receive confirmation of purchases, redemptions and exchanges (except for systematic transactions). In addition, you will receive periodic statements reporting all account activity, including systematic transactions, dividends and capital gains paid.
DIVIDENDS AND CAPITAL GAINS
The Fund declares and pays any dividends monthly to shareholders. Dividends are paid to all shareholders invested in the Fund on the record date. The record date is the date on which a shareholder must officially own Shares in order to earn a dividend.
In addition, the Fund pays any capital gains at least annually, and may make such special distributions of dividends and capital gains as may be necessary to meet applicable regulatory requirements. Your dividends and capital gains distributions will be automatically reinvested in additional Shares without a sales charge, unless you elect cash payments. Dividends may also be reinvested without sales charges in shares of any class of any other Federated Hermes fund of which you are already a shareholder.
If you purchase Shares just before the record date for a dividend or capital gain distribution, you will pay the full price for the Shares and then receive a portion of the price back in the form of a taxable distribution, whether or not you reinvest the distribution in Shares. Therefore, you should consider the tax implications of purchasing Shares shortly before the record date for a dividend or capital gain. Contact your financial intermediary or the Fund for information concerning when dividends and capital gains will be paid.
Under the federal securities laws, the Fund is required to provide a notice to shareholders regarding the source of distributions made by the Fund if such distributions are from sources other than ordinary investment income. In addition, important information regarding the Fund’s distributions, if applicable, is available via the link to the Fund and share class name at Federatedinvestors.com/FundInformation.
40
Small Distributions and Uncashed Checks
Generally, dividend and/or capital gain distributions payable by check in an amount of less than $25 will be automatically reinvested in additional shares. This policy does not apply if you have elected to receive cash distributions that are directly deposited into your bank account via wire or ACH.
Additionally, if one or more dividend or capital gain distribution checks are returned as “undeliverable,” or remain uncashed for 180 days, all subsequent dividend and capital gain distributions will be reinvested in additional shares. No interest will accrue on amounts represented by uncashed distribution checks. For questions on whether reinvestment applies to your distributions, please contact a Client Service Representative at 1-800-341-7400.
Certain states, including the state of Texas, have laws that allow shareholders to designate a representative to receive abandoned or unclaimed property (“escheatment”) notifications by completing and submitting a designation form that generally can be found on the official state website. If a shareholder resides in an applicable state, and elects to designate a representative to receive escheatment notifications, escheatment notices generally will be delivered as required by such state laws, including, as applicable, to both the shareholder and the designated representative. A completed designation form may be mailed to the Fund (if Shares are held directly with the Fund) or to the shareholder’s financial intermediary (if Shares are not held directly with the Fund). Shareholders should refer to relevant state law for the shareholder’s specific rights and responsibilities under his or her state’s escheatment law(s), which can generally be found on a state’s official website.
ACCOUNTS WITH LOW BALANCES
Federated Hermes reserves the right to close accounts if redemptions or exchanges cause the account balance to fall below:
■ $1,500 for the A, B, C and F classes (or in the case of IRAs, $250); and
■ $25,000 for the IS class.
Before an account is closed, you will be notified and allowed at least 30 days to purchase additional Shares to meet the minimum.
TAX INFORMATION
The Fund sends an IRS Form 1099 and an annual statement of your account activity to assist you in completing your federal, state and local tax returns. It is anticipated that Fund distributions will be primarily dividends that are partially exempt from federal income tax and partially eligible for any applicable reduced federal income tax-rate that may be available with respect to qualified dividends, although a portion of the Fund’s dividends may not be exempt or advantaged. Shareholders should note the federal income tax laws may change, and any exemption or reduced income tax rate may change or be eliminated. Dividends also may be subject to state and local taxes.
It is the understanding of the Adviser that, to obtain the full advantage of any applicable reduced federal income tax rate that may be available with respect to qualified dividends paid by the Fund, it may be necessary for a shareholder to hold Shares of the Fund for at least some minimum period of time. Shareholders should consult their tax advisor regarding any applicable holding period requirements. If any federal exemption or reduced income tax rate is eliminated, dividends from the Fund will be taxable at ordinary federal income tax rates. The Fund may realize and distribute capital gains from time to time as a result of the Fund’s normal investment activities. Distributions of net short-term capital gains are taxable to you as ordinary income. Distributions of net long-term capital gains are taxable to you as long-term capital gains regardless of how long you have owned your Shares. Fund distributions of non-exempt dividends and capital gains are taxable whether paid in cash or reinvested in the Fund. Dividends are taxable at different rates depending on the source of the dividend income. Redemptions and exchanges are taxable sales. Please consult your tax adviser regarding your federal, state and local taxation.
FREQUENT TRADING POLICIES
Frequent or short-term trading into and out of the Fund can have adverse consequences for the Fund and shareholders who use the Fund as a long-term investment vehicle. Such trading in significant amounts can disrupt the Fund’s investment strategies (e.g., by requiring it to sell investments at inopportune times or maintain excessive short-term or cash positions to support redemptions), increase brokerage and administrative costs and affect the timing and amount of taxable gains distributed by the Fund. Investors engaged in such trading may also seek to profit by anticipating changes in the Fund’s NAV in advance of the time as of which NAV is calculated.
The Fund’s Board has approved policies and procedures intended to discourage excessive frequent or short-term trading of the Fund’s Shares. The Fund’s fair valuation procedures are intended in part to discourage short-term trading strategies by reducing the potential for these strategies to succeed. See “What Do Shares Cost?” The Fund also monitors trading in Fund Shares in an effort to identify disruptive trading activity. The Fund monitors trades into and out of the Fund within a period of 30 days or less. The Fund may also monitor trades into and out of the Fund for potentially disruptive trading
41
activity over periods longer than 30 days. The size of Share transactions subject to monitoring varies. Where it is determined that a shareholder has exceeded the detection amounts twice within a period of 12 months, the Fund will temporarily prohibit the shareholder from making further purchases or exchanges of Fund Shares. If the shareholder continues to exceed the detection amounts for specified periods, the Fund will impose lengthier trading restrictions on the shareholder, up to and including permanently prohibiting the shareholder from making any further purchases or exchanges of Fund Shares. Whether or not the specific monitoring limits are exceeded, the Fund’s management or the Adviser may determine from the amount, frequency or pattern of purchases and redemptions or exchanges that a shareholder is engaged in excessive trading that is or could be detrimental to the Fund and other shareholders and may prohibit the shareholder from making further purchases or exchanges of Fund Shares. No matter how the Fund defines its limits on frequent trading of Fund Shares, other purchases and sales of Fund Shares may have adverse effects on the management of the Fund’s portfolio and its performance.
The Fund’s frequent trading restrictions do not apply to purchases and sales of Fund Shares by other Federated Hermes funds. These funds impose the same frequent trading restrictions as the Fund at their shareholder level. In addition, allocation changes of the investing Federated Hermes fund are monitored, and the managers of the recipient fund must determine that there is no disruption to their management activity. The intent of this exception is to allow investing fund managers to accommodate cash flows and other activity that result from non-abusive trading in the investing fund, without being stopped from such trading because the aggregate of such trades exceeds the monitoring limits. Nonetheless, as with any trading in Fund Shares, purchases and redemptions of Fund Shares by other Federated Hermes funds could adversely affect the management of the Fund’s portfolio and its performance.
The Fund will not restrict transactions made on a non-discretionary basis by certain asset allocation programs, wrap programs, fund of funds, collective funds or other similar accounts that have been pre-approved by Federated Hermes (“Approved Accounts”). The Fund will continue to monitor transactions by the Approved Accounts and will seek to limit or restrict even non-discretionary transactions by Approved Accounts that are determined to be disruptive or harmful to the Fund.
The Fund’s objective is that its restrictions on short-term trading should apply to all shareholders that are subject to the restrictions, regardless of the number or type of accounts in which Shares are held. However, the Fund anticipates that limitations on its ability to identify trading activity to specific shareholders, including where Shares are held through intermediaries in multiple or omnibus accounts, will mean that these restrictions may not be able to be applied uniformly in all cases.
Other funds in the Federated Hermes family of funds may impose different monitoring policies or in some cases, may not monitor for frequent or short-term trading. Under normal market conditions such monitoring policies are designed to protect the funds being monitored and their shareholders and the operation of such policies and shareholder investments under such monitoring are not expected to have materially adverse impact on the Federated Hermes funds or their shareholders. If you plan to exchange your fund shares for shares of another Federated Hermes fund, please read the prospectus of that other Federated Hermes fund for more information.
PORTFOLIO HOLDINGS INFORMATION
Information concerning the Fund’s portfolio holdings is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation. A complete listing of the Fund’s portfolio holdings as of the end of each month is posted on the website 15 days (or the next business day) after the end of the month and remains posted for six months thereafter. Summary portfolio composition information as of the close of each month is posted on the website 15 days (or the next business day) after month-end and remains posted until replaced by the information for the succeeding month. The summary portfolio composition information may include identification of the Fund’s top 10 equity holdings, top five fixed-income holdings, equity and fixed-income portfolio profile statistics (such as weighted medium market cap and weighted average effective duration), and percentage breakdowns of the portfolio by credit quality, asset class and sector.
You may also access portfolio information as of the end of the Fund’s fiscal quarters via the link to the Fund and share class name at FederatedInvestors.com. The Fund’s Annual and Semi-Annual Shareholder Reports contain complete listings of the Fund’s portfolio holdings as of the end of the Fund’s second and fourth fiscal quarters. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC’s website at sec.gov.
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
42
In addition, from time to time (for example, during periods of unusual market conditions), additional information regarding the Fund’s portfolio holdings and/or composition may be posted to FederatedInvestors.com. If and when such information is posted, its availability will be noted on, and the information will be accessible from, the home page of the website.
Who Manages the Fund?
The Board governs the Fund. The Board selects and oversees the Adviser, Federated Equity Management Company of Pennsylvania. The Adviser manages the Fund’s assets, including buying and selling portfolio securities. Federated Advisory Services Company (FASC), an affiliate of the Adviser, provides research, quantitative analysis, equity trading and transaction settlement and certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund.
The address of the Adviser and FASC is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser has delegated daily management of some or all of the Fund assets to the Sub-Adviser, Federated Investment Management Company, who is paid by the Adviser and not by the Fund, based on the portion of securities the Sub-Adviser manages. The Sub-Adviser’s address is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779.
The Adviser, Sub-Adviser and other subsidiaries of Federated Hermes advise approximately 135 equity, fixed-income and money market mutual funds as well as a variety of other pooled investment vehicles, private investment companies and customized separately managed accounts (including non-U.S./offshore funds) which totaled approximately $575.9 billion in assets as of December 31, 2019. Federated Hermes was established in 1955 as Federated Investors, Inc. and is one of the largest investment managers in the United States with nearly 1,900 employees. Federated Hermes provides investment products to approximately 11,500 investment professionals and institutions.
The Adviser advises approximately 16 equity mutual funds (including sub-advised funds) which totaled approximately $17.7 billion in assets as of December 31, 2019.
The Sub-Adviser advises approximately 75 fixed-income and money market mutual funds (including sub-advised funds) and private investment companies, which totaled approximately $344.3 billion in assets as of December 31, 2019.
PORTFOLIO MANAGEMENT INFORMATION
Linda Bakhshian and Michael Jura are the portfolio managers responsible for managing the Fund’s equity portfolio. R.J. Gallo and Ann Ferentino are the portfolio managers responsible for managing the Fund’s fixed-income portfolio.
Linda Bakhshian
Linda Bakhshian, CA and CPA, Senior Portfolio Manager, has been the Fund’s portfolio manager since November of 2009.
Ms. Bakhshian is head of the Value Income Team and is responsible for the investment strategy, asset allocation and equity security selection of the Fund. She has been with the Adviser or an affiliate since 2007; has worked in investment management since 2002; and has managed investment portfolios since 2009. Education: B.B., University of New England (Australia).
Michael Jura
Michael Jura, Portfolio Manager, has been the Fund’s portfolio manager since December of 2020. Mr. Jura is jointly responsible for the equity security selection of the Fund. He has been with the Adviser or an affiliate since 2012; has worked in investment management since 2012; and has managed investment portfolios since 2020. Education: B.S., Carnegie Mellon University; M.B.A., Tepper School of Business, Carnegie Mellon University.
R.J. Gallo
R.J. Gallo, CFA, Senior Portfolio Manager, has been the Fund’s portfolio manager since its inception in September of 2003.
Mr. Gallo is head of the Municipal Bond Investment Group and Chairman of the Duration Management Committee. He has primary responsibility for investment strategy and security selection in relation to the fixed income portion of the Fund. Mr. Gallo has been with the Adviser or an affiliate since 2000; has worked in investment management since 1996; and has managed investment portfolios since 2002. Education: B.A., University of Michigan; M.P.A., Princeton University.
Ann Ferentino
Ann Ferentino, CFA, Portfolio Manager, has been the Fund’s portfolio manager since December of 2013.
Ms. Ferentino is jointly responsible for the fixed-income security selection of the Fund. She has been with the Adviser or an affiliate since 1995; has worked in investment management since 2000; and has managed investment portfolios since 2013. Education: B.S., University of Dayton; M.B.A., University of Pittsburgh.
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The Fund’s SAI provides additional information about the Portfolio Managers’ compensation, management of other accounts and ownership of securities in the Fund.
ADVISORY FEES
The Fund’s investment advisory contract provides for payment to the Adviser of an annual investment advisory fee of 0.65% of the Fund’s average daily net assets. The Adviser may voluntarily waive a portion of its fee or reimburse the Fund for certain operating expenses. The Adviser and its affiliates have also agreed to certain “Fee Limits” as described in the footnote to the “Risk/Return Summary: Fees and Expenses” table found in the “Fund Summary” section of the Prospectus.
A discussion of the Board’s review of the Fund’s investment advisory contract is available in the Fund’s annual and semi-annual shareholder reports for the periods ended October 31 and April 30, respectively.
Financial Information
FINANCIAL HIGHLIGHTS
The Financial Highlights will help you understand the Fund’s financial performance for its past five fiscal years. Some of the information is presented on a per Share basis. Total returns represent the rate an investor would have earned (or lost) on an investment in the Fund, assuming reinvestment of any dividends and capital gains.
This information has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose report, along with the Fund’s audited financial statements, is included in the Annual Report.
44
Financial Highlights–Class A Shares
(For a Share Outstanding Throughout Each Period)  
Year Ended October 31
2020
2019
2018
2017
2016
Net Asset Value, Beginning of Period
$12.98
$13.08
$13.36
$12.41
$12.25
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.311
0.30
0.29
0.29
0.32
Net realized and unrealized gain (loss)
0.04
0.56
(0.28)
0.95
0.16
TOTAL FROM INVESTMENT OPERATIONS
0.35
0.86
0.01
1.24
0.48
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.31)
(0.30)
(0.29)
(0.29)
(0.32)
Distributions from net realized gain
—
(0.66)
—
—
—
TOTAL DISTRIBUTIONS
(0.31)
(0.96)
(0.29)
(0.29)
(0.32)
Net Asset Value, End of Period
$13.02
$12.98
$13.08
$13.36
$12.41
Total Return 2
2.73%
6.99%
0.04%
10.13%
4.02%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.00%4
1.00%4
1.00%4
1.00%
1.00%
Net investment income
2.40%
2.34%
2.19%
2.28%
2.65%
Expense waiver/reimbursement5
0.07%
0.08%
0.07%
0.07%
0.07%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$577,400
$610,305
$638,891
$625,239
$638,593
Portfolio turnover
68%
50%
87%
71%
55%
1
 Per share number has been calculated using the average shares method.
2
 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3 Amount does not reflect net expenses incurred by investment companies in which the Fund may invest. 
4
 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 1.00% for the years ended October 31, 2020, 2019 and2018, respectively, after taking into account these expense reductions.
5
 This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
Further information about the Fund’s performance is contained in the Fund’s Annual Report, dated October 31, 2020, which can be obtained free of charge.
45
Financial Highlights–Class B Shares
(For a Share Outstanding Throughout Each Period)  
Year Ended October 31
2020
2019
2018
2017
2016
Net Asset Value, Beginning of Period
$12.97
$13.07
$13.35
$12.40
$12.24
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.221
0.21
0.21
0.21
0.23
Net realized and unrealized gain (loss)
0.03
0.55
(0.30)
0.94
0.16
TOTAL FROM INVESTMENT OPERATIONS
0.25
0.76
(0.09)
1.15
0.39
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.21)
(0.20)
(0.19)
(0.20)
(0.23)
Distributions from net realized gain
—
(0.66)
—
—
—
TOTAL DISTRIBUTIONS
(0.21)
(0.86)
(0.19)
(0.20)
(0.23)
Net Asset Value, End of Period
$13.01
$12.97
$13.07
$13.35
$12.40
Total Return 2
1.95%
6.20%
(0.71)%
9.31%
3.25%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.75%4
1.75%4
1.75%4
1.75%
1.75%
Net investment income
1.70%
1.59%
1.45%
1.53%
1.91%
Expense waiver/reimbursement5
0.07%
0.08%
0.07%
0.07%
0.07%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$9,822
$16,302
$19,816
$24,661
$25,682
Portfolio turnover
68%
50%
87%
71%
55%
1
 Per share number has been calculated using the average shares method.
2
 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
 Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 1.75% for the years ended October 31, 2020, 2019 and2018, respectively, after taking into account these expense reductions.
5
 This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
Further information about the Fund’s performance is contained in the Fund’s Annual Report, dated October 31, 2020, which can be obtained free of charge.
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Financial Highlights–Class C Shares
(For a Share Outstanding Throughout Each Period)  
Year Ended October 31
2020
2019
2018
2017
2016
Net Asset Value, Beginning of Period
$12.97
$13.07
$13.35
$12.40
$12.24
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.211
0.20
0.20
0.20
0.23
Net realized and unrealized gain (loss)
0.04
0.56
(0.29)
0.95
0.16
TOTAL FROM INVESTMENT OPERATIONS
0.25
0.76
(0.09)
1.15
0.39
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.21)
(0.20)
(0.19)
(0.20)
(0.23)
Distributions from net realized gain
—
(0.66)
—
—
—
TOTAL DISTRIBUTIONS
(0.21)
(0.86)
(0.19)
(0.20)
(0.23)
Net Asset Value, End of Period
$13.01
$12.97
$13.07
$13.35
$12.40
Total Return 2
1.96%
6.20%
(0.71)%
9.31%
3.25%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.75%4
1.75%4
1.75%4
1.75%
1.75%
Net investment income
1.66%
1.59%
1.45%
1.53%
1.89%
Expense waiver/reimbursement5
0.07%
0.08%
0.07%
0.07%
0.07%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$212,844
$260,572
$299,803
$344,327
$334,633
Portfolio turnover
68%
50%
87%
71%
55%
1
 Per share number has been calculated using the average shares method.
2
 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
 Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 1.75% for the years ended October 31, 2020, 2019 and2018, respectively, after taking into account these expense reductions.
5
 This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
Further information about the Fund’s performance is contained in the Fund’s Annual Report, dated October 31, 2020, which can be obtained free of charge.
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Financial Highlights–Class F Shares
(For a Share Outstanding Throughout Each Period)  
Year Ended October 31
2020
2019
2018
2017
2016
Net Asset Value, Beginning of Period
$12.98
$13.08
$13.36
$12.41
$12.25
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.311
0.30
0.30
0.29
0.32
Net realized and unrealized gain (loss)
0.04
0.56
(0.29)
0.95
0.16
TOTAL FROM INVESTMENT OPERATIONS
0.35
0.86
0.01
1.24
0.48
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.31)
(0.30)
(0.29)
(0.29)
(0.32)
Distributions from net realized gain
—
(0.66)
—
—
—
TOTAL DISTRIBUTIONS
(0.31)
(0.96)
(0.29)
(0.29)
(0.32)
Net Asset Value, End of Period
$13.02
$12.98
$13.08
$13.36
$12.41
Total Return 2
2.73%
6.99%
0.04%
10.13%
4.02%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
1.00%4
1.00%4
1.00%4
1.00%
1.00%
Net investment income
2.40%
2.34%
2.19%
2.28%
2.63%
Expense waiver/reimbursement5
0.07%
0.08%
0.07%
0.07%
0.07%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$238,543
$253,897
$252,291
$234,840
$199,009
Portfolio turnover
68%
50%
87%
71%
55%
1
 Per share number has been calculated using the average shares method.
2
 Based on net asset value, which does not reflect the sales charge, redemption fee or contingent deferred sales charge, if applicable.
3
 Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 1.00% for the years ended October 31, 2020, 2019 and2018, respectively, after taking into account these expense reductions.
5
 This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
Further information about the Fund’s performance is contained in the Fund’s Annual Report, dated October 31, 2020, which can be obtained free of charge.
48
Financial Highlights–Institutional Shares
(For a Share Outstanding Throughout Each Period)  
Year Ended October 31
2020
2019
2018
2017
2016
Net Asset Value, Beginning of Period
$12.98
$13.08
$13.36
$12.41
$12.25
Income From Investment Operations:
 
 
 
 
 
Net investment income
0.341
0.33
0.33
0.32
0.36
Net realized and unrealized gain (loss)
0.04
0.56
(0.28)
0.95
0.16
TOTAL FROM INVESTMENT OPERATIONS
0.38
0.89
0.05
1.27
0.52
Less Distributions:
 
 
 
 
 
Distributions from net investment income
(0.34)
(0.33)
(0.33)
(0.32)
(0.36)
Distributions from net realized gain
—
(0.66)
—
—
—
TOTAL DISTRIBUTIONS
(0.34)
(0.99)
(0.33)
(0.32)
(0.36)
Net Asset Value, End of Period
$13.02
$12.98
$13.08
$13.36
$12.41
Total Return 2
2.99%
7.27%
0.29%
10.40%
4.28%
Ratios to Average Net Assets:
 
 
 
 
 
Net expenses3
0.75%4
0.75%4
0.75%4
0.75%
0.75%
Net investment income
2.66%
2.59%
2.44%
2.53%
2.83%
Expense waiver/reimbursement5
0.07%
0.08%
0.07%
0.07%
0.07%
Supplemental Data:
 
 
 
 
 
Net assets, end of period (000 omitted)
$367,771
$408,096
$430,621
$356,049
$235,124
Portfolio turnover
68%
50%
87%
71%
55%
1
 Per share number has been calculated using the average shares method.
2
 Based on net asset value.
3
 Amount does not reflect net expenses incurred by investment companies in which the Fund may invest.
4
 The net expense ratio is calculated without reduction for expense offset arrangements. The net expense ratio is 0.75% for the years ended October 31, 2020, 2019 and2018, respectively, after taking into account these expense reductions.
5
 This expense decrease is reflected in both the net expense and net investment income ratios shown above. Amount does not reflect expense waiver/reimbursement recorded by investment companies in which the Fund may invest.
Further information about the Fund’s performance is contained in the Fund’s Annual Report, dated October 31, 2020, which can be obtained free of charge.
49
Appendix A: Hypothetical Investment and Expense Information
The following charts provide additional hypothetical information about the effect of the Fund’s expenses, including investment advisory fees and other Fund costs, on the Fund’s assumed returns over a 10-year period. Each chart shows the estimated expenses that would be incurred in respect of a hypothetical investment of $10,000, assuming a 5% return each year, and no redemption of Shares. Each chart also assumes that the Fund’s annual expense ratio stays the same throughout the 10-year period (except the B class, which converts to the A class after you have held them for eight years) and that all dividends and distributions are reinvested. The annual expense ratios used in each chart are the same as stated in the “Fees and Expenses” table of this Prospectus (and thus may not reflect any fee waiver or expense reimbursement currently in effect). The maximum amount of any sales charge that might be imposed on the purchase of Shares (and deducted from the hypothetical initial investment of $10,000; the “Front-End Sales Charge”) is reflected in the “Hypothetical Expenses” column. The hypothetical investment information does not reflect the effect of charges (if any) normally applicable to redemptions of Shares (e.g., deferred sales charges, redemption fees). Mutual fund returns, as well as fees and expenses, may fluctuate over time, and your actual investment returns and total expenses may be higher or lower than those shown below.  
FEDERATED HERMES MUNI AND STOCK ADVANTAGE FUND - A CLASS
ANNUAL EXPENSE RATIO: 1.07%
MAXIMUM FRONT-END SALES CHARGE: 5.50%
Year
Hypothetical
Beginning
Investment
Hypothetical
Performance
Earnings
Investment
After
Returns
Hypothetical
Expenses
Hypothetical
Ending
Investment
1
$10,000.00
$472.50
$9,922.50
$653.10
$9,821.39
2
$9,821.39
$491.07
$10,312.46
$107.15
$10,207.37
3
$10,207.37
$510.37
$10,717.74
$111.37
$10,608.52
4
$10,608.52
$530.43
$11,138.95
$115.74
$11,025.43
5
$11,025.43
$551.27
$11,576.70
$120.29
$11,458.73
6
$11,458.73
$572.94
$12,031.67
$125.02
$11,909.06
7
$11,909.06
$595.45
$12,504.51
$129.93
$12,377.09
8
$12,377.09
$618.85
$12,995.94
$135.04
$12,863.51
9
$12,863.51
$643.18
$13,506.69
$140.34
$13,369.05
10
$13,369.05
$668.45
$14,037.50
$145.86
$13,894.45
Cumulative
 
$5,654.51
 
$1,783.84
 
 
FEDERATED HERMES MUNI AND STOCK ADVANTAGE FUND - B CLASS
ANNUAL EXPENSE RATIO: 1.82%
MAXIMUM FRONT-END SALES CHARGE: NONE
Year
Hypothetical
Beginning
Investment
Hypothetical
Performance
Earnings
Investment
After
Returns
Hypothetical
Expenses
Hypothetical
Ending
Investment
1
$10,000.00
$500.00
$10,500.00
$184.89
$10,318.00
2
$10,318.00
$515.90
$10,833.90
$190.77
$10,646.11
3
$10,646.11
$532.31
$11,178.42
$196.84
$10,984.66
4
$10,984.66
$549.23
$11,533.89
$203.10
$11,333.97
5
$11,333.97
$566.70
$11,900.67
$209.56
$11,694.39
6
$11,694.39
$584.72
$12,279.11
$216.22
$12,066.27
7
$12,066.27
$603.31
$12,669.58
$223.10
$12,449.98
8
$12,449.98
$622.50
$13,072.48
$230.19
$12,845.89
Converts from Class B to Class A
 
 
Annual Expense Ratio: 1.07%
9
$12,845.89
$642.29
$13,488.18
$140.15
$13,350.73
10
$13,350.73
$667.54
$14,018.27
$145.66
$13,875.41
Cumulative
 
$5,784.50
 
$1,940.48
 
 
50
FEDERATED HERMES MUNI AND STOCK ADVANTAGE FUND - C CLASS
ANNUAL EXPENSE RATIO: 1.82%
MAXIMUM FRONT-END SALES CHARGE: NONE
Year
Hypothetical
Beginning
Investment
Hypothetical
Performance
Earnings
Investment
After
Returns
Hypothetical
Expenses
Hypothetical
Ending
Investment
1
$10,000.00
$500.00
$10,500.00
$184.89
$10,318.00
2
$10,318.00
$515.90
$10,833.90
$190.77
$10,646.11
3
$10,646.11
$532.31
$11,178.42
$196.84
$10,984.66
4
$10,984.66
$549.23
$11,533.89
$203.10
$11,333.97
5
$11,333.97
$566.70
$11,900.67
$209.56
$11,694.39
6
$11,694.39
$584.72
$12,279.11
$216.22
$12,066.27
7
$12,066.27
$603.31
$12,669.58
$223.10
$12,449.98
8
$12,449.98
$622.50
$13,072.48
$230.19
$12,845.89
9
$12,845.89
$642.29
$13,488.18
$237.51
$13,254.39
10
$13,254.39
$662.72
$13,917.11
$245.07
$13,675.88
Cumulative
 
$5,779.68
 
$2,137.25
 
 
FEDERATED HERMES MUNI AND STOCK ADVANTAGE FUND - F CLASS
ANNUAL EXPENSE RATIO: 1.07%
MAXIMUM FRONT-END SALES CHARGE: 1.00%
Year
Hypothetical
Beginning
Investment
Hypothetical
Performance
Earnings
Investment
After
Returns
Hypothetical
Expenses
Hypothetical
Ending
Investment
1
$10,000.00
$495.00
$10,395.00
$208.01
$10,289.07
2
$10,289.07
$514.45
$10,803.52
$112.26
$10,693.43
3
$10,693.43
$534.67
$11,228.10
$116.67
$11,113.68
4
$11,113.68
$555.68
$11,669.36
$121.25
$11,550.45
5
$11,550.45
$577.52
$12,127.97
$126.02
$12,004.38
6
$12,004.38
$600.22
$12,604.60
$130.97
$12,476.15
7
$12,476.15
$623.81
$13,099.96
$136.12
$12,966.46
8
$12,966.46
$648.32
$13,614.78
$141.47
$13,476.04
9
$13,476.04
$673.80
$14,149.84
$147.03
$14,005.65
10
$14,005.65
$700.28
$14,705.93
$152.81
$14,556.07
Cumulative
 
$5,923.75
 
$1,392.61
 
51
 
FEDERATED HERMES MUNI AND STOCK ADVANTAGE FUND - IS CLASS
ANNUAL EXPENSE RATIO: 0.82%
MAXIMUM FRONT-END SALES CHARGE: NONE
Year
Hypothetical
Beginning
Investment
Hypothetical
Performance
Earnings
Investment
After
Returns
Hypothetical
Expenses
Hypothetical
Ending
Investment
1
$10,000.00
$500.00
$10,500.00
$83.71
$10,418.00
2
$10,418.00
$520.90
$10,938.90
$87.21
$10,853.47
3
$10,853.47
$542.67
$11,396.14
$90.86
$11,307.15
4
$11,307.15
$565.36
$11,872.51
$94.66
$11,779.79
5
$11,779.79
$588.99
$12,368.78
$98.61
$12,272.19
6
$12,272.19
$613.61
$12,885.80
$102.74
$12,785.17
7
$12,785.17
$639.26
$13,424.43
$107.03
$13,319.59
8
$13,319.59
$665.98
$13,985.57
$111.50
$13,876.35
9
$13,876.35
$693.82
$14,570.17
$116.16
$14,456.38
10
$14,456.38
$722.82
$15,179.20
$121.02
$15,060.66
Cumulative
 
$6,053.41
 
$1,013.50
 
52
Appendix B: Sales Charge Waivers and Exchange Features for Shareholders Purchasing Through Certain Financial Intermediaries
The term “fund family,” used herein, shall refer to the Federated Hermes mutual funds.
Ameriprise Financial
CLASS A SHARES FRONT-END SALES CHARGE WAIVERS AVAILABLE AT AMERIPRISE FINANCIAL:
The following information applies to Class A shares purchases if you have an account with or otherwise purchase Fund shares through Ameriprise Financial:
Effective January 15, 2021, shareholders purchasing Fund shares through an Ameriprise Financial retail brokerage account are eligible for the following front-end sales charge waivers, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI:
■ Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.
■ Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same Fund (but not any other fund within the same fund family).
■ Shares exchanged from Class C shares of the same fund in the month of or following the 7-year anniversary of the purchase date. To the extent that this prospectus elsewhere provides for a waiver with respect to exchanges of Class C shares or conversion of Class C shares following a shorter holding period, that waiver will apply.
■ Employees and registered representatives of Ameriprise Financial or its affiliates and their immediate family members.
■ Shares purchased by or through qualified accounts (including IRAs, Coverdell Education Savings Accounts, 401(k)s, 403(b) TSCAs subject to ERISA and defined benefit plans) that are held by a covered family member, defined as an Ameriprise financial advisor and/or the advisor’s spouse, advisor’s lineal ascendant (mother, father, grandmother, grandfather, great grandmother, great grandfather), advisor’s lineal descendant (son, step-son, daughter, step-daughter, grandson, granddaughter, great grandson, great granddaughter) or any spouse of a covered family member who is a lineal descendant.
■ Shares purchased from the proceeds of redemptions within the same fund family, provided (1) the repurchase occurs within 90 days following the redemption, (2) the redemption and purchase occur in the same account, and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., Rights of Reinstatement).
Robert W. Baird & Co., Inc.
Effective June 15, 2020, shareholders purchasing Fund shares through a Baird platform or account will only be eligible for the following sales charge waivers (front-end sales charge waivers and CDSC waivers) and discounts, which may differ from those disclosed elsewhere in this prospectus or the SAI.
Front-End Sales Charge Waivers on Investors A-shares Available at Baird
■ Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing share of the same fund;
■ Share purchase by employees and registered representatives of Baird or its affiliate and their family members as designated by Baird;
■ Shares purchase from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same accounts; and (3) redeemed shares were subject to a front-end or deferred sales charge (known as rights of reinstatement);
■  Class C (i.e., level-load) shares that are no longer subject to a CDSC and are exchanged to Class A shares (or the appropriate share class) of the same fund pursuant to Baird’s intra-fund share class policies and procedures;
■ Employer-sponsored retirement plans or charitable accounts in a transactional brokerage account at Baird, including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans. For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs or SAR-SEPs.
CDSC Waivers on Investor A and C Shares Available at Baird
■ Shares sold upon the death or disability of the shareholder;
■ Shares sold as part of a systematic withdrawal plan as described in the Fund’s Prospectus;
53
■ Shares bought due to returns of excess contributions from an IRA Account;
■ Shares sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code;
■ Shares sold to pay Baird fees but only if the transaction is initiated by Baird;
■ Shares acquired through a right of reinstatement.
Front-End Sales Charge Discounts Available at Baird: Breakpoints and/or Rights of Accumulations
■ Breakpoints as described in this prospectus;
■ Rights of accumulations which entitles shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Baird. Eligible fund family assets not held at Baird may be included in the rights of accumulations calculation only if the shareholder notifies his or her financial advisor about such assets;
■ Letters of Intent (LOI) allow for breakpoint discounts based on anticipated purchases within a fund family through Baird, over a 13-month period of time.
EDWARD JONES
Effective on or after May 1, 2020, shareholders purchasing Fund shares on the Edward Jones commission and fee-based platforms are eligible only for the following sales charge waivers (front-end sales charge waivers and contingent deferred sales charge (CDSC), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI. In all instances, it is the shareholder’s responsibility to inform Edward Jones at the time of purchase of any relationship, holdings of fund family or other facts qualifying the purchaser for waivers or discounts. Edward Jones can ask for documentation of such circumstance.
Front-End Sales Load Waivers on Class A and F Shares Available at Edward Jones
Sales charges are waived for the following shareholders and in the following situations:
■ Associates of Edward Jones and its affiliates and their family members who are in the same pricing group (as determined by Edward Jones under its policies and procedures) as the associate. This waiver will continue for the remainder of the associate’s life if the associate retires from Edward Jones in good-standing and remains in good standing pursuant to Edward Jones’ policies and procedures.
■ Shares purchased in an Edward Jones fee-based program.
■ Shares purchased through reinvestment of capital gains distributions and dividend reinvestment.
■ Shares purchased from the proceeds of redeemed shares of the same fund family so long as the following conditions are met: (1) the proceeds are from the sale of shares within 60 days of the purchase; and (2) the sale and purchase are made in the same share class and the same account or the purchase is made in an individual retirement account with proceeds from liquidations in a non-retirement account.
■ Shares exchanged into Class A shares from another share Class so long as the exchange is into the same fund and was initiated at the discretion of Edward Jones. Edward Jones is responsible for any remaining CDSC due to the fund company, if applicable. Any future purchases are subject to the applicable sales charge as disclosed in the prospectus.
■ Exchanges from Class C shares to Class A shares of the same fund, generally, in the 84th month following the anniversary of the purchase date or earlier at the discretion of Edward Jones. Edward Jones will be responsible for any remaining CDSC due to the fund company, if applicable.
CDSC Waivers on A, B, C and F Shares Available at Edward Jones
If the shareholder purchases shares that are subject to a CDSC and those shares are redeemed before the CDSC is expired, the shareholder will be responsible to pay the CDSC except in the following conditions:
■ Shares sold upon the death or disability of the shareholder.
■ Shares sold as part of a systematic withdrawal plan (limited to up to 10% per year of the account value).
■ Return of excess contributions from an Individual Retirement Account (IRA).
■ Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
■ Shares sold to pay Edward Jones fees or costs in such cases where the transaction is initiated by Edward Jones.
■ Shares exchanged in an Edward Jones fee-based program. Edward Jones is responsible for any remaining CDSC due to the fund company, if applicable.
■ Shares acquired through a right of reinstatement.
54
Front-End Load Discounts Available at Edward Jones:
Rights of Accumulation (ROA)
■ The applicable sales charge on a purchase of Class A shares is determined by taking into account all share classes (except any money market funds and retirement plan share classes) of the fund family held by the shareholder or in an account grouped by Edward Jones with other accounts for the purpose of providing certain pricing considerations (“pricing groups”). This includes all share classes held on the Edward Jones platform and/or held on another platform. The inclusion of eligible fund family assets in the rights of accumulation calculation is dependent on the shareholder notifying his or her financial advisor of such assets at the time of calculation.
■ ROA is determined by calculating the higher of cost or market value (current shares x NAV).
Letter of Intent (LOI)
■ Through a LOI, shareholders can receive the sales charge and breakpoint discounts for purchases shareholders intend to make over a 13-month period from the date Edward Jones receives the LOI. The LOI is determined by calculating the higher of cost or market value of qualifying holdings at LOI initiation in combination with the value that the shareholder intends to buy over a 13-month period to calculate the front-end sales charge and any breakpoint discounts. Each purchase the shareholder makes during that 13-month period will receive the sales charge and breakpoint discount that applies to the total amount. The inclusion of eligible fund family assets in the LOI calculation is dependent on the shareholder notifying his or her financial advisor of such assets at the time of calculation. Purchases made before the LOI is received by Edward Jones are not covered under the LOI and will not reduce the sales charge previously paid. Sales charges will be adjusted if LOI is not met.
Other Important Information
Minimum Purchase Amounts
1. $250 initial purchase minimum
2. $50 subsequent purchase minimum
Minimum Balances
3. Edward Jones has the right to redeem at its discretion fund holdings with a balance of $250 or less. The following are examples of accounts that are not included in this policy:
1. A fee-based account held on an Edward Jones platform
2. A 529 account held on an Edward Jones platform
3. An account with an active systematic investment plan or letter of intent (LOI)
Changing Share Classes
4. At any time it deems necessary, Edward Jones has the authority to exchange at NAV a shareholder’s holdings in a fund to Class A shares.
Janney Montgomery Scott LLC
Effective May 1, 2020, if you purchase or redeem Fund shares through a Janney Montgomery Scott LLC (“Janney”) brokerage account, you will be eligible for the following load waivers (front-end sales charge waivers and contingent deferred sales charge (CDSC), or back-end sales charge, waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s Prospectus or SAI.
Front-end sales charge waivers on Class A Shares available at Janney
■ Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family).
■ Shares purchased by employees and registered representatives of Janney or its affiliates and their family members as designated by Janney.
■ Shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within ninety (90) days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (i.e., right of reinstatement).
■ Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans.
55
■ Shares acquired through a right of reinstatement.
■  Class C shares that are no longer subject to a contingent deferred sales charge and are exchanged to Class A shares (or the appropriate share class) of the same fund pursuant to Janney’s intra-fund share class policies and procedures.
CDSC Waivers on Class A and C Shares available at Janney
■ Shares sold upon the death or disability of the shareholder.
■ Shares sold as part of a systematic withdrawal plan as described in the fund’s Prospectus.
■ Shares purchased in connection with a return of excess contributions from an IRA account.
■ Shares sold as part of a required minimum distribution for IRA and retirement accounts if the redemption is taken in or after the year the shareholder reaches qualified age based on applicable IRS regulations.
■ Shares sold to pay Janney fees but only if the transaction is initiated by Janney.
■ Shares acquired through a right of reinstatement.
■ Shares exchanged into the same share class of a different Federated Hermes fund, if the shares were held for the applicable CDSC holding period (the holding period on the shares purchased in the exchange will include the holding period of the shares sold in the exchange).
Front-end sales charge discounts available at Janney: Breakpoints, Rights of Accumulation, and/or Letters of Intent
■ Breakpoints as described in the fund’s Prospectus.
■ Rights of accumulation (“ROA”), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Janney. Eligible fund family assets not held at Janney may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets.
■ Letters of intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Janney may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.
Merrill Lynch
Shareholders purchasing Fund shares through a Merrill Lynch platform or account will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI.
Front-end Sales Load Waivers on Class A Shares available at Merrill Lynch
■ Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan;
■ Shares purchased by a 529 Plan (does not include 529 Plan units or 529-specific share classes or equivalents);
■ Shares purchased through a Merrill Lynch affiliated investment advisory program or exchanged due to the holdings moving from the program;
■ Shares exchanged due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch brokerage (non-advisory) account pursuant to Merrill Lynch’s policies relating to sales load discounts and waivers;
■ Shares purchased by third party investment advisors on behalf of their advisory clients through Merrill Lynch’s platform;
■ Shares of funds purchased through the Merrill Edge Self-Directed platform (if applicable);
■ Shares purchased through reinvestment of capital gains distributions and dividend reinvestment when purchasing shares of the same fund (but not any other fund within the fund family);
■ Shares exchanged from Class C (i.e., level-load) shares of the same fund pursuant to Merrill Lynch’s policies relating to sales load discounts and waivers;
■ Employees and registered representatives of Merrill Lynch or its affiliates and their family members;
■ Directors or Trustees of the Fund, and employees of the Fund’s investment adviser or any of its affiliates, as described in the prospectus;
56
■ Eligible shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement). Automated transactions (i.e., systematic purchases and withdrawals) and purchases made after shares are automatically sold to pay Merrill Lynch’s account maintenance fees are not eligible for reinstatement.
CDSC Waivers on A, B and C Shares available at Merrill Lynch
■ Death or disability of the shareholder;
■ Shares sold as part of a systematic withdrawal plan as described in the Fund’s prospectus;
■ Return of excess contributions from an IRA Account;
■ Shares sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code;
■ Shares sold to pay Merrill Lynch fees but only if the transaction is initiated by Merrill Lynch;
■ Shares acquired through a right of reinstatement;
■ Shares held in retirement brokerage accounts, that are exchanged for a lower cost share class due to transfer to certain fee based accounts or platforms (applicable to A and C shares only);
■  Class A Shares received through an exchange due to the holdings moving from a Merrill Lynch affiliated investment advisory program to a Merrill Lynch brokerage (non-advisory) account pursuant to Merrill Lynch’s policies relating to sales load discounts and waivers.
Front-end load Discounts Available at Merrill Lynch:
Breakpoints, Rights of Accumulation & Letters of Intent
■ Breakpoints as described in this prospectus;
■ Rights of Accumulation (ROA) which entitle shareholders to breakpoint discounts as described in the Fund’s prospectus will be automatically calculated based on the aggregated holding of fund family assets held by accounts (including 529 program holdings, where applicable) within the purchaser’s household at Merrill Lynch. Eligible fund family assets not held at Merrill Lynch may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets;
■ Letters of Intent (LOI) which allow for breakpoint discounts based on anticipated purchases within a fund family, through Merrill Lynch, over a 13-month period of time (if applicable).
Morgan Stanley Smith Barney
Shareholders purchasing Fund shares through a Morgan Stanley Wealth Management transactional brokerage account will be eligible only for the following front-end sales charge waivers with respect to Class A shares, which may differ from and may be more limited than those disclosed elsewhere in this Fund’s Prospectus or SAI.
Front-End Sales Charge Waivers on Class A Shares Available at Morgan Stanley Wealth Management
■ Employer-sponsored retirement plans (e.g., 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit sharing and money purchase pension plans and defined benefit plans). For purposes of this provision, employer-sponsored retirement plans do not include SEP IRAs, Simple IRAs, SAR-SEPs or Keogh plans;
■ Morgan Stanley employee and employee-related accounts according to Morgan Stanley’s account linking rules;
■ Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund;
■ Shares purchased through a Morgan Stanley self-directed brokerage account;
■  Class C (i.e., level-load) shares that are no longer subject to a contingent deferred sales charge and are exchanged to Class A shares of the same fund pursuant to Morgan Stanley Wealth Management’s intra-fund share class exchange program;
■ Shares purchased from the proceeds of redemptions within the same fund family, provided (i) the repurchase occurs within 90 days following the redemption, (ii) the redemption and purchase occur in the same account, and (iii) redeemed shares were subject to a front-end or deferred sales charge.
OPPENHEIMER & CO., INC.
Effective May 1, 2020, shareholders purchasing Fund shares through an Oppenheimer & Co., Inc. (OPCO) platform or account are eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI.
57
Front-end Sales Load Waivers on Class A Shares available at OPCO
■ Employer-sponsored retirement, deferred compensation and employee benefit plans (including health savings accounts) and trusts used to fund those plans, provided that the shares are not held in a commission-based brokerage account and shares are held for the benefit of the plan
■ Shares purchased by or through a 529 Plan
■ Shares purchased through an OPCO affiliated investment advisory program
■ Shares purchased through reinvestment of dividends and capital gains distributions when purchasing shares of the same fund (but not any other fund within the fund family)
■ Shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement).
■ A shareholder in the Fund’s Class C shares will have their shares automatically exchanged at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the automatic exchange is in line with the policies and procedures of OPCO
■ Employees and registered representatives of OPCO or its affiliates and their family members
■ Directors or Trustees of the Fund, and employees of the Fund’s investment adviser or any of its affiliates, as described in this prospectus
CDSC Waivers on A, B and C Shares available at OPCO
■ Death or disability of the shareholder
■ Shares sold as part of a systematic withdrawal plan as described in the Fund’s prospectus
■ Return of excess contributions from an IRA Account
■ Shares sold as part of a required minimum distribution for IRA and retirement accounts pursuant to the Internal Revenue Code
■ Shares sold to pay OPCO fees but only if the transaction is initiated by OPCO
■ Shares acquired through a right of reinstatement
Front-end load Discounts Available at OPCO: Breakpoints, Rights of Accumulation & Letters of Intent
■ Breakpoints as described in this prospectus.
■ Rights of Accumulation (ROA), which entitle shareholders to breakpoint discounts, will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at OPCO. Eligible fund family assets not held at OPCO may be included in the ROA calculation only if the shareholder notifies his or her financial advisor about such assets
Raymond James & Associates, Inc., Raymond James Financial Services, Inc. and each entity’s affiliates (“Raymond James”)
Effective March 1, 2019, shareholders purchasing and redeeming Fund shares through a Raymond James platform or account, or through an introducing broker-dealer or independent registered investment adviser for which Raymond James provides trade execution, clearance, and/or custody services, will be eligible only for the following load waivers (front-end sales charge waivers and contingent deferred, or back-end, sales charge waivers) and discounts, which may differ from those disclosed elsewhere in this Fund’s prospectus or SAI.
Front-End Sales Load Waivers on Class A Shares Available at Raymond James
■ Shares purchased in an investment advisory program.
■ Shares purchased within the same fund family through a systematic reinvestment of capital gains and dividend distributions.
■ Employees and registered representatives of Raymond James or its affiliates and their family members as designated by Raymond James.
■ Shares purchased from the proceeds of redemptions within the same fund family, provided: (1) the repurchase occurs within 90 days following the redemption; (2) the redemption and purchase occur in the same account; and (3) redeemed shares were subject to a front-end or deferred sales load (known as Rights of Reinstatement).
■ A shareholder in the Fund’s Class C shares will have their shares automatically exchanged at net asset value to Class A shares (or the appropriate share class) of the Fund if the shares are no longer subject to a CDSC and the automatic exchange is in line with the policies and procedures of Raymond James.
58
CDSC Waivers on A, B and C Shares Available at Raymond James
■ Death or disability of the shareholder.
■ Shares sold as part of a systematic withdrawal plan as described in the fund’s prospectus.
■ Return of excess contributions from an IRA Account.
■ Shares sold as part of a required minimum distribution for IRA and retirement accounts due to the shareholder reaching the qualified age based on applicable IRS regulations as described in the fund’s prospectus.
■ Shares sold to pay Raymond James fees but only if the transaction is initiated by Raymond James.
■ Shares acquired through a right of reinstatement.
Front-End Load Discounts Available at Raymond James: Breakpoints, Rights of Accumulation, and/or Letters of Intent
■ Breakpoints as described in this prospectus;
■ Rights of accumulation which entitle shareholders to breakpoint discounts will be automatically calculated based on the aggregated holding of fund family assets held by accounts within the purchaser’s household at Raymond James. Eligible fund family assets not held at Raymond James may be included in the calculation of rights of accumulation only if the shareholder notifies his or her financial advisor about such assets.
■ Letters of Intent which allow for breakpoint discounts based on anticipated purchases within a fund family, over a 13-month time period. Eligible fund family assets not held at Raymond James may be included in the calculation of letters of intent only if the shareholder notifies his or her financial advisor about such assets.
Stifel, Nicolaus & Company, Incorporated
Effective July 1, 2020, shareholders purchasing Fund shares through a Stifel, Nicolaus & Company, Incorporated (“Stifel”)platform or account or who own shares for which Stifel or an affiliate is the broker-dealer of record are eligible for the following additional sales charge waiver.
Front-End Sales Load Waiver on Class A Shares
■  Class C shares that have been held for more than seven (7) years will be converted to Class A shares of the same Fund pursuant to Stifel’s policies and procedures
All other sales charge waivers and reductions described elsewhere in the Fund’s Prospectus or SAI still apply.
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An SAI dated December 31, 2020, is incorporated by reference into this Prospectus. Additional information about the Fund and its investments is contained in the Fund’s SAI and Annual and Semi-Annual Reports to shareholders as they become available. The Annual Report’s Management’s Discussion of Fund Performance discusses market conditions and investment strategies that significantly affected the Fund’s performance during its last fiscal year. The SAI contains a description of the Fund’s policies and procedures with respect to the disclosure of its portfolio securities. To obtain the SAI, Annual Report, Semi-Annual Report and other information without charge, and to make inquiries, call your financial intermediary or the Fund at 1-800-341-7400.
These documents, as well as additional information about the Fund (including portfolio holdings, performance and distributions), are also available on FederatedInvestors.com.
You can obtain information about the Fund (including the SAI) by accessing Fund information from the EDGAR Database on the SEC’s website at sec.gov. You can purchase copies of this information by contacting the SEC by email at publicinfo@sec.gov.
 
Federated Hermes Muni and Stock Advantage Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
Investment Company Act File No. 811-4577
CUSIP 31420C837
CUSIP 31420C829
CUSIP 31420C811
CUSIP 31420C720
CUSIP 31420C654
28809 (12/20)
© 2020 FederatedHermes, Inc.
Statement of Additional Information
December 31, 2020
 
 
Share Class | Ticker
A | FMUAX
B | FMNBX
C | FMUCX
F | FMUFX
Institutional | FMUIX
Federated Hermes Muni and Stock Advantage Fund
(formerly, Federated Muni and Stock Advantage Fund)
A Portfolio of Federated Hermes Income Securities Trust
(formerly, Federated Income Securities Trust)
This Statement of Additional Information (SAI) is not a Prospectus. Read this SAI in conjunction with the Prospectus for Federated Hermes Muni and Stock Advantage Fund (the “Fund”), dated December 31, 2020.
This SAI incorporates by reference the Fund’s Annual Report. Obtain the Prospectus or the Annual Report without charge by calling 1-800-341-7400.  
Federated Hermes Muni and Stock Advantage Fund
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Contact us at FederatedInvestors.com
or call 1-800-341-7400.
Federated Securities Corp., Distributor
28809B (12/20)
© 2020 FederatedHermes, Inc.
How is the Fund Organized?
The Fund is a diversified portfolio of Federated Hermes Income Securities Trust (“Trust”). The Trust is an open-end, management investment company that was established under the laws of the Commonwealth of Massachusetts on January 24, 1986. The Trust may offer separate series of shares representing interests in separate portfolios of securities. Effective June 26, 2020, the Trust changed its name from Federated Income Securities Trust to Federated Hermes Income Securities Trust and the Fund changed its name from Federated Muni and Stock Advantage Fund to Federated Hermes Muni and Stock Advantage Fund.
The Board of Trustees (“Board”) has established the following classes of shares of the Fund, known as Class A Shares, Class B Shares, Class C Shares, Class F Shares and Institutional Shares (“Shares”). This SAI relates to all classes of Shares. The Fund’s investment adviser is Federated Equity Management Company of Pennsylvania (“Adviser”) and the Fund’s Sub-Adviser is Federated Investment Management Company. The Adviser andsub-adviser are wholly owned subsidiaries of Federated Hermes, Inc. (“Federated”).
Securities in Which the Fund Invests
The principal securities or other investments in which the Fund invests are described in the Fund’s Prospectus. The Fund also may invest in securities or other investments as non-principal investments for any purpose that is consistent with its investment objective. The following information is either additional information, in respect of a principal security or other investment referenced in the Prospectus, or information in respect of a non-principal security or other investment (in which case there is no related disclosure in the Prospectus).
Securities Descriptions and Techniques
Fixed-Income Securities
Fixed-income securities pay interest, dividends or distributions at a specified rate. The rate may be a fixed percentage of the principal or may be adjusted periodically. In addition, the issuer of a fixed-income security must repay the principal amount of the security, normally within a specified time. Fixed-income securities provide more regular income than equity securities. However, the returns on fixed-income securities are limited and normally do not increase with the issuer’s earnings. This limits the potential appreciation of fixed-income securities as compared to equity securities.
A security’s yield measures the annual income earned on a security as a percentage of its price. A security’s yield will increase or decrease depending upon whether it costs less (a “discount”) or more (a “premium”) than the principal amount. If the issuer may redeem the security before its scheduled maturity, the price and yield on a discount or premium security may change based upon the probability of an early redemption. Securities with higher risks generally have higher yields.
The following further describes the types of fixed-income securities in which the Fund may invest.
Asset-Backed Securities (A Fixed-Income Security)
Asset-backed securities are payable from pools of obligations other than mortgages. Most asset-backed securities involve consumer or commercial debts with maturities of less than 10 years. However, almost any type of fixed-income assets (including other fixed-income securities) may be used to create an asset-backed security. Asset-backed securities may take the form of commercial paper, notes or pass-through certificates or other similar securities. Asset-backed securities have prepayment risks.
PACs (A Type of Municipal Mortgage-Backed Security)
PACs (planned amortization classes) are a sophisticated form of municipal mortgage-backed security issued with a companion class(es). PACs receive principal payments and prepayments at a specified rate. The companion classes receive principal payments and prepayments in excess of the specified rate. In addition, PACs will receive the companion classes’ share of principal payments, if necessary, to cover a shortfall in the prepayment rate. This helps PACs to control prepayment risks by increasing the risks to their companion classes.
Municipal Notes (A Type of Tax-Exempt Security)
Municipal notes are short-term, tax-exempt securities. Many municipalities issue such notes to fund their current operations before collecting taxes or other municipal revenues. Municipalities may also issue notes to fund capital projects prior to issuing long-term bonds. The issuers typically repay the notes at the end of their fiscal year, either with taxes, other revenues or proceeds from newly issued notes or bonds.
1
Municipal Auction Rate Securities (A Type of Tax-Exempt Security)
Municipal auction rate securities are tax-exempt securities that are issued (without a demand feature) generally for a specified term, during which the interest rate may be reset at specified intervals (such as, for example, every 7, 28,35 or49 days) by means of a “Dutch Auction” or similar competitive process. These securities may be referred to as “municipal auction rate notes.” In the auction, holders of such securities, and investors who seek to acquire such securities, indicate their interest in continuing to hold, or to purchase, the securities at rates that they specify to broker-dealers that serve as auction agents for the auction. If the auction is successful, a holder of such securities will be able to sell them at par value through the auction process. A “failed auction” occurs when, for example, the auction agent does not receive enough bids to cover the aggregate amount of securities that have been put up for sale at the auction, or the lowest interest rate at which all of the securities that have been put up for sale at the auction would be above the “maximum interest rate” set forth in the documentation for the securities, or some other reason. When a failed auction occurs, a holder of the securities may not be able to sell all or a portion of the securities it desired to sell at the auction, in which case the affected securities would pay the maximum interest rate set forth in their documentation until the next successful auction. The maximum interest rate may be a multiple of a specified index or a fixed rate, and may be dependent on other factors, such as the credit rating of the securities at the time of the auction. Municipal auction rate securities may be subject to interest rate, credit, credit enhancement, prepayment, liquidity and economic risks.
Variable Rate Demand Instruments (A Type of Tax-Exempt Security)
Variable rate demand instruments are tax-exempt securities that require the issuer or a third party, such as a dealer or bank (the “Demand Provider”), to repurchase the security for its face value upon demand. The securities also pay interest at a variable rate intended to cause the securities to trade at their face value. Some variable rate demand instruments are “conditional,” so that the occurrence of certain conditions discharges the Demand Provider’s obligation to repurchase the security. Other variable rate demand instruments are “unconditional,” so that there are no conditions under which the Demand Provider’s obligation to repurchase the security can terminate. The Fund treats variable rate demand instruments as short-term securities even though their maturity may extend beyond 397 days because, within 397 days, their variable interest rate adjusts in response to changes in market rates and the repayment of their principal amount can be demanded. Certain variable rate demand instruments that may be invested in by the Fund, referred to as “synthetic” variable rate demand instruments, have certain features, such as call features, that make it possible that the Fund will realize capital gains.
Tax-Exempt Commercial Paper (A Type of Tax-Exempt Security)
Tax-exempt commercial paper is an obligation issued by a tax-exempt issuer with a maturity of generally less than nine months. Tax-exempt issuers may issue commercial paper to pay for current expenditures or other permissible activities. Tax-exempt issuers may constantly reissue their commercial paper and use the proceeds (or other sources) to repay maturing paper. If the tax-exempt issuer cannot continue to obtain liquidity in this fashion, and if there is not another available source of liquidity, its commercial paper may default or there may be a reduction in payments received in repayment of the tax-exempt commercial paper.
Equity Securities
The following further describes the types of equity securities in which the Fund invests. This information is either additional information in respect of a principal security described in the Prospectus or information in respect of a non-principal security (in which case there is no related disclosure in the Prospectus).
Interests in Other Limited Liability Companies
Entities such as limited partnerships, limited liability companies, business trusts and companies organized outside the United States may issue securities comparable to common or preferred stock.
Warrants
Warrants give the Fund the option to buy the issuer’s equity securities at a specified price (the “exercise price”) by a specified future date (the “expiration date”). The Fund may buy the designated securities by paying the exercise price before the expiration date. Warrants may become worthless if the price of the stock does not rise above the exercise price by the expiration date. This increases the market risks of warrants as compared to the underlying security. Rights are the same as warrants, except companies typically issue rights to existing stockholders.
2
Foreign Exchange Contracts
In order to convert U.S. dollars into the currency needed to buy a foreign security, or to convert foreign currency received from the sale of a foreign security into U.S. dollars, the Fund may enter into spot currency trades. In a spot trade, the Fund agrees to exchange one currency for another at the current exchange rate. The Fund may also enter into derivative contracts in which a foreign currency is an underlying asset. The exchange rate for currency derivative contracts may be higher or lower than the spot exchange rate. Use of these derivative contracts may increase or decrease the Fund’s exposure to currency risks.
Derivative Contracts
Derivative contracts are financial instruments that require payments based upon changes in the values of designated securities, commodities, currencies, indices, or other assets or instruments including other derivative contracts, (each a “Reference Instrument” and collectively, “Reference Instruments”). Each party to a derivative contract may sometimes be referred to as a counterparty. Some derivative contracts require payments relating to an actual, future trade involving the Reference Instrument. These types of derivatives are frequently referred to as “physically settled” derivatives. Other derivative contracts require payments relating to the income or returns from, or changes in the market value of, a Reference Instrument. These types of derivatives are known as “cash settled” derivatives, since they require cash payments in lieu of delivery of the Reference Instrument.
Many derivative contracts are traded on securities or commodities exchanges. In this case, the exchange sets all the terms of the contract except for the price. Investors make payments due under their contracts through the exchange. Most exchanges require investors to maintain margin accounts through their brokers to cover their potential obligations to the exchange. Parties to the contract make (or collect) daily payments to the margin accounts to reflect losses (or gains) in the value of their contracts. This protects investors against potential defaults by the other party to the contract. Trading contracts on an exchange also allows investors to close out their contracts by entering into offsetting contracts.
For example, the Fund could close out an open contract to buy an asset at a future date by entering into an offsetting contract to sell the same asset on the same date. If the offsetting sale price is more than the original purchase price, the Fund realizes a gain; if it is less, the Fund realizes a loss. Exchanges may limit the amount of open contracts permitted at any one time. Such limits may prevent the Fund from closing out a position. If this happens, the Fund will be required to keep the contract open (even if it is losing money on the contract), and to make any payments required under the contract (even if it has to sell portfolio securities at unfavorable prices to do so). Inability to close out a contract could also harm the Fund by preventing it from disposing of or trading any assets it has been using to secure its obligations under the contract.
The Fund may also trade derivative contracts over-the-counter (OTC) in transactions negotiated directly between the Fund and a financial institution. OTC contracts do not necessarily have standard terms, so they may be less liquid and more difficult to close-out than exchange-traded contracts. In addition, OTC contracts with more specialized terms may be more difficult to value than exchange-traded contracts, especially in times of financial stress.
The market for swaps and other OTC derivatives was largely unregulated prior to the enactment of federal legislation known as the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Regulations enacted by the Commodity Futures Trading Commission (the CFTC) under the Dodd-Frank Act require the Fund to clear certain swap contracts through a clearing house or central counterparty (a CCP).
To clear a swap through the CCP, the Fund will submit the contract to, and post margin with, a futures commission merchant (FCM) that is a clearing house member. The Fund may enter into the swap with a financial institution other than the FCM and arrange for the contract to be transferred to the FCM for clearing, or enter into the contract with the FCM itself. If the Fund must centrally clear a transaction, the CFTC’s regulations also generally require that the swap be executed on registered exchange or through a market facility that is known as a swap execution facility or SEF. Central clearing is presently required only for certain swaps and the CFTC is expected to impose a mandatory central clearing requirement for additional derivative instruments over time.
The CCP, SEF and FCM are all subject to regulatory oversight by the CFTC. In addition, most derivative market participants are now regulated as swap dealers or major swap participants and are subject to certain minimum capital and margin requirements and business conduct standards. Similar regulatory requirements are expected to apply to derivative contracts that are subject to the jurisdiction of the SEC, although the SEC has not yet finalized its regulations. In addition, uncleared OTC swaps will be subject to regulatory collateral requirements that could adversely affect the Fund’s ability to enter into swaps in the OTC market. These developments could cause the Fund to terminate new or existing swap agreements or to realize amounts to be received under such instruments at an inopportune time.
Until the mandated rulemaking and regulations are implemented completely, it will not be possible to determine the complete impact of the Dodd-Frank Act and related regulations on the Fund.
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Depending on how the Fund uses derivative contracts and the relationships between the market value of a derivative contract and the Reference Instrument, derivative contracts may increase or decrease the Fund’s exposure to the risks of the Reference Instrument, and may also expose the Fund to liquidity and leverage risks. OTC contracts also expose the Fund to credit risks in the event that a counterparty defaults on the contract, although this risk may be mitigated by submitting the contract for clearing through a CCP.
The Fund may invest in a derivative contract if it is permitted to own, invest in, or otherwise have economic exposure to the Reference Instrument. The Fund is not required to own a Reference Instrument in order to buy or sell a derivative contract relating to that Reference Instrument. The Fund may trade in the following specific types and/or combinations of derivative contracts:
Futures Contracts (A Type of Derivative)
Futures contracts provide for the future sale by one party and purchase by another party of a specified amount of a Reference Instrument at a specified price, date and time. Entering into a contract to buy a Reference Instrument is commonly referred to as buying a contract or holding a long position in the asset. Entering into a contract to sell a Reference Instrument is commonly referred to as selling a contract or holding a short position in the Reference Instrument. Futures contracts are considered to be commodity contracts. The Adviser has claimed an exclusion from the definition of the term “commodity pool operator” under the Commodity Exchange Act with respect to the Fund, and therefore is not subject to registration or regulation with respect to the Fund. Futures contracts traded OTC are frequently referred to as forward contracts. The Fund can buy or sell financial futures (such as interest rate futures, index futures and security futures), as well as currency futures and currency forward contracts.
Interest Rate Futures
An interest rate futures contract is an exchange-traded contract for which the Reference Instrument is an interest-bearing, fixed-income security or an inter-bank deposit. Two examples of common interest rate futures contracts are U.S. Treasury futures contracts and Eurodollar futures contracts. The Reference Instrument for a U.S. Treasury futures contract is a U.S. Treasury security. The Reference Instrument for a Eurodollar futures contract is the London Interbank Offered Rate (commonly referred to as LIBOR); Eurodollar futures contracts enable the purchaser to obtain a fixed rate for the lending of funds over a stated period of time and the seller to obtain a fixed rate for a borrowing of funds over that same period.
Index Futures
An index futures contract is an exchange-traded contract to make or receive a payment based upon changes in the value of an index. An index is a statistical composite that measures changes in the value of designated Reference Instruments within the index.
Security Futures
A security futures contract is an exchange-traded contract to purchase or sell in the future a specific quantity of a security (other than a Treasury security) or a narrow-based securities index at a certain price. Presently, the only available security futures contracts use shares of a single equity security as the Reference Instrument. However, it is possible that in the future, security futures contracts will be developed that use a single fixed-income security as the Reference Instrument.
Currency Futures and Currency Forward Contracts (Types of Futures Contracts)
A currency futures contract is an exchange-traded contract to buy or sell a particular currency at a specific price at some time in the future (commonly three months or more). A currency forward contract is not an exchange-traded contract and represents an obligation to purchase or sell a specific currency at a future date, at a price set at the time of the contract and for a period agreed upon by the parties which may be either a window of time or a fixed number of days from the date of the contract. Currency futures and forward contracts are highly volatile, with a relatively small price movement potentially resulting in substantial gains or losses to the Fund. Additionally, the Fund may lose money on currency futures and forward contracts if changes in currency rates do not occur as anticipated or if the Fund’s counterparty to the contract were to default.
4
Option Contracts (A Type of Derivative)
Option contracts (also called “options”) are rights to buy or sell a Reference Instrument for a specified price (the “exercise price”) during, or at the end of, a specified period. The seller (or “writer”) of the option receives a payment, or premium, from the buyer, which the writer keeps regardless of whether the buyer uses (or exercises) the option. Options may be bought or sold on a wide variety of Reference Instruments. Options that are written on futures contracts will be subject to margin requirements similar to those applied to futures contracts.
The Fund may buy the following types of options:
Call Options
A call option gives the holder (buyer) the right to buy the Reference Instrument from the seller (writer) of the option. The Fund may use call options in the following ways:
■ Buy call options on a Reference Instrument in anticipation of an increase in the value of the Reference Instrument; and
■ Write call options on a Reference Instrument to generate income from premiums, and in anticipation of a decrease or only limited increase in the value of the Reference Instrument. If the Fund writes a call option on a Reference Instrument that it owns and that call option is exercised, the Fund foregoes any possible profit from an increase in the market price of the Reference Instrument over the exercise price plus the premium received.
Put Options
A put option gives the holder the right to sell the Reference Instrument to the writer of the option. The Fund may use put options in the following ways:
■ Buy put options on a Reference Instrument in anticipation of a decrease in the value of the Reference Instrument; and
■ Write put options on a Reference Instrument to generate income from premiums, and in anticipation of an increase or only limited decrease in the value of the Reference Instrument. In writing puts, there is a risk that the Fund may be required to take delivery of the Reference Instrument when its current market price is lower than the exercise price.
The Fund may also buy or write options, as needed, to close out existing option positions.
Finally, the Fund may enter into combinations of options contracts in an attempt to benefit from changes in the prices of those options contracts (without regard to changes in the value of the Reference Instrument).
Swap Contracts (A Type of Derivative)
A swap contract (also known as a “swap”) is a type of derivative contract in which two parties agree to pay each other (swap) the returns derived from Reference Instruments. Most swaps do not involve the delivery of the underlying assets by either party, and the parties might not own the Reference Instruments. The payments are usually made on a net basis so that, on any given day, the Fund would receive (or pay) only the amount by which its payment under the contract is less than (or exceeds) the amount of the other party’s payment. Swap agreements are sophisticated instruments that can take many different forms and are known by a variety of names.
Common swap agreements that the Fund may use include:
Interest Rate Swaps
Interest rate swaps are contracts in which one party agrees to make regular payments equal to a fixed or floating interest rate times a stated principal amount (commonly referred to as a “notional principal amount”) in return for payments equal to a different fixed or floating rate times the same principal amount, for a specific period. For example, a $10 million London Interbank Offered Rate (commonly referred to as LIBOR) swap would require one party to pay the equivalent of the London Interbank Offered Rate of interest (which fluctuates) on $10 million principal amount in exchange for the right to receive the equivalent of a stated fixed rate of interest on $10 millionprincipal amount.
Total Return Swaps
A total return swap is an agreement between two parties whereby one party agrees to make payments of the total return from a Reference Instrument (or a basket of such instruments) during the specified period, in return for payments equal to a fixed or floating rate of interest or the total return from another Reference Instrument. Alternately, a total return swap can be structured so that one party will make payments to the other party if the value of a Reference Instrument increases, but receive payments from the other party if the value of that instrument decreases.
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Credit Default Swaps
A credit default swap (CDS) is an agreement between two parties whereby one party (the “Protection Buyer”) agrees to make payments over the term of the CDS to the other party (the “Protection Seller”), provided that no designated event of default, restructuring or other credit related event (each a “Credit Event”) occurs with respect to Reference Instrument that is usually a particular bond, loan or the unsecured credit of an issuer, in general (the “Reference Obligation”). Many CDS are physically settled, which means that if a Credit Event occurs, the Protection Seller must pay the Protection Buyer the full notional value, or “par value,” of the Reference Obligation in exchange for delivery by the Protection Buyer of the Reference Obligation or another similar obligation issued by the issuer of the Reference Obligation (the “Deliverable Obligation”). The Counterparties agree to the characteristics of the Deliverable Obligation at the time that they enter into the CDS. Alternately, a CDS can be “cash-settled,” which means that upon the occurrence of a Credit Event, the Protection Buyer will receive a payment from the Protection Seller equal to the difference between the par amount of the Reference Obligation and its market value at the time of the Credit Event. The Fund may be either the Protection Buyer or the Protection Seller in a CDS. If the Fund is a Protection Buyer and no Credit Event occurs, the Fund will lose its entire investment in the CDS (i.e., an amount equal to the payments made to the Protection Seller over the term of the CDS). However, if a Credit Event occurs, the Fund (as “Protection Buyer”) will deliver the Deliverable Obligation and receive a payment equal to the full notional value of the Reference Obligation, even though the Reference Obligation may have little or no value. If the Fund is the Protection Seller and no Credit Event occurs, the Fund will receive a fixed rate of income throughout the term of the CDS. However, if a Credit Event occurs, the Fund (as “Protection Seller”) will pay the Protection Buyer the full notional value of the Reference Obligation and receive the Deliverable Obligation from the Protection Buyer. A CDS may involve greater risks than if the Fund invested directly in the Reference Obligation. For example, a CDS may increase credit risk since the Fund has exposure to both the issuer of the Reference Obligation and the Counterparty to the CDS.
Caps and Floors (A Type of Swap Contract)
Caps and Floors are contracts in which one party agrees to make payments only if an interest rate or index goes above (Cap) or below (Floor) a certain level in return for a fee from the other party.
Currency Swaps
Currency swaps are contracts which provide for interest payments in different currencies. The parties might agree to exchange the notional principal amounts of the currencies as well (commonly called a “foreign exchange swap”).
Other Investments, Transactions, Techniques
Repurchase Agreements
Repurchase agreements are transactions in which the Fund buys a security from a dealer or bank and agrees to sell the security back at a mutually agreed-upon time and price. The repurchase price exceeds the sale price, reflecting the Fund’s return on the transaction. This return is unrelated to the interest rate on the underlying security. The Fund will enter into repurchase agreements only with banks and other recognized financial institutions, such as securities dealers, deemed creditworthy by the Adviser.
The Fund’s custodian or subcustodian will take possession of the securities subject to repurchase agreements. The Adviser or subcustodian will monitor the value of the underlying security each day to ensure that the value of the security always equals or exceeds the repurchase price.
Repurchase agreements are subject to credit risks.
Reverse Repurchase Agreements (A Fixed-Income Security)
Reverse repurchase agreements (which are considered a type of special transaction for asset segregation purposes) are repurchase agreements in which the Fund is the seller (rather than the buyer) of the securities, and agrees to repurchase them at an agreed-upon time and price. A reverse repurchase agreement may be viewed as a type of borrowing by the Fund. Reverse repurchase agreements are subject to credit risks. In addition, reverse repurchase agreements create leverage risks because the Fund must repurchase the underlying security at a higher price, regardless of the market value of the security at the time of repurchase.
Hedging
Hedging transactions are intended to reduce specific risks. For example, to protect the Fund against circumstances that would normally cause the Fund’s portfolio securities to decline in value, the Fund may buy or sell a derivative contract that would normally increase in value under the same circumstances. The Fund may also attempt to hedge by using combinations of different derivative contracts, or derivative contracts and securities. The Fund’s ability to hedge may be limited by the costs of the derivative contracts. The Fund may attempt to lower the cost of hedging by entering into transactions that provide only
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limited protection, including transactions that: (1) hedge only a portion of its portfolio; (2) use derivative contracts that cover a narrow range of circumstances; or (3) involve the sale of derivative contracts with different terms. Consequently, hedging transactions will not eliminate risk even if they work as intended. In addition, hedging strategies are not always successful, and could result in increased expenses and losses to the Fund.
Hybrid Instruments
Hybrid instruments combine elements of two different kinds of securities or financial instruments (such as a derivative contract). Frequently, the value of a hybrid instrument is determined by reference to changes in the value of a Reference Instrument (that is a designated security, commodity, currency, index or other asset or instrument including a derivative contract). Hybrid instruments can take on many forms including, but not limited to, the following forms. First, a common form of a hybrid instrument combines elements of a derivative contract with those of another security (typically a fixed-income security). In this case, all or a portion of the interest or principal payable on a hybrid security is determined by reference to changes in the price of a Reference Instrument. Second, a hybrid instrument may also combine elements of a fixed-income security and an equity security. Third, hybrid instruments may include convertible securities with conversion terms related to a Reference Instrument.
Depending on the type and terms of the hybrid instrument, its risks may reflect a combination of the risks of investing in the Reference Instrument with the risks of investing in other securities, currencies and derivative contracts. Thus, an investment in a hybrid instrument may entail significant risks in addition to those associated with traditional securities or the Reference Instrument. Hybrid instruments are also potentially more volatile than traditional securities or the Reference Instrument. Moreover, depending on the structure of the particular hybrid, it may expose the Fund to leverage risks or carry liquidity risks.
Credit Linked Notes (A Type of Hybrid Instrument)
A credit linked note (CLN) is a type of hybrid instrument in which a special purpose entity issues a structured note (the “Note Issuer”) with respect to which the Reference Instrument is a single bond, a portfolio of bonds or the unsecured credit of an issuer, in general (each a “Reference Credit”). The purchaser of the CLN (the “Note Purchaser”) invests a par amount and receives a payment during the term of the CLN that equals a fixed or floating rate of interest equivalent to a high rated funded asset (such as a bank certificate of deposit) plus an additional premium that relates to taking on the credit risk of the Reference Credit. Upon maturity of the CLN, the Note Purchaser will receive a payment equal to: (i) the original par amount paid to the Note Issuer, if there is no occurrence of a designated event of default, restructuring or other credit event (each a “Credit Event”) with respect to the issuer of the Reference Credit; or (ii) the market value of the Reference Credit, if a Credit Event has occurred. Depending upon the terms of the CLN, it is also possible that the Note Purchaser may be required to take physical delivery of the Reference Credit in the event of a Credit Event. Most credit linked notes use a corporate bond (or a portfolio of corporate bonds) as the Reference Credit. However, almost any type of fixed-income security (including foreign government securities), index or derivative contract (such as a credit default swap) can be used as the Reference Credit.
Equity Linked Note (A Type of Hybrid Instrument)
An equity linked note (ELN) is a type of hybrid instrument that provides the noteholder with exposure to a single equity security, a basket of equity securities, or an equity index (the “Reference Equity Instrument”). Typically, an ELN pays interest at agreed rates over a specified time period and, at maturity, either converts into shares of a Reference Equity Instrument or returns a payment to the noteholder based on the change in value of a Reference Equity Instrument.
Securities Lending
The Fund may lend portfolio securities to borrowers that the Adviser deems creditworthy. In return, the Fund receives cash or liquid securities from the borrower as collateral. The borrower must furnish additional collateral if the market value of the loaned securities increases. Also, the borrower must pay the Fund the equivalent of any dividends or interest received on the loaned securities.
The Fund will reinvest cash collateral in securities that qualify as an acceptable investment for the Fund. However, the Fund must pay interest to the borrower for the use of cash collateral. An acceptable investment into which the Fund may reinvest cash collateral includes, among other acceptable investments, securities of affiliated money market funds (including affiliated institutional prime money market funds with a “floating” net asset value that can impose redemption fees and liquidity gates, impose certain operational impediments to investing cash collateral, and, if net asset value decreases, result in the Fund having to cover the decrease in the value of the cash collateral.)
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Loans are subject to termination at the option of the Fund or the borrower. The Fund will not have the right to vote on securities while they are on loan. However, the Fund will attempt to terminate a loan in an effort to reacquire the securities in time to vote on matters that are deemed to be material by the Adviser. There can be no assurance that the Fund will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon. The Fund may pay administrative and custodial fees in connection with a loan and may pay a negotiated portion of the interest earned on the cash collateral to a securities lending agent or broker.
Securities lending activities are subject to interest rate risks and credit risks.
Asset Segregation
In accordance with the Securities and Exchange Commission (SEC) and SEC staff positions regarding the interpretation of the Investment Company Act of 1940 (“1940 Act”), with respect to derivatives that create a future payment obligation of the Fund, the Fund must “set aside” (referred to sometimes as “asset segregation”) liquid assets, or engage in other SEC- or staff-approved measures, while the derivative contracts are open. For example, with respect to forwards and futures contracts that are not contractually required to “cash-settle,” the Fund must cover its open positions by setting aside cash or readily marketable securities equal to the contracts’ full, notional value. With respect to forwards and futures that are contractually required to “cash-settle,” however, the Fund is permitted to set aside cash or readily marketable securities in an amount equal to the Fund’s daily marked-to-market (“net”) obligations, if any (i.e., the Fund’s daily net liability, if any), rather than the notional value.
The Fund will employ another approach to segregating assets to cover options that it sells. If the Fund sells a call option, the Fund will set aside either the Reference Instrument subject to the option, cash or readily marketable securities with a value that equals or exceeds the current market value of the Reference Instrument. In no event will the value of the cash or readily marketable securities set aside by the Fund be less than the exercise price of the call option. If the Fund sells a put option, the Fund will set aside cash or readily marketable securities with a value that equals or exceeds the exercise price of the put option.
The Fund’s asset segregation approach for swap agreements varies among different types of swaps. For example, if the Fund enters into a credit default swap as the Protection Buyer, then it will set aside cash or readily marketable securities necessary to meet any accrued payment obligations under the swap. By comparison, if the Fund enters into a credit default swap as the Protection Seller, then the Fund will set aside cash or readily marketable securities equal to the full notional amount of the swap that must be paid upon the occurrence of a Credit Event. For some other types of swaps, such as interest rate swaps, the Fund will calculate the obligations of the counterparties to the swap on a net basis. Consequently, the Fund’s current obligation (or rights) under this type of swap will equal only the net amount to be paid or received based on the relative values of the positions held by each counterparty to the swap (the “net amount”). The net amount currently owed by or to the Fund will be accrued daily and the Fund will set aside cash or readily marketable securities equal to any accrued but unpaid net amount owed by the Fund under the swap.
The Fund may reduce the liquid assets segregated to cover obligations under a derivative contract by entering into an offsetting derivative contract. For example, if the Fund sells a put option for the same Reference Instrument as a call option the Fund has sold, and the exercise price of the call option is the same as or higher than the exercise price of the put option, then the Fund may net its obligations under the options and set aside cash or readily marketable securities (including any margin deposited for the options) with a value equal to the greater of: (a) the current market value of the Reference Instrument deliverable under the call option; or (b) the exercise price of the put option.
By setting aside cash or readily marketable securities equal to only its net obligations under swaps and certain cash-settled derivative contracts, the Fund will have the ability to employ leverage to a greater extent than if the Fund were required to segregate cash or readily marketable securities equal to the full notional value of such contracts. The use of leverage involves certain risks. See “Investment Risks.” Unless the Fund has other cash or readily marketable securities to set aside, it cannot trade assets set aside in connection with derivative contracts or special transactions without entering into an offsetting derivative contract or terminating a special transaction. This may cause the Fund to miss favorable trading opportunities or to realize losses on derivative contracts or special transactions. The Fund reserves the right to modify its asset segregation policies in the future to comply with any changes in the positions articulated from time to time by the SEC and its staff.
Generally, special transactions do not cash-settle on a net basis. Consequently, with respect to special transactions, the Fund will set aside cash or readily marketable securities with a value that equals or exceeds the Fund’s obligations.
Investing in Exchange-Traded Funds
The Fund may invest in exchange-traded funds (ETFs) as an efficient means of carrying out its investment strategies. As with traditional mutual funds, ETFs charge asset-based fees, although these fees tend to be relatively low. ETFs are traded on stock exchanges or on the over-the-counter market. ETFs do not charge initial sales charges or redemption fees and investors pay only customary brokerage fees to buy and sell ETF shares.
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Temporary Investments
The Fund may make temporary investments in taxable, fixed-income securities and the following other taxable securities:
Treasury Securities (A Type of Fixed-Income Security)
Treasury securities are direct obligations of the federal government of the United States. Treasury securities are generally regarded as having minimal credit risks.
Bank Instruments (A Type of Fixed-Income Security)
Bank instruments are unsecured interest-bearing deposits with banks. Bank instruments include, but are not limited to, bank accounts, time deposits, certificates of deposit and banker’s acceptances. Yankee instruments are denominated in U.S. dollars and issued by U.S. branches of foreign banks. Eurodollar instruments are denominated in U.S. dollars and issued by non-U.S. branches of U.S. orforeign banks.
Government Securities (A Type of Fixed-Income Security)
Government securities are issued or guaranteed by a federal agency or instrumentality acting under federal authority. Some government securities, including those issued by Government National Mortgage Association (“Ginnie Mae”), are supported by the full faith and credit of the United States and are guaranteed only as to the timely payment of interest and principal.
Other government securities receive support through federal subsidies, loans or other benefits, but are not backed by the full faith and credit of the United States. For example, the U.S. Treasury is authorized to purchase specified amounts of securities issued by (or otherwise make funds available to) the Federal Home Loan Bank System, Federal Home Loan Mortgage Corporation (“Freddie Mac”), Federal National Mortgage Association (“Fannie Mae”) and Tennessee Valley Authority in support of such obligations.
Some government agency securities have no explicit financial support and are supported only by the credit of the applicable agency, instrumentality or corporation. The U.S. government has provided financial support to Freddie Mac and Fannie Mae, but there is no assurance that it will support these or other agencies in the future.
Investors generally regard government securities as having minimal credit risks, but not as low as Treasury securities.
The Fund treats mortgage-backed securities guaranteed by a federal agency or instrumentality as government securities. Although such a guarantee helps protect against credit risk, it does not eliminate it entirely or reduce other risks.
Additional Information Related to Freddie Mac and Fannie Mae . The extreme and unprecedented volatility and disruption that impacted the capital and credit markets beginning in 2008 led to market concerns regarding the ability of Freddie Mac and Fannie Mae to withstand future credit losses associated with securities held in their investment portfolios, and on which they provide guarantees, without the direct support of the federal government. On September 7, 2008, Freddie Mac and Fannie Mae were placed under the conservatorship of the Federal Housing Finance Agency (FHFA). Under the plan of conservatorship, the FHFA assumed control of, and generally has the power to direct, the operations of Freddie Mac and Fannie Mae, and is empowered to exercise all powers collectively held by their respective shareholders, directors and officers, including the power to: (1) take over the assets of and operate Freddie Mac and Fannie Mae with all the powers of the shareholders, the directors and the officers of Freddie Mac and Fannie Mae and conduct all business of Freddie Mac and Fannie Mae; (2) collect all obligations and money due to Freddie Mac and Fannie Mae; (3) perform all functions of Freddie Mac and Fannie Mae which are consistent with the conservator’s appointment; (4) preserve and conserve the assets and property of Freddie Mac and Fannie Mae; and (5) contract for assistance in fulfilling any function, activity, action or duty of the conservator.
In connection with the actions taken by the FHFA, the Treasury has entered into certain preferred stock purchase agreements (SPAs) with each of Freddie Mac and Fannie Mae which establish the Treasury as the holder of a new class of senior preferred stock in each of Freddie Mac and Fannie Mae. The senior preferred stock was issued in connection with financial contributions from the Treasury to Freddie Mac and Fannie Mae. Although the SPAs are subject to amendment from time to time, currently the Treasury is obligated to provide such financial contributions up to an aggregate maximum amount determined by a formula set forth in the SPAs, and until such aggregate maximum amount is reached, there is not a specific end date to the Treasury’s obligations.
The future status and role of Freddie Mac and Fannie Mae could be impacted by (among other things) the actions taken and restrictions placed on Freddie Mac and Fannie Mae by the FHFA in its role as conservator, the restrictions placed on Freddie Mac’s and Fannie Mae’s operations and activities under the SPAs, market responses to developments at Freddie Mac and Fannie Mae, downgrades or upgrades in the credit ratings assigned to Freddie Mac and Fannie Mae by nationally recognized statistical rating organizations (NRSROs) or ratings services, and future legislative and regulatory action that alters the operations, ownership, structure and/or mission of these institutions, each of which may, in turn, impact the value of, and cash flows on, any securities guaranteed by Freddie Mac and Fannie Mae.
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In addition, the future of Freddie Mac and Fannie Mae, and other U.S. government-sponsored enterprises that are not backed by the full faith and credit of the U.S. government (GSEs), remains in question as the U.S. government continues to consider options ranging from structural reform, nationalization, privatization or consolidation, to outright elimination. The issues that have led to significant U.S. government support for Freddie Mac and Fannie Mae have sparked serious debate regarding the continued role of the U.S. government in providing mortgage loan liquidity.
Corporate Debt Securities (A Type of Fixed-Income Security)
Corporate debt securities are fixed-income securities issued by businesses. Notes, bonds, debentures and commercial paper are the most prevalent types of corporate debt securities. The Fund may also purchase interests in bank loans to companies. The credit risk of corporate debt securities vary widely across issuers.
In addition, the credit risk of an issuer’s debt security may vary based on its priority for repayment. For example, higher ranking (“senior”) debt securities have a higher priority than lower ranking (“subordinated”) securities. This means that the issuer might not make payments on subordinated securities while continuing to make payments on senior securities. In addition, in the event of bankruptcy, holders of senior securities may receive amounts otherwise payable to the holders of subordinated securities. Some subordinated securities, such as trust preferred and capital securities notes, also permit the issuer to defer payments under certain circumstances. For example, insurance companies issue securities known as surplus notes that permit the insurance company to defer any payment that would reduce its capital below regulatory requirements.
Commercial Paper (A Type of Corporate Debt Security)
Commercial paper is an issuer’s obligation with a maturity of less than nine months. Companies typically issue commercial paper to pay for current expenditures. Most issuers constantly reissue their commercial paper and use the proceeds (or bank loans) to repay maturing paper. If the issuer cannot continue to obtain liquidity in this fashion, its commercial paper may default. The short maturity of commercial paper generally reduces both the market and credit risks as compared to other debt securities of the same issuer.
INTER-FUND BORROWING AND THIRD-PARTY LENDING ARRANGEMENTS
Inter-Fund Borrowing
The Securities and Exchange Commission (SEC) has granted an exemption that permits the Fund and all other funds (“Federated Hermes funds”) advised by subsidiaries of Federated Hermes, Inc. (“Federated Hermes,” formerly, Federated Investors, Inc.) to lend and borrow money for certain temporary purposes directly to and from other Federated Hermes funds. Participation in this inter-fund lending program is voluntary for both borrowing and lending Federated Hermes funds, and an inter-fund loan is only made if it benefits each participating Federated Hermes fund. Federated Hermes administers the program according to procedures approved by the Fund’s Board, and the Board monitors the operation of the program. Any inter-fund loan must comply with certain conditions set out in the exemption, which are designed to assure fairness and protect all participating Federated Hermes funds.
For example, inter-fund lending is permitted only: (a) to meet shareholder redemption requests; (b) to meet commitments arising from “failed” trades; and (c) for other temporary purposes. All inter-fund loans must be repaid in seven days or less. The Fund’s participation in this program must be consistent with its investment policies and limitations, and must meet certain percentage tests. Inter-fund loans may be made only when the rate of interest to be charged is more attractive to the lending Federated Hermes fund than market-competitive rates on overnight repurchase agreements (“Repo Rate”) and more attractive to the borrowing Federated Hermes fund than the rate of interest that would be charged by an unaffiliated bank for short-term borrowings (“Bank Loan Rate”), as determined by the Board. The interest rate imposed on inter-fund loans is the average of the Repo Rate and the Bank Loan Rate.
Third-Party Line of Credit
The Fund participates with certain other Federated Hermes funds, on a several basis, in an up to $500,000,000 unsecured, 364-day, committed, revolving line of credit (LOC) agreement. The LOC was made available to temporarily finance the repurchase or redemption of shares of the Fund, failed trades, payment of dividends, settlement of trades and for other short-term, temporary or emergency general business purposes. The Fund cannot borrow under the LOC if an inter-fund loan is outstanding. The Fund’s ability to borrow under the LOC also is subject to the limitations of the 1940 Act and various conditions precedent that must be satisfied before the Fund can borrow. Loans under the LOC are charged interest at a fluctuating rate per annum equal to the highest, on any day, of: (a) (i) the federal funds effective rate; (ii) the one month London Interbank Offered Rate
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(LIBOR), or a replacement rate as appropriate; and (iii) 0.0%; plus (b) a margin. Any fund eligible to borrow under the LOC pays its pro rata share of an upfront fee, and its pro rata share of a commitment fee based on the amount of the lenders’ commitment that has not been utilized, quarterly in arrears and at maturity. As of the date of this Statement of Additional Information, there were no outstanding loans. During the most recently ended fiscal year, the Fund did not utilize the LOC.
LIQUIDITY RISK MANAGEMENT PROGRAM
The Fund has adopted and implemented a written liquidity risk management program (LRMP) and related procedures to assess and manage the liquidity risk of the Fund in accordance with Section 22(e) of the 1940 Act and Rule 22e-4 thereunder. The Board has designated the Adviser, together with Federated Hermes, Inc.’s (“Federated Hermes,” formerly, Federated Investors, Inc.) other affiliated registered investment advisory subsidiaries that serve as investment advisers to other Federated Hermes funds, to collectively serve as the administrator of the LRMP and the related procedures (the “Administrator”). Rule 22e-4 defines “liquidity risk” as the risk that the Fund will be unable to meet requests to redeem shares issued by the Fund without significant dilution of the remaining investors’ interests in the Fund. As a part of the LRMP, the Administrator is responsible for classifying the liquidity of the Fund’s portfolio investments in accordance with Rule 22e-4. As part of the LRMP, the Administrator is also responsible for assessing, managing and periodically reviewing the Fund’s liquidity risk, for making periodic reports to the Board and the SEC regarding the liquidity of the Fund’s investments, and for notifying the Board and the SEC of certain liquidity events specified in Rule 22e-4. The liquidity of the Fund’s portfolio investments is determined based on relevant market, trading and investment-specific considerations under the LRMP.
Investment Risks
There are many risk factors which may affect an investment in the Fund. The Fund’s principal risks are described in its Prospectus. The following information is either additional information in respect of a principal risk factor referenced in the Prospectus or information in respect of a non-principal risk factor applicable to the Fund (in which case there is no related disclosure in the Prospectus).
Risk Related to Company Capitalization
The Fund may invest in companies with market capitalizations of any size, including small-capitalization and mid-capitalization (or “small-cap” and “mid-cap”) companies. Market capitalization is determined by multiplying the number of a company’s outstanding shares by the current market price per share. Larger, more established, companies may be unable to respond quickly to new competitive challenges, like price competition, changes in consumer tastes or innovative smaller competitors or innovative products. Small-cap companies may have unproven business strategies and track records, less liquid stock, a more volatile share price and limited access to capital, which make them more likely to fail than larger companies. Mid-cap companies also often have narrower markets, and limited managerial and financial resources, more volatile performance and greater risk of failure, compared to larger, more established, companies. The performance of small-cap and mid-cap companies can be more volatile and they face greater risk of business failure. These factors could increase the volatility of the Fund’s portfolio and performance. Shareholders should expect that the value of the Fund’s shares will be more volatile than a fund that invests exclusively in large-cap companies.
Risk of Investing in ADRs and Domestically Traded Securities of Foreign Issuers
Because the Fund may invest in American Depositary Receipts (ADRs) and other domestically traded securities of foreign companies, the Fund’s Share price may be more affected by foreign economic and political conditions, taxation policies and accounting and auditing standards, than would otherwise be the case. Foreign companies may not provide information as frequently or to as great an extent as companies in the United States. Foreign companies may also receive less coverage than U.S. companies by market analysts and the financial press. In addition, foreign companies may lack uniform accounting, auditing and financial reporting standards or regulatory requirements comparable to those applicable to U.S. companies. These factors may prevent the Fund and its Adviser from obtaining information concerning foreign companies that is as frequent, extensive and reliable as the information available concerning companies in the United States.
Credit Risk
The Fund may invest in fixed-income securities (including tax-exempt securities) rated “B” (including modifiers, sub-categories or gradations) or higher or in unrated but comparable securities. The presence of a ratings modifier, sub-category or gradation (for example, a (+) or (-)) is intended to show relative standing within the major rating categories and does not affect the security credit rating for purposes of the Fund’s investment parameters.
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Prepayment Risk
Like municipal mortgage-backed securities, asset-backed securities (including fixed-income or tax-exempt securities that are pooled or collateralized) may be subject to prepayment risks and the possibility that interest and other payments may not be made. Such investments also may be subject to interest rate, credit and other risks described in the Fund’s Prospectus and this SAI.
Risk of Investing in Derivative Contracts and Hybrid Instruments
The Fund’s exposure to derivative contracts and hybrid instruments (either directly or through its investment in another investment company) involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. First, changes in the value of the derivative contracts and hybrid instruments in which the Fund invests may not be correlated with changes in the value of the underlying Reference Instruments or, if they are correlated, may move in the opposite direction than originally anticipated. Second, while some strategies involving derivatives may reduce the risk of loss, they may also reduce potential gains or, in some cases, result in losses by offsetting favorable price movements in portfolio holdings. Third, there is a risk that derivative contracts and hybrid instruments may be erroneously priced or improperly valued and, as a result, the Fund may need to make increased cash payments to the counterparty. Fourth, exposure to derivative contracts and hybrid instruments may have tax consequences to the Fund and its shareholders. For example, derivative contracts and hybrid instruments may cause the Fund to realize increased ordinary income or short-term capital gains (which are treated as ordinary income for federal income tax purposes) and, as a result, may increase taxable distributions to shareholders. In addition, under certain circumstances certain derivative contracts and hybrid instruments may cause the Fund to: (a) incur an excise tax on a portion of the income related to those contracts and instruments; and/or (b) reclassify, as a return of capital, some or all of the distributions previously made to shareholders during the fiscal year as dividend income. Fifth, a common provision in OTC derivative contracts permits the counterparty to terminate any such contract between it and the Fund, if the value of the Fund’s total net assets declines below a specified level over a given time period. Factors that may contribute to such a decline (which usually must be substantial) include significant shareholder redemptions and/or a marked decrease in the market value of the Fund’s investments. Any such termination of the Fund’s OTC derivative contracts may adversely affect the Fund (for example, by increasing losses and/or costs and/or preventing the Fund from fully implementing its investment strategies). Sixth, the Fund may use a derivative contract to benefit from a decline in the value of a Reference Instrument. If the value of the Reference Instrument declines during the term of the contract, the Fund makes a profit on the difference (less any payments the Fund is required to pay under the terms of the contract). Any such strategy involves risk. There is no assurance that the Reference Instrument will decline in value during the term of the contract and make a profit for the Fund. The Reference Instrument may instead appreciate in value creating a loss for the Fund. Seventh, a default or failure by a CCP or an FCM (also sometimes called a “futures broker”), or the failure of a contract to be transferred from an Executing Dealer to the FCM for clearing, may expose the Fund to losses, increase its costs, or prevent the Fund from entering or exiting derivative positions, accessing margin or fully implementing its investment strategies. The central clearing of a derivative and trading of a contract over a SEF could reduce the liquidity in, or increase costs of entering into or holding, any contracts. Finally, derivative contracts and hybrid instruments may also involve other risks described herein or in the Fund’s Prospectus, such as stock market, interest rate, credit, currency, liquidity and leverage risks.
Risk Associated With the Investment Activities of Other Accounts
Investment decisions for the Fund are made independently from those of other accounts managed by the Adviser and accounts managed by affiliates of the Adviser. Therefore, it is possible that investment-related actions taken by such other accounts could adversely impact the Fund with respect to, for example, the value of Fund portfolio holdings and/or prices paid to or received by the Fund on its portfolio transactions and/or the Fund’s ability to obtain or dispose of portfolio securities. Related considerations are discussed elsewhere in this SAI under “Brokerage Transactions and Investment Allocation.”
Exchange-Traded Funds Risk
An investment in an exchange-traded fund (ETF) generally presents the same primary risks as an investment in a conventional fund (i.e., one that is not exchange-traded) that has the same investment objectives, strategies and policies. The price of an ETF can fluctuate up or down, and the Fund could lose money investing in an ETF if the prices of the securities owned by the ETF go down. In addition, ETFs may be subject to the following risks that do not apply to conventional funds: (i) the market price of an ETF’s shares may trade above or below its net asset value; (ii) an active trading market for an ETF’s shares may not develop or be maintained; or (iii) trading of an ETF’s shares may be halted if the listing exchange’s officials deem such action appropriate, the shares are delisted from the exchange or the activation of market-wide “circuit breakers” (which are tied to large decreases in stock prices) halts stock trading generally.
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LIBOR Risk
Certain derivatives or debt securities, or other financial instruments in which the Fund may invest, as well as the Fund’s committed, revolving line of credit agreement, utilize or may utilize in the future the London Interbank Offered Rate (LIBOR) as the reference or benchmark rate for interest rate calculations. LIBOR is a measure of the average interest rate at which major global banks can borrow from one another. It is quoted in multiple currencies and tenors using data reported by a panel of private-sector banks. Following allegations of rate manipulation in 2012 and concerns regarding its thin liquidity, the use of LIBOR came under increasing pressure, and in July 2017, the U.K. Financial Conduct Authority, which regulates LIBOR, announced that it will stop encouraging banks to provide the quotations needed to sustain LIBOR after 2021. This may cause LIBOR to cease to be published. LIBOR panel banks have agreed to submit quotations to LIBOR through the end of 2021. Before then, it is expected that market participants will transition to the use of different reference or benchmark rates. However, there is currently no definitive information regarding the future utilization of LIBOR or of any particular replacement rate. Regulators have suggested alternative reference rates, but global consensus is lacking and the process for amending existing contracts or instruments to transition away from LIBOR remains unclear.
While it is expected that market participants will amend financial instruments referencing LIBOR to include fallback provisions and other measures that contemplate the discontinuation of LIBOR or other similar market disruption events, neither the effect of the transition process nor the viability of such measures is known. While market participants have begun transitioning away from LIBOR, there are obstacles to converting certain longer term securities and transactions to a new benchmark or benchmarks. The effectiveness of multiple alternative reference rates as opposed to one primary reference rate has not been determined. The effectiveness of alternative reference rates used in new or existing financial instruments and products has also not yet been determined. As market participants transition away from LIBOR, LIBOR’s usefulness may deteriorate, which could occur prior to the end of 2021. The transition process may lead to increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates. LIBOR’s deterioration may adversely affect the liquidity and/or market value of securities that use LIBOR as a benchmark interest rate, including securities and other financial instruments held by the Fund. Further, the utilization of an alternative reference rate, or the transition process to an alternative reference rate, may adversely affect the Fund’s performance.
Cybersecurity Risk
Like other funds and business enterprises, Federated Hermes’ business relies on the security and reliability of information and communications technology, systems and networks. Federated Hermes uses digital technology, including, for example, networked systems, email and the Internet, to conduct business operations and engage clients, customers, employees, products, accounts, shareholders, and relevant service providers, among others. Federated Hermes, as well as its funds and certain service providers, also generate, compile and process information for purposes of preparing and making filings or reports to governmental agencies, and a cybersecurity attack or incident that impacts that information, or the generation and filing processes, may prevent required regulatory filings and reports from being made. The use of the Internet and other electronic media and technology exposes the Fund, the Fund’s shareholders, and the Fund’s service providers, and their respective operations, to potential risks from cybersecurity attacks or incidents (collectively, “cyber-events”).
Cyber-events can result from intentional (or deliberate) attacks or unintentional events by insiders or third parties, including cybercriminals, competitors, nation-states and “hacktivists,” among others. Cyber-events may include, for example, phishing, use of stolen access credentials, unauthorized access to systems, networks or devices (such as, for example, through “hacking” activity), structured query language attacks, infection from or spread of malware, ransomware, computer viruses or other malicious software code, corruption of data, and attacks (including, but not limited to, denial of service attacks on websites) which shut down, disable, slow, impair or otherwise disrupt operations, business processes, technology, connectivity or website or internet access, functionality or performance. Like other funds and business enterprises, the Fund and its service providers have experienced, and will continue to experience, cyber-events on a daily basis. In addition to intentional cyber-events, unintentional cyber-events can occur, such as, for example, the inadvertent release of confidential information. To date, cyber-events have not had a material adverse effect on the Fund’s business operations or performance.
Cyber-events can affect, potentially in a material way, Federated Hermes’ relationships with its customers, employees, products, accounts, shareholders and relevant service providers. Any cyber-event could adversely impact the Fund and its shareholders and cause the Fund to incur financial loss and expense, as well as face exposure to regulatory penalties, reputational damage and additional compliance costs associated with corrective measures. A cyber-event may cause the Fund, or its service providers, to lose proprietary information, suffer data corruption, lose operational capacity (such as, for example, the loss of the ability to process transactions, calculate the Fund’s NAV, or allow shareholders to transact business or other disruptions to
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operations), and/or fail to comply with applicable privacy and other laws. Among other potentially harmful effects, cyber-events also may result in theft, unauthorized monitoring and failures in the physical infrastructure or operating systems that support the Fund and its service providers. In addition, cyber-events affecting issuers in which the Fund invests could cause the Fund’s investments to lose value.
The Fund’s Adviser and its relevant affiliates have established risk management systems reasonably designed to seek to reduce the risks associated with cyber-events. The Fund’s Adviser employs various measures aimed at mitigating cybersecurity risk, including, among others, use of firewalls, system segmentation, system monitoring, virus scanning, periodic penetration testing, employee phishing training and an employee cybersecurity awareness campaign. Among other vendor management efforts, Federated Hermes also conducts due diligence on key service providers (or vendors) relating to cybersecurity. Federated Hermes has established a committee to oversee Federated Hermes’ information security and data governance efforts, and updates on cyber-events and risks are reviewed with relevant committees, as well as Federated Hermes’ and the Fund’s Boards of Directors or Trustees (or a committee thereof), on a periodic (generally quarterly) basis (and more frequently when circumstances warrant) as part of risk management oversight responsibilities. However, there is no guarantee that the efforts of Federated Hermes, the Fund’s Adviser or its affiliates, or other service providers, will succeed, either entirely or partially as there are limits on Federated Hermes’ and the Fund’s ability to prevent, detect or mitigate cyber-events. Among other reasons, the cybersecurity landscape is constantly evolving, the nature of malicious cyber-events is becoming increasingly sophisticated and the Fund’s Adviser, and its relevant affiliates, cannot control the cyber systems and cybersecurity systems of issuers or third-party service providers.
Investment Objective (and Policies) and Investment Limitations
Fundamental Investment Objective and Policies
The Fund’s primary investment objective is to provide tax-advantaged income with a secondary objective of capital appreciation.
The Fund will attempt to invest its assets so that the income derived from municipal securities that it distributes will be exempt from federal income tax (including the alternative minimum income tax), except when investing for “defensive purposes.” The Fund will attempt to invest its assets so that dividends received for equity securities will qualify for federal income taxation at the 15% rate.
The investment objective and policies may not be changed by the Fund’s Board without shareholder approval.
Shareholders should note that federal income tax laws with respect to qualified dividends change (and in fact, were changed for certain high income taxpayers in the American Taxpayer Relief Act of 2012), and any applicable reduced income tax rate may change or be eliminated for some or all individual taxpayers.
Investment Limitations
Diversification
With respect to securities comprising 75% of the value of its total assets, the Fund will not purchase securities of any one issuer (other than cash; cash items; securities issued or guaranteed by the government of the United States or its agencies or instrumentalities and repurchase agreements collateralized by such U.S. government securities; and securities of other investment companies) if, as a result, more than 5% of the value of its total assets would be invested in the securities of that issuer, or the Fund would own more than 10% of the outstanding voting securities of that issuer.
Concentration
The Fund will not make investments that will result in the concentration of its investments in the securities of issuers primarily engaged in the same industry, but may invest more than 25% of its total assets in securities of issuers in the same economic sector. For purposes of this restriction, the term concentration has the meaning set forth in the 1940 Act, any rule or order thereunder, or any SEC staff interpretation thereof. Government securities and municipal securities will not be deemed to constitute an industry.
Underwriting
The Fund may not underwrite the securities of other issuers, except that the Fund may engage in transactions involving the acquisition, disposition or resale of its portfolio securities, under circumstances where it may be considered to be an underwriter under the Securities Act of 1933.
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Investing in Commodities
The Fund may not purchase or sell physical commodities, provided that the Fund may purchase securities of companies that deal in commodities. For purposes of this restriction, investments in transactions involving futures contracts and options, forward currency contracts, swap transactions and other financial contracts that settle by payment of cash are not deemed to be investments in commodities.
Investing in Real Estate
The Fund may not purchase or sell real estate, provided that this restriction does not prevent the Fund from investing in issuers which invest, deal, or otherwise engage in transactions in real estate or interests therein, or investing in securities that are secured by real estate or interests therein. The Fund may exercise its rights under agreements relating to such securities, including the right to enforce security interests and to hold real estate acquired by reason of such enforcement until that real estate can be liquidated in an orderly manner.
Borrowing Money and Issuing Senior Securities
The Fund may borrow money, directly or indirectly, and issue senior securities to the maximum extent permitted under the 1940 Act, any rule or order thereunder, or any SEC staff interpretation thereof.
Lending
The Fund may not make loans, provided that this restriction does not prevent the Fund from purchasing debt obligations, entering into repurchase agreements, lending its assets to broker/dealers or institutional investors and investing in loans, including assignments and participation interests.
The above limitations cannot be changed unless authorized by the Board and by the “vote of a majority of the Fund’s outstanding voting securities,” as defined by the 1940 Act. The following limitations, however, may be changed by the Board without shareholder approval. Shareholders will be notified before any material change in these limitations becomes effective.
Illiquid Securities
The Fund will not purchase securities for which there is no readily available market, or enter into repurchase agreements or purchase time deposits that the Fund cannot dispose of within seven days, if immediately after and as a result, the value of such securities would exceed, in the aggregate, 15% of the Fund’s net assets.
Purchases on Margin
The Fund will not purchase securities on margin, provided that the Fund may obtain short-term credits necessary for the clearance of purchases and sales of securities, and further provided that the Fund may make margin deposits in connection with its use of financial options and futures, forward and spot currency contracts, swap transactions and other financial contracts or derivatives instruments.
Pledging Assets
The Fund will not mortgage, pledge or hypothecate any of its assets, provided that this shall not apply to the transfer of securities in connection with any permissible borrowing or to collateral arrangements in connection with permissible activities.
Restricted Securities
The Fund may invest in securities subject to restrictions or resale under the Securities Act of 1933.
Additional Information
In applying the Fund’s commodities restriction, investments in transactions involving futures contracts and options, forward currency contracts, swap transactions and other financial contracts that settle by payment of cash are not deemed to be investments in commodities.
In applying the Fund’s concentration limitation, investments in certain industrial development bonds funded by activities in a single industry will be deemed to constitute investment in an industry. In addition: (a) utility companies will be divided according to their services, for example, gas, gas transmission, electric and telephone will each be considered a separate industry; (b) financial service companies will be classified according to end users of their services, for example, automobile finance, bank finance and diversified finance will each be considered a separate industry; and (c) asset-backed securities will be classified according to the underlying assets securing such securities. To conform to the current view of the SEC staff that only domestic bank instruments may be excluded from industry concentration limitations, the Fund will not exclude foreign bank instruments from industry concentration tests as long as the policy of the SEC remains in effect. The Fund will consider concentration to be the investment of more than 25% of the value of its total assets in any one industry.
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For purposes of the above limitations, the Fund considers certificates of deposit and demand and time deposits issued by a U.S. branch of a domestic bank or savings association having capital, surplus and undivided profits in excess of $100,000,000 at the time of investment to be “cash items.”
Except with respect to borrowing money, if a percentage limitation is adhered to at the time of investment, a later increase or decrease in percentage resulting from any change in value or net assets will not result in a violation of such limitation.
As a matter of non-fundamental policy, for purposes of the illiquid securities policy, illiquid securities are securities that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
What Do Shares Cost?
Determining Market Value of Securities
A Share’s net asset value (NAV) is determined as of the end of regular trading on the New York Stock Exchange (NYSE) (normally 4:00 p.m. Eastern time) each day the NYSE is open. The Fund calculates the NAV of each class by valuing the assets allocated to the Share’s class, subtracting the liabilities allocated to each class and dividing the balance by the number of Shares of the class outstanding. The NAV for each class of Shares may differ due to the level of expenses allocated to each class as well as a result of the variance between the amount of accrued investment income and capital gains or losses allocated to each class and the amount actually distributed to shareholders of each class. The NAV is calculated to the nearest whole cent per Share.
In calculating its NAV, the Fund generally values investments as follows:
■ Equity securities listed on a U.S. securities exchange or traded through the U.S. national market system are valued at their last reported sale price or official closing price in their principal exchange or market. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers.
■ Other equity securities traded primarily in the United States are valued based upon the mean of closing bid-and-asked quotations from one or more dealers.
■ Equity securities traded primarily through securities exchanges and regulated market systems outside the United States are valued at their last reported sale price or official closing price in their principal exchange or market. These prices may be adjusted for significant events occurring after the closing of such exchanges or market systems as described below. If a price is not readily available, such equity securities are valued based upon the mean of closing bid and asked quotations from one or more dealers.
■ Fixed-income securities are fair valued using price evaluations provided by a pricing service approved by the Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such fixed-income securities are fair valued based upon price evaluations from one or more dealers.
■ Futures contracts listed on exchanges are valued at their reported settlement price. Option contracts listed on exchanges are valued based upon the mean of closing bid and asked quotations reported by the exchange or from one or more futures commission merchants.
■ OTC derivative contracts are fair valued using price evaluations provided by a pricing service approved by the Board. The methods used by pricing services to determine such price evaluations are described below. If a price evaluation from a pricing service is not readily available, such derivative contracts may be fair valued based upon price evaluations from one or more dealers or using a recognized pricing model for the contract.
■ Shares of other mutual funds or non-exchange-traded investment companies are valued based upon their reported NAVs. The prospectuses for these mutual funds explain the circumstances under which they will use fair value pricing and the effects of using fair value pricing.
If any price, quotation, price evaluation or other pricing source is not readily available when the NAV is calculated, if the Fund cannot obtain price evaluations from a pricing service or from more than one dealer for an investment within a reasonable period of time as set forth in the Fund’s valuation policies and procedures, or if information furnished by a pricing service, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the Fund will use the fair value of the investment determined in accordance with the procedures described below. There can be no assurance that the Fund could purchase or sell an investment at the price used to calculate the Fund’s NAV. The Fund will not use a pricing service or dealer who is an affiliated person of the Adviser to value investments.
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Noninvestment assets and liabilities are valued in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The NAV calculation includes expenses, dividend income, interest income, other income and realized and unrealized investment gains and losses through the date of the calculation. Changes in holdings of investments and in the number of outstanding Shares are included in the calculation not later than the first business day following such change. Any assets or liabilities denominated in foreign currencies are converted into U.S. dollars using an exchange rate obtained from one or more currency dealers.
The Fund follows procedures that are common in the mutual fund industry regarding errors made in the calculation of its NAV. This means that, generally, the Fund will not correct errors of less than one cent per Share or errors that did not result in net dilution to the Fund.
Fair Valuation and Significant Events Procedures
The Board has ultimate responsibility for determining the fair value of investments for which market quotations are not readily available. The Board has appointed a Valuation Committee comprised of officers of the Fund, the Adviser and certain of the Adviser’s affiliated companies to assist in determining fair value and in overseeing the calculation of the NAV. The Board has also authorized the use of pricing services recommended by the Valuation Committee to provide price evaluations of the current fair value of certain investments for purposes of calculating the NAV.
Pricing Service Valuations. Based on the recommendations of the Valuation Committee, the Board has authorized the Fund, subject to Board oversight, to use pricing services that provide daily fair value evaluations of the current value of certain investments, primarily fixed-income securities and OTC derivatives contracts. Different pricing services may provide different price evaluations for the same security because of differences in their methods of evaluating market values. Factors considered by pricing services in evaluating an investment include the yields or prices of investments of comparable quality, coupon, maturity, call rights and other potential prepayments, terms and type, reported transactions, indications as to values from dealers and general market conditions. A pricing service may find it more difficult to apply these and other factors to relatively illiquid or volatile investments, which may result in less frequent or more significant changes in the price evaluations of these investments. If a pricing service determines that it does not have sufficient information to use its standard methodology, it may evaluate an investment based on the present value of what investors can reasonably expect to receive from the issuer’s operations or liquidation.
Special valuation considerations may apply with respect to the Fund’s “odd-lot” positions, if any, as the Fund may receive lower prices when it sells such positions than it would receive for sales of institutional round lot positions. Typically, these securities are valued assuming orderly transactions of institutional round lot sizes, but the Fund may hold or, from time to time, transact in such securities in smaller, odd lot sizes.
The Valuation Committee engages in oversight activities with respect to the Fund’s pricing services, which includes, among other things, monitoring significant or unusual price fluctuations above predetermined tolerance levels from the prior day, back-testing of pricing services’ prices against actual sale transactions, conducting periodic due diligence meetings and reviews, and periodically reviewing the inputs, assumptions and methodologies used by these pricing services. If information furnished by a pricing service is not readily available or, in the opinion of the Valuation Committee, is deemed not representative of the fair value of such security, the security will be fair valued by the Valuation Committee in accordance with procedures established by the Trustees as discussed below in “Fair Valuation Procedures.”
Some pricing services provide a single price evaluation reflecting the bid-side of the market for an investment (a “bid” evaluation). Other pricing services offer both bid evaluations and price evaluations indicative of a price between the prices bid and asked for the investment (a “mid” evaluation). The Fund normally uses bid evaluations for any U.S. Treasury and Agency securities, mortgage-backed securities and municipal securities. The Fund normally uses mid evaluations for any other types of fixed-income securities and any OTC derivative contracts.
Fair Valuation Procedures. The Board has established procedures for determining the fair value of investments for which price evaluations from pricing services or dealers and market quotations are not readily available. The procedures define an investment’s “fair value” as the price that the Fund might reasonably expect to receive upon its current sale. The procedures assume that any sale would be made to a willing buyer in the ordinary course of trading. The procedures require consideration of factors that vary based on the type of investment and the information available. Factors that may be considered in determining an investment’s fair value include: (1) the last reported price at which the investment was traded; (2) information provided by dealers or investment analysts regarding the investment or the issuer; (3) changes in financial conditions and business prospects disclosed in the issuer’s financial statements and other reports; (4) publicly announced transactions (such as tender offers and mergers) involving the issuer; (5) comparisons to other investments or to financial indices that are correlated to the investment; (6) with respect to fixed-income investments, changes in market yields and spreads; (7) with respect to investments that have been suspended from trading, the circumstances leading to the suspension; and (8) other factors that might affect the investment’s value.
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The Valuation Committee is responsible for the day-to-day implementation of these procedures subject to Board oversight. The Valuation Committee may also authorize the use of a financial valuation model to determine the fair value of a specific type of investment. The Board periodically reviews and approves the fair valuations made by the Valuation Committee and any changes made to the procedures.
Using fair value to price investments may result in a value that is different from an investment’s most recent closing price and from the prices used by other mutual funds to calculate their NAVs. The application of the fair value procedures to an investment represent a good faith determination of an investment’s fair value. There can be no assurance that the Fund could obtain the fair value assigned to an investment if it sold the investment at approximately the time at which the Fund determines its NAV per share, and the actual value could be materially different.
Significant Events. The Board has adopted procedures requiring an investment to be priced at its fair value whenever the Adviser determines that a significant event affecting the value of the investment has occurred between the time as of which the price of the investment would otherwise be determined and the time as of which the NAV is computed. An event is considered significant if there is both an affirmative expectation that the investment’s value will change in response to the event and a reasonable basis for quantifying the resulting change in value. Examples of significant events that may occur after the close of the principal market on which a security is traded, or the time of a price evaluation provided by a pricing service or a dealer, include:
■ With respect to securities traded principally in foreign markets, significant trends in U.S. equity markets or in the trading of foreign securities index futures contracts;
■ Political or other developments affecting the economy or markets in which an issuer conducts its operations or its securities are traded; and
■ Announcements concerning matters such as acquisitions, recapitalizations or litigation developments, or a natural disaster affecting the issuer’s operations or regulatory changes or market developments affecting the issuer’s industry.
The Board has adopted procedures whereby the Valuation Committee uses a pricing service to provide factors to update the fair value of equity securities traded principally in foreign markets from the time of the close of their respective foreign stock exchanges to the pricing time of the Fund. The pricing service uses models that correlate changes between the closing and opening price of equity securities traded primarily in non-U.S. markets to changes in prices in U.S.-traded securities and derivative contracts. The pricing service seeks to employ the model that provides the most significant correlation based on a periodic review of the results. The model uses the correlation to adjust the reported closing price of a foreign equity security based on information available up to the close of the NYSE.
For other significant events, the Fund may seek to obtain more current quotations or price evaluations from alternative pricing sources. If a reliable alternative pricing source is not available, the fair value of the investment is determined using the methods discussed above in “Fair Valuation Procedures.” The Board has ultimate responsibility for any fair valuations made in response to a significant event.
How is the Fund Sold?
Under the Distributor’s Contract with the Fund, the Distributor (“Federated Securities Corp.”) offers Shares on a continuous, best-efforts basis.
Class B Shares are closed to new investments by new investors and existing shareholders (excluding reinvestment of dividends and capital gains). Reinvestment of dividends and capital gains will continue uninterrupted. Class B Shares of the Fund may be exchanged for Class B Shares of any other Federated Hermes fund. Please disregard any further references to purchases of Class B Shares with the exception of Class BShare exchanges.
Rule 12b-1 Plan (CLASS A SHARES, CLASS B SHARES, CLASS C SHARES)
As a compensation-type plan, the Rule 12b-1 Plan is designed to pay the Distributor for activities principally intended to result in the sale of Shares such as advertising and marketing of Shares (including printing and distributing prospectuses and sales literature to prospective shareholders and financial intermediaries) and providing incentives to financial intermediaries to sell Shares. The Plan is also designed to cover the cost of administrative services performed in conjunction with the sale of Shares, including, but not limited to, shareholder services, recordkeeping services and educational services, as well as the costs of implementing and operating the Plan. The Rule 12b-1 Plan allows the Distributor to contract with financial intermediaries to perform activities covered by the Plan. The Rule 12b-1 Plan is expected to benefit the Fund in a number of ways. For example, it is anticipated that the Plan will help the Fund attract and retain assets, thus providing cash for orderly portfolio management and Share redemptions and possibly helping to stabilize or reduce other operating expenses.
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In addition, the Plan is integral to the multiple class structure of the Fund, which promotes the sale of Shares by providing a range of options to investors. The Fund’s service providers that receive asset-based fees also benefit from stable or increasing Fund assets.
The Fund may compensate the Distributor more or less than its actual marketing expenses. In no event will the Fund pay for any expenses of the Distributor that exceed the maximum Rule 12b-1 Plan fee.
For some classes of shares, the maximum Rule 12b-1 Plan fee that can be paid in any one year may not be sufficient to cover the marketing-related expenses the Distributor has incurred. Therefore, it may take the Distributor a number of years to recoup these expenses.
In addition, in connection with the sale of Class B Shares and Class C Shares, Federated Hermes and its subsidiaries make advance commission payments to financial intermediaries and in return may receive Rule 12b-1 fees and contingent deferred sales loads from the Class B Shares and Class C Shares. Federated Hermes and its subsidiaries may benefit or sustain losses from such arrangements.
Regarding the Fund’s Class A shares, the Class A shares of the Fund currently do not accrue, pay or incur any Rule 12b-1 Plan fee, although the Board of Trustees has adopted a Plan that permits the Class A shares of the Fund to accrue, pay and incur a Rule 12b-1 Plan fee of up to a maximum amount of 0.05%, or some lesser amount as the Board of Trustees shall approve from time to time. The Class A shares of the Fund will not accrue, pay or incur such Rule 12b-1 Plan fees until such time as approved by the Fund’s Board of Trustees.
Additional Payments To Financial Intermediaries
The Distributor may pay out of its own resources amounts to certain financial intermediaries, including broker-dealers, banks, registered investment advisers, independent financial planners and retirement plan administrators. In some cases, such payments may be made by, or funded from the resources of, companies affiliated with the Distributor (including the Adviser). While Financial Industry Regulatory Authority, Inc. (FINRA) regulations limit the sales charges that you may bear, there are no limits with regard to the amounts that the Distributor may pay out of its own resources. In addition to the payments which are generally described herein and in the Prospectus, the financial intermediary also may receive payments under the Rule 12b-1 Plan and/or Service Fees. In connection with these payments, the financial intermediary may elevate the prominence or profile of the Fund and/or other Federated Hermes funds within the financial intermediary’s organization by, for example, placement on a list of preferred or recommended funds and/or granting the Distributor preferential or enhanced opportunities to promote the funds in various ways within the financial intermediary’s organization. The same financial intermediaries may receive payments under more than one or all categories. These payments assist in the Distributor’s efforts to support the sale of Shares. These payments are negotiated and may be based on such factors as: the number or value of Shares that the financial intermediary sells or may sell; the value of client assets invested; the level and types of services or support furnished by the financial intermediary; or the Fund’s and/or other Federated Hermes funds’ relationship with the financial intermediary. Not all financial intermediaries receive such payments and the amount of compensation may vary by intermediary. You should ask your financial intermediary for information about any payments it receives from the Distributor or the Federated Hermes funds and any services it provides, as well as the fees and/or commissions it charges.
The categories of additional payments are described below.
Supplemental Payments
The Distributor may make supplemental payments to certain financial intermediaries that are holders or dealers of record for accounts in one or more of the Federated Hermes funds. These payments may be based on such factors as: the number or value of Shares the financial intermediary sells or may sell; the value of client assets invested; or the type and nature of services or support furnished by the financial intermediary.
Processing Support Payments
The Distributor may make payments to certain financial intermediaries that sell Federated Hermes fund shares to help offset their costs associated with client account maintenance support, statement processing and transaction processing. The types of payments that the Distributor may make under this category include: payment of ticket charges on a per-transaction basis; payment of networking fees; and payment for ancillary services such as setting up funds on the financial intermediary’s mutual fund trading system.
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Retirement Plan Program Servicing Payments
The Distributor may make payments to certain financial intermediaries who sell Federated Hermes fund shares through retirement plan programs. A financial intermediary may perform retirement plan program services itself or may arrange with a third party to perform retirement plan program services. In addition to participant recordkeeping, reporting or transaction processing, retirement plan program services may include: services rendered to a plan in connection with fund/investment selection and monitoring; employee enrollment and education; plan balance rollover or separation; or other similar services.
Marketing Support Payments
From time to time, the Distributor, at its expense, may provide additional compensation to financial intermediaries that sell or arrange for the sale of Shares. Such compensation, provided by the Distributor, may include financial assistance to financial intermediaries that enable the Distributor to participate in or present at conferences or seminars, sales or training programs for invited registered representatives and other employees, client entertainment, client and investor events and other financial intermediary-sponsored events. The Distributor may also provide additional compensation to financial intermediaries for services rendered in connection with technology and programming set-up, platform development and maintenance or similar services and for the provision of sales-related data to the Adviser and/orits affiliates.
The Distributor also may hold or sponsor, at its expense, sales events, conferences and programs for employees or associated persons of financial intermediaries and may pay the travel and lodging expenses of attendees. The Distributor also may provide, at its expense, meals and entertainment in conjunction with meetings with financial intermediaries. Other compensation may be offered to the extent not prohibited by applicable federal or state law or regulations, or the rules of any self-regulatory agency, such as FINRA. These payments may vary depending on the nature of the event or the relationship.
For the year ended December 31, 2019, the following is a list of FINRA member firms that received additional payments from the Distributor or an affiliate. Additional payments may also be made to certain other financial intermediaries that are not FINRA member firms that sell Federated Hermes fund shares or provide services to the Federated Hermes funds and shareholders. These firms are not included in this list. Any additions, modifications or deletions to the member firms identified in this list that have occurred since December 31,2019, are not reflected. You should ask your financial intermediary for information about any additional payments it receives from the Distributor.
Access Point, LLC
ADP Broker-Dealer, Inc.
American Enterprise Investment Services Inc.
American Portfolios Advisors Inc.
Ascensus Broker Dealer Services LLC
Avantax Investment Services, Inc.
Banc of America Investment Services, Inc.
BB&T Securities, LLC
BBVA Securities Inc.
BMO Harris Financial Advisors, Inc.
Broadridge Business Process Outsourcing, LLC
Brown Brothers Harriman & Company
Cadaret, Grant & Co., Inc.
Caitlin John, LLC
Calton & Associates, Inc.
Cambridge Financial Group, Inc.
Castle Rock Wealth Management, LLC
CBIZ Financial Solutions, Inc.
Cetera Advisor Networks LLC
Cetera Advisors LLC
Cetera Financial Specialists LLC
Cetera Investment Advisers LLC
Cetera Investment Services LLC
Charles Schwab & Company, Inc.
Citigroup Global Markets Inc.
Citizens Securities, Inc.
Comerica Securities, Inc.
Commonwealth Financial Network
Concord Wealth Partners
CVAGS, Inc.
D.A. Davidson & Co.
Davenport & Company LLC
David Lerner Associates, Inc.
Deutsche Bank Securities Inc.
E*Trade Securities LLC
Edward D. Jones & Co., LP
Emerald Advisors, LLC
Envestnet Asset Management, Inc.
Epic Advisors Inc.
ESL Investment Services, LLC
FBL Marketing Services, LLC
Fidelity Investments Institutional Operations Company, Inc. (FIIOC)
Fiducia Group, LLC
Fieldpoint Private Securities, LLC
Fifth Third Securities, Inc.
FIS Brokerage & Securities Services LLC
Folger Nolan Fleming Douglas Incorporated
Franklin/Templeton Distributors, Inc.
FSC Securities Corporation
Gitterman Wealth Management LLC
Goldman Sachs & Co. LLC
Great-West Life & Annuity Insurance Company
GWFS Equities, Inc.
Hancock Whitney Investment Services, Inc.
Hefren-Tillotson Inc.
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Henderson Global Investors Limited
HighTower Securities, LLC
Hilltop Securities Inc.
The Huntington Investment Company
Independent Financial Group, LLC
Industrial and Commercial Bank of China
Financial Services LLC
Infinex Investments, Inc.
Institutional Cash Distributors, LLC
INTL FCStone Financial Inc.
J.J.B. Hilliard, W.L. Lyons, LLC
J.P. Morgan Securities LLC
Janney Montgomery Scott LLC
Kestra Investment Services, LLC
Key Investment Services, LLC
KeyBanc Capital Markets, Inc.
KMS Financial Services, Inc.
Laidlaw Wealth Management LLC
Lincoln Financial Securities Corporation
Lincoln Investment Planning, LLC
LPL Financial LLC
M Holdings Securities, Inc.
M&T Securities Inc.
Materetsky Financial Group
Mercer Global Advisors Inc.
Merrill Lynch, Pierce, Fenner and Smith Incorporated
Mid Atlantic Capital Corp.
MML Investors Services, LLC
Morgan Stanley Smith Barney LLC
National Financial Services LLC
Nationwide Investment Services Corporation
NBC Securities, Inc.
Newport Group, Inc.
Northwestern Mutual Investment Services, LLC
NYLIFE Distributors LLC
NYLIFE Securities LLC
Oneamerica Securities, Inc.
Open Range Financial Group, LLC
Oppenheimer & Company, Inc.
Paychex Securities Corp.
Pensionmark Financial Group, LLC
People’s Securities, Inc.
Pershing LLC
Piper Jaffray & Co.
Pitcairn Trust Company
Planmember Securities Corporation
PNC Capital Markets, LLC
PNC Investments LLC
Principal Securities, Inc.
Private Client Services, LLC
Procyon Private Wealth Partners, LLC
Proequities, Inc.
Prudential Investment Management Services, LLC
Purshe Kaplan Sterling Investments
Raymond James & Associates, Inc.
Raymond James Financial Services, Inc.
RBC Capital Markets, LLC
Regal Investment Advisors LLC
Resources Investment Advisors, Inc.
Robert W. Baird & Co. Inc.
Royal Alliance Associates Inc.
SA Stone Wealth Management Inc.
SagePoint Financial, Inc.
Sageview Advisory Group, LLC
Securian Financial Services, Inc.
Securities America, Inc.
Securities Service Network, Inc.
Security Distributors LLC
Sentry Advisors, LLC
Sigma Financial Corporation
Spire Securities LLC
State Street Global Markets, LLC
Stephens Inc.
Stifel, Nicolaus & Company, Incorporated
Strategic Benefits Consultants, Inc.
Summit Financial Group, Inc.
Suntrust Investment Services, Inc.
Suntrust Robinson Humphrey, Inc.
TD Ameritrade, Inc.
Thrivent Investment Management, Inc.
TIAA CREF Individual & Institutional Services LLC
Towerpoint Wealth, LLC
Transamerica Financial Advisors, Inc.
Triad Advisors, LLC
U.S. Bancorp Investments, Inc.
UBS Financial Services Inc.
UBS Securities LLC
United Planners Financial Services of America
Valic Financial Advisors, Inc.
Valor Financial Securities LLC
The Vanguard Group, Inc.
Vanguard Marketing Corporation
Vining-Sparks IBG, Limited Partnership
Vision Financial Markets, LLC
Voya Financial Advisors, Inc.
Voya Financial Partners, LLC
Voya Retirement Advisors, LLC
The Wealth Enhancement Group, Inc.
Wells Fargo Clearing Services LLC
Wells Fargo Securities, LLC
Wintrust Investments, LLC
Woloshin Investment Management LLC
Woodbury Financial Services, Inc.
World Equity Group, Inc.
XML Financial, LLC
 
21
UNDERWRITING COMMISSIONS
The following chart reflects the total front-end sales charges and/or contingent deferred sales charges paid in connection with the sale of Fund Shares and the amount retained by the Distributor for the last three fiscal years ended October 31:  
 
2020
2019
2018
 
Total Sales
Charges
Amount
Retained
Total Sales
Charges
Amount
Retained
Total Sales
Charges
Amount
Retained
Class A Shares
$ 742,626
$ 104,353
$ 969,308
$ 133,038
$ 1,445,620
$ 165,078
Class B Shares
$ 59,898
$ 59,898
$ 45,360
$ 45,360
$ 61,014
$ 61,014
Class C Shares
$ 22,058
$ 22,058
$ 28,435
$ 28,435
$ 41,535
$ 41,535
Class F Shares
$ 209,608
$ 60,029
$ 263,417
$ 71,170
$ 468,623
$ 100,784
Purchases In-Kind
You may contact the Distributor to request a purchase of Shares using securities you own. The Fund reserves the right to determine whether to accept your securities and the minimum market value to accept. The Fund will value your securities in the same manner as it values its assets. An in-kind purchase may be treated as a sale of your securities for federal tax purposes; please consult your tax adviser regarding potential tax liability.
Redemption In-Kind
Although the Fund generally intends to pay Share redemptions in cash, it reserves the right, on its own initiative or in response to a shareholder request, to pay the redemption price in whole or in part by a distribution of the Fund’s portfolio securities.
Because the Fund has elected to be governed by Rule 18f-1 under the 1940 Act, the Fund is obligated to pay Share redemptions to any one shareholder in cash only up to the lesser of $250,000 or 1% of the net assets represented by such Share class during any 90-day period.
Any Share redemption payment greater than this amount will also be in cash unless the Fund elects to pay all or a portion of the remainder of the redemption in portfolio securities, valued in the same way as the Fund determines its NAV.
Redemption in-kind is not as liquid as a cash redemption. Shareholders receiving the portfolio securities could have difficulty selling them, may incur related transaction costs and would be subject to risks of fluctuations in the securities’ values prior to sale.
Massachusetts Partnership Law
Under certain circumstances, shareholders may be held personally liable as partners under Massachusetts law for obligations of the Trust. To protect its shareholders, the Trust has filed legal documents with Massachusetts that expressly disclaim the liability of its shareholders for acts or obligations of the Trust.
In the unlikely event a shareholder is held personally liable for the Trust’s obligations, the Trust is required by the Declaration of Trust to use its property to protect or compensate the shareholder. On request, the Trust will defend any claim made and pay any judgment against a shareholder for any act or obligation of the Trust. Therefore, financial loss resulting from liability as a shareholder will occur only if the Trust itself cannot meet its obligations to indemnify shareholders and pay judgments against them.
Account and Share Information
Voting Rights
Each Share of the Fund gives the shareholder one vote in Trustee elections and other matters submitted to shareholders for vote.
All Shares of the Trust have equal voting rights, except that in matters affecting only a particular Fund or class, only Shares of that Fund or class are entitled to vote.
Trustees may be removed by the Board or by shareholders at a special meeting. A special meeting of shareholders will be called by the Board upon the written request of shareholders who own at least 10% of the Trust’s outstanding Shares of all series entitled to vote.
22
As of December 8, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class A Shares:Edward D.Jones & Co.,Saint Louis, MO, owned approximately 21,123,765 Shares (47.63%); Wells Fargo Clearing Services LLC, St. Louis, MO, owned approximately 3,852,997 Shares (8.68%); MLPF&S,Jacksonville, FL, owned approximately 3,772,100 Shares (8.50%); National Financial Services LLCNew York, NY, owned approximately 3,054,507 Shares (6.88%); and Pershing LLC, Jersey City, NJ, owned approximately 2,434,948 Shares (5.49%).
As of December 8, 2020, the following shareholders owned or record, beneficially, or both, 5% or more of outstanding Class B Shares: American Enterprise Inv Svc.,Minneapolis, MN, owned approximately 182,704 Shares (24.96%); MLPF&S, Jacksonville, FL, owned approximately 100,147 Shares (13.68%); National Financial Services LLC, New York, NY owned approximately 96,325 Shares (13.16%); Pershing LLC,Jersey City, NJ, owned approximately 84,289 Shares (11.51%); Wells Fargo Clearing Services, LLC,St. Louis, MO, owned approximately 70,764 Shares (9.67%); and Charles Schwab & Co. Inc.,San Francisco, CA, owned approximately 68,580 Shares (9.37%).
As of December 8, 2020, the following shareholders owned or record, beneficially, or both, 5% or more of outstanding Class C Shares: Wells Fargo Clearing Services, LLC,St. Louis, MO., owned approximately 3,442,484 Shares (21.30%); Raymond James,St. Petersburg, FL owned approximately 2,102,992 Shares (13.01%); American Enterprise Inv. Svc.,Minneapolis, MN, owned approximately 1,962,840 Shares (12.14%); Edward D. Jones & Co.,Saint Louis, MO, owned approximately 1,621,867 Shares (10.03%); MLPF&S, Jacksonville, FL, owned approximately 1,324,782 Shares (8.20%); and Pershing LLC, Jersey City, NJ, owned approximately 1,225,169 Shares (7.58%).
As of December 8, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Class F Shares:Edward D.Jones & Co.,Saint Louis, MO, owned approximately 11,916,157 Shares (65.42%) and Pershing LLC,Jersey City, NJ, owned approximately 3,555,543 Shares (19.52%).
As of December 8, 2020, the following shareholders owned of record, beneficially, or both, 5% or more of outstanding Institutional Shares: Raymond James,St. Petersburg, FL, owned approximately 5,258,490 Shares (18.62%); Wells Fargo Clearing Services LLC, St. Louis, MO owned approximately 3,794,292 Shares (13.44%); American Enterprise Inv. Svc., Minneapolis, MN, owned approximately 3,757,241 Shares (13.31%); LPL Financial,San Diego, CA, owned approximately 2,415,790 Shares (8.55%); Edward D.Jones & Co.,Saint Louis, MO, owned approximately 2,138,352 Shares (7.57%); Pershing LLC, Jersey City, NJ, owned approximately 1,957,836 Shares (6.93%) Merrill Lynch Pierce Fenner & Smith, Jacksonville, FL, owned approximately 1,683,113 Shares (5.96%); and National Financial Services LLC, Jersey City, NJ, owned approximately 1,652,091 Shares (5.85%).
Shareholders owning 25% or more of outstanding Shares may be in control and be able to affect the outcome of certain matters presented for a vote of shareholders.
Edward Jones is trade name of Edward D. Jones & Co., L.P. which is organized in the state of Missouri.
Tax Information
Federal Income Tax
The Fund intends to meet requirements of Subchapter M of the Internal Revenue Code (the “Code”) applicable to regulated investment companies. If these requirements are not met, it will not receive special tax treatment and will be subject to federal corporate income tax.
The Fund will be treated as a single, separate entity for federal income tax purposes so that income earned and capital gains and losses realized by the Trust’s other portfolios will be separate from those realized by the Fund.
The Fund is entitled to a loss carryforward, which may reduce the taxable income or gain that the Fund would realize, and to which the shareholder would be subject, in the future.
Tax Basis Information
The Fund’s Transfer Agent is required to provide you with the cost basis information on the sale of any of your Shares in the Fund, subject to certain exceptions.
Foreign Investments
If the Fund purchases foreign securities, its investment income may be subject to foreign withholding or other taxes that could reduce the return on these securities. Tax treaties between the United States and foreign countries, however, may reduce or eliminate the amount of foreign taxes to which the Fund would be subject. The effective rate of foreign tax cannot be predicted since the amount of Fund assets to be invested within various countries is uncertain. However, the Fund intends to operate so as to qualify for treaty-reduced tax rates when applicable.
23
Distributions from the Fund may be based on estimates of book income for the year. Book income generally consists solely of the income generated by the securities in the portfolio, whereas tax-basis income includes, in addition, gains or losses attributable to currency fluctuation. Due to differences in the book and tax treatment of fixed-income securities denominated in foreign currencies, it is difficult to project currency effects on an interim basis. Therefore, to the extent that currency fluctuations cannot be anticipated, a portion of distributions to shareholders could later be designated as a return of capital, rather than income, for income tax purposes, which may be of particular concern to certain trusts.
Certain foreign corporations may qualify as Passive Foreign Investment Companies (PFIC). There are special rules prescribing the tax treatment of such an investment by the Fund, which could subject the Fund to federal income tax.
If more than 50% of the value of the Fund’s assets at the end of the tax year is represented by stock or securities of foreign corporations, the Fund will qualify for certain Code provisions that allow its shareholders to claim a foreign tax credit or deduction on their U.S. income tax returns. The Code may limit a shareholder’s ability to claim a foreign tax credit. Shareholders who elect to deduct their portion of the Fund’s foreign taxes rather than take the foreign tax credit must itemize deductions on their income tax returns.
Who Manages and Provides Services to the Fund?
Board of Trustees
The Board of Trustees is responsible for managing the Trust’s business affairs and for exercising all the Trust’s powers except those reserved for the shareholders. The following tables give information about each Trustee and the senior officers of the Fund. Where required, the tables separately list Trustees who are “interested persons” of the Fund (i.e., “Interested” Trustees) and those who are not (i.e., “Independent” Trustees). Unless otherwise noted, the address of each person listed is 1001 Liberty Avenue, Pittsburgh, PA 15222-3779. The address of all Independent Trustees listed is 4000 Ericsson Drive, Warrendale, PA 15086-7561; Attention: Mutual Fund Board. As of December 31, 2019, the Trust comprised seven portfolios, and the Federated Hermes Complex consisted of 41 investment companies (comprising 135 portfolios). Unless otherwise noted, each Officer is elected annually. Unless otherwise noted, each Trustee oversees all portfolios in the Federated Hermes Complex and serves for an indefinite term.
As of December 8, 2020, the Fund’s Board and Officers as a group owned less than 1% of the Fund’s outstanding Shares.
qualifications of Independent Trustees
Individual Trustee qualifications are noted in the “Independent Trustees Background and Compensation” chart. In addition, the following characteristics are among those that were considered for each existing Trustee and will be considered for any Nominee Trustee.
■ Outstanding skills in disciplines deemed by the Independent Trustees to be particularly relevant to the role of Independent Trustee and to the Federated Hermes funds, including legal, accounting, business management, the financial industry generally and the investment industry particularly.
■ Desire and availability to serve for a substantial period of time, taking into account the Board’s current mandatory retirement age of 75 years.
■ No conflicts which would interfere with qualifying as independent.
■ Appropriate interpersonal skills to work effectively with other Independent Trustees.
■ Understanding and appreciation of the important role occupied by Independent Trustees in the regulatory structure governing regulated investment companies.
■  Diversity of background.
24
Interested Trustees Background and Compensation  
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) for Past Five Years,
Other Directorships Held and Previous Position(s)
Aggregate
Compensation
From Fund
(past fiscal year)
Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
J. Christopher Donahue*
Birth Date: April 11, 1949
President and Trustee
Indefinite Term
Began serving: January 2000
Principal Occupations: Principal Executive Officer and President of certain
of the Funds in the Federated Hermes Complex; Director or Trustee of the
Funds in the Federated Hermes Complex; President, Chief Executive
Officer and Director, Federated Hermes, Inc.; Chairman and Trustee,
Federated Investment Management Company; Trustee, Federated
Investment Counseling; Chairman and Director, Federated Global
Investment Management Corp.; Chairman and Trustee, Federated Equity
Management Company of Pennsylvania; Trustee, Federated Shareholder
Services Company; Director, Federated Services Company.
Previous Positions: President, Federated Investment Counseling; President
and Chief Executive Officer, Federated Investment Management Company,
Federated Global Investment Management Corp. and Passport
Research, Ltd.; Chairman, Passport Research, Ltd.
$0
$0
John B. Fisher*
Birth Date: May 16, 1956
Trustee
Indefinite Term
Began serving: May 2016
Principal Occupations: Principal Executive Officer and President of certain
of the Funds in the Federated Hermes Complex; Director or Trustee of
certain of the Funds in the Federated Hermes Complex; Vice President,
Federated Hermes, Inc.; President, Director/Trustee and CEO, Federated
Advisory Services Company, Federated Equity Management Company of
Pennsylvania, Federated Global Investment Management Corp., Federated
Investment Counseling, Federated Investment Management Company;
President of some of the Funds in the Federated Hermes Complex and
Director, Federated Investors Trust Company.
Previous Positions: President and Director of the Institutional Sales
Division of Federated Securities Corp.; President and Director of Federated
Investment Counseling; President and CEO of Passport Research, Ltd.;
Director, Edgewood Securities Corp.; Director, Federated Services
Company; Director, Federated Hermes, Inc.; Chairman and Director,
Southpointe Distribution Services, Inc. and President, Technology,
Federated Services Company.
$0
$0
*
Reasons for “interested” status: J. Christopher Donahue and John B. Fisher are interested due to their beneficial ownership of shares of Federated Hermes, Inc. and due to positions they hold with Federated Hermes, Inc. and its subsidiaries.
Independent Trustees Background, Qualifications and Compensation  
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications
Aggregate
Compensation
From Fund
(past fiscal year)
Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
John T. Collins
Birth Date: January 24, 1947
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Complex; formerly, Chairman and CEO, The Collins Group, Inc. (a private
equity firm) (Retired).
Other Directorships Held: Chairman of the Board of Directors, Director,
and Chairman of the Compensation Committee, KLX Energy Services
Holdings, Inc. (oilfield services); former Director of KLX Corp (aerospace).
Qualifications: Mr. Collins has served in several business and financial
management roles and directorship positions throughout his career.
Mr. Collins previously served as Chairman and CEO of The Collins Group,
Inc. (a private equity firm) and as a Director of KLX Corp. Mr. Collins serves
as Chairman Emeriti, Bentley University. Mr. Collins previously served as
Director and Audit Committee Member, Bank of America Corp.; Director,
FleetBoston Financial Corp.; and Director, Beth Israel Deaconess Medical
Center (Harvard University Affiliate Hospital).
$1,236.96
$286,000
25
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications
Aggregate
Compensation
From Fund
(past fiscal year)
Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
G. Thomas Hough
Birth Date: February 28, 1955
Trustee

Indefinite Term
Began serving: August 2015
Principal Occupations: Director or Trustee, Chair of the Audit Committee
of the Federated Hermes Complex; formerly, Vice Chair, Ernst & Young LLP
(public accounting firm) (Retired).
Other Directorships Held: Director, Chair of the Audit Committee,
Equifax, Inc.; Director, Member of the Audit Committee, Haverty Furniture
Companies, Inc.; formerly, Director, Member of Governance and
Compensation Committees, Publix Super Markets, Inc.
Qualifications: Mr. Hough has served in accounting, business management
and directorship positions throughout his career. Mr. Hough most recently
held the position of Americas Vice Chair of Assurance with Ernst &
Young LLP (public accounting firm). Mr. Hough serves on the President’s
Cabinet and Business School Board of Visitors for the University of
Alabama. Mr. Hough previously served on the Business School Board of
Visitors for Wake Forest University, and he previously served as an
Executive Committee member of the United States Golf Association.
$1,344.57
$286,000
Maureen Lally-Green
Birth Date: July 5, 1949
Trustee

Indefinite Term
Began serving: August 2009
Principal Occupations: Director or Trustee of the Federated Hermes
Complex; Adjunct Professor of Law, Duquesne University School of Law;
formerly, Dean of the Duquesne University School of Law and Professor of
Law and Interim Dean of the Duquesne University School of Law; formerly,
Associate General Secretary and Director, Office of Church Relations,
Diocese of Pittsburgh.
Other Directorships Held: Director, CNX Resources Corporation (formerly
known as CONSOL Energy Inc.).
Qualifications: Judge Lally-Green has served in various legal and business
roles and directorship positions throughout her career. Judge Lally-Green
previously held the position of Dean of the School of Law of Duquesne
University (as well as Interim Dean). Judge Lally-Green previously served as
a member of the Superior Court of Pennsylvania and as a Professor of Law,
Duquesne University School of Law. Judge Lally-Green was appointed by
the Supreme Court of Pennsylvania to serve on the Supreme Court’s Board
of Continuing Judicial Education and the Supreme Court’s Appellate Court
Procedural Rules Committee. Judge Lally-Green also currently holds the
positions on not for profit or for profit boards of directors as follows:
Director and Chair, UPMC Mercy Hospital; Director and Vice Chair, Our
Campaign for the Church Alive!, Inc.; Regent, Saint Vincent Seminary;
Member, Pennsylvania State Board of Education (public); Director, Catholic
Charities, Pittsburgh; and Director, CNX Resources Corporation (formerly
known as CONSOL Energy Inc.). Judge Lally-Green has held the positions
of: Director, Auberle; Director, Epilepsy Foundation of Western and Central
Pennsylvania; Director, Ireland Institute of Pittsburgh; Director, Saint
Thomas More Society; Director and Chair, Catholic High Schools of the
Diocese of Pittsburgh, Inc.; Director, Pennsylvania Bar Institute; Director,
Saint Vincent College; and Director and Chair, North Catholic
High School, Inc.
$1,236.96
$286,000
Charles F. Mansfield, Jr.
Birth Date: April 10, 1945
Trustee

Indefinite Term
Began serving: November 1999
Principal Occupations: Director or Trustee of the Federated Hermes
Complex; Management Consultant and Author.
Other Directorships Held: None.
Qualifications: Mr. Mansfield has served as a Marine Corps officer and in
several banking, business management, educational roles and directorship
positions throughout his long career. He remains active as a
Management Consultant and Author.
$1,124.48
$260,000
26
Name
Birth Date
Positions Held with Trust
Date Service Began
Principal Occupation(s) and Other Directorships Held for
Past Five Years, Previous Position(s) and Qualifications
Aggregate
Compensation
From Fund
(past fiscal year)
Total Compensation
From Fund and
Federated Hermes Complex
(past calendar year)
Thomas M. O’Neill
Birth Date: June 14, 1951
Trustee

Indefinite Term
Began serving: August 2006
Principal Occupations: Director or Trustee of the Federated Hermes
Complex; Sole Proprietor, Navigator Management Company (investment
and strategic consulting).
Other Directorships Held: None.
Qualifications: Mr. O’Neill has served in several business, mutual fund and
financial management roles and directorship positions throughout his
career. Mr. O’Neill serves as Director, Medicines for Humanity and Director,
The Golisano Children’s Museum of Naples, Florida. Mr. O’Neill previously
served as Chief Executive Officer and President, Managing Director and
Chief Investment Officer, Fleet Investment Advisors; President and Chief
Executive Officer, Aeltus Investment Management, Inc.; General Partner,
Hellman, Jordan Management Co., Boston, MA; Chief Investment Officer,
The Putnam Companies, Boston, MA; Credit Analyst and Lending Officer,
Fleet Bank; Director and Consultant, EZE Castle Software (investment order
management software); and Director, Midway Pacific (lumber).
$1,280.70
$321,000
Madelyn A. Reilly
Birth Date: February 2, 1956
Trustee
Indefinite Term
Began serving: November 2020
Principal Occupations: Director or Trustee of the Federated Hermes
Complex; Senior Vice President for Legal Affairs, General Counsel and
Secretary of the Board of Trustees, Duquesne University.
Other Directorships Held: None.
Qualifications: Ms. Reilly has served in various business and legal
management roles throughout her career. Ms. Reilly previously served as
Director of Risk Management and Associate General Counsel, Duquesne
University. Prior to her work at Duquesne University, Ms. Reilly served as
Assistant General Counsel of Compliance and Enterprise Risk as well as
Senior Counsel of Environment, Health and Safety, PPG Industries.
Ms. Reilly also previously served as Chair of the Risk Management
Committee for Holy Ghost Preparatory School, Philadelphia and Secretary
and Chair of the Governance Committee, Oakland Catholic High School
Board of Trustees, Pittsburgh.
$0
$0
P. Jerome Richey
Birth Date: February 23, 1949
Trustee
Indefinite Term
Began serving: October 2013
Principal Occupations: Director or Trustee of the Federated Hermes
Complex; Management Consultant; Retired; formerly, Senior Vice
Chancellor and Chief Legal Officer, University of Pittsburgh and Executive
Vice President and Chief Legal Officer, CNX Resources Corporation
(formerly known as CONSOL Energy Inc.).
Other Directorships Held: None.

Qualifications: Mr. Richey has served in several business and legal
management roles and directorship positions throughout his career.
Mr. Richey most recently held the positions of Senior Vice Chancellor and
Chief Legal Officer, University of Pittsburgh. Mr. Richey previously served as
Chairman of the Board, Epilepsy Foundation of Western Pennsylvania and
Chairman of the Board, World Affairs Council of Pittsburgh. Mr. Richey
previously served as Chief Legal Officer and Executive Vice President, CNX
Resources Corporation (formerly known as CONSOL Energy Inc.) and Board
Member, Ethics Counsel and Shareholder, Buchanan Ingersoll & Rooney PC
(a law firm).
$1,124.48
$260,000
John S. Walsh
Birth Date: November 28, 1957
Trustee

Indefinite Term
Began serving: November 1999
Principal Occupations: Director or Trustee and Chair of the Board of
Directors or Trustees, of the Federated Hermes Complex; President and
Director, Heat Wagon, Inc. (manufacturer of construction temporary
heaters); President and Director, Manufacturers Products, Inc. (distributor
of portable construction heaters); President, Portable Heater Parts, a
division of Manufacturers Products, Inc.
Other Directorships Held: None.
Qualifications: Mr. Walsh has served in several business management roles
and directorship positions throughout his career. Mr. Walsh previously
served as Vice President, Walsh & Kelly, Inc. (paving contractors).
$1,492.11
$345,000
27
OFFICERS*  
Name
Birth Date
Address
Positions Held with Trust
Date Service Began
Principal Occupation(s) and Previous Position(s)
Lori A. Hensler
Birth Date: January 6, 1967
Treasurer
Officer since: April 2013
Principal Occupations: Principal Financial Officer and Treasurer of the Federated Hermes Complex; Senior Vice President,
Federated Administrative Services; Financial and Operations Principal for Federated Securities Corp.; and Assistant Treasurer,
Federated Investors Trust Company. Ms. Hensler has received the Certified Public Accountant designation.
Previous Positions: Controller of Federated Hermes, Inc.; Senior Vice President and Assistant Treasurer, Federated Investors
Management Company; Treasurer, Federated Investors Trust Company; Assistant Treasurer, Federated Administrative Services,
Federated Administrative Services, Inc., Federated Securities Corp., Edgewood Services, Inc., Federated Advisory Services
Company, Federated Equity Management Company of Pennsylvania, Federated Global Investment Management Corp.,
Federated Investment Counseling, Federated Investment Management Company, Passport Research, Ltd. and Federated MDTA,
LLC; Financial and Operations Principal for Federated Securities Corp., Edgewood Services, Inc. and Southpointe Distribution
Services, Inc.
Peter J. Germain
Birth Date: September 3, 1959
CHIEF LEGAL OFFICER,
SECRETARY and EXECUTIVE
VICE PRESIDENT
Officer since: January 2005
Principal Occupations: Mr. Germain is Chief Legal Officer, Secretary and Executive Vice President of the Federated Hermes
Complex. He is General Counsel, Chief Legal Officer, Secretary and Executive Vice President, Federated Hermes, Inc.; Trustee
and Senior Vice President, Federated Investors Management Company; Trustee and President, Federated Administrative
Services; Director and President, Federated Administrative Services, Inc.; Director and Vice President, Federated Securities
Corp.; Director and Secretary, Federated Private Asset Management, Inc.; Secretary, Federated Shareholder Services Company;
and Secretary, Retirement Plan Service Company of America. Mr. Germain joined Federated Hermes, Inc. in 1984 and is a
member of the Pennsylvania Bar Association.

Previous Positions: Deputy General Counsel, Special Counsel, Managing Director of Mutual Fund Services, Federated Hermes,
Inc.; Senior Vice President, Federated Services Company; and Senior Corporate Counsel, Federated Hermes, Inc.
Stephen Van Meter
Birth Date: June 5, 1975
CHIEF COMPLIANCE OFFICER
AND SENIOR VICE PRESIDENT
Officer since: July 2015
Principal Occupations: Senior Vice President and Chief Compliance Officer of the Federated Hermes Complex; Vice President
and Chief Compliance Officer of Federated Hermes, Inc. and Chief Compliance Officer of certain of its subsidiaries.
Mr. Van Meter joined Federated Hermes, Inc. in October 2011. He holds FINRA licenses under Series 3, 7, 24 and 66.
Previous Positions: Mr. Van Meter previously held the position of Compliance Operating Officer, Federated Hermes, Inc. Prior to
joining Federated Hermes, Inc., Mr. Van Meter served at the United States Securities and Exchange Commission in the positions
of Senior Counsel, Office of Chief Counsel, Division of Investment Management and Senior Counsel, Division of Enforcement.
Stephen F. Auth
Birth Date: September 13, 1956
101 Park Avenue
41st Floor
New York, NY 10178
CHIEF INVESTMENT OFFICER
Officer since: May 2004
Principal Occupations: Stephen F. Auth is Chief Investment Officer of various Funds in the Federated Hermes Complex;
Executive Vice President, Federated Investment Counseling, Federated Global Investment Management Corp. and Federated
Equity Management Company of Pennsylvania.
Previous Positions: Executive Vice President, Federated Investment Management Company and Passport Research, Ltd.
(investment advisory subsidiary of Federated); Senior Vice President, Global Portfolio Management Services Division; Senior Vice
President, Federated Investment Management Company and Passport Research, Ltd.; Senior Managing Director and Portfolio
Manager, Prudential Investments.
*
Officers do not receive any compensation from the Fund.
In addition, the Fund has appointed an Anti-Money Laundering Compliance Officer.
DIRECTOR/TRUSTEE EMERITUS PROGRAM
The Board has created a position of Director/Trustee Emeritus, whereby an incumbent Director/Trustee who has attained the age of 75 and completed a minimum of five years of service as a director/trustee, may, in the sole discretion of the Committee of Independent Directors/Trustees (“Committee”), be recommended to the full Board of Directors/Trustees of the Fund to serve as Director/Trustee Emeritus.
A Director/Trustee Emeritus that has been approved as such receives an annual fee in an amount equal to a percent of the annual base compensation paid to a Director/Trustee. In the case of a Director/Trustee Emeritus who had previously served at least five years but less than 10 years as a Director/Trustee, the percent will be 10%. In the case of a Director/Trustee Emeritus who had previously served at least 10 years as a Director/Trustee, the percent will be 20%. The Director/Trustee Emeritus will be reimbursed for any expenses incurred in connection with their service, including expenses of travel and lodging incurred in attendance at Board meetings. Director/Trustee Emeritus will continue to receive relevant materials concerning the Funds, will be expected to attend at least one regularly scheduled quarterly meeting of the Board of Directors/Trustees each year and will be available to consult with the Committees or its representatives at reasonable times as requested by the Chairman; however, a Director/Trustee Emeritus does not have any voting rights at Board meetings and is not subject to election by shareholders of the Funds.
28
The Director/Trustee Emeritus will be permitted to serve in such capacity at the pleasure of the Committee, but the annual fee will cease to be paid at the end of the calendar year during which he or she has attained the age of 80 years, thereafter the position will be honorary.
The following table shows the fees paid to each Director/Trustee Emeritus for the Fund’s most recently ended fiscal year and the portion of that fee paid by the Fund or Trust.1
EMERITUS Trustees and Compensation  
Director/Trustee Emeritus
Compensation
From Fund
(past fiscal year)
Total
Compensation
Paid to
Director/Trustee
Emeritus1
Peter E. Madden
$ 224.01
$ 52,000.00
1
The fees paid to a Director/Trustee are allocated among the funds that were in existence at the time the Director/Trustee elected Emeritus status, based on each fund’s net assets at that time.
BOARD LEADERSHIP STRUCTURE
As required under the terms of certain regulatory settlements, the Chairman of the Board is not an interested person of the Fund and neither the Chairman, nor any firm with which the Chairman is affiliated, has a prior relationship with Federated Hermes or its affiliates or (other than his position as a Trustee) with the Fund.
Committees of the Board  
Board
Committee
Committee
Members
Committee Functions
Meetings Held
During Last
Fiscal Year
Executive
J. Christopher Donahue
John T. Collins
John S. Walsh
In between meetings of the full Board, the Executive Committee generally may
exercise all the powers of the full Board in the management and direction of the
business and conduct of the affairs of the Trust in such manner as the Executive
Committee shall deem to be in the best interests of the Trust. However, the
Executive Committee cannot elect or remove Board members, increase or decrease
the number of Trustees, elect or remove any Officer, declare dividends, issue shares
or recommend to shareholders any action requiring shareholder approval.
One
Audit
John T. Collins
G. Thomas Hough
Maureen Lally-Green
Thomas M. O’Neill
The purposes of the Audit Committee are to oversee the accounting and financial
reporting process of the Fund, the Fund’s internal control over financial reporting
and the quality, integrity and independent audit of the Fund’s financial statements.
The Committee also oversees or assists the Board with the oversight of compliance
with legal requirements relating to those matters, approves the engagement and
reviews the qualifications, independence and performance of the Fund’s
independent registered public accounting firm, acts as a liaison between the
independent registered public accounting firm and the Board and reviews the Fund’s
internal audit function.
Seven
Nominating
John T. Collins
G. Thomas Hough
Maureen Lally-Green
Charles F. Mansfield, Jr.
Thomas M. O’Neill
Madelyn A. Reilly
P. Jerome Richey
John S. Walsh
The Nominating Committee, whose members consist of all Independent Trustees,
selects and nominates persons for election to the Fund’s Board when vacancies
occur. The Committee will consider candidates recommended by shareholders,
Independent Trustees, officers or employees of any of the Fund’s agents or service
providers and counsel to the Fund. Any shareholder who desires to have an
individual considered for nomination by the Committee must submit a
recommendation in writing to the Secretary of the Fund, at the Fund’s address
appearing on the back cover of this SAI. The recommendation should include the
name and address of both the shareholder and the candidate and detailed
information concerning the candidate’s qualifications and experience. In identifying
and evaluating candidates for consideration, the Committee shall consider such
factors as it deems appropriate. Those factors will ordinarily include: integrity,
intelligence, collegiality, judgment, diversity, skill, business and other experience,
qualification as an “Independent Trustee,” the existence of material relationships
which may create the appearance of a lack of independence, financial or accounting
knowledge and experience and dedication and willingness to devote the time and
attention necessary to fulfill Board responsibilities.
One
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BOARD’S ROLE IN RISK OVERSIGHT
The Board’s role in overseeing the Fund’s general risks includes receiving performance reports for the Fund and risk management reports from Federated Hermes’ Chief Risk Officer at each regular Board meeting. The Chief Risk Officer is responsible for enterprise risk management at Federated Hermes, which includes risk management committees for investment management and for investor services. The Board also receives regular reports from the Fund’s Chief Compliance Officer regarding significant compliance risks.
On behalf of the Board, the Audit Committee plays a key role overseeing the Fund’s financial reporting and valuation risks. The Audit Committee meets regularly with the Fund’s Principal Financial Officer and outside auditors, as well as with Federated Hermes’ Chief Audit Executive to discuss financial reporting and audit issues, including risks relating to financial controls.
Board Ownership Of Shares In The Fund And In The Federated Hermes Family Of Investment Companies As Of December 31, 2019  
Interested Board
Member Name
Dollar Range of
Shares Owned in
Federated Hermes Muni and
Stock Advantage Fund
Aggregate
Dollar Range of
Shares Owned in
Federated Hermes Family of
Investment Companies
J. Christopher Donahue
Over $100,000
Over $100,000
John B. Fisher
None
Over $100,000
Independent Board
Member Name
 
 
John T. Collins
None
Over $100,000
G. Thomas Hough
None
Over $100,000
Maureen Lally-Green
None
Over $100,000
Charles F. Mansfield, Jr.
None
$50,001-$100,000
Thomas M. O’Neill
None
Over $100,000
Madelyn A. Reilly
None
None
P. Jerome Richey
None
Over $100,000
John S. Walsh
Over $100,000
Over $100,000
Investment Adviser
The Adviser conducts investment research and makes investment decisions for the Fund. The Adviser has delegated daily management of some or all of the Fund assets to the Sub-Adviser, Federated Investment Management Company, who is paid by the Adviser and not by the Fund, based on the portion of securities Sub-Adviser manages.
The Adviser and subadviser are wholly owned subsidiaries of Federated.
The Adviser (or Subadviser) shall not be liable to the Trust or any Fund shareholder for any losses that may be sustained in the purchase, holding or sale of any security or for anything done or omitted by it, except acts or omissions involving willful misfeasance, bad faith, gross negligence or reckless disregard of the duties imposed upon it by its contract with the Trust.
In December 2017, Federated Investors, Inc., now Federated Hermes, Inc., became a signatory to the Principles for Responsible Investment (PRI). The PRI is an investor initiative in partnership with the United Nations Environment Programme Finance Initiative and the United Nations Global Compact. Commitments made as a signatory to the PRI are not legally binding, but are voluntary and aspirational. They include efforts, where consistent with our fiduciary responsibilities, to incorporate environmental, social and corporate governance (ESG) issues into investment analysis and investment decision making, to be active owners and incorporate ESG issues into our ownership policies and practices, to seek appropriate disclosure on ESG issues by the entities in which we invest, to promote acceptance and implementation of the PRI within the investment industry, to enhance our effectiveness in implementing the PRI, and to report on our activities and progress towards implementing the PRI. Being a signatory to the PRI does not obligate Federated Hermes to take, or not take, any particular action as it relates to investment decisions or other activities.
In July 2018, Federated Investors, Inc., now Federated Hermes, Inc., acquired a 60% interest in Hermes Fund Managers Limited (Hermes), which operates as Hermes Investment Management, a pioneer of integrated ESG investing. Hermes’ experience with ESG issues contributes to Federated Hermes’ understanding of material risks and opportunities these issues may present.
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EOS at Federated Hermes, which was established as Hermes Equity Ownership Services Limited (EOS) in 2004 as an affiliate of Hermes Investment Management Limited, is our in-house engagement and stewardship team. The 40+ member team conducts long-term, objectives-driven dialogue with board and senior executive level representatives of more than 1,000 issuers. It seeks to address the most material ESG risks and opportunities through constructive and continuous discussions with the goal of improving long term results for investors. Engagers’ deep understanding across sectors, themes and regional markets, along with language and cultural expertise, allows EOS to provide insights to companies on the merits of addressing ESG risks and the positive benefits of capturing opportunities. Federated Hermes investment management teams have access to the insights gained from understanding a company’s approach to these long-term strategic matters as an additional input to improve portfolio risk/return characteristics.
Portfolio Manager Information
As a general matter, certain conflicts of interest may arise in connection with a portfolio manager’s management of a fund’s investments, on the one hand, and the investments of other funds/pooled investment vehicles or accounts (collectively, including the Fund, as applicable, “accounts”) for which the portfolio manager is responsible, on the other. For example, it is possible that the various accounts managed could have different investment strategies that, at times, might conflict with one another to the possible detriment of the Fund. Alternatively, to the extent that the same investment opportunities might be desirable for more than one account, possible conflicts could arise in determining how to allocate them. Other potential conflicts can include, for example, conflicts created by specific portfolio manager compensation arrangements (including, for example, the allocation or weighting given to the performance of the Fund or other accounts or activities for which the portfolio manager is responsible in calculating the portfolio manager’s compensation), and conflicts relating to selection of brokers or dealers to execute Fund portfolio trades and/or specific uses of commissions from Fund portfolio trades (for example, research or “soft dollars”). The Adviser has adopted policies and procedures and has structured the portfolio managers’ compensation in a manner reasonably designed to safeguard the Fund from being negatively affected as a result of any such potential conflicts.
The following information about the Fund’s Portfolio Managers is provided as of the end of the Fund’s most recently completed fiscal year unless otherwise indicated.
Linda Bakhshian, Portfolio Manager  
Types of Accounts Managed
by Linda Bakhshian
Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies
2/$1.1 billion
Other Pooled Investment Vehicles
0/$0
Other Accounts
7/$4.8 million
*
None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: $10,001-$50,000.
Linda Bakhshian is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive, position-specific salary range, based on the portfolio manager’s experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year taxable equivalent gross total return and taxable equivalent gross distribution yield average versus the Fund’s designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
As noted above, Ms. Bakhshian is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts for which Ms. Bakhshian is responsible when her compensation is calculated may be equal or can vary.
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For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of four IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management’s assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
In addition, Ms. Bakhshian was awarded a grant of restricted Federated Hermes stock. Awards of restricted stock are discretionary and are made in variable amounts based on the subjective judgment of Federated Hermes’ senior management.
Michael Jura, Portfolio Manager  
Types of Accounts Managed
by Michael Jura
Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies
0/$0
Other Pooled Investment Vehicles
0/$0
Other Accounts
7/$4.8 million
*
None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: None.
Michael Jura is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive, position-specific salary range, based on the portfolio manager’s experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
IPP is measured on a rolling one, three and five calendar year taxable equivalent gross total return and taxable equivalent gross distribution yield average versus the Fund’s designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
As noted above, Mr. Jura is also an analyst for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts for which Mr. Jura is responsible when his compensation is calculated may be equal or can vary.
For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of four IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management’s assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
32
Richard J. Gallo, Portfolio Manager  
Types of Accounts Managed
by Richard J. Gallo
Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies
9/$12.2 billion
Other Pooled Investment Vehicles
0/$0
Other Accounts
4/$28.4 million
*
None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: $100,001-500,000.
Richard J. Gallo is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive, position-specific salary range, based on the portfolio manager’s experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
Mr. Gallo manages only the fixed-income portion of the Fund’s portfolio. IPP for the fixed-income portion is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund’s benchmark (i.e., S&P Custom Index) and versus the Fund’s designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
As noted above, Mr. Gallo is also the portfolio manager for other accounts in addition to the Fund. Such other accounts may have different benchmarks and performance measures. The allocation or weighting given to the performance of the Fund or other accounts or activities for which Mr. Gallo is responsible when his compensation is calculated may be equal or can vary.
In addition, Mr. Gallo has oversight responsibility for other portfolios that he does not personally manage and serves on one or more Investment Teams that establish guidelines on various performance drivers (e.g., currency, duration, sector, volatility and/or yield curve) for taxable, fixed-income accounts. A portion of the IPP score is based on Federated Hermes’ senior management’s assessment of team contributions.
For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of two IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed or activity engaged in by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is greater than or equal to the weighting assigned to other accounts or activities used to determine IPP (but can be adjusted periodically). A portion of the bonus tied to the IPP score may be adjusted based on management’s assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
In addition, Mr. Gallo was awarded a grant of restricted Federated Hermes stock. Awards of restricted stock are discretionary and are made in variable amounts based on the subjective judgment of Federated Hermes’ senior management.
33
Ann Ferentino, Portfolio Manager  
Types of Accounts Managed
by Ann Ferentino
Total Number of Additional Accounts
Managed/Total Assets*
Registered Investment Companies
0/$0
Other Pooled Investment Vehicles
0/$0
Other Accounts
4/$28.4 million
*
None of the Accounts has an advisory fee that is based on the performance of the account.
Dollar value range of shares owned in the Fund: $10,001-$50,000.
Ann Ferentino is paid a fixed base salary and a variable annual incentive. Base salary is determined within a market competitive, position-specific salary range, based on the portfolio manager’s experience and performance. The annual incentive amount is determined based primarily on Investment Product Performance (IPP) and may also include a discretionary component based on a variety of factors deemed relevant, such as financial measures and performance and may be paid entirely in cash, or in a combination of cash and restricted stock of Federated Hermes, Inc. (“Federated Hermes”). The total combined annual incentive opportunity is intended to be competitive in the market for this portfolio manager role.
Ms. Ferentino manages only the fixed-income portion of the Fund’s portfolio. IPP for the fixed-income portion is measured on a rolling one, three and five calendar year pre-tax gross total return basis versus the Fund’s benchmark (i.e., S&P Custom Index) and versus the Fund’s designated peer group of comparable accounts. Performance periods are adjusted if a portfolio manager has been managing an account for less than five years; accounts with less than one year of performance history under a portfolio manager may be excluded.
For purposes of calculating the annual incentive amount, each account managed by the portfolio manager currently is categorized into one of four IPP groups (which may be adjusted periodically). Within each performance measurement period and IPP group, IPP currently is calculated on the basis of an assigned weighting to each account managed by the portfolio manager and included in the IPP groups. At the account level, the weighting assigned to the Fund is lesser than the weighting assigned to certain other accounts, and is greater than the weighting assigned to certain other accounts used to determine IPP (but can be adjusted periodically).Additionally, a portion of Ms. Ferentino’s IPP score is based on the performance of the accounts for which she provides research and analytic support. A portion of the bonus tied to the IPP score may be adjusted based on management’s assessment of overall contributions to account performance and any other factors as deemed relevant.
Any individual allocations from the discretionary pool may be determined, by executive management on a discretionary basis using various factors, such as, for example, on a product, strategy or asset class basis, and considering overall contributions and any other factors deemed relevant (and may be adjusted periodically).
Services Agreement
Federated Advisory Services Company, an affiliate of the Adviser, provides research, quantitative analysis, equity trading and transaction settlement and certain support services to the Adviser. The fee for these services is paid by the Adviser and not by the Fund.
Other Related Services
Affiliates of the Adviser may, from time to time, provide certain electronic equipment and software to institutional customers in order to facilitate the purchase of Fund Shares offered by the Distributor.
Code Of Ethics Restrictions On Personal Trading
As required by Rule 17j-1 of the Investment Company Act of 1940 and Rule 204A-1 under the Investment Advisers Act (as applicable), the Fund, its Adviser and its Distributor have adopted codes of ethics. These codes govern securities trading activities of investment personnel, Fund Trustees and certain other employees. Although they do permit these people to trade in securities, including those that the Fund could buy, as well as Shares of the Fund, they also contain significant safeguards designed to protect the Fund and its shareholders from abuses in this area, such as requirements to obtain prior approval for, and to report, particular transactions.
Voting Proxies On Fund Portfolio Securities
The Board has delegated to the Adviser authority to vote proxies on the securities held in the Fund’s portfolio. The Board has also approved the Adviser’s policies and procedures for voting the proxies, which are described below.
34
Proxy Voting Policies
As an investment adviser with a fiduciary duty to the Fund and its shareholders, the Adviser’s general policy is to cast proxy votes in favor of management proposals and shareholder proposals that the Adviser anticipates will enhance the long-term value of the securities being voted in a manner that is consistent with the investment objectives of the Fund. Generally, this will mean voting for proposals that the Adviser believes will improve the management of a company, increase the rights or preferences of the voted securities, or increase the chance that a premium offer would be made for the company or for the voted securities. This approach to voting proxy proposals will be referred to hereafter as the “General Policy.”
The Adviser generally votes consistently on the same matter when securities of an issuer are held by multiple client portfolios. However, the Adviser may vote differently if a particular client’s investment objectives differ from those of other clients or if a client explicitly instructs the Adviser to vote differently.
The following examples illustrate how the General Policy may apply to the most common management proposals and shareholder proposals. However, whether the Adviser supports or opposes a proposal will always depend on a thorough understanding of the Fund’s investment objectives and the specific circumstances described in the proxy statement and other available information.
On matters related to the board of directors, generally the Adviser will vote to elect nominees to the board in uncontested elections except in certain circumstances, such as where the director: (1) had not attended at least 75% of the board meetings during the previous year; (2) serves as the company’s chief financial officer; (3) has become overboarded (more than five boards for retired executives and more than two boards for CEOs); (4) is the chair of the nominating or governance committee when the roles of chairman of the board and CEO are combined and there is no lead independent director; (5) served on the compensation committee during a period in which compensation appears excessive relative to performance and peers; or (6) served on a board that did not implement a shareholder proposal that the Adviser supported and received more than 50% shareholder support the previous year. In addition, the Adviser will generally vote in favor of; (7) a full slate of directors, where the directors are elected as a group and not individually, unless more than half of the nominees are not independent; (8) shareholder proposals to declassify the board of directors; (9) shareholder proposals to require a majority voting standard in the election of directors; (10) shareholder proposals to separate the roles of chairman of the board and CEO; and (11) a proposal to require a company’s audit committee to be comprised entirely of independent directors.
On other matters of corporate governance, generally the Adviser will vote in favor of: (1) proposals to grant shareholders the right to call a special meeting if owners of at least 25% of the outstanding stock agree; (2) a proposal to require independent tabulation of proxies and/or confidential voting of shareholders; (3) a proposal to ratify the board’s selection of auditors, unless: (a) compensation for non-audit services exceeded 50% of the total compensation received from the company; or (b) the previous auditor was dismissed because of a disagreement with the company; (4) a proposal to repeal a shareholder rights plan (also known as a “poison pill”) and against the adoption of such a plan, unless the plan is designed to facilitate, rather than prevent, unsolicited offers for the company; (5) shareholder proposals to eliminate supermajority requirements in company bylaws; and (6) shareholder proposals calling for “Proxy Access,” that is, a bylaw change allowing shareholders owning at least 3% of the outstanding common stock for at least three years to nominate candidates for election to the board of directors. The Adviser will generally withhold support from shareholder proposals to grant shareholders the right to act by written consent.
On environmental and social matters, generally the Adviser will vote in favor of shareholder proposals calling for: (1) enhanced disclosure of the company’s approach to mitigating climate change and other environmental risks; (2) managing risks related to manufacturing or selling of guns and opioids; (3) monitoring gender pay equity; and (4) achieving and maintaining diversity on the board of directors. Generally, the Adviser will not support shareholder proposals calling for limitations on political activity by the company, including political contributions, lobbying and memberships in trade associations.
On matters of capital structure, generally the Adviser will vote against a proposal to authorize or issue shares that are senior in priority or voting rights to the voted securities, and in favor of a proposal to: (1) reduce the amount of shares authorized for issuance (subject to adequate provisions for outstanding convertible securities, options, warrants, rights and other existing obligations to issue shares); and (2) grant authorities to issue shares with and without pre-emptive rights unless the size of the authorities would threaten to unreasonably dilute existing shareholders. The Adviser will decide how to vote on proposals to authorize a stock repurchase or special dividend program on a case-by-case basis.
35
On matters relating to management compensation, generally the Adviser will vote in favor of stock incentive plans (including plans for directors) that align the recipients of stock incentives with the interests of shareholders, without creating undue dilution, and against: (1) the advisory vote on executive compensation plans (“Say On Pay”) when the plan has failed to align executive compensation with corporate performance; (2) the advisory vote on the frequency of the Say On Pay vote when the frequency is other than annual; (3) proposals that would permit the amendment or replacement of outstanding stock incentives having more favorable terms (e.g., lower purchase prices or easier vesting requirements); and (4) executive compensation plans that do not disclose the maximum amounts of compensation that may be awarded or the criteria for determining awards.
On matters relating to corporate transactions, the Adviser will generally vote in favor of mergers, acquisitions and sales of assets if the Adviser’s analysis of the proposed business strategy and the transaction price would have a positive impact on the total return for shareholders.
If a shareholders meeting is contested, that is, shareholders are presented with a set of director candidates nominated by company management and a set of director candidates nominated by a dissident shareholder, the Adviser will study the proposed business strategies of both groups and vote in a way that maximizes expected total return for the Fund.
In addition, the Adviser will not vote any proxy if it determines that the consequences or costs of voting outweigh the potential benefit of voting. For example, if a foreign market requires shareholders voting proxies to retain the voted shares until the meeting date (thereby rendering the shares “illiquid” for some period of time), the Adviser will not vote proxies for such shares. In addition, the Adviser is not obligated to incur any expense to send a representative to a shareholder meeting or to translate proxy materials into English.
To the extent that the Adviser is permitted to loan securities, the Adviser does not have the right to vote on securities while they are on loan. However, the Adviser will take all reasonable steps to recall shares prior to the record date when the meeting raises issues that the Adviser believes materially affect shareholder value, including, but not limited to, excessive compensation, mergers and acquisitions, contested elections and weak oversight by the audit committee. However, there can be no assurance that the Adviser will have sufficient notice of such matters to be able to terminate the loan in time to vote thereon.
If proxies are not delivered in a timely or otherwise appropriate basis, the Adviser may not be able to vote a particular proxy.
For an Adviser that employs a quantitative investment strategy for certain funds or accounts that does not make use of qualitative research (“Non-Qualitative Accounts”), the Adviser may not have the kind of research to make decisions about how to vote proxies for them. Therefore, the Adviser will vote the proxies of these Non-Qualitative Accounts as follows: (a) in accordance with the Standard Voting Instructions (defined below); (b) if the Adviser is casting votes for the same proxy on behalf of a regular qualitative account and a Non-Qualitative Account, the Non-Qualitative Account would vote in the same manner as the regular qualitative account; (c) if neither of the first two conditions apply, as the proxy voting service is recommending; and (d) if none of the previous conditions apply, as recommended by the Proxy Voting Committee.
Proxy Voting Procedures
The Adviser has established a Proxy Voting Committee (“Proxy Committee”), to exercise all voting discretion granted to the Adviser by the Board in accordance with the proxy voting policies. To assist it in carrying out the day-to-day operations related to proxy voting, the Proxy Committee has created the Proxy Voting Management Group (PVMG). The day-to-day operations related to proxy voting are carried out by the Proxy Voting Operations Team (PVOT) and overseen by the PVMG. Besides voting the proxies, this work includes engaging with investee companies on corporate governance matters, managing the proxy voting service, soliciting voting recommendations from the Adviser’s investment professionals, bringing voting recommendations to the Proxy Committee for approval, filing with regulatory agencies any required proxy voting reports, providing proxy voting reports to clients and investment companies as they are requested from time to time, and keeping the Proxy Committee informed of any issues related to corporate governance and proxy voting.
The Adviser has compiled a list of specific voting instructions based on the General Policy (the “Standard Voting Instructions”). The Standard Voting Instructions and any modifications to them are approved by the Proxy Committee. The Standard Voting Instructions sometimes call for an investment professional to review the ballot question and provide a voting recommendation to the Proxy Committee (a “case-by-case vote”). The foregoing notwithstanding, the Proxy Committee always has the authority to determine a final voting decision.
The Adviser has hired a proxy voting service to perform various proxy voting related administrative services such as ballot reconciliation, vote processing, and recordkeeping functions. The Proxy Committee has supplied the proxy voting services with the Standard Voting Instructions. The Proxy Committee retains the right to modify the Standard Voting Instructions at any time or to vote contrary to them at any time in order to cast proxy votes in a manner that the Proxy Committee believes is in accordance with the General Policy. The proxy voting service may vote any proxy as directed in the Standard Voting Instructions without further direction from the Proxy Committee. However, if the Standard Voting Instructions require case-by-case handling
36
for a proposal, the PVOT will work with the investment professionals and the proxy voting service to develop a voting recommendation for the Proxy Committee and to communicate the Proxy Committee’s final voting decision to the proxy voting service. Further, if the Standard Voting Instructions require the PVOT to analyze a ballot question and make the final voting decision, the PVOT will report such votes to the Proxy Committee on a quarterly basis for review.
Conflicts of Interest
The Adviser has adopted procedures to address situations where a matter on which a proxy is sought may present a potential conflict between the interests of the Fund (and its shareholders) and those of the Adviser or Distributor. This may occur where a significant business relationship exists between the Adviser (or its affiliates) and a company involved with a proxy vote.
A company that is a proponent, opponent, or the subject of a proxy vote, and which to the knowledge of the Proxy Committee has this type of significant business relationship, is referred to below as an “Interested Company.”
The Adviser has implemented the following procedures in order to avoid concerns that the conflicting interests of the Adviser or its affiliates have influenced proxy votes. Any employee of the Adviser or its affiliates who is contacted by an Interested Company regarding proxies to be voted by the Adviser must refer the Interested Company to a member of the Proxy Committee, and must inform the Interested Company that the Proxy Committee has exclusive authority to determine how the proxy will be voted. Any Proxy Committee member contacted by an Interested Company must report it to the full Proxy Committee and provide a written summary of the communication. This requirement includes engagement meetings with investee companies and does not include communications with proxy solicitation firms. Under no circumstances will the Proxy Committee or any member of the Proxy Committee make a commitment to an Interested Company regarding the voting of proxies or disclose to an Interested Company how the Proxy Committee has directed such proxies to be voted. If the Standard Voting Instructions already provide specific direction on the proposal in question, the Proxy Committee shall not alter or amend such directions. If the Standard Voting Instructions require the Proxy Committee to provide further direction, the Proxy Committee shall do so in accordance with the proxy voting policies, without regard for the interests of the Adviser with respect to the Interested Company. If the Proxy Committee provides any direction as to the voting of proxies relating to a proposal affecting an Interested Company, it must disclose annually to the Fund’s Board information regarding: the significant business relationship; any material communication with the Interested Company; the matter(s) voted on; and how, and why, the Adviser voted as it did. In certain circumstances it may be appropriate for the Adviser to vote in the same proportion as all other shareholders, so as to not affect the outcome beyond helping to establish a quorum at the shareholders’ meeting. This is referred to as “proportional voting.” If the Fund owns shares of another Federated Hermes mutual fund, generally the Adviser will proportionally vote the client’s proxies for that fund or seek direction from the Board or the client on how the proposal should be voted. If the Fund owns shares of an unaffiliated mutual fund, the Adviser may proportionally vote the Fund’s proxies for that fund depending on the size of the position. If the Fund owns shares of an unaffiliated exchange-traded fund, the Adviser will proportionally vote the Fund’s proxies for that fund.
Downstream Affiliates
If the Proxy Committee gives further direction, or seeks to vote contrary to the Standard Voting Instructions, for a proxy relating to a portfolio company in which the Fund owns more than 10% of the portfolio company’s outstanding voting securities at the time of the vote (“Downstream Affiliate”), the Proxy Committee must first receive guidance from counsel to the Proxy Committee as to whether any relationship between the Adviser and the portfolio company, other than such ownership of the portfolio company’s securities, gives rise to an actual conflict of interest. If counsel determines that an actual conflict exists, the Proxy Committee must address any such conflict with the executive committee of the board of directors or trustees of any investment company client prior to taking any action on the proxy at issue.
Proxy Advisers’ Conflicts of Interest
Proxy advisory firms may have significant business relationships with the subjects of their research and voting recommendations. For example, a proxy voting service client may be a public company with an upcoming shareholders’ meeting and the proxy voting service has published a research report with voting recommendations. In another example, a proxy voting service board member also sits on the board of a public company for which the proxy voting service will write a research report. These and similar situations give rise to an actual or apparent conflict of interest.
In order to avoid concerns that the conflicting interests of the engaged proxy voting service have influenced proxy voting recommendations, the Adviser will take the following steps:
■ A due diligence team made up of employees of the Adviser and/or its affiliates will meet with the proxy voting service on an annual basis and determine through a review of their policies and procedures and through inquiry that the proxy voting service has established a system of internal controls that provide reasonable assurance that their voting recommendations are not influenced by the business relationships they have with the subjects of their research.
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■ Whenever the standard voting guidelines call for voting a proposal in accordance with the proxy voting service recommendation and the proxy voting service has disclosed that they have a conflict of interest with respect to that issuer, the PVOT will take the following steps: (a) the PVOT will obtain a copy of the research report and recommendations published by another proxy voting service for that issuer; (b) the Director of Proxy Voting, or his designee, will review both the engaged proxy voting service research report and the research report of the other proxy voting service and determine what vote will be cast. The PVOT will report all proxies voted in this manner to the Proxy Committee on a quarterly basis. Alternatively, the PVOT may seek direction from the Committee on how the proposal shall be voted.
Proxy Voting Report
A report on “Form N-PX” of how the Fund voted any proxies during the most recent 12-month period ended June 30 is available via the Proxy Voting Record (Form N-PX) link associated with the Fund and share class name at FederatedInvestors.com/FundInformation. Form N-PX filings are also available at the SEC’s website at sec.gov.
Portfolio Holdings Information
Information concerning the Fund’s portfolio holdings is available via the link to the Fund and share class name at FederatedInvestors.com/FundInformation. A complete listing of the Fund’s portfolio holdings as of the end of each month is posted on the website 15 days (or the next business day) after the end of the month and remains posted for six months thereafter. Summary portfolio composition information as of the close of each month is posted on the website 15 days (or the next business day) after month-end and remains posted until replaced by the information for the succeeding month. The summary portfolio composition information may include: identification of the Fund’s top ten equity holdings, top ten fixed-income holdings, equity and fixed-income portfolio profile statistics (such as weighted medium market cap and effective weighted average effective duration), and percentage breakdowns of the portfolio by credit quality, asset class and sector.
You may also access portfolio information as of the end of the Fund’s fiscal quarters via the link to the Fund and share class name at FederatedInvestors.com. The Fund’s Annual Shareholder Report and Semi-Annual Shareholder Report contain complete listings of the Fund’s portfolio holdings as of the end of the Fund’s second and fourth fiscal quarters. Fiscal quarter information is made available on the website within 70 days after the end of the fiscal quarter. This information is also available in reports filed with the SEC at the SEC’s website at sec.gov.
Each fiscal quarter, the Fund will file with the SEC a complete schedule of its monthly portfolio holdings on “Form N-PORT.” The Fund’s holdings as of the end of the third month of every fiscal quarter, as reported on Form N-PORT, will be publicly available on the SEC’s website at sec.gov within 60 days of the end of the fiscal quarter upon filing. You may also access this information via the link to the Fund and share class name at FederatedInvestors.com.
The disclosure policy of the Fund and the Adviser prohibits the disclosure of portfolio holdings information to any investor or intermediary before the same information is made available to other investors. Employees of the Adviser or its affiliates who have access to nonpublic information concerning the Fund’s portfolio holdings are prohibited from trading securities on the basis of this information. Such persons must report all personal securities trades and obtain pre-clearance for all personal securities trades other than mutual fund shares.
Firms that provide administrative, custody, financial, accounting, legal or other services to the Fund may receive nonpublic information about Fund portfolio holdings for purposes relating to their services. The Fund may also provide portfolio holdings information to publications that rate, rank or otherwise categorize investment companies. Traders or portfolio managers may provide “interest” lists to facilitate portfolio trading if the list reflects only that subset of the portfolio for which the trader or portfolio manager is seeking market interest. A list of service providers, publications and other third parties who may receive nonpublic portfolio holdings information appears in the Appendix to this SAI.
The furnishing of nonpublic portfolio holdings information to any third party (other than authorized governmental or regulatory personnel) requires the prior approval of the President of the Adviser and of the Chief Compliance Officer of the Fund. The President of the Adviser and the Chief Compliance Officer will approve the furnishing of nonpublic portfolio holdings information to a third party only if they consider the furnishing of such information to be in the best interests of the Fund and its shareholders. In that regard, and to address possible conflicts between the interests of Fund shareholders and those of the Adviser and its affiliates, the following procedures apply. No consideration may be received by the Fund, the Adviser, any affiliate of the Adviser or any of their employees in connection with the disclosure of portfolio holdings information. Before information is furnished, the third party must sign a written agreement that it will safeguard the confidentiality of the information, will use it only for the purposes for which it is furnished and will not use it in connection with the trading of any security. Persons approved to receive nonpublic portfolio holdings information will receive it as often as necessary for the purpose for which it is provided. Such information may be furnished as frequently as daily and often with no time lag between the date of the information and the date it is furnished. The Board receives and reviews annually a list of the persons who receive nonpublic portfolio holdings information and the purposes for which it is furnished.
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Brokerage Transactions And Investment Allocation
Equity securities may be traded in the over-the-counter market through broker/dealers acting as principal or agent, or in transactions directly with other investors. Transactions may also be executed on a securities exchange or through an electronic communications network. The Adviser seeks to obtain best execution of trades in equity securities by balancing the costs inherent in trading, including opportunity costs, market impact costs and commissions. As a general matter, the Adviser seeks to add value to its investment management by using market information to capitalize on market opportunities, actively seek liquidity and discover price. The Adviser continually monitors its trading results in an effort to improve execution. Fixed-income securities are generally traded in an over-the-counter market on a net basis (i.e., without commission) through dealers acting as principal or in transactions directly with the issuer. Dealers derive an undisclosed amount of compensation by offering securities at a higher price than they bid for them. Some fixed-income securities may have only one primary market maker. The Adviser seeks to use dealers it believes to be actively and effectively trading the security being purchased or sold, but may not always obtain the lowest purchase price or highest sale price with respect to a fixed-income security. The Adviser’s receipt of research services (as described below) may also be a factor in the Adviser’s selection of brokers and dealers. The Adviser may also direct certain portfolio trades to a broker that, in turn, pays a portion of the Fund’s operating expenses. The Adviser makes decisions on portfolio transactions and selects brokers and dealers subject to review by the Fund’s Board.
On October 31, 2020, the Fund owned securities of the following regular broker/dealers:  
Broker Dealer
Amount of
Securities Owned
JPMorgan
Bank of America
Goldman Sachs
$15,495,418
$14,048,981
$9,586,408
Investment decisions for the Fund are made independently from those of other accounts managed by the Adviser and accounts managed by affiliates of the Adviser. Except as noted below, when the Fund and one or more of those accounts invests in, or disposes of, the same security, available investments or opportunities for sales will be allocated among the Fund and the account(s) in a manner believed by the Adviser to be equitable. While the coordination and ability to participate in volume transactions may benefit the Fund, it is possible that this procedure could adversely impact the price paid or received and/or the position obtained or disposed of by the Fund. Investments for Federated Hermes Kaufmann Fund and other accounts managed by that fund’s portfolio managers in initial public offerings (IPO) are made independently from any other accounts, and much of their non-IPO trading may also be conducted independently from other accounts. Trading and allocation of investments, including IPOs, for accounts managed by Federated MDTA LLC are also made independently from the Fund. Investment decisions and trading for certain separately managed or wrap-fee accounts, and other accounts, of the Adviser and/or certain investment adviser affiliates of the Adviser also are generally made and conducted independently from the Fund. It is possible that such independent trading activity could adversely impact the prices paid or received and/or positions obtained or disposed of by the Fund.
Brokerage and Research Services
Brokerage services include execution of trades and products and services that relate to the execution of trades, including communications services related to trade execution, clearing and settlement, trading software used to route orders to market centers, software that provides algorithmic trading strategies and software used to transmit orders to direct market access (DMA) systems. Research services may include: advice as to the advisability of investing in securities; security analysis and reports; economic studies; industry studies; receipt of quotations for portfolio evaluations; and similar services. Research services assist the Adviser and its affiliates in terms of their overall investment responsibilities to funds and investment accounts for which they have investment discretion. However, particular brokerage and research services received by the Adviser and its affiliates may not be used to service every fund or account, and may not benefit the particular funds and accounts that generated the brokerage commissions. In addition, brokerage and research services paid for with commissions generated by the Fund may be used in managing other funds and accounts. To the extent that receipt of these services may replace services for which the Adviser or its affiliates might otherwise have paid, it would tend to reduce their expenses. The Adviser and its affiliates exercise reasonable business judgment in selecting brokers to execute securities transactions where receipt of research services is a factor. They determine in good faith that commissions charged by such persons are reasonable in relationship to the value of the brokerage and research services provided.
For the fiscal year ended October 31, 2020, the Fund’s Adviser directed brokerage transactions to certain brokers in connection with the Adviser’s receipt of research services. The total amount of these transactions was $1,733,259,349 for which the Fund paid $1,256,068 in brokerage commissions.
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Administrator
Federated Administrative Services (FAS), a subsidiary of Federated Hermes, provides administrative personnel and services, including certain legal, compliance, recordkeeping and financial reporting services (“Administrative Services”), necessary for the operation of the Fund. FAS provides Administrative Services for a fee based upon the rates set forth below paid on the average daily net assets of the Fund. For purposes of determining the appropriate rate breakpoint, “Investment Complex” is defined as all of the Federated Hermes funds subject to a fee under the Administrative Services Agreement with FAS. FAS is also entitled to reimbursement for certain out-of-pocket expenses incurred in providing Administrative Services to the Fund.  
Administrative Services
Fee Rate
Average Daily Net Assets
of the Investment Complex
0.100 of 1%
on assets up to $50 billion
0.075 of 1%
on assets over $50 billion
Custodian
The Bank of New York Mellon, New York, New York, is custodian for the securities and cash of the Fund. Foreign instruments purchased by the Fund are held by foreign banks participating in a network coordinated by The Bank of New York Mellon.
Transfer Agent And Dividend Disbursing Agent
State Street Bank and Trust Company, the Fund’s registered transfer agent, maintains all necessary shareholder records.
Independent Registered Public Accounting Firm
The independent registered public accounting firm for the Fund, Ernst & Young LLP, conducts its audits in accordance with the standards of the Public Company Accounting Oversight Board (United States), which require it to plan and perform its audits to provide reasonable assurance about whether the Fund’s financial statements and financial highlights are free of material misstatement.
Fees Paid by the Fund for Services  
For the Year Ended October 31
2020
2019
2018
Advisory Fee Earned
$ 9,573,078
$ 10,136,588
$ 10,773,654
Advisory Fee Waived
$ 1,097,835
$ 1,238,198
$ 1,232,101
Brokerage Commissions
$ 1,272,084
$ 1,212,011
$ 1,764,754
Net Administrative Fee
$ 1,148,567
$ 1,260,832
$ 1,328,884
Net 12b-1 Fee:
 
 
 
Class B Shares
$ 96,494
$ 132,763
$ 171,195
Class C Shares
$ 1,795,537
$ 2,065,825
$ 2,552,583
Net Shareholder Services Fee:
 
 
 
Class A Shares
$ 1,462,362
$ 1,524,458
$ 1,607,974
Class B Shares
$ 32,165
$ 44,254
$ 57,065
Class C Shares
$ 598,512
$ 688,608
$ 850,861
Class F Shares
$ 615,509
$ 626,835
$ 628,166
Fees are allocated among classes based on their pro rata share of Fund assets, except for marketing (“Rule 12b-1”) fees and shareholder services fees, which are borne only by the applicable class of Shares.
If the Fund’s expenses are capped at a particular level, the cap does not include reimbursement to the Fund of any expenses incurred by shareholders who use the transfer agent’s subaccounting facilities.
Securities Lending Activities
The services provided to the Fund by Citibank, N.A. as securities lending agent may include the following: selecting securities previously identified by the Fund as available for loan to be loaned; locating borrowers identified in the securities lending agency agreement; negotiating loan terms; monitoring daily the value of the loaned securities and collateral; requiring additional collateral as necessary; marking to market non-cash collateral; instructing the Fund’s custodian with respect to the transfer of loaned securities; indemnifying the Fund in the event of a borrower default; and arranging for return of loaned securities to the Fund at loan termination.
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The Fund did not participate in any securities lending activities during the Fund’s most recently completed fiscal year.  
Gross income from securities lending activities
$ 00.00
Fees and/or compensation for securities lending activities and related services
 
Fees paid to securities lending agent from a revenue split
$ 00.00
Fees paid for any cash collateral management service (including fees deducted from a pooled cash collateral reinvestment vehicle) that are not included in
the revenue split
—
Administrative fees not included in revenue split
—
Indemnification fee not included in revenue split
—
Rebate (paid to borrower)
$ 00.00
Other fees not included in revenue split (specify)
—
Aggregate fees/compensation for securities lending activities
$ 00.00
Net income from securities lending activities
$00.00
The Financial Statements for the Fund for the fiscal year ended October 31, 2020, are incorporated herein by reference to the Annual Report to Shareholders of Federated Hermes Muni and Stock Advantage Fund dated October 31, 2020.
Investment Ratings
Standard & Poor’s Rating Services (S&P) LONG-TERM Issue RATINGS
Issue credit ratings are based, in varying degrees, on S&P’s analysis of the following considerations: the likelihood of payment-capacity and willingness of the obligor to meet its financial commitment on an obligation in accordance with the terms of the obligation; the nature of and provisions of the obligation; and the protection afforded by, and relative position of, the obligation in the event of bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws affecting creditors’ rights.
AAA — An obligation rated “AAA” has the highest rating assigned by S&P. The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
AA — An obligation rated “AA” differs from the highest rated obligations only to a small degree. The obligor’s capacity to meet its financial commitment on the obligation is very strong.
A — An obligation rated “A” is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher-rated categories. However, the obligor’s capacity to meet its financial commitment on the obligation is still strong.
BBB — An obligation rated “BBB” exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
Obligations rated “BB,” “B,” “CCC,” “CC” and “C” are regarded as having significant speculative characteristics. “BB” indicates the least degree of speculation and “C” the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.
BB — An obligation rated “BB” is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet its financial commitment on the obligation.
B — An obligation rated “B” is more vulnerable to nonpayment than obligations rated “BB,” but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial or economic conditions will likely impair the obligor’s capacity or willingness to meet its financial commitment on the obligation.
CCC — An obligation rated “CCC” is currently vulnerable to nonpayment, and is dependent upon favorable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.
CC — An obligation rated “CC” is currently highly vulnerable to nonpayment.
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C — A “C” rating is assigned to obligations that are currently highly vulnerable to nonpayment, obligations that have payment arrearages allowed by the terms of the documents, or obligations of an issuer that is the subject of a bankruptcy petition or similar action which have not experienced a payment default. Among others, the “C” rating may be assigned to subordinated debt, preferred stock or other obligations on which cash payments have been suspended in accordance with the instrument’s terms or when preferred stock is the subject of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.
D — An obligation rated “D” is in payment default. The “D” rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within five business days, irrespective of any grace period. The “D” rating also will be used upon the filing of a bankruptcy petition or the taking of similar action if payments on an obligation are jeopardized. An obligation’s rating is lowered to “D” upon completion of a distressed exchange offer, whereby some or all of the issue is either repurchased for an amount of cash or replaced by other instruments having a total value that is less than par.
The ratings from “AA” to “CCC” may be modified by the addition of a plus (+) or minus (-) sign to show relative standing within the major rating categories.
S&P Rating Outlook
An S&P rating outlook assesses the potential direction of a long-term credit rating over the intermediate term (typically six months to two years). In determining a rating outlook, consideration is given to any changes in the economic and/or fundamental business conditions.
Positive — Positive means that a rating may be raised.
Negative — Negative means that a rating may be lowered.
Stable — Stable means that a rating is not likely to change.
Developing — Developing means a rating may be raised or lowered.
N.M. — N.M. means not meaningful.
S&P Short-Term Issue RATINGS
Short-term ratings are generally assigned to those obligations considered short-term in the relevant market. In the United States, for example, that means obligations with an original maturity of no more than 365 days–including commercial paper.
A-1 — A short-term obligation rated “A-1” is rated in the highest category by S&P. The obligor’s capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates that the obligor’s capacity to meet its financial commitment on these obligations is extremely strong.
A-2 — A short-term obligation rated “A-2” is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor’s capacity to meet its financial commitment on the obligation is satisfactory.
A-3 — A short-term obligation rated “A-3” exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.
B — A short-term obligation rated “B” is regarded as vulnerable and has significant speculative characteristics. The obligor currently has the capacity to meet its financial commitments; however, it faces major ongoing uncertainties which could lead to the obligor’s inadequate capacity to meet its financial commitments.
C — A short-term obligation rated “C” is currently vulnerable to nonpayment and is dependent upon favorable business, financial and economic conditions for the obligor to meet its financial commitment on the obligation.
D — A short-term obligation rated “D” is in payment default. The “D” rating category is used when payments on an obligation are not made on the date due, unless S&P believes that such payments will be made within any stated grace period. However, any stated grace period longer than five business days will be treated as five business days. The “D” rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.
MOODY’S Investor Services, Inc. (MOODY’s) LONG-TERM RATINGS
Moody’s long-term ratings are assigned to issuers or obligations with an original maturity of one year or more and reflect both on the likelihood of a default on contractually promised payments and the expected financial loss suffered in the event of default.
Aaa — Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level of credit risk.
Aa — Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.
A — Obligations rated A are judged to be upper-medium grade and are subject to low credit risk.
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Baa — Obligations rated Baa are judged to be medium-grade and subject to moderate credit risk and as such may possess certain speculative characteristics.
Ba — Obligations rated Ba are judged to be speculative and are subject to substantial credit risk.
B — Obligations rated B are considered speculative and are subject to high credit risk.
Caa — Obligations rated Caa are judged to be speculative of poor standing and are subject to very high credit risk.
Ca — Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.
C — Obligations rated C are the lowest rated and are typically in default, with little prospect for recovery of principal or interest.
Moody’s appends numerical modifiers 1, 2 and 3 to each generic rating classification from Aaa through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.
MOODY’S Short-Term RATINGS
Moody’s short-term ratings are assigned to obligations with an original maturity of 13 months or less and reflect the likelihood of a default on contractually promised payments.
P-1 — Issuers (or supporting institutions) rated P-1 have a superior ability to repay short-term debt obligations.
P-2 — Issuers (or supporting institutions) rated P-2 have a strong ability to repay short-term debt obligations.
P-3 — Issuers (or supporting institutions) rated P-3 have an acceptable ability to repay short-term obligations.
NP — Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.
FITCH, INC. (Fitch) LONG-TERM Debt RATINGs
Fitch long-term ratings report Fitch’s opinion on an entity’s relative vulnerability to default on financial obligations. The “threshold” default risk addressed by the rating is generally that of the financial obligations whose non-payment would best reflect the uncured failure of that entity. As such, Fitch long-term ratings also address relative vulnerability to bankruptcy, administrative receivership or similar concepts, although the agency recognizes that issuers may also make pre-emptive and therefore voluntary use of such mechanisms.
AAA: Highest Credit Quality — “AAA” ratings denote the lowest expectation of default risk. They are assigned only in cases of exceptionally strong capacity for payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.
AA: Very High Credit Quality — “AA” ratings denote expectations of very low default risk. They indicate very strong capacity for payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.
A: High Credit Quality — “A” ratings denote expectations of low default risk. The capacity for payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to adverse business or economic conditions than is the case for higher ratings.
BBB: Good Credit Quality — “BBB” ratings indicate that expectations of default risk are currently low. The capacity for payment of financial commitments is considered adequate, but adverse business or economic conditions are more likely to impair this capacity.
BB: Speculative — “BB” ratings indicate an elevated vulnerability to default risk, particularly in the event of adverse changes in business or economic conditions over time; however, business or financial flexibility exists which supports the servicing of financial commitments.
B: Highly Speculative — “B” ratings indicate that material default risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is vulnerable to deterioration in the business and economic environment.
CCC: Substantial Credit Risk — Default is a real possibility.
CC: Very High Levels of Credit Risk — Default of some kind appears probable.
C: Exceptionally High Levels of Credit Risk — Default is imminent or inevitable, or the issuer is in standstill. Conditions that are indicative of a “C” category rating for an issuer include: (a) the issuer has entered into a grace or cure period following non-payment of a material financial obligation; (b) the issuer has entered into a temporary negotiated waiver or standstill agreement following a payment default on a material financial obligation; or (c) Fitch otherwise believes a condition of “RD” or “D” to be imminent or inevitable, including through the formal announcement of a distressed debt exchange.
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RD: Restricted Default — “RD” ratings indicate an issuer that in Fitch’s opinion has experienced an uncured payment default on a bond, loan or other material financial obligation but which has not entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, and which has not otherwise ceased operating. This would include: (a) the selective payment default on a specific class or currency of debt; (b) the uncured expiry of any applicable grace period, cure period or default forbearance period following a payment default on a bank loan, capital markets security or other material financial obligation; (c) the extension of multiple waivers or forbearance periods upon a payment default on one or more material financial obligations, either in series or in parallel; or (d) execution of a distressed debt exchange on one or more material financial obligations.
D: Default — “D” ratings indicate an issuer that in Fitch’s opinion has entered into bankruptcy filings, administration, receivership, liquidation or other formal winding-up procedure, or which has otherwise ceased business.
Default ratings are not assigned prospectively to entities or their obligations; within this context, non-payment on an instrument that contains a deferral feature or grace period will generally not be considered a default until after the expiration of the deferral or grace period, unless a default is otherwise driven by bankruptcy or other similar circumstance, or by a distressed debt exchange.
“Imminent” default typically refers to the occasion where a payment default has been intimated by the issuer, and is all but inevitable. This may, for example, be where an issuer has missed a scheduled payment, but (as is typical) has a grace period during which it may cure the payment default. Another alternative would be where an issuer has formally announced a distressed debt exchange, but the date of the exchange still lies several days or weeks in the immediate future.
In all cases, the assignment of a default rating reflects the agency’s opinion as to the most appropriate rating category consistent with the rest of its universe of ratings, and may differ from the definition of default under the terms of an issuer’s financial obligations or local commercial practice.
FITCH SHORT-TERM DEBT RATINGs
A Fitch short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of the rated entity or security stream and relates to the capacity to meet financial obligations in accordance with the documentation governing the relevant obligation. Short-Term Ratings are assigned to obligations whose initial maturity is viewed as “short-term” based on market convention. Typically, this means up to 13 months for corporate, sovereign and structured obligations, and up to 36 months for obligations in U.S. publicfinance markets.
F1: Highest Short-Term Credit Quality — Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added “+” to denote any exceptionally strong credit feature.
F2: Good Short-Term Credit Quality — Good intrinsic capacity for timely payment of financial commitments.
F3: Fair Short-Term Credit Quality — The intrinsic capacity for timely payment of financial commitments is adequate.
B: Speculative Short-Term Credit Quality — Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near-term adverse changes in financial and economic conditions.
C: High Short-Term Default Risk — Default is a real possibility.
RD: Restricted Default — Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Applicable to entity ratings only.
D: Default — Indicates a broad-based default event for an entity, or the default of a short-term obligation.
A.M. BEST Company, Inc. (a.m. best) LONG-TERM DEBT and Preferred Stock RATINGS
A Best’s long-term debt rating is Best’s independent opinion of an issuer/entity’s ability to meet its ongoing financial obligations to security holders when due.
aaa: Exceptional — Assigned to issues where the issuer has an exceptional ability to meet the terms of the obligation.
aa: Very Strong — Assigned to issues where the issuer has a very strong ability to meet the terms of the obligation.
a: Strong — Assigned to issues where the issuer has a strong ability to meet the terms of the obligation.
bbb: Adequate — Assigned to issues where the issuer has an adequate ability to meet the terms of the obligation; however, the issue is more susceptible to changes in economic or other conditions.
bb: Speculative — Assigned to issues where the issuer has speculative credit characteristics, generally due to a modest margin or principal and interest payment protection and vulnerability to economic changes.
b: Very Speculative — Assigned to issues where the issuer has very speculative credit characteristics, generally due to a modest margin of principal and interest payment protection and extreme vulnerability to economic changes.
ccc, cc, c: Extremely Speculative — Assigned to issues where the issuer has extremely speculative credit characteristics, generally due to a minimal margin of principal and interest payment protection and/or limited ability to withstand adverse changes in economic or other conditions.
44
d: In Default — Assigned to issues in default on payment of principal, interest or other terms and conditions, or when a bankruptcy petition or similar action has been filed.
Ratings from “aa” to “ccc” may be enhanced with a “+” (plus) or “-” (minus) to indicate whether credit quality is near the top or bottom of a category.
A.M. BEST SHORT-TERM DEBT RATINGS
A Best’s short-term debt rating is Best’s opinion of an issuer/entity’s ability to meet its financial obligations having original maturities of generally less than one year, such as commercial paper.
AMB-1+ Strongest — Assigned to issues where the issuer has the strongest ability to repay short-term debt obligations.
AMB-1 Outstanding — Assigned to issues where the issuer has an outstanding ability to repay short-term debt obligations.
AMB-2 Satisfactory — Assigned to issues where the issuer has a satisfactory ability to repay short-term debt obligations.
AMB-3 Adequate — Assigned to issues where the issuer has an adequate ability to repay short-term debt obligations; however, adverse economic conditions likely will reduce the issuer’s capacity to meet its financial commitments.
AMB-4 Speculative — Assigned to issues where the issuer has speculative credit characteristics and is vulnerable to adverse economic or other external changes, which could have a marked impact on the company’s ability to meet its financial commitments.
d: In Default — Assigned to issues in default on payment of principal, interest or other terms and conditions, or when a bankruptcy petition or similar action has been filed.
A.M. Best Rating Modifiers
Both long- and short-term credit ratings can be assigned a modifier.
u — Indicates the rating may change in the near term, typically within six months. Generally is event-driven, with positive, negative or developing implications.
pd — Indicates ratings assigned to a company that chose not to participate in A.M. Best’s interactive rating process. (Discontinued in 2010).
i — Indicates rating assigned is indicative.
A.M. BEST RATING OUTLOOK
A.M. Best Credit Ratings are assigned a Rating Outlook that indicates the potential direction of a credit rating over an intermediate term, generally defined as the next 12 to36 months.
Positive — Indicates possible ratings upgrade due to favorable financial/market trends relative to the current trading level.
Negative — Indicates possible ratings downgrade due to unfavorable financial/market trends relative to the current trading level.
Stable — Indicates low likelihood of rating change due to stable financial/market trends.
Not Rated
Certain nationally recognized statistical rating organizations (NRSROs) may designate certain issues as NR, meaning that the issue or obligation is not rated.
45
Addresses
Federated Hermes Muni and Stock Advantage Fund
Class A Shares
Class B Shares
Class C Shares
Class F Shares
Institutional Shares
Federated Hermes Funds
4000 Ericsson Drive
Warrendale, PA 15086-7561
Distributor
Federated Securities Corp.
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Investment Adviser
Federated Equity Management Company of Pennsylvania
Federated Investment Management Company (Sub-Adviser)
1001 Liberty Avenue
Pittsburgh, PA 15222-3779
Transfer Agent and Dividend Disbursing Agent
State Street Bank and Trust Company
P.O. Box 219318
Kansas City, MO 64121-9318
Custodian
The Bank of New York Mellon
One Wall Street
New York, NY 10286
Independent Registered Public Accounting Firm
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116-5072
46
Appendix
The following is a list of persons, other than the Adviser and its affiliates, that have been approved to receive nonpublic portfolio holdings information concerning the Federated Hermes Complex; however, certain persons below might not receive such information concerning the Fund:
CUSTODIAN(S)
Bank of New York Mellon
SECURITIES LENDING AGENT
Citibank, N.A.
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
LEGAL COUNSEL
Goodwin Procter LLP
K&L Gates LLP
Financial Printer(S)
Donnelley Financial Solutions
Proxy Voting Administrator
Glass Lewis & Co., LLC
SECURITY PRICING SERVICES
Bloomberg L.P.
IHS Markit (Markit North America)
ICE Data Pricing & Reference Data, LLC
JPMorgan PricingDirect
Refinitiv US Holdings Inc.
RATINGS AGENCIES
Fitch, Inc.
Moody’s Investors Service, Inc.
Standard & Poor’s Financial Services LLC
Other SERVICE PROVIDERS
Other types of service providers that have been approved to receive nonpublic portfolio holdings information include service providers offering, for example, trade order management systems, portfolio analytics, or performance and accounting systems, such as:
Bank of America Merrill Lynch
Bloomberg L.P.
Citibank, N.A.
Eagle Investment Systems LLC
Electra Information Systems
FactSet Research Systems Inc.
FISGlobal
Institutional Shareholder Services
Investortools, Inc.
MSCI ESG Research LLC
Sustainalytics U.S. Inc.
The Yield Book, Inc.
Wolters Kluwer N.V.
47

Item 28. Exhibits

(a) Declaration of Trust  
 

Conformed Copy of Restated and Amended Declaration of Trust of the Registrant dated May 19, 2000, including Amendment Nos. 8-36, as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(b) By-Laws  
 

Conformed Copy of Amended and Restated By-Laws of the Registrant dated December 31, 1991, including Amendment Nos. 4 through 14 as filed via EDGAR in Post-Effective Amendment No. 220 on June 25, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(c) Instruments Defining Rights of Security Holders  
1

Copy of Specimen Certificate for Institutional Shares and Institutional Service Shares of Beneficial Interest for Federated Income Securities Trust, as filed via EDGAR in Post-Effective Amendment No. 21 on June 24, 1994 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
 

As of September 1, 1997, Federated Securities Corp. stopped issuing share certificates.

 

 

 

(d) Investment Advisory Contracts  
  Federated Investment Management Company  
1

Conformed copy of the Investment Advisory Contract of the Registrant dated December 31, 1991 including Exhibits A through H, Amendment dated June 1, 2001, Assignment dated January 1, 2004 and Limited Power of Attorney dated June 1, 2017, as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
  Federated Equity Management Company of Pennsylvania  
2

Conformed copy of the Investment Advisory Contract of the Registrant dated December 1, 2002 including Exhibit A, Assignment dated January 1, 2004 and Limited Power of Attorney dated June 1, 2017, as filed via EDGAR in Post-Effective Amendment No. 218 on May 27, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
3

Conformed copy of the Amended and Restated Investment Advisory Contract of the Registrant January 1, 2004 including Exhibits A through D and Limited Power of Attorney dated June 1, 2017, as filed via EDGAR in Post-Effective Amendment No. 218 on May 27, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
  Sub-Advisory Agreements  
4

Conformed copy of Sub-Advisory Agreement between Federated Equity Management Company of Pennsylvania and Federated Investment Management Company dated January 1, 2004 including Exhibit A and Limited Power of Attorney dated June 1, 2017 (Federated Muni and Stock Advantage Fund), as filed in Post-Effective Amendment No. 218 on May 27, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
5

Conformed copy of Sub-Advisory Agreement between Federated Equity Management Company of Pennsylvania and Federated Investment Management Company dated January 1, 2004 including Exhibit A and Limited Power of Attorney dated June 1, 2017 (Federated Capital Income Fund), as filed via EDGAR in Post-Effective Amendment No. 218 on May 27, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(e) Underwriting Contracts  
1

Conformed copy of the Distributor’s Contract of the Registrant dated December 31, 1991, including Exhibits A through JJ and Amendments dated June 1, 2001 and October 1, 2003, as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
2

Conformed copy of the Distributor’s Contract for Class B Shares of the Registrant dated October 24, 1997, including Amendments dated October 1, 2003 and June 1, 2001 and Schedule A (revised June 29, 2020), as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(f) Bonus or Profit Sharing Contracts  
 

Not applicable

 

 

 

(g) Custodian Agreements  
1

Conformed copy of Amended and Restated Master Custodian Agreement dated March 1, 2017 by and between State Street Bank and Trust Company and the Registrant, including Appendix A, revised as of December 1, 2020

 

+
2

Conformed copy of the Custody Agreement dated June 7, 2005 by and between The Bank of New York and the Registrant, including Amendments 1 through 33

 

+

 

 
 

 

 

(h) Other Material Contracts  
     
1 Services Agreement  
(a)

Conformed copy of Services Agreement between Federated Advisory Services Company and Federated Investment Management Company dated January 1, 2004, including Schedule 1 (revised December 1, 2020)

 

+
(b)

Conformed copy of Services Agreement between Federated Advisory Services Company and Federated Equity Management Company of Pennsylvania dated January 1, 2004, including Schedule 1 (revised June 29, 2020), as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
(c)

Conformed copy of the Second Amended and Restated Services Agreement, amended and restated as of December 1, 2001, between Federated Shareholder Services Company and the Registrant, including Schedule 1 (revised December 1, 2020)

 

+
(d)

Conformed copy of the Principal Shareholder Servicer’s Agreement for Class B Shares of the Registrant dated October 24, 1997, including Schedule A (revised June 26, 2020), as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
(e)

Conformed copy of the Shareholder Services Agreement for Class B Shares of the Registrant dated October 24, 1997, including Schedule A (revised September 1, 2020), as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
     
2 Transfer Agency Agreement  
 

Conformed copy of the Transfer Agency and Service Agreement between the Federated Funds and State Street Bank and Trust dated January 31, 2017, including Exhibit A (revised October 2, 2020) and Schedules, as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
     
3 Administrative Services Agreement  
 

Conformed copy of the Second Amended and Restated Agreement for Administrative Services between the Federated Funds and Federated Administrative Services dated September 1, 2017, including Exhibit A (revised December 1, 2020) and Exhibit B

 

+

 

     
4 Financial Administration and Accounting Agreement  
(a)

Conformed copy of the Financial Administration and Accounting Services Agreement between the Federated Funds and State Street Bank and Trust Company dated March 1, 2011, as amended, including Exhibit A (revised September 1, 2020), as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
(b)

Conformed copy of the Fund Accounting Agreement between the Federated Funds and The Bank of New York Mellon dated March 1, 2011, as amended, updated as of December 1, 2020

 

+

 

(i) Legal Opinion  
 

Conformed copy of Opinion and Consent of Counsel as to legality of shares being registered, as filed in Pre-Effective Amendment No. 3 on June 19, 1986 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(j) Other Opinions  
1

Conformed copy of Consent of Independent Registered Public Accounting Firm Ernst & Young

 

+

 

2

Conformed copy of Consent of Independent Registered Public Accounting Firm KPMG LLP

 

N/A

 

(k) Omitted Financial Statements  
 

Not Applicable

 

 

 

(l) Initial Capital Agreements  
 

Conformed copy of Initial Capital Agreement of the Registrant, as filed in Pre-Effective Amendment No. 3 on June 19, 1986 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(m) Rule 12b-1 Plan  
1

Conformed copy of the Distribution Plan between certain classes of the Registrant and Federated Securities Corp., dated February 12, 2004, including Exhibits A through R, as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 
2

Conformed copy of the Distribution Plan for Class B Shares of the Registrant dated October 24, 1997 including Schedule A (Revised June 29, 2020), as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(n) Rule 18f-3 Plan  
  Conformed copy of the Multiple Class Plan and all share class Exhibits as adopted by certain Federated investment companies offering separate classes of shares

+

 

 

(o) Powers of Attorney  
 

Conformed copy of Power of Attorney of the Registrant dated November 1, 2020, as filed via EDGAR in Post-Effective Amendment No. 224 on November 23, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

(p) Codes of Ethics  
 

Conformed copy of the Federated Hermes, Inc. Code of Ethics for Access Persons, effective January 31, 2020, as filed via EDGAR in Post-Effective Amendment No. 218 on May 27, 2020 on Form N-1A (File Nos. 33-3164 and 811-4577)

 

 

 

+

Exhibit is being filed electronically with registration statement

 

 

 

Exhibit List for Inline Interactive Data File Submission. 

Index No. Description of Exhibit
EX-101.INS XBRL Instance Document - Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the inline XBRL document.
EX-101.SCH XBRL Taxonomy Extension Schema Document
EX-101.CAL XBRL Taxonomy Extension Calculation Linkbase
EX-101.DEF XBRL Taxonomy Extension Definition Linkbase
EX-101.LAB XBRL Taxonomy Extension Labels Linkbase
EX-101.PRE XBRL Taxonomy Extension Presentation Linkbase

 


Item 29  Persons Controlled by or Under Common Control with the Fund:
None

 

 
 

 

 

Item 30  Indemnification

Indemnification is provided to Officers and Trustees of the Registrant pursuant to the Registrant's By-Laws, as amended. This includes indemnification against: (a) any liabilities or expenses incurred in connection with the defense or disposition of any action, suit or proceeding in which an Officer or Trustee may be or may have been involved; and (b) any liabilities and expenses incurred by an Officer or Trustee as a result of having provided personally identifiable information to a regulator or counterparty by or with whom the Registrant (or its series, as applicable) is regulated or engages in business to satisfy a legal or procedural requirement of such regulator or counterparty.

The Investment Advisory Contract, and Sub-advisory Agreement as applicable, (collectively, “Advisory Contracts”) between the Registrant and the investment adviser, and sub-adviser as applicable, (collectively, “Advisers”) of its series, provide that, in the absence of willful misfeasance, bad faith, gross negligence, or reckless disregard of the obligations or duties under the Advisory Contracts on the part of the Advisers, Advisers shall not be liable to the Registrant or to any shareholder for any act or omission in the course of or connected in any way with rendering services or for any losses that may be sustained in the purchase, holding, or sale of any security.

The Registrant’s distribution contract contains provisions limiting the liability, and providing for indemnification, of the Officers and Trustees under certain circumstances.

Registrant's Trustees and Officers are covered by an Investment Trust Errors and Omissions Policy.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to Trustees, Officers, and controlling persons of the Registrant by the Registrant pursuant to the By-Laws, as amended, or otherwise, the Registrant is aware that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Act and, therefore, is unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by Trustees), Officers, or controlling persons of the Registrant in connection with the successful defense of any act, suit, or proceeding) is asserted by such Trustees, Officers, or controlling persons in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issues.

Insofar as indemnification for liabilities may be permitted pursuant to Section 17 of the Investment Company Act of 1940 for Trustees, Officers, and controlling persons of the Registrant by the Registrant pursuant to the By-Laws, as amended, or otherwise, the Registrant is aware of the position of the Securities and Exchange Commission as set forth in Investment Company Act Release No. IC-11330. Therefore, the Registrant undertakes that in addition to complying with the applicable provisions of the By-Laws, as amended, or otherwise, in the absence of a final decision on the merits by a court or other body before which the proceeding was brought, that an indemnification payment will not be made unless in the absence of such a decision, a reasonable determination based upon factual review has been made (i) by a majority vote of a quorum of non-party Trustees who are not interested persons of the Registrant or (ii) by independent legal counsel in a written opinion that the indemnitee was not liable for an act of willful misfeasance, bad faith, gross negligence, or reckless disregard of duties. The Registrant further undertakes that advancement of expenses incurred in the defense of a proceeding (upon undertaking for repayment unless it is ultimately determined that indemnification is appropriate) against an Officer, Trustee or controlling person of the Registrant will not be made absent the fulfillment of at least one of the following conditions: (i) the indemnitee provides security for his undertaking; (ii) the Registrant is insured against losses arising by reason of any lawful advances; or (iii) a majority of a quorum of disinterested non-party Trustees or independent legal counsel in a written opinion makes a factual determination that there is reason to believe the indemnitee will be entitled to indemnification.

 

 

 

 
 

 

Item 31  Business and Other Connections of Investment Adviser: Federated Investment Management Company
For a description of the other business of the Investment Adviser, see the section entitled “Who Manages the Fund?” in Part A. The affiliations with the Registrant of two of the Trustees and two of the Officers of the Investment Adviser are included in Part B of this Registration Statement under "Who Manages and Provides Services to the Fund?"  The remaining Trustees of the Investment Adviser and, in parentheses, their principal occupations are:  Thomas R. Donahue, (Chief Financial Officer, Federated Hermes, Inc.), 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779, John B. Fisher, (Vice Chairman, Federated Hermes, Inc.) 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779 and James J. Gallagher, II, Partner, Morris James LLP, 500 Delaware Avenue, Suite 1500, Wilmington, DE  19801-1494.  The business address of each of the Officers of the Investment Adviser is 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.  These individuals are also officers of a majority of the Investment Advisers to the investment companies in the Federated Hermes Fund Complex described in Part B of this Registration Statement.
The Officers of the Investment Adviser are:
Chairman: J. Christopher Donahue
President/ Chief Executive Officer: John B. Fisher
Executive Vice Presidents:

Deborah A. Cunningham

Robert J. Ostrowski

Senior Vice Presidents:

Todd Abraham

J. Scott Albrecht

Randall S. Bauer

Jonathan C. Conley

Mark E. Durbiano

Donald T. Ellenberger

Eamonn G. Folan

Richard J. Gallo

John T. Gentry

Susan R. Hill

William R. Jamison

Jeffrey A. Kozemchak

Anne H. Kruczek

Marian R. Marinack

Mary Jo Ochson

Jeffrey A. Petro

Ihab Salib

Michael W. Sirianni, Jr.

Steven J. Wagner

Paige Wilhelm

 

Vice Presidents:

Christopher S. Bodamer

G. Andrew Bonnewell

Hanan Callas

David B. Catalane, Jr.

Leslie Ciferno

Jerome Conner

Lee R. Cunningham, II

Gregory Czamara, V

B. Anthony Delserone, Jr.

Joseph A. Delvecchio

Jason DeVito

Bryan Dingle

William Ehling

Ann Ferentino

Kevin M. Fitzpatrick

Timothy P. Gannon

Kathryn P. Glass

James L. Grant

Patricia L. Heagy

Nathan H. Kehm

John C. Kerber

J. Andrew Kirschler

Allen J. Knizner

Tracey Lusk

Karen Manna

Daniel James Mastalski

Robert J. Matthews

Christopher McGinley

Keith E. Michaud

Karl Mocharko

Joseph M. Natoli

Gene Neavin

Bob Nolte

Liam O’Connell

Mary Kay Pavuk

John Polinski

Rae Ann Rice

Brian Ruffner

Thomas C. Scherr

John Sidawi

Kyle Stewart

Patrick J. Strollo, III

Mary Ellen Tesla

James Damen Thompson

Timothy G. Trebilcock

Nicholas S. Tripodes

Anthony A. Venturino

Mark Weiss

George B. Wright

Christopher Wu

 

Assistant Vice Presidents:

John Badeer

Ian Paul Bangor

Patrick Benacci

Nicholas Cecchini

James Chelmu

Joseph Engel

Brandon Ray Hochstetler

Jeff J. Ignelzi

Nick Navari

Bradley Payne

Braden Rotberg

John W. Scullion

Steven J. Slanika

Peter Snook

Randal Stuckwish

Michael S. Wilson

 

Secretary: G. Andrew Bonnewell
Assistant Secretaries:

Edward C. Bartley

George F. Magera

 

Treasurer: Thomas R. Donahue
Assistant Treasurers: Jeremy D. Boughton
Richard A. Novak
Chief Compliance Officer: Stephen Van Meter

 

Item 31  Business and Other Connections of Investment Adviser: Federated Equity Management Company of Pennsylvania
For a description of the other business of the Investment Adviser, see the section entitled “Who Manages the Fund?” in Part A. The affiliations with the Registrant of one of the Trustees and two of the Officers of the Investment Adviser are included in Part B of this Registration Statement under "Who Manages and Provides Services to the Fund?"  The remaining Trustees of the Investment Adviser and, in parentheses, their principal occupations are:  Thomas R. Donahue, (Chief Financial Officer, Federated Hermes, Inc.), 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779, John B. Fisher, (Vice Chairman, Federated Hermes, Inc.) 1001 Liberty Avenue, Pittsburgh, PA, 15222-3779 and James J. Gallagher, II, Partner, Morris James LLP, 500 Delaware Avenue, Suite 1500, Wilmington, DE  19801-1494.  The business address of each of the Officers of the Investment Adviser is 1001 Liberty Avenue, Pittsburgh, Pennsylvania 15222-3779.  These individuals are also officers of a majority of the Investment Advisers to the investment companies in the Federated Hermes Fund Complex described in Part B of this Registration Statement.
The Officers of the Investment Adviser are:
Chairman J. Christopher Donahue
President/ Chief Executive Officer: John B. Fisher
Executive Vice President Stephen F. Auth
Senior Vice Presidents:

Linda A. Duessel

Anne H. Kruczek

Dana L. Meissner

Daniel Peris

 

Vice Presidents:

Deborah D. Bickerstaff

Linda Bakhshian

P. Ryan Bend

G. Andrew Bonnewell

Jared Hoff

Chad Hudson

Damian McIntyre

Ian Miller

Michael Tucker

 

Assistant Vice Presidents:

Michael D. Jura

Keith Michaud

Secretary: G. Andrew Bonnewell
Assistant Secretaries:

Edward C. Bartley

George F. Magera

 

Treasurer: Thomas R. Donahue
Assistant Treasurers: Jeremy Boughton
Richard A. Novak
Chief Compliance Officer: Stephen Van Meter

 

Item 32  Principal Underwriters:
(a) Federated Securities Corp., the Distributor for shares of the Registrant, acts as principal underwriter for the following investment companies, including the Registrant:
  Federated Hermes Adjustable Rate Securities Trust
  Federated Hermes Adviser Series
  Federated Hermes Core Trust
  Federated Hermes Core Trust III
  Federated Hermes Equity Funds
  Federated Hermes Equity Income Fund, Inc.
  Federated Hermes Fixed Income Securities, Inc.
  Federated Hermes Global Allocation Fund
  Federated Hermes Government Income Securities, Inc.
  Federated Hermes Government Income Trust
  Federated Hermes High Income Bond Fund, Inc.
  Federated Hermes High Yield Trust
  Federated Hermes Income Securities Trust
  Federated Hermes Index Trust
  Federated Hermes Institutional Trust
  Federated Hermes Insurance Series
  Federated Hermes Intermediate Municipal Trust
  Federated Hermes International Series, Inc.
  Federated Hermes Investment Series Funds, Inc.
  Federated Hermes Managed Pool Series
  Federated Hermes MDT Series
  Federated Hermes Money Market Obligations Trust
  Federated Hermes Municipal Bond Fund, Inc.
  Federated Hermes Municipal Securities Income Trust
  Federated Hermes Premier Municipal Income Fund
  Federated Hermes Project and Trade Finance Tender Fund
  Federated Hermes Short-Intermediate Duration Municipal Trust
  Federated Hermes Short-Intermediate Government Trust
  Federated Hermes Short-Term Government Trust
  Federated Hermes Total Return Government Bond Fund
  Federated Hermes Total Return Series, Inc.
  Federated Hermes World Investment Series, Inc.

 

(b)    

(1)

Positions and Offices with Distributor

(2)

Name

 

(3)

Positions and Offices With Registrant

Executive Vice President, Assistant Secretary and Director: Thomas R. Donahue  
President and Director: Paul Uhlman  
Vice President and Director: Peter J. Germain  
Director: Frank C. Senchak  

 

 
 

 

(1)

Positions and Offices with Distributor

(2)

Name

 

(3)

Positions and Offices With Registrant

Executive Vice Presidents:

Michael Bappert

Peter W. Eisenbrandt

Solon A. Person, IV

 
Senior Vice Presidents:

Irving Anderson

Daniel G. Berry

Jack Bohnet

Edwin J. Brooks, III

Bryan Burke

Scott J. Charlton

Steven R. Cohen

James S. Conley

Stephen R. Cronin

Charles L. Davis, Jr.

Michael T. Dieschborg

Michael T. DiMarsico

Jack C. Ebenreiter

James Getz, Jr.

Scott A. Gunderson

Dayna C. Haferkamp

Vincent L. Harper, Jr.

Bruce E. Hastings

Donald Jacobson

Jeffrey S. Jones

Scott D. Kavanagh

Harry J. Kennedy

Michael Koenig

Edwin C. Koontz

Anne H. Kruczek

Jane E. Lambesis

Jerry Landrum

Hans W. Lange, Jr.

Michael Liss

Diane Marzula

Amy Michaliszyn

Richard C. Mihm

Vincent T. Morrow

Alec H. Neilly

Keith Nixon

James E. Ostrowski

Stephen Otto

Richard P. Paulson

Richard A. Recker

Diane M. Robinson

Brian S. Ronayne

Timothy A. Rosewicz

Eduardo G. Sanchez

Tom Schinabeck

Edward L. Smith

John Staley

William C. Tustin

Michael N. Vahl

G. Walter Whalen

Lewis C. Williams

Michael Wolff

Daniel R. Wroble

Erik Zettlemayer

Paul Zuber

 
Vice Presidents:

Frank Amato

Catherine M. Applegate

Kenneth C. Baber

Raisa E. Barkaloff

Robert W. Bauman

Marc Benacci

Christopher D. Berg

Bill Boarts

Matthew A. Boyle

Edward R. Bozek

Thomas R. Brown

Mark Carroll

Dan Casey

Stephen J. Costlow

Mary Ellen Coyne

Kevin J. Crenny

David G. Dankmyer

Christopher T. Davis

Donald Edwards

Mark A. Flisek

Stephen Francis

Heather W. Froelich

David D. Gregoire

Raymond J. Hanley

George M. Hnaras

Scott A. Holick

Ryan W. Jones

Todd Jones

Patrick Kelly

Nicholas R. Kemerer

Robert H. Kern

Shawn E. Knutson

Crystal C. Kwok

David M. Larrick

John P. Liekar

Jonathan Lipinski

Paul J. Magan

Margaret M. Magrish

Alexi A. Maravel

Meghan McAndrew

Martin J. McCaffrey

Samuel McGowan

Daniel McGrath

Brian McInis

John C. Mosko

Mark J. Murphy

Catherine M. Nied

Ted Noethling

John A. O’Neill

Mark Patsy

Marcus Persichetti

Max E. Recker

Emory Redd

Matt Ryan

 
 

John Shrewsbury

Peter Siconolfi

Neal Siena

Justin Slomkowski

Bradley Smith

John R. Stanley

Mark Strubel

Jonathan Sullivan

David Wasik

Theodore Williams

Brian R. Willer

Littell L. Wilson

James J. Wojciak

 
Assistant Vice Presidents:

Debbie Adams-Marshall

Zachary J. Bono

Edward R. Costello

Madison Dischinger

Chris Jackson

Kristen C. Kiesling

Anthony W. Lennon

Stephen R. Massey

Carol McEvoy McCool

John K. Murray

Melissa R. Ryan

Carol Anne Sheppard

Scott A. Vallina

Laura Vickerman

 
Secretary: Kary A. Moore  
Assistant Secretaries: Edward C. Bartley  
  Thomas R. Donahue  
  George F. Magera  
Treasurer: Richard A. Novak  
Assistant Treasurer: Jeremy D. Boughton  
Chief Compliance Officer: Stephen Van Meter  

 

(c) Not Applicable

 

Item 33.  Location of Accounts and Records:
All accounts and records required to be maintained by Section 31(a) of the Investment Company Act of 1940 and Rules 31a-1 through 31a-3 promulgated thereunder and those records required to be maintained by the Adviser with respect to the Registrant in accordance with CFTC regulations are maintained at one of the following locations:

 

Registrant

Federated Hermes Funds

4000 Ericsson Drive

Warrendale, PA 15086-7561

(Notices should be sent to the Agent for Service at the address listed on the facing page of this filing.)

Federated Administrative Services

(Administrator)

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

 

Federated Securities Corp.

(Distributor)

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

 

Federated Equity Management Company of Pennsylvania

(Adviser to Federated Capital Income Fund and Federated Muni and Stock Advantage Fund (“Adviser”)

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Federated Investment Management Company

(Adviser to Federated Floating Rate Strategic Income Fund, Federated Fund for U.S. Government Securities, Federated Intermediate Corporate Bond Fund, Federated Real Return Bond Fund and Federated Short-Term Income Fund.)

(“Adviser”)

(Sub-Adviser to Federated Capital Income Fund and Federated Muni and Stock Advantage Fund (“Sub-Adviser”)

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Federated Advisory Services Company

(Adviser)

 

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

State Street Bank and Trust Company

(Transfer Agent and Dividend Disbursing Agent)

 

P.O. Box 219318

Kansas City, MO 64121-9318

State Street Bank and Trust Company

(Custodian)

 

1 Iron Street

Boston, MA 02110

Bank of New York Mellon
(Custodian)

The Bank of New York Mellon

One Wall Street

New York, NY 10286

 

 

Item 34 Management Services:  Not applicable.
 

 

Item 35  Undertakings:
Registrant hereby undertakes to comply with the provisions of Section 16(c) of the 1940 Act with respect to the removal of Trustees and the calling of special shareholder meetings by shareholders.

 

 
 

 

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, Federated Hermes Income Securities Trust certifies that it meets all of the requirements for effectiveness of this Amendment to its Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Amendment to its Registration Statement to be signed on its behalf by the undersigned, duly authorized, in the City of Pittsburgh and Commonwealth of Pennsylvania, on the 28th day of December, 2020.

FEDERATED HERMES INCOME SECURITIES TRUST

BY: /s/ George F. Magera

George F. Magera, Assistant Secretary

Pursuant to the requirements of the Securities Act of 1933, this Amendment to its Registration Statement has been signed below by the following person in the capacity and on the date indicated:

 

NAME TITLE DATE

BY:/s/ George F. Magera

George F. Magera, Assistant Secretary

Attorney In Fact For the Persons Listed Below December 28, 2020
J. Christopher Donahue* President and Trustee (Principal Executive Officer)  
John B. Fisher* Trustee  
Lori A. Hensler* Treasurer (Principal Financial Officer/Principal Accounting Officer)  
John T. Collins* Trustee  
G. Thomas Hough* Trustee  
Maureen Lally-Green* Trustee  
Charles F. Mansfield, Jr.* Trustee  
Thomas O’Neill* Trustee  
Madelyn A. Reilly* Trustee  
P. Jerome Richey* Trustee  
John S. Walsh* Trustee  
*By Power of Attorney    

 

Exhibit 28 (g) (1) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

 

Execution Copy

 

Amended and Restated Master Custodian Agreement

 

This Amended and Restated Master Custodian Agreement is made as of March 1, 2017 (this “Agreement”), between each management investment company identified on Appendix A and each management investment company which becomes a party to this Agreement in accordance with the terms hereof (in each case, a “Fund”), including, if applicable, each series of the Fund identified on Appendix A and each series which becomes a party to this Agreement in accordance with the terms hereof, and State Street Bank and Trust Company, a Massachusetts trust company (the “Custodian”). This Agreement amends and restates the Custodian Contract between the Funds and the Custodian dated as of December 1, 1993, as amended.

 

Witnesseth:

 

Whereas, each Fund desires for the Custodian to provide certain custodial services relating to securities and other assets of the Fund; and

 

Whereas, the Custodian is willing to provide the services upon the terms contained in this Agreement;

 

Section 1. Definitions. In addition to terms defined in Section 4.1 (Rule 17f-5 and Rule 17f-7 related definitions) or elsewhere in this Agreement, (a) terms defined in the UCC have the same meanings herein as therein and (b) the following other terms have the following meanings for purposes of this Agreement:

 

“1940 Act” means the Investment Company Act of 1940, as amended from time to time.

 

“Board” means, in relation to a Fund, the board of directors, trustees or other governing body of the Fund.

 

“Client Publications” means the general client publications of State Street Bank and Trust Company available from time to time to clients and their investment managers.

 

“Deposit Account Agreement” means the Deposit Account Agreement and Disclosure, as may be amended from time to time, issued by the Custodian and available on the Custodian’s internet customer portal, “my.statestreet.com”.

 

“Domestic securities” means securities held within the United States.

 

“Foreign securities” means securities held primarily outside of the United States.

 

“Held outside of the United States” means not held within the United States.

 

“Held within the United States” means (a) in relation to a security or other financial asset, the security or other financial asset (i) is a certificated security registered in the name of the Custodian or its sub-custodian, agent or nominee or is endorsed to the Custodian or its sub-custodian, agent or nominee or in blank and the security certificate is located within the United States, (ii) is an uncertificated security or other financial asset registered in the name of the Custodian or its sub-custodian, agent or nominee at an office located in the United States, or (iii) has given rise to a security entitlement of which the Custodian or its sub-custodian, agent or nominee is the entitlement holder against a U.S. Securities System or another securities intermediary for which the securities intermediary’s jurisdiction is within the United States, and (b) in relation to cash, the cash is maintained in a deposit account denominated in U.S. dollars with the banking department of the Custodian or with another bank or trust company’s office located in the United States.

 

“Investment Advisor” means, in relation to a Portfolio, the investment manager or investment advisor of the Portfolio.

 

“On book currency” means (a) U.S. dollars or (b) a foreign currency that, when credited to a deposit account of a customer maintained in the banking department of the Custodian or an Eligible Foreign Custodian, the Custodian maintains on its books as an amount owing as a liability by the Custodian to the customer.

 

“Portfolio” means (a) in relation to a Fund that is a series organization, a series of the Fund and (b) in relation to a Fund that is not a series organization, the Fund itself.

 

“Portfolio Interests” means beneficial interests in a Portfolio.

 

“Proper Instructions” means instructions in accordance with Section 9 received by the Custodian from a Fund, the Fund’s Investment Advisor, or an individual or organization duly authorized by the Fund or the Investment Advisor. The term includes standing instructions.

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“Series organization” means an organization that, pursuant to the statute under which the organization is organized, has the following characteristics: (a) the organic record of the organization provides for creation by the organization of one or more series (however denominated) with respect to specified property of the organization, and provides for records to be maintained for each series that identify the property of or associated with the series, (b) debt incurred or existing with respect to the activities of, or property of or associated with a particular series is enforceable against the property of or associated with the series only, and not against the property of or associated with the organization or of other series of the organization, and (c) debt incurred or existing with respect to the activities or property of the organization is enforceable against the property of the organization only, and not against the property of or associated with any series of the organization.

 

“UCC” means the Uniform Commercial Code of the Commonwealth of Massachusetts as in effect from time to time.

 

“Underlying Portfolios” means a group of investment companies as defined in Section 12(d)(1)(F) of the 1940 Act.

 

“Underlying Shares” means shares or other securities, issued by a U.S. issuer, of Underlying Portfolios and other registered “investment companies” (as defined in Section 3(a)(1) of the 1940 Act), whether or not in the same “group of investment companies” (as defined in Section 12(d)(1)(G)(ii) of the 1940 Act).

 

“Underlying Transfer Agent” means State Street Bank and Trust Company or such other organization which may from time to time be appointed by the Fund to act as a transfer agent for the Underlying Portfolios and with respect to which the Custodian is provided with Proper Instructions.

 

“U.S. Securities System” means a securities depository or book-entry system authorized by the U.S. Department of the Treasury or a “clearing corporation” as defined in Section 8-102 of the UCC.

 

Section 2. Employment of Custodian.

 

Section 2.1 General. Each Fund hereby employs the Custodian as a custodian of (a) securities and cash of each of the Portfolios and (b) other assets of each of the Portfolios that the Custodian agrees to treat as financial assets. Each Fund, on behalf of each of its Portfolios, agrees to deliver to the Custodian (i) all securities and cash of the Portfolios, (ii) all other assets of each Portfolio that the Fund desires the Custodian, and the Custodian is willing, to treat as a financial asset and (iii) all cash and other proceeds of the securities and financial assets held in custody under this Agreement. The holding of confirmation statements that identify Underlying Shares as being recorded in the Custodian’s name on behalf of the Portfolios will be custody for purposes of this Section 2.1. This Agreement does not require the Custodian to accept an asset for custody hereunder or to treat any asset that is not a security as a financial asset if such acceptance or treatment is inconsistent with applicable law and/or internal policies and procedures of the Custodian .

 

Section 2.2 Sub-custodians. Upon receipt of Proper Instructions, the Custodian shall on behalf of a Fund appoint one or more banks, trust companies or other entities located in the United States and designated in the Proper Instructions to act as a sub-custodian for the purposes of effecting such transactions as may be designated by the Fund in the Proper Instructions. The Custodian may place and maintain each Fund’s foreign securities with foreign banking institution sub-custodians employed by the Custodian or foreign securities depositories, all in accordance with the applicable provisions of Sections 4 and 5. An entity acting in the capacity of Underlying Transfer Agent is not an agent or sub-custodian of the Custodian for purposes of this Agreement.

 

Section 2.3 Relationship. With respect to securities and other financial assets, the Custodian is a securities intermediary and the Portfolio is the entitlement holder. With respect to cash maintained in a deposit account and denominated in an “on book” currency, the Custodian is a bank and the Portfolio is the bank’s customer. If cash is maintained in a deposit account with a bank other than the Custodian and the cash is denominated in an “on book” currency, the Custodian is that bank’s customer. The Custodian agrees to treat the claim to the cash as a financial asset for the benefit of the Portfolio. The Custodian does not otherwise agree to treat cash as a financial asset. The duties of the Custodian as securities intermediary and bank set forth in the UCC are varied by the terms of this Agreement to the extent that the duties may be varied by agreement under the UCC.

 

Section 3. Activities of the Custodian with Respect to Property Held in the United States.

 

Section 3.1 Holding Securities. The Custodian may deposit and maintain securities or other financial assets of a Portfolio in a U.S. Securities System in compliance with the conditions of Rule 17f-4 under the 1940 Act. Upon receipt of Proper Instructions on behalf of a Portfolio, the Custodian shall establish and maintain a segregated account or accounts for and on behalf of the Portfolio and into which account or accounts may be transferred cash or securities and other financial assets, including securities and financial assets maintained in a U.S. Securities System. The Custodian shall hold and physically segregate for the account of each Portfolio all securities and other financial assets held by the Custodian in the United States, including all domestic securities of the Portfolio, other than (a) securities or other financial assets maintained in a U.S. Securities System and (b) Underlying Shares maintained pursuant to Section 3.6 in an account of an Underlying Transfer Agent. The Custodian may at any time or times in its discretion appoint any other bank or trust company, qualified under the 1940 Act to act as a custodian, as the Custodian’s agent to carry out such of the provisions of this Section as the Custodian may from time to time direct, provided, however, that prior to such appointment on behalf of a Portfolio the Custodian must first provide the Fund with written notice of such appointment. The appointment of any agent shall not relieve the Custodian of any of its duties, responsibilities or liabilities, including the standard of care set forth in Section 14.1. The Custodian may at any time or times in its discretion remove the bank or trust company as the Custodian’s agent.

 

Section 3.2 Registration of Securities. Domestic securities or other financial assets held by the Custodian and that are not bearer securities shall be registered in the name of the applicable Portfolio or in the name of any nominee of a Fund on behalf of the Portfolio or of any nominee of the Custodian, or in the name or nominee name of any agent or any sub-custodian permitted hereby. All securities accepted by the Custodian on behalf of the Portfolio under the terms of this Agreement shall be in “street name” or other good delivery form. However, if a Fund directs the Custodian to maintain securities or other financial assets in “street name,” the Custodian shall utilize reasonable efforts only to timely collect income due the Fund on the securities and other financial assets and to notify the Fund of relevant issuer actions including, without limitation, pendency of calls, maturities, tender or exchange offers.

 

Section 3.3 Bank Accounts. The Custodian shall open and maintain upon the terms of the Deposit Account Agreement a separate deposit account or accounts in the United States in the name of each Portfolio, subject only to draft or order by the Custodian acting pursuant to the terms of this Agreement. The Custodian shall credit to the deposit account or accounts, subject to the provisions hereof, all cash received by the Custodian from or for the account of the Portfolio, other than cash maintained by the Portfolio in a deposit account established and used in accordance with Rule 17f-3 under the 1940 Act. Funds held by the Custodian for a Portfolio may be deposited by the Custodian to its credit as Custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable; provided, however, that (a) every such bank or trust company shall be qualified to act as a custodian under the 1940 Act and (b) each such bank or trust company and the funds to be deposited with each such bank or trust company shall on behalf of each applicable Portfolio of a Fund be approved by vote of a majority of the Fund’s Board. The funds shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian only in that capacity.

 

Section 3.4 Collection of Income. Subject to the domestic securities or other financial assets held in the United States being registered as provided in Section 3.2, the Custodian shall collect on a timely basis all income and other payments with respect to the securities and other financial assets and to which a Portfolio shall be entitled either by law or pursuant to custom in the securities business. The Custodian shall collect on a timely basis all income and other payments with respect to bearer domestic securities if, on the date of payment by the issuer, the securities are held by the Custodian or its agent. The Custodian shall present for payment all income items requiring presentation as and when they become due and shall collect interest when due on securities and other financial assets held hereunder. The Custodian shall credit income to the Portfolio as such income is received or in accordance with the Custodian’s then current payable date income schedule. Any credit to the Portfolio in advance of receipt may be reversed when the Custodian determines that payment will not occur in due course, and the Portfolio may be charged at the Custodian’s applicable rate for time credited.

 

Section 3.5 Delivery Out. The Custodian shall release and deliver out domestic securities and other financial assets of a Portfolio held in a U.S. Securities System, or in an account at the Underlying Transfer Agent, only upon receipt of Proper Instructions on behalf of the applicable Portfolio, specifying the domestic securities or financial assets held in the United States to be delivered out and the person or persons to whom delivery is to be made. The Custodian shall pay out cash of a Portfolio upon receipt of Proper Instructions on behalf of the applicable Portfolio, specifying the amount of the payment and the person or persons to whom the payment is to be made.

 

Section 3.6 Deposit of Fund Assets with the Underlying Transfer Agent. Underlying Shares of a Fund, on behalf of a Portfolio, shall be deposited and held in an account or accounts maintained with an Underlying Transfer Agent. Each Portfolio hereby directs the Custodian to deposit and/or maintain such securities with the Underlying Transfer Agent, subject to the following provisions:

 

1) Upon receipt of a confirmation or statement from an Underlying Transfer Agent that the Underlying Transfer Agent is holding or maintaining Underlying Shares in the name of the Custodian (or a nominee of the Custodian) for the benefit of a Portfolio, the Custodian shall identify by book-entry that the Underlying Shares are being held by it as custodian for the benefit of the Portfolio.

 

2) Upon receipt of Proper Instructions to purchase Underlying Shares for the account of a Portfolio, the Custodian shall pay out cash of the Portfolio as so directed to purchase the Underlying Shares and record the payment from the account of the Portfolio on the Custodian’s books and records.

 

3) Upon receipt of Proper Instructions for the sale or redemption of Underlying Shares for the account of a Portfolio, the Custodian shall transfer the Underlying Shares as so directed to sell or redeem the Underlying Shares, record the transfer from the account of the Portfolio on the Custodian’s books and records and, upon the Custodian’s receipt of the proceeds of the sale or redemption, record the receipt of the proceeds for the account of such Portfolio on the Custodian’s books and records.

 

4) The Custodian shall not be liable to any Fund or any Portfolio for any loss or damage to any Fund or any Portfolio resulting from maintenance of Underlying Shares with Underlying Transfer Agent provided that the Custodian meets the standard of care set forth in Section 14.1.

 

Section 3.7 Proxies. The Custodian shall cause to be promptly executed by the registered holder of domestic securities or other financial assets held in the United States of a Portfolio, if the securities or other financial assets are registered otherwise than in the name of the Portfolio or a nominee of the Portfolio, all proxies, without indication of the manner in which the proxies are to be voted, and shall promptly deliver to the Fund or its delegates such proxies, all proxy soliciting materials and all notices relating to the securities or other financial assets.

 

Section 3.8 Communications. Subject to the domestic securities or other financial assets held in the United States being registered as provided in Section 3.2, the Custodian shall transmit promptly to the applicable Fund or its delegates for each Portfolio all written information received by the Custodian from issuers of the securities and other financial assets being held for the Portfolio. The Custodian shall transmit promptly to the applicable Fund or its delegates all written information (including, without limitation, pendency of calls and maturities of securities and expiration of rights in connection therewith, notices of exercise of call and put options written by the Fund, and the maturity of futures contracts purchased or sold by the Fund) received by the Custodian from issuers of the securities and other financial assets whose tender or exchange is sought and from the party or its agent making the tender or exchange offer. The Custodian shall also transmit promptly to the applicable Fund or its delegates for each Portfolio all written information received by the Custodian regarding any class action or other collective litigation relating to Portfolio securities or other financial assets issued in the United States and then held, or previously held, during the relevant class-action period during the term of this Agreement by the Custodian for the account of the Fund for the Portfolio, including, but not limited to, opt-out notices and proof-of-claim forms. The Custodian does not support class-action participation by a Fund beyond such forwarding of written information received by the Custodian to the Fund or its delegates.

 

Section 4. Provisions Relating to Rules 17f-5 and 17f-7.

 

Section 4.1. Definitions. As used in this Agreement, the following terms have the following meanings:

 

“Country Risk” means all factors reasonably related to the systemic risk of holding Foreign Assets in a particular country. The factors include but are not limited to risks arising from the country’s political environment, economic and financial infrastructure (including any Eligible Securities Depository operating in the country); prevailing or developing custody, tax and settlement practices; nationalization, expropriation or other government actions; currency restrictions, devaluations or fluctuations; market conditions affecting the orderly execution of securities transactions or the value of assets; the regulation of the banking and securities industries, including changes in market rules; and laws and regulations applicable to the safekeeping and recovery of Foreign Assets held in custody in that country.

 

“Covered Foreign Country” means a country listed on Schedule A, which list of countries may be amended from time to time at the request of any Fund and with the agreement of the Foreign Custody Manager.

 

“Eligible Foreign Custodian” has the meaning set forth in Section (a)(1) of Rule 17f-5.

 

“Eligible Securities Depository” has the meaning set forth in section (b)(1) of Rule 17f-7.

 

“Foreign Assets” means, in relation to a Portfolio, any of the Portfolio’s securities or other investments (including foreign currencies) for which the primary market is outside the United States, and any cash and cash equivalents that are reasonably necessary to effect transactions of the Portfolio in those investments.

 

“Foreign Custody Manager” has the meaning set forth in section (a)(3) of Rule 17f-5.

 

“Foreign Securities System” means an Eligible Securities Depository listed on Schedule B.

 

“Rule 17f-5” means Rule 17f-5 promulgated under the 1940 Act.

 

“Rule 17f-7” means Rule 17f-7 promulgated under the 1940 Act.

 

 

 

Section 4.2. The Custodian as Foreign Custody Manager.

 

4.2.1       Delegation. Each Fund, by resolution adopted by its Board, hereby delegates to the Custodian, subject to Section (b) of Rule 17f-5, the responsibilities set forth in this Section 4.2 with respect to Foreign Assets of the Portfolios held outside the United States. The Custodian hereby accepts such delegation. By giving at least 30 days’ prior written notice to the Fund, the Foreign Custody Manager may withdraw its acceptance of the delegated responsibilities generally or with respect to a Covered Foreign Country designated in the notice. Following the withdrawal, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Fund generally or, as the case may be, with respect to the Covered Foreign Country so designated.

 

4.2.2       Exercise of Care as Foreign Custody Manager. In performing the responsibilities delegated to it, the Foreign Custody Manager shall exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of the Foreign Assets would exercise.

 

4.2.3       Foreign Custody Arrangements. The Foreign Custody Manager shall be responsible for performing the delegated responsibilities only with respect to Covered Foreign Countries. The Foreign Custody Manager shall list on Schedule A for a Covered Foreign Country each Eligible Foreign Custodian selected by the Foreign Custody Manager to maintain the Foreign Assets of the Portfolios with respect to the Covered Foreign Country. The list of Eligible Foreign Custodians may be amended from time to time upon notice in the sole discretion of the Foreign Custody Manager. This Agreement constitutes a Proper Instruction by a Fund, on behalf of each applicable Portfolio, to open an account, and to place and maintain Foreign Assets, for the Portfolio in each applicable Covered Foreign Country. The Fund, on behalf of the Portfolios, shall satisfy the account opening requirements for the Covered Foreign Country, and the delegation with respect to the Portfolio for the Covered Foreign Country will not be considered to have been accepted by the Custodian until that satisfaction. If the Foreign Custody Manager receives from the Fund Proper Instructions directing the Foreign Custody Manager to close the account, the delegation shall be considered withdrawn, and the Custodian shall immediately cease to be the Foreign Custody Manager with respect to the Portfolio for the Covered Foreign Country.

 

4.2.4        Scope of Delegated Responsibilities: Subject to the provisions of this Section 4.2, the Foreign Custody Manager may place and maintain Foreign Assets in the care of an Eligible Foreign Custodian selected by the Foreign Custody Manager in each applicable Covered Foreign Country. The Foreign Custody Manager shall determine that (a) the Foreign Assets will be subject to reasonable care, based on the standards applicable to custodians in the country in which the Foreign Assets will be held by the Eligible Foreign Custodian, after considering all factors relevant to the safekeeping of such assets, including, without limitation the factors specified in Rule 17f-5(c)(1) and (b) the contract between the Foreign Custody Manager and the Eligible Foreign Custodian governing the foreign custody arrangements will satisfy the requirements of Rule 17f-5(c)(2). The Foreign Custody Manager shall establish a system to monitor (i) the appropriateness of maintaining the Foreign Assets with the Eligible Foreign Custodian and (ii) the performance of the contract governing the custody arrangements. If the Foreign Custody Manager determines that the custody arrangements with an Eligible Foreign Custodian are no longer appropriate, the Foreign Custody Manager shall so notify the Fund.

 

4.2.5       Reporting Requirements. The Foreign Custody Manager shall (a) report the withdrawal of Foreign Assets from an Eligible Foreign Custodian and the placement of Foreign Assets with another Eligible Foreign Custodian by providing to the Fund’s Board an amended Schedule A at the end of the calendar quarter in which the action has occurred, and (b) after the occurrence of any other material change in the foreign custody arrangements of the Portfolios described in this Section 4.2, make a written report to the Board containing a notification of the change.

 

4.2.6       Representations. The Foreign Custody Manager represents to each Fund that it is a U.S. Bank as defined in Section (a)(7) of Rule 17f-5. Each Fund represents to the Custodian that its Board has (a) determined that it is reasonable for the Board to rely on the Custodian to perform the responsibilities delegated pursuant to this Agreement to the Custodian as the Foreign Custody Manager of the Portfolios and (b) considered and determined to accept such Country Risk as is incurred by placing and maintaining the Foreign Assets of each Portfolio in each Covered Foreign Country.

 

4.2.7       Termination by a Portfolio of the Custodian as Foreign Custody Manager. By giving at least 30 days’ prior written notice to the Custodian, a Fund, on behalf of a Portfolio, may terminate the delegation to the Custodian as the Foreign Custody Manager for the Portfolio. Following the termination, the Custodian shall have no further responsibility in its capacity as Foreign Custody Manager to the Portfolio.

 

Section 4.3 Monitoring of Eligible Securities Depositories. The Custodian shall (a) provide the Fund or its Investment Advisor with an analysis of the custody risks associated with maintaining assets with the Eligible Securities Depositories set forth on Schedule B in accordance with Section (a)(1)(i)(A) of Rule 17f-7 and (b) monitor such risks on a continuing basis and promptly notify the Fund or its Investment Advisor of any material change in such risks, in accordance with Section (a)(1)(i)(B) of Rule 17f-7.

 

Section 5. Activities of the Custodian with Respect to Property Held Outside the United States.

 

Section 5.1. Holding Securities. Foreign securities and other financial assets held outside of the United States shall be maintained in a Foreign Securities System in a Covered Foreign Country through arrangements implemented by the Custodian or an Eligible Foreign Custodian, as applicable, in the Covered Foreign Country. The Custodian shall identify on its books as belonging to the Portfolios the foreign securities and other financial assets held by each Eligible Foreign Custodian or Foreign Securities System. The Custodian may hold foreign securities and other financial assets for all of its customers, including the Portfolios, with any Eligible Foreign Custodian in an account that is identified as the Custodian’s account for the benefit of its customers; provided however, that (a) the records of the Custodian with respect to foreign securities or other financial assets of a Portfolio maintained in the account shall identify those securities and other financial assets as belonging to the Portfolio and (b) to the extent permitted and customary in the market in which the account is maintained, the Custodian shall require that securities and other financial assets so held by the Eligible Foreign Custodian be held separately from any assets of the Eligible Foreign Custodian or of other customers of the Eligible Foreign Custodian.

 

Section 5.2. Registration of Foreign Securities. Foreign securities and other financial assets held outside of the United States maintained in the custody of an Eligible Foreign Custodian and that are not bearer securities shall be registered in the name of the applicable Portfolio or in the name of the Custodian or in the name of any Eligible Foreign Custodian or in the name of any nominee of any of the foregoing. To the extent applicable, the Custodian and each Eligible Foreign Custodian shall establish and maintain current powers-of-attorney with respect to such foreign securities and other financial assets held outside of the United States to facilitate the voting of all proxies, without indication of the manner in which the proxies are to be voted, and shall promptly deliver to the Fund or its delegates such proxies, all proxy soliciting materials and all notices relating to the securities or other financial assets. The Fund on behalf of the Portfolio agrees to hold any such nominee harmless from any liability as a holder of record of the foreign securities or other financial assets. The Custodian or an Eligible Foreign Custodian reserves the right not to accept securities or other financial assets on behalf of a Portfolio under the terms of this Agreement unless the form of the securities or other financial assets and the manner in which they are delivered are in accordance with local market practice.

 

Section 5.3. Indemnification by Eligible Foreign Custodians. Each contract pursuant to which the Custodian employs an Eligible Foreign Custodian shall, to the extent possible, require the Eligible Foreign Custodian to exercise reasonable care in the performance of its duties and to indemnify and hold harmless the Custodian from and against any loss, cost, expense, liability or claim arising out of or in connection with the Eligible Foreign Custodian’s performance of its obligations. At a Fund’s election, a Portfolio shall be entitled to be subrogated to the rights of the Custodian with respect to any claims against an Eligible Foreign Custodian as a consequence of any such loss, cost or expense if and to the extent that the Portfolio has not been made whole for the loss, cost or expense. In no event shall the Custodian be obligated to bring suit in its own name or to allow suit to be brought in its name.

 

Section 5.4 Bank Accounts.

 

5.4.1       General. The Custodian shall identify on its books as for the account of the applicable Portfolio the amount of cash (including cash denominated in foreign currencies) deposited with the Custodian. The Custodian shall maintain cash deposits in on book currencies on its balance sheet. The Custodian shall be liable for such balances. If the Custodian is unable to maintain, or market practice does not facilitate the maintenance for the Portfolio of a cash balance in a currency as an on book currency, a deposit account shall be opened and maintained by the Custodian outside the United States on behalf of the Portfolio with an Eligible Foreign Custodian. The Custodian shall not maintain the cash deposit on its balance sheet. The Eligible Foreign Custodian will be liable for such balance directly to the Portfolio. All deposit accounts referred to in this Section shall be subject only to draft or order by the Custodian or, if applicable, the Eligible Foreign Custodian acting pursuant to the terms of this Agreement, and shall be withdrawable by the Custodian or the Eligible Foreign Custodian only in that capacity. Cash maintained in a deposit account and denominated in an “on book” currency will be maintained under and subject to the laws of the Commonwealth of Massachusetts. The Custodian will not have any deposit liability for deposits in any currency that is not an “on book” currency, provided, however, that Custodian shall remain liable for the acts or omissions of an Eligible Foreign Custodian in accordance with Section 14.4.

 

5.4.2       Non-U.S. Branch and Non-U.S. Dollar Deposits. In accordance with the laws of the Commonwealth of Massachusetts, the Custodian shall not be required to repay any deposit made at a non-U.S. branch of the Custodian or any deposit made with the Custodian and denominated in a non-U.S. dollar currency, if repayment of the deposit or the use of assets denominated in the non-U.S. dollar currency is prevented, prohibited or otherwise blocked due to (a) an act of war, insurrection or civil strife; (b) any action by a non-U.S. government or instrumentality or authority asserting governmental, military or police power of any kind, whether such authority be recognized as a de facto or a de jure government, or by any entity, political or revolutionary movement or otherwise that usurps, supervenes or otherwise materially impairs the normal operation of civil authority; or (c) the closure of a non-U.S. branch in order to prevent, in the reasonable judgment of the Custodian, harm to the employees or property of the Custodian.

 

Section 5.5. Collection of Income. The Custodian shall use reasonable commercial efforts to collect all income and other payments with respect to the Foreign Assets held hereunder to which a Portfolio shall be entitled. If extraordinary measures are required to collect the income or payment, the Fund and the Custodian shall consult as to such measures and as to the compensation and expenses of the Custodian relating to such measures. The Custodian shall credit income to the applicable Portfolio as such income is received or in accordance with the Custodian’s then current payable date income schedule. Any credit to the Portfolio in advance of receipt may be reversed when the Custodian determines that payment will not occur in due course, and the Portfolio may be charged at the Custodian’s applicable rate for time credited. Income on securities or other financial assets loaned other than from the Custodian’s securities lending program shall be credited as received.

 

Section 5.6. Transactions in Foreign Custody Account.

 

5.6.1       Delivery Out. The Custodian or an Eligible Foreign Custodian shall release and deliver foreign securities or other financial assets held outside of the United States owned by a Portfolio and held by the Custodian or such Eligible Foreign Custodian, or in a Foreign Securities System account, only upon receipt of Proper Instructions, specifying the foreign securities to be delivered and the person or persons to whom delivery is to be made. The Custodian shall pay out, or direct the respective Eligible Foreign Custodian or the respective Foreign Securities System to pay out, cash of a Portfolio only upon receipt of Proper Instructions specifying the amount of the payment and the person or persons to whom the payment is to be made.

 

5.6.2       Market Conditions. Notwithstanding any provision of this Agreement to the contrary, settlement and payment for Foreign Assets received for the account of the Portfolios and delivery of Foreign Assets maintained for the account of the Portfolios may be effected in accordance with the customary established securities trading or processing practices and procedures in the country or market in which the transaction occurs, including, without limitation, delivering Foreign Assets to the purchaser thereof or to a dealer therefor (or an agent for such purchaser or dealer) with the expectation of receiving later payment for the Foreign Assets from such purchaser or dealer.

 

5.6.3       Settlement Practices. The Custodian shall provide to each Board the information with respect to custody and settlement practices in countries in which the Custodian employs an Eligible Foreign Custodian described on Schedule C at the time or times set forth on the Schedule. The Custodian may revise Schedule C from time to time, but no revision shall result in a Board being provided with substantively less information than had been previously provided on Schedule C.

 

Section 5.7 Shareholder or Bondholder Rights. The Custodian shall use reasonable commercial efforts to facilitate the exercise of voting and other shareholder and bondholder rights with respect to foreign securities and other financial assets held outside the United States, subject always to the laws, regulations and practical constraints that may exist in the country where the securities or other financial assets are issued. The Custodian may utilize Broadridge Financial Solutions, Inc. or another proxy service firm of recognized standing as its delegate to provide proxy services for the exercise of shareholder and bondholder rights. Local conditions, including lack of regulation, onerous procedural obligations, lack of notice and other factors may have the effect of severely limiting the ability of a Fund to exercise shareholder and bondholder rights.

 

Section 5.8. Communications. The Custodian shall transmit promptly to the applicable Fund written information with respect to materials received by the Custodian through Eligible Foreign Custodians from issuers of the foreign securities and other financial assets being held outside the United States for the account of a Portfolio. The Custodian shall transmit promptly to the applicable Fund written information with respect to materials so received by the Custodian from issuers of foreign securities whose tender or exchange is sought or from the party or its agent making the tender or exchange offer. The Custodian shall also transmit promptly to the Fund all written information received by the Custodian through Eligible Foreign Custodians from issuers of the foreign securities or other financial assets issued outside of the United States and being held for the account of the Portfolio regarding any class action or other collective litigation relating to the Portfolio’s foreign securities or other financial assets issued outside the United States and then held, or previously held, during the relevant class-action period during the term of this Agreement by the Custodian via an Eligible Foreign Custodian for the account of the Fund for the Portfolio, including, but not limited to, opt-out notices and proof-of-claim forms. The Custodian does not support class-action participation by a Fund beyond such forwarding of written information received by the Custodian.

 

Section 6. Foreign Exchange.

 

Section 6.1. Generally. Upon receipt of Proper Instructions, which for purposes of this Section may also include security trade advices, the Custodian shall facilitate the processing and settlement of foreign exchange transactions. Such foreign exchange transactions do not constitute part of the services provided by the Custodian under this Agreement.

 

Section 6.2. Fund Elections. Each Fund (or its Investment Advisor acting on its behalf) may elect to enter into and execute foreign exchange transactions with third parties that are not affiliated with the Custodian, with State Street Global Markets, which is the foreign exchange division of State Street Bank and Trust Company and its affiliated companies (“SSGM”), or with a sub-custodian. Where the Fund or its Investment Advisor gives Proper Instructions for the execution of a foreign exchange transaction using an indirect foreign exchange service described in the Client Publications, the Fund (or its Investment Advisor) instructs the Custodian, on behalf of the Fund, to direct the execution of such foreign exchange transaction to SSGM or, when the relevant currency is not traded by SSGM, to the applicable sub-custodian. The Custodian shall not have any agency (except as contemplated in preceding sentence), trust or fiduciary obligation to the Fund, its Investment Advisor or any other person in connection with the execution of any foreign exchange transaction. The Custodian shall have no responsibility under this Agreement for the selection of the counterparty to, or the method of execution of, any foreign exchange transaction entered into by the Fund (or its Investment Advisor acting on its behalf) or the reasonableness of the execution rate on any such transaction.

Section 6.3. Fund Acknowledgement Each Fund acknowledges that in connection with all foreign exchange transactions entered into by the Fund (or its Investment Advisor acting on its behalf) with SSGM or any sub-custodian, SSGM and each such sub-custodian:

 

(i) shall be acting in a principal capacity and not as broker, agent or fiduciary to the Fund or its Investment Advisor;

 

(ii) shall seek to profit from such foreign exchange transactions, and are entitled to retain and not disclose any such profit to the Fund or its Investment Advisor; and

 

(iii) shall enter into such foreign exchange transactions pursuant to the terms and conditions, including pricing or pricing methodology, (a) agreed with the Fund or its Investment Advisor from time to time or (b) in the case of an indirect foreign exchange service, (i) as established by SSGM and set forth in the Client Publications with respect to the particular foreign exchange execution services selected by the Fund or the Investment Advisor or (ii) as established by the sub-custodian from time to time.

 

Section 6.4. Transactions by State Street. The Custodian or its affiliates, including SSGM, may trade based upon information that is not available to the Fund (or its Investment Advisor acting on its behalf), and may enter into transactions for its own account or the account of clients in the same or opposite direction to the transactions entered into with the Fund (or its Investment Manager), and shall have no obligation, under this Agreement, to share such information with or consider the interests of their respective counterparties, including, where applicable, the Fund or the Investment Advisor.

 

Section 6A. Contractual Settlement Services (Purchase/Sales).

 

Section 6A.1 General. The Custodian shall, in accordance with the terms set out in this Section 6A, debit or credit the appropriate deposit account of each Portfolio on a contractual settlement basis in connection with the purchase of securities or other financial assets for the Portfolio or the receipt of the proceeds of the sale or redemption of securities or other financial assets.

 

Section 6A.2 Provision of Services. The services described in Section 6A.1 (the “Contractual Settlement Services”) shall be provided for the securities and other financial assets and in such markets as the Custodian may advise from time to time. The Custodian may terminate or suspend any part of the provision of the Contractual Settlement Services at its sole discretion immediately upon notice to the applicable Fund on behalf of each Portfolio, including, without limitation, in the event of force majeure events affecting settlement, any disorder in markets, or other changed external business circumstances affecting the markets or the Fund.

 

 

Section 6A.3 Purchase Consideration. The consideration payable in connection with a purchase transaction shall be debited from the appropriate deposit account of the Portfolio as of the time and date that funds would ordinarily be required to settle the transaction in the applicable market. The Custodian shall promptly recredit the amount at the time that the Portfolio or the Fund notifies the Custodian by Proper Instruction that the transaction has been canceled.

 

Section 6A.4 Sales and Redemptions. A provisional credit of an amount equal to the net sale price for a sale or redemption of securities or other financial assets shall be made to the account of the Portfolio as if the amount had been received as of the close of business on the date on which good funds would ordinarily be immediately available in the applicable market. The provisional credit will be made conditional upon the Custodian having received Proper Instructions with respect to, or reasonable notice of, the transaction, as applicable; and the Custodian or its agent having possession of the securities of other financial assets (excluding financial assets subject to any third party lending arrangement entered into by a Portfolio) associated with the transaction in good deliverable form and not being aware of any facts which would lead the Custodian or its agent to believe that the transaction will not settle in the time period ordinarily applicable to such transactions in the applicable market.

 

Section 6A.5 Reversals of Provisional Credits or Debits. The Custodian shall have the right to reverse any provisional credit or debit given in connection with the Contractual Settlement Services at any time when the Custodian believes, in its reasonable judgment, that such transaction will not settle in accordance with its terms or amounts due pursuant thereto, will not be collectable or where the Custodian has not been provided Proper Instructions with respect thereto, as applicable. The Portfolio shall be responsible for any costs or liabilities resulting from such reversal. Upon such reversal, a sum equal to the credited or debited amount shall become immediately payable by the Portfolio to the Custodian and may be debited from any deposit or other account held for benefit of the Portfolio.

 

Section 7. Tax Services.

 

Section 7.1 General. Subject to and to the extent of receipt by the Custodian of relevant and necessary documentation and information with respect to the Portfolios that the Custodian has requested, the Custodian shall perform the following services: (a) file claims for exemptions, reductions in withholding taxes, or refunds of any tax with respect to withheld foreign (non-U.S.) taxes in instances in which such claims are appropriate; (b) withhold appropriate amounts as required by U.S. tax laws with respect to amounts received on behalf of nonresident aliens; and (c) provide to the Portfolios such information actually received by the Custodian that is reasonably requested by the Fund or could, in the Custodian’s reasonable belief, assist any of the Portfolios in their submission of any reports or returns with respect to taxes. It shall be the responsibility of each Portfolio to notify the Custodian of the obligations imposed on the Portfolio or the Custodian as custodian by the tax law of countries, states and political subdivisions thereof, including responsibility for withholding and other taxes, assessments or other governmental charges, certifications and governmental reporting. The sole responsibility of the Custodian with regard to such tax law shall be to use reasonable efforts to assist the Portfolio with respect to any claim for exemption or refund under the tax law of countries for which the Portfolio has provided sufficient information and documentation.

 

Section 7.2 Ownership Certificates for Tax Purposes. The Custodian shall execute ownership and other certificates and affidavits for all federal and state tax purposes in connection with receipt of income or other payments with respect to domestic securities or other financial assets held within the United States of each Portfolio held by the Custodian and in connection with transfers of securities and other financial assets.

 

Section 7.3 Authorizations. The Custodian is authorized to deduct from any cash received or credited to the account of a Portfolio any taxes or levies required by any tax or other governmental authority having jurisdiction in respect of such Portfolio’s transactions and to disclose any information required by any such tax or other governmental authority in relation to processing any claim for exemption from or reduction or refund of any taxes relating to Portfolio transactions and holdings.

 

Section 7.4 Services Further Limited. Other than the servicing responsibilities provided herein, the Custodian shall have no responsibility or liability for any obligations now or hereafter imposed on any Fund, any Portfolio or the Custodian as custodian of the assets of the Fund or the Portfolio by the tax law of any country or of any state or political subdivision thereof. The Custodian shall not be considered the Fund’s tax advisor or tax counsel.

 

Section 8. Payments for Sales or Redemptions of Portfolio Interests.

 

Section 8.1 Payment for Portfolio Interests Issued. The Custodian shall receive from the distributor of Portfolio Interests of a Fund or from the Fund’s transfer agent (the “Transfer Agent”) and deposit into the account of the Portfolio such payments as are received for Portfolio Interests issued or sold from time to time by the Fund. The Custodian will provide timely notification to the Fund on behalf of the Portfolio and the Transfer Agent of any receipt of the payments by the Custodian.

 

Section 8.2 Payment for Portfolio Interests Redeemed. Upon receipt of instructions from the Transfer Agent, the Custodian shall set aside funds of a Portfolio to the extent available for payment to holders of Portfolio Interests who have delivered to the Transfer Agent a request for redemption of their Portfolio Interests. The Custodian is authorized upon receipt of instructions from the Transfer Agent, if any, or from the Portfolio, to wire funds to or through a commercial bank designated by the redeeming interest holders. If the Custodian furnishes a check to a holder in payment for the redemption of the holder’s Portfolio Interests and the check is drawn on the Custodian, the Custodian shall honor the check so long as the check is presented to the Custodian in accordance with the Deposit Account Agreement and such procedures and controls as are mutually agreed upon from time to time between the Fund and the Custodian.

 

Section 9. Proper Instructions.

 

Section 9. 1 Form and Security Procedures. Proper Instructions may be in writing signed by the authorized individual or individuals or may be in a tested communication or in a communication utilizing access codes effected between electro-mechanical or electronic devices or may be by such other means and utilizing such intermediary systems and utilities as may be agreed to from time to time by the Custodian and the individual or organization giving the instruction, provided that the Fund has followed any security procedures agreed to from time to time by the applicable Fund and the Custodian including, but not limited to, the security procedures selected by the Fund. The Custodian may agree to accept oral instructions, and in such case oral instructions will be considered Proper Instructions. The Fund shall cause all oral instructions to be confirmed in writing, but the Fund’s failure to do so shall not affect the Custodian’s authority to rely on the oral instructions, if the Custodian reasonably believes the oral instructions have been given by an individual authorized to give such instructions with respect to the transaction involved.

 

Section 9.2 Reliance on Officer’s Certificate. Concurrently with the execution of this Agreement, and from time to time thereafter, as appropriate, each Fund shall deliver to the Custodian an officer’s certificate setting forth the names, titles, signatures and scope of authority of all individuals authorized to give Proper Instructions or any other notice, request, direction, instruction, certificate or instrument on behalf of the Fund. The certificate may be accepted and conclusively relied upon by the Custodian and shall be considered to be in full force and effect until receipt by the Custodian of a similar certificate to the contrary and the Custodian has had a reasonable time to act thereon.

 

Section 9.3 Untimely Proper Instructions. If the Custodian is not provided with reasonable time to execute a Proper Instruction (including any Proper Instruction not to execute, or any other modification to, a prior Proper Instruction), the Custodian will use good faith efforts to execute the Proper Instruction but, provided that the Custodian meets the standard of care set forth in Section 14.1, will not be responsible or liable if the Custodian’s efforts are not successful (including any inability to change any actions that the Custodian had taken pursuant to the prior Proper Instruction). The inclusion of a statement of purpose or intent (or any similar notation) in a Proper Instruction shall not impose any additional obligations on the Custodian or condition or qualify its authority to effect the Proper Instruction. The Custodian will not assume a duty to ensure that the stated purpose or intent is fulfilled and will have no responsibility or liability when it follows the Proper Instruction without regard to such purpose or intent; provided, however, the Custodian will use good faith efforts when it follows such Proper Instruction, taking into account past practices (including with respect to resolution of issues and responsibility).

 

Section 10. Actions Permitted without Express Authority.

 

The Custodian may in its discretion, without express authority from the applicable Fund on behalf of each Portfolio:

 

1) Make payments to itself or others for minor expenses of handling securities or other financial assets relating to its duties under this Agreement; provided that all such payments shall be accounted for to the Fund on behalf of the Portfolio and the Fund shall have the opportunity to review such payments and the parties shall use good faith efforts to resolve any dispute with respect to such payments;
2) Surrender securities or other financial assets in temporary form for securities or other financial assets in definitive form;

 

3) Endorse for collection, in the name of the Portfolio, checks, drafts and other negotiable instruments; and

 

4) In general, attend to all non-discretionary details in connection with the sale, exchange, substitution, purchase, transfer and other dealings with the securities and other financial assets of the Portfolio except as otherwise directed by the applicable Board.

 

Section 11. Reserved.

 

Section 12. Records.

 

The Custodian shall with respect to each Portfolio create and maintain all records relating to its activities and obligations under this Agreement in such manner as will meet the obligations of each Fund under the 1940 Act, with particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder. All such records shall be the property of the Fund and shall at all times during the regular business hours of the Custodian be open for inspection by duly authorized officers, employees or agents of the Fund and employees and agents of the SEC or other regulators with jurisdiction over the Funds with respect to the Portfolios. The Custodian shall, at the Fund’s request, supply the Fund with a tabulation of securities owned by each Portfolio and held by the Custodian and shall, when requested to do so by the Fund and for such compensation as shall be agreed upon between the Fund and the Custodian, include certificate numbers in such tabulations. In the event that the Custodian is requested or authorized by a Fund, or required by subpoena, administrative order, court order or other legal process, applicable law or regulation, or required in connection with any investigation, examination or inspection of the Fund by state or federal regulatory agencies, to produce the records of the Fund or the Custodian’s personnel as witnesses, the Fund will pay the Custodian for the Custodian’s time and expenses incurred in responding to a non-routine request, order or requirement as reasonably agreed by the Fund and the Custodian, taking into account past practices.

 

Section 13. Fund’s Independent Accountants; Reports.

 

Section 13.1 Opinions. The Custodian shall take all reasonable action, as a Fund with respect to a Portfolio may from time to time request, to obtain from year to year favorable opinions from the Fund’s independent accountants with respect to its activities hereunder in connection with the preparation of the Fund’s Form N-1A or Form N-2, as applicable, and Form N-CEN or other monthly or annual reports to the SEC and with respect to any other requirements thereof.

 

Section 13.2 Reports. Upon reasonable request of a Fund, the Custodian shall provide the Fund with a copy of the Custodian’s Service Organizational Control (SOC) 1 reports prepared in accordance with the requirements of AT section 801, Reporting on Controls at a Service Organization (formerly Statement on Standards for Attestation Engagements (SSAE) No. 16). The Custodian shall use commercially reasonable efforts to provide the Fund with such reports as the Fund may reasonably request or otherwise reasonably require to fulfill its duties under Rule 38a-1 of the 1940 Act or similar legal and regulatory requirements.

 

Section 14. Custodian’s Standard of Care; Exculpation.

 

14.1       Standard of Care. In carrying out the provisions of this Agreement, the Custodian shall act in good faith and without negligence, misfeasance or willful misconduct and shall be held to the exercise of reasonable care; provided, however, that the Custodian shall be held to any higher standard of care which would be imposed upon the Custodian by any applicable law or regulation, as if such above-stated higher standard of reasonable care were part of this Agreement.

 

14.2       Reliance on Proper Instructions. The Custodian shall be entitled conclusively to rely and act upon Proper Instructions until the Custodian has received notice of any change from the Fund and has had a reasonable time to act thereon. The Custodian may act on a Proper Instruction if it reasonably believes that it contains sufficient information and may refrain from acting on any Proper Instructions until such time that it has reasonably determined, in its sole discretion, that is has received any required clarification or authentication of Proper Instructions. The Custodian may rely upon and shall be protected in acting upon any Proper Instruction or any other instruction, notice, request, consent, certificate or other instrument or paper believed by it in good faith to be genuine and to have been properly executed by or on behalf of the applicable Fund.

 

14.3       Other Reliance. The Custodian is authorized and instructed to reasonably rely upon the information that the Custodian receives from the Fund or any authorized third party on behalf of the Fund. The Custodian shall have no responsibility to review, confirm or otherwise assume any duty with respect to the accuracy or completeness of any information supplied to it by or on behalf of any Fund. The Custodian shall have no liability in respect of any loss, cost or expense incurred or sustained by the Fund arising from the performance of the Custodian’s duties hereunder in reliance upon records that were maintained for the Fund by any individual or organization, other than the Custodian, prior to the Custodian’s appointment as custodian hereunder. The Custodian shall be entitled to reasonably rely on and may act upon advice of counsel (who may be counsel for the Fund) on all matters and shall be without liability for any action reasonably taken or omitted pursuant to such advice, provided that the Custodian meets the standard of care set forth in Section 14.1.

 

14.4       Liability for Foreign Custodians. The Custodian shall be liable for the acts or omissions of an Eligible Foreign Custodian to the same extent as if the action or omission were performed by the Custodian itself, taking into account the facts and circumstances and the established local market practices and laws prevailing in the particular jurisdiction in which the Fund or Portfolio elects to invest.

 

14.5       Insolvency and Country Risk. The Custodian shall in no event be liable for any loss, cost or expense incurred or sustained by a Fund or Portfolio resulting from or caused by Country Risk. The Custodian shall be without liability for any loss, damage or expense caused by or resulting from the insolvency of any domestic sub-custodian or Eligible Foreign Custodian that is not a wholly-owned subsidiary of the Custodian; provided, however, that the foregoing exculpation of the Custodian with respect to the insolvency of a particular Eligible Foreign Custodian shall not be applicable if the Custodian fails to comply with its obligations under this Agreement or as a Foreign Custody Manager pursuant to Rule 17f-5 with respect to such Eligible Foreign Custodian. For the avoidance of doubt, if the Custodian has met its standard of care hereunder and has fulfilled its obligations as a Foreign Custody Manager pursuant to Rule 17f-5 with respect to an Eligible Foreign Custodian, then the Custodian shall be without liability for any loss, damage or expense caused by or resulting from the insolvency of such Eligible Foreign Custodian.

 

14.6       Force Majeure and Third Party Actions. Except as may arise from the Custodian’s gross negligence or willful misconduct, the Custodian shall be without responsibility or liability to any Fund or Portfolio for: (a) events or circumstances beyond the reasonable control of the Custodian, including, without limitation, the interruption, suspension or restriction of trading on or the closure of any currency or securities market or system, power or other mechanical or technological failures or interruptions, computer viruses or communications disruptions, work stoppages, natural disasters, acts of war, revolution, riots or terrorism or other similar force majeure events or acts; (b) errors by any Fund, its Investment Advisor or any other duly authorized person in their instructions to the Custodian; (c) the insolvency of or acts or omissions by a U.S. Securities System, Foreign Securities System, Underlying Transfer Agent or domestic sub-custodian designated pursuant to Section 2.2; (d) the failure of any Fund, its Investment Advisor, Portfolio or any duly authorized individual or organization to adhere to the Custodian’s operational policies and procedures; (e) any delay or failure of any broker, agent, securities intermediary or other intermediary, central bank or other commercially prevalent payment or clearing system to deliver to the Custodian’s sub-custodian or agent securities or other financial assets purchased or in the remittance or payment made in connection with securities or other financial assets sold; (f) any delay or failure of any organization in charge of registering or transferring securities or other financial assets in the name of the Custodian, any Fund, any Portfolio, the Custodian’s sub-custodians, nominees or agents including non-receipt of bonus, dividends and rights and other accretions or benefits; (g) delays or inability to perform its duties due to any disorder in market infrastructure with respect to any particular security, other financial asset, U.S. Securities System or Foreign Securities System; and (h) the effect of any provision of any law or regulation or order of the United States of America, or any state thereof, or any other country, or political subdivision thereof or of any court of competent jurisdiction.

 

14.7       Indirect/Special/Consequential Damages. Notwithstanding Section

15.2 and any other provision of this Agreement to the contrary, in no event shall either party be liable for any indirect, incidental, consequential, special, punitive, exemplary or enhanced damages of any kind or nature whatsoever (including loss of profit goodwill, reputation, business opportunity or anticipated savings, or losses arising from any special circumstances of the other party or any other person) arising under this Agreement or under law or otherwise in connection with or in any way related to this Agreement or the subject matter hereof (including the provision of the services, and the performance, non-performance or breach of any obligation or duty owed by a party) whether or not such party (including each party’s relevant affiliates) has been advised of, or otherwise might or should have anticipated, the possibility or likelihood of such damages. The limitations of liability set forth in this Section 14.7 shall apply regardless of the form or type of action in which a claim is brought or under which it is made, whether in contract, tort (including negligence of any kind), warranty, strict liability, indemnity or any other legal or equitable grounds, and shall survive failure of an exclusive remedy.

 

14.8       Delivery of Property. The Custodian shall not be responsible for any securities or other assets of a Portfolio which are not received by the Custodian or which are delivered out in accordance with Proper Instructions. The Custodian shall not be responsible for the title, validity or genuineness of any securities or other assets or evidence of title thereto received by it or delivered by it pursuant to this Agreement.

 

14.9       No Investment Advice. The Custodian has no responsibility to monitor or oversee the investment activity undertaken by a Fund or its Investment Advisor or by a Portfolio. The Custodian has no duty to ensure or to inquire whether an Investment Advisor complies with any investment objectives or restrictions agreed upon between a Fund and the Investment Advisor or whether the Investment Advisor complies with its legal obligations under applicable securities laws or other laws, including laws intended to protect the interests of investors. The Custodian shall neither assess nor take any responsibility or liability for the suitability or appropriateness of the investments made by a Fund or a Portfolio or on its behalf.

 

14.10       Communications. The Custodian shall not be liable for any untimely exercise of any tender, exchange or other right or power in connection with securities or other financial assets of a Portfolio at any time held by the Custodian unless (a) the Custodian or the Eligible Foreign Custodian is in actual possession of such securities or other financial assets, (b) the Custodian receives Proper Instructions with regard to the exercise of the right or power, and (c) both of the conditions referred to in the foregoing clauses (a) and (b) have been satisfied at least three business days prior to the date on which the Custodian is to take action to exercise the right or power. However, the Custodian shall nevertheless exercise its best efforts to take such action in the event that notification is received three business days or less prior to the date on which action is required.

 

14.11       Loaned Securities. Income due to each Portfolio on securities or other financial assets loaned shall be the responsibility of the applicable Fund. The Custodian will have no duty or responsibility, pursuant to this Agreement, in connection with loaned securities or other financial assets, other than to provide the Fund with such information or data as may be necessary to assist the Fund in arranging for the timely delivery to the Custodian of the income to which the Portfolio is entitled.

 

14.12       Trade Counterparties. A Fund’s receipt of securities or other financial assets from a counterparty in connection with any of its purchase transactions and its receipt of cash from a counterparty in connection with any sale or redemption of securities or other financial assets will be at the Fund’s sole risk, and the Custodian shall not be obligated to make demands on the Fund’s behalf if the Fund’s counterparty defaults. If a Fund’s counterparty fails to deliver securities, other financial assets or cash, the Custodian will notify the Fund’s Investment Advisor of the failure within a reasonable time after the Custodian became aware of the failure.

 

Section 15. Compensation and Indemnification of Custodian; Security Interest.

 

Section. 15.1 Compensation. The Custodian shall be entitled to reasonable compensation for its services and expenses as agreed upon from time to time between each Fund on behalf of each applicable Portfolio and the Custodian.

 

Section 15.2 Indemnification. Each Portfolio agrees to indemnify the Custodian and to hold the Custodian harmless from and against any loss, cost or expense sustained or incurred by the Custodian in acting or omitting to act under or in respect of this Agreement in good faith, without negligence and with reasonable care, including, without limitation, (a) the Custodian’s compliance with Proper Instructions and (b) in connection with the provision of services to a Fund pursuant to Section 7, any obligations, including taxes, withholding and reporting requirements, claims for exemption and refund, additions for late payment, interest, penalties and other expenses, that may be assessed against the Fund, the Portfolio or the Custodian as custodian of the assets of the Fund or the Portfolio. If a Fund on behalf of a Portfolio instructs the Custodian to take any action with respect to securities or other financial assets, and the action involves the payment of money or may, in the opinion of the Custodian, result in the Custodian or its nominee assigned to the Fund or the Portfolio being liable therefor, the Fund on behalf of the Portfolio, as a prerequisite to the Custodian taking the action, shall provide to the Custodian at the Custodian’s request such further indemnification in an amount and form satisfactory to the Custodian. The obligations and liabilities any Portfolio assumes shall be limited in any case to the relevant Portfolio and its assets and the Custodian shall not seek satisfaction of any obligation from the shareholders of the relevant Portfolio, any other Portfolio or its shareholders or the Trustees, officers, employees or agents of the Fund. In addition, in connection with the discharge and satisfaction of any claim made by the Custodian against a Fund involving more than one Portfolio, the Fund has the exclusive right to determine the appropriate allocations of liability for any claim between or among Portfolios.

 

Section 15.3 Security Interest. Each Fund hereby grants to the Custodian, to secure the payment and performance of the Fund’s obligations under this Agreement, whether contingent or otherwise, a security interest in and right of recoupment and setoff against all cash and all securities and other financial assets at any time held for the account of a Portfolio by or through the Custodian. The obligations include, without limitation, the Fund’s obligations to reimburse the Custodian if the Custodian or any of its affiliates, subsidiaries or agents advances cash or securities or other financial assets to the Fund for any purpose (including but not limited to settlements of securities or other financial assets, foreign exchange contracts and assumed settlement), or in the event that the Custodian or its nominee shall incur or be assessed any taxes, charges, expenses, assessments, claims or liabilities in connection with the performance of this Agreement, except such as may arise from its or its nominee’s own negligence, as well as the Fund’s obligation to compensate the Custodian pursuant to Section 15.1 or indemnify the Custodian pursuant to Section 15.2. Should the Fund fail to reimburse or otherwise pay the Custodian any obligation under this Agreement promptly, the Custodian shall have the rights and remedies of a secured party under this Agreement, the UCC and other applicable law, including the right to utilize available cash and to sell or otherwise dispose of the Portfolio’s assets to the extent necessary to obtain payment or reimbursement.  The Custodian may at any time decline to follow Proper Instructions to deliver out cash, securities or other financial assets if the Custodian determines in its reasonable discretion that, after giving effect to the Proper Instructions, the cash, securities or other financial assets remaining will not have sufficient value fully to secure the Fund's payment or reimbursement obligations, whether contingent or otherwise.

 

Section 16. Effective Period and Termination.

 

Section 16.1 Term. This Agreement shall remain in full force and effect for an initial term ending February 28, 2021. After the expiration of the Initial Term, this Agreement shall automatically renew for successive one-year terms unless a written notice of non-renewal is delivered by the non-renewing party no later than ninety (90) days prior to the expiration of the Initial Term or any renewal term, as the case may be. A written notice of non-renewal may be given as to a Fund or a Portfolio.

 

Section 16.2 Termination. Either party may terminate this Agreement as to a Fund or a Portfolio: (a) in the event of the other party’s material breach of a material provision of this Agreement that the other party has either failed to cure, or failed to establish a remedial plan to cure that is reasonably acceptable to the non-breaching party, within 60 days’ written notice being given by the non-breaching party of the breach, or (b) in the event of the appointment of a conservator or receiver for the other party, the commencement by or against the other party of a bankruptcy or insolvency case or proceeding, or upon the happening of a like event to the other party at the direction of an appropriate agency or court of competent jurisdiction.

 

Section 16.3 Payments Owing to the Custodian. Upon termination of this Agreement pursuant to Section 16.1 or 16.2 with respect to any Fund or Portfolio, the applicable Fund shall pay to the Custodian any compensation then due and shall reimburse the Custodian for its other reasonable costs, expenses and charges then due. Upon receipt of such payment and reimbursement, the Custodian will deliver the Fund’s or Portfolio’s cash and its securities and other financial assets as set forth in Section 17.

 

Section 16.4 Reserved.

 

Section 16.5 Effect of Termination. Termination of this Agreement with respect to any one particular Fund or Portfolio shall in no way affect the rights and duties under this Agreement with respect to any other Fund or Portfolio. Following termination with respect to a Fund or Portfolio, the Custodian shall have no further responsibility to forward information under Section 3.8 or 5.8. The provisions of Sections 7, 14, 15 and 17 of this Agreement shall survive termination of this Agreement. To the extent the Custodian continues to possess confidential information or records of the Fund or its agents or service providers after the termination of this Agreement, the obligations contained in Sections 12, 20.11, 20.12, and 20.13 of this Agreement shall continue until the five (5) year anniversary of the termination date of this Agreement.

 

Section 17. Successor Custodian.

 

Section 17.1 Successor Appointed. If a successor custodian shall be appointed for a Portfolio by its Board, the Custodian shall, upon termination of this Agreement and receipt of Proper Instructions, deliver to the successor custodian at the office of the Custodian, duly endorsed and in the form for transfer, all cash and all securities and other financial assets of the Portfolio then held by the Custodian hereunder and shall transfer to an account of the successor custodian all of the securities and other financial assets of the Portfolio held in a U.S. Securities System or Foreign Securities System or at the Underlying Transfer Agent.

 

Section 17.2 No Successor Appointed. If no such successor custodian shall be appointed, the Custodian shall, in like manner, upon receipt of Proper Instructions, deliver at the office of the Custodian and transfer the cash and the securities and other financial assets of the Portfolio in accordance with the Proper Instructions.

 

Section 17.3 No Successor Appointed and No Proper Instructions. If no successor custodian has been appointed and no Proper Instructions have been delivered to the Custodian on or before the termination of this Agreement, then the Custodian shall have the right to deliver to a bank or trust company, which is a “bank” as defined in the 1940 Act, doing business in Boston, Massachusetts, or New York, New York, of its own selection, all cash and all securities and other financial assets of the Portfolio then held by the Custodian hereunder, and to transfer to an account of the bank or trust company all of the securities and other financial assets of the Portfolio held in any U.S. Securities System or Foreign Securities System or at the Underlying Transfer Agent. The transfer will be on such terms as are contained in this Agreement or as the Custodian may otherwise reasonably negotiate with the bank or trust company. Any compensation payable to the bank or trust company, and any cost or expense incurred by the Custodian, in connection with the transfer shall be for the account of the Portfolio.

 

Section 17.4 Remaining Property. If any cash or any securities or other financial assets of the Portfolio held by the Custodian hereunder remain held by the Custodian after the termination of this Agreement owing to the failure of the applicable Fund to provide Proper Instructions, the Custodian shall be entitled to fair compensation for its services during such period as the Custodian holds the cash or the securities or other financial assets (the existing agreed-to compensation at the time of termination shall be one indicator of what is considered fair compensation). The provisions of this Agreement relating to the duties, exculpation and indemnification of the Custodian shall apply in favor of the Custodian during such period.

 

Section 17.5 Reserves. Notwithstanding the foregoing provisions of this Section 17, the Custodian may retain cash or securities or other financial assets of the Fund or Portfolio as a reserve reasonably established by the Custodian to secure the payment or performance of any obligations of the Fund or Portfolio secured by a security interest or right of recoupment or setoff in favor of the Custodian.

 

Section 18. [Reserved]

 

Section 19. Loan Services Addendum. If a Fund directs the Custodian in writing to perform loan services, the Custodian and the Fund will be bound by the terms of the Loan Services Addendum attached hereto. The Fund shall reimburse Custodian for its fees and expenses related thereto as agreed upon from time to time in writing by the Fund and the Custodian.

 

Section 20. General.

 

Section 20.1 Governing Law. Any and all matters in dispute between the parties hereto, whether arising from or relating to this Agreement, shall be governed by and construed in accordance with laws of the Commonwealth of Massachusetts, without giving effect to any conflict of laws rules. Likewise, the law applicable to all issues in Article 2(1) of the Hague Convention on the Law Applicable to Certain Rights in respect of Securities Held with an Intermediary is the law in force in the Commonwealth of Massachusetts.

 

Section 20.2 [Reserved]

 

Section 20.3 Prior Agreements; Amendments. This Agreement supersedes the December 1, 1993 Custodian Contract, as amended, between each Fund on behalf of each of the Fund’s Portfolios and the Custodian relating to the custody of the Fund’s assets. This Agreement may be amended at any time in writing by mutual agreement of the parties hereto.

 

Section 20.4 Assignment. This Agreement may not be assigned by (a) any Fund without the written consent of the Custodian or (b) the Custodian without the written consent of each applicable Fund. However, without the consent of any Fund or any Portfolio, the Custodian may assign this Agreement to a successor of all or a substantial portion of its business, or to a party controlling, controlled by or under common control with the Custodian. Notwithstanding the foregoing, the Custodian may employ, engage, associate or contract with such person or persons, including, without limitation, affiliates and subsidiaries of the Custodian, as the Custodian may deem desirable to assist it in performing certain of its non-custodial obligations under this Agreement without the consent of any Fund; provided, however, that the compensation of such person or persons shall be paid by the Custodian and that the Custodian shall be as fully responsible to the Fund for the acts and omissions of any such person or persons as it is for its own acts and omissions under this Agreement.

 

Section 20.5 Interpretive and Additional Provisions. In connection with the operation of this Agreement, the Custodian and each Fund on behalf of each of the Portfolios, 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, provided that no such interpretive or additional provisions shall contravene any applicable laws or regulations or any provision of a Fund’s organic record and Prospectus. No interpretive or additional provisions made as provided in the preceding sentence shall be an amendment of this Agreement.

 

Section 20.6 Additional Funds and Portfolios.

 

20.6.1       Additional Fund. If any management investment company in addition to those listed on Appendix A desires the Custodian to render services as custodian under the terms of this Agreement, the management investment company shall so notify the Custodian in writing. If the Custodian agrees in writing to provide the services, the management investment company shall become a Fund hereunder and be bound by all terms and conditions and provisions hereof including, without limitation, the representations and warranties set forth in Section 20.7 below.

 

20.6.2       Additional Portfolio. If any Fund establishes a series in addition to the Portfolios set forth on Appendix A with respect to which the Fund desires the Custodian to render services as custodian under the terms of this Agreement, the Fund shall so notify the Custodian in writing. If the Custodian agrees in writing to provide the services, the series shall become a Portfolio hereunder.

 

Section 20.7 The Parties; Representations and Warranties. All references in this Agreement to the “Fund” are to each of the management investment companies listed on Appendix A, and each management investment company made subject to this Agreement in accordance with Section 20.6 above, individually, as if this Agreement were between the individual Fund and the Custodian. In the case of a series organization, all references in this Agreement to the “Portfolio” are to the individual series of the series organization on behalf of the individual series. Any reference in this Agreement to “the parties” shall mean the Custodian and such other individual Fund as to which the matter pertains.

 

20.7.1       Fund Representations and Warranties. Each Fund hereby represents and warrants that (a) it is duly organized and validly existing in good standing in its jurisdiction of organization; (b) it has the requisite power and authority under applicable law and its organic record to enter into and perform this Agreement; (c) all requisite proceedings have been taken to authorize it to enter into and perform this Agreement; (d) no legal or administrative proceedings have been instituted or threatened which would materially impair the Fund’s ability to perform its duties and obligations under this Agreement; and (e) its entering into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Fund or any law or regulation applicable to it.

 

 

20.7.2       Custodian Representations and Warranties. The Custodian hereby represents and warrants that (a) it is a trust company, duly organized and validly existing under the laws of the Commonwealth of Massachusetts; (b) it has the requisite power and authority to carry on its business in the Commonwealth of Massachusetts; (c) all requisite proceedings have been taken to authorize it to enter into and perform this Agreement; (d) no legal or administrative proceedings have been instituted or threatened which would materially impair the Custodian’s ability to perform its duties and obligations under this Agreement; and (e) its entering into this Agreement shall not cause a material breach or be in material conflict with any other agreement or obligation of the Custodian or any law or regulation applicable to it.

 

Section 20.8 Notices. Any notice, instruction or other communication required to be given hereunder will, unless otherwise provided in this Agreement, be in writing and may be sent by hand, or by facsimile transmission, or overnight delivery by any recognized delivery service, to the parties at the following addresses or such other addresses as may be notified by any party from time to time.

 

To any Fund: c/o Federated Investors, Inc.

Federated Investors Tower - 21st Floor

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Attention: Lori Hensler, Director of Funds Financial Services

Telephone: 412-288-1277

Telecopy: 412-288-8668

 

with a copy to:

Federated Investors, Inc.

Federated Investors Tower - 17th Floor

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Attention: Chief Legal Officer

Telephone: 412-288-6331

Telecopy: 412-288-8668

 

 

To the Custodian: State Street Bank and Trust Company

1 Iron Street

Boston, MA 02110

Attention: Andrea Griffin

Telephone: 617-662-3590

Telecopy: 617-375-4279

 

with a copy to:

State Street Bank and Trust Company

Legal Division – Global Services Americas

One Lincoln Street

Boston, MA 02111

Attention: Senior Vice President and Senior Managing Counsel

 

Section 20.9 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all such counterparts taken together shall constitute one and the same Agreement. Counterparts may be executed in either original or electronically transmitted form (e.g., faxes or emailed portable document format (PDF) form), and the parties hereby adopt as original any signatures received in electronically transmitted form.

 

Section 20.10 Severability; No Waiver. If any provision of this Agreement shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired. The failure of a party hereto to insist upon strict adherence to any term of this Agreement on any occasion or the failure of a party hereto to exercise or any delay in exercising any right or remedy under this Agreement shall not constitute a waiver of any the term, right or remedy or a waiver of any other rights or remedies, and no single or partial exercise of any right or remedy under this Agreement shall prevent any further exercise of the right or remedy or the exercise of any other right or remedy.

 

Section 20.11 Confidentiality. All information provided under this Agreement by or on behalf of a party or its agents or service providers (the “Disclosing Party”) to the other party (the “Receiving Party”) regarding the Disclosing Party’s business and operations shall be treated as confidential. Subject to Section 20.12 below, all confidential information provided under this Agreement by Disclosing Party shall be used, including disclosure to third parties, by the Receiving Party, or its agents or service providers, solely for the purpose of performing or receiving the services and discharging the Receiving Party’s other obligations under the Agreement or managing the business of the Receiving Party and its Affiliates (as defined in Section 20.12 below), including financial and operational management and reporting, risk management, legal and regulatory compliance and client service management. The foregoing shall not be applicable to any information (a) that is publicly available when provided or thereafter becomes publicly available, other than through a breach of this Agreement, (b) that is independently derived by the Receiving Party without the use of any information provided by the Disclosing Party in connection with this Agreement, (c) that is disclosed to comply with any legal or regulatory proceeding, investigation, audit, examination, subpoena, civil investigative demand or other similar process, (d) that is disclosed as required by operation of law or regulation or as required to comply with the requirements of any market infrastructure that the Disclosing Party or its agents direct the Custodian or its affiliates to employ (or which is required in connection with the holding or settlement of instruments included in the assets subject to this Agreement), or (e) where the party seeking to disclose is expressly permitted under applicable law or regulation to disclose for a legitimate business purpose subject to confidentiality obligation, or has received the prior written consent of the Disclosing Party providing the information, which consent shall not be unreasonably withheld. A Receiving Party shall protect confidential information of a Disclosing Party at least to the same degree as the Receiving Party protects its own confidential information. All confidential information, provided by a Disclosing Party shall remain the property of such Disclosing Party. All confidential information, together with any copies thereof, in whatever form, shall, upon the Disclosing Party’s written request, be returned to the Disclosing Party or destroyed, at the Receiving Party’s election; provided, that the Receiving Party shall be permitted to retain all or any portion of the confidential information, in accordance with the confidentiality obligations specified in this Agreement, to the extent required by applicable law or regulatory authority or to the extent required by the Receiving Party’s internal policies and in accordance with its customary practices for backup and storage.

 

Section 20.12 Use of Data.

 

(a)               In connection with the provision of the services and the discharge of its other obligations under this Agreement, the Custodian (which term for purposes of this Section 20.12 includes each of its parent company, branches and affiliates (“Affiliates”)) may collect and store information regarding a Fund and share such information with its Affiliates, agents and service providers in order and to the extent reasonably necessary (i) to carry out the provision of services contemplated under this Agreement and other agreements between the Fund and the Custodian or any of its Affiliates and (ii) to carry out management of its businesses, including, but not limited to, financial and operational management and reporting, risk management, legal and regulatory compliance and client service management.

 

(b)       Subject to paragraph (c) below, the Custodian and/or its Affiliates (except those Affiliates or business divisions principally engaged in the business of asset management) may use any data or other information (“Data”) obtained by such entities in the performance of their services under this Agreement or any other agreement between the Fund and the Custodian or one of its Affiliates, including Data regarding transactions and portfolio holdings relating to the Fund, and publish, sell, distribute or otherwise commercialize the Data; provided that, unless the Fund otherwise consents, Data is combined or aggregated with information relating to (i) other customers of the Custodian and/or its Affiliates or (ii) information derived from other sources, in each case such that any published information will be displayed in a manner designed to prevent attribution to or identification of such Data with the Fund. The Fund agrees that Custodian and/or its Affiliates may seek to profit and realize economic benefit from the commercialization and use of the Data, that such benefit will constitute part of the Custodian’s compensation for services under this Agreement or such other agreement, and the Custodian and/or its Affiliates shall be entitled to retain and not be required to disclose the amount of such economic benefit and profit to the Fund.

 

(c)       Except as expressly contemplated by this Agreement, nothing in this Section 20.12 shall limit the confidentiality and data-protection obligations of the Custodian and its Affiliates under this Agreement and applicable law. The Custodian shall cause any Affiliate, agent or service provider to which it has disclosed Data pursuant to this Section 20.12 to comply at all times with confidentiality and data-protection obligations as if it were a party to this Agreement.

 

Section 20.13 Data Privacy. The Custodian will implement and maintain a written information security program that contains appropriate security measures generally consistent with industry standard practices aligned with a security framework appropriate for a large financial services company to safeguard the personal information of the Funds’ shareholders, employees, directors and officers that the Custodian receives, stores, maintains, processes or otherwise accesses in connection with the provision of services hereunder.  The term, “personal information”, as used in this Section, means (a) an individual’s name (first initial and last name or first name and last name), address or telephone number plus (i) Social Security or other tax identification number, (ii) driver’s license number, (iii) state identification card number, (iv) debit or credit card number, (v) financial account number or (vi) personal identification number or password that would permit access to a person’s account, (b) any combination of any of the foregoing that would allow a person to log onto or access an individual’s account, or (c) any other non-public personal information within the meaning of applicable law or regulation.  “Personal Information” shall not include information that is lawfully obtained from publicly available information, or from federal, state or local government records lawfully made available to the general public (except to the extent applicable law in a particular jurisdiction does not exclude such publicly available information from protection as personal information).

 

Section 20.14 Reproduction of Documents. This Agreement and all schedules, addenda, exhibits, appendices, attachments and amendments hereto may be reproduced by any photographic, photostatic, microfilm, micro-card, miniature photographic or other similar process. Any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding, whether or not the original is in existence and whether or not such reproduction was made by a party in the regular course of business, and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.

 

Section 20.15 Regulation GG. Each Fund represents and warrants that it does not engage in an “Internet gambling business,” as such term is defined in Section 233.2(r) of Federal Reserve Regulation GG (12 CFR 233) and covenants that it shall not engage in an Internet gambling business. In accordance with Regulation GG, each Fund is hereby notified that “restricted transactions,” as such term is defined in Section 233.2(y) of Regulation GG, are prohibited in any dealings with the Custodian pursuant to this Agreement or otherwise between or among any party hereto.

 

Section 20.16 Shareholder Communications Election. SEC Rule 14b-2 requires banks that hold securities, as that term is used in federal securities laws, for the account of customers to respond to requests by issuers of securities for the names, addresses and holdings of beneficial owners of securities of that issuer held by the bank unless the beneficial owner has expressly objected to disclosure of this information. In order to comply with the rule, as may be applicable, the Custodian needs each Fund to indicate whether it authorizes the Custodian to provide such Fund’s name, address, and share position to requesting companies whose securities the Fund owns. If a Fund tells the Custodian “no,” the Custodian will not provide this information to requesting companies. If a Fund tells the Custodian “yes” or does not check either “yes” or “no” below, the Custodian is required by the rule, as applicable, to treat the Fund as consenting to disclosure of this information for all securities owned by the Fund or any funds or accounts established by the Fund. For a Fund’s protection, the Rule, as applicable, prohibits the requesting company from using the Fund’s name and address for any purpose other than corporate communications. Please indicate below whether the Fund consents or objects by checking one of the alternatives below.

 

YES [ ] The Custodian is authorized to release the Fund’s name, address, and share positions.

 

NO [X] The Custodian is not authorized to release the Fund’s name, address, and share positions.

 

Section 20.17 Business Continuity/Disaster Recovery. In the event of equipment failure, work stoppage, governmental action, communication disruption or other impossibility of performance beyond the Custodian’s control, the Custodian shall take reasonable steps to minimize service interruptions. Specifically, Custodian shall implement reasonable procedures to prevent the loss of data and to recover from service interruptions caused by equipment failure or other circumstances with resumption of all substantial elements of services in a timeframe sufficient to meet business requirements. The Custodian shall enter into and shall maintain in effect at all times during the term of this Agreement with appropriate parties one or more agreements making reasonable provision for (i) periodic back-up of the computer files and data with respect to the Fund; and (ii) emergency use of electronic data processing equipment to provide services under this Agreement. Custodian shall test the ability to recover to alternate data processing equipment in accordance with State Street program standards, and provide a high level summary of business continuity test results to the Fund upon request. Custodian will remedy any material deficiencies in accordance with State Street program standards. Upon reasonable advance notice, and at no cost to Custodian, the Fund retains the right to review Custodian’s business continuity, crisis management, disaster recovery, and third-party vendor management processes and programs (including discussions with the relevant subject matter experts and an on-site review of the production facilities used) related to delivery of the service no more frequently than an annual basis. Upon reasonable request, the Custodian also shall discuss with senior management of the Fund any business continuity/disaster recovery plan of the Custodian and/or provide a high-level presentation summarizing such plan.

 

20.18       Anti-Money Laundering. With respect to the Fund's offering and sale of Interests at any time, and for all subsequent transfers of such interests, the Fund or its delegate shall, directly or indirectly and to the extent required by law: (i) conduct know your customer/client identity due diligence with respect to potential investors and transferees in the Interests and shall obtain and retain due diligence records for each investor and transferee; (ii) use its best efforts to ensure that each investor's and any transferee's funds used to purchase Interests shall not be derived from, nor the product of, any criminal activity; (iii) if requested, provide periodic written verifications that such investors/transferees have been checked against the United States Department of the Treasury Office of Foreign Assets Control database for any non-compliance or exceptions; and (iv) perform its obligations under this Section in accordance with all applicable anti-money laundering laws and regulations. In the event that the Custodian has received advice from counsel that access to underlying due diligence records pertaining to the investors/transferees is necessary to ensure compliance by the Custodian with relevant anti-money laundering (or other applicable) laws or regulations, the Fund shall, upon receipt of written request from the Custodian, provide the Custodian with copies of such due diligence records.

 

 

[Remainder of page intentionally left blank.]

 
 

 

Signature Page

 

 

In Witness Whereof, each of the parties has caused this Agreement to be executed in its name and behalf by its duly authorized representative under seal as of the date first above-written.

 

 

EACH OF THE MANAGEMENT INVESTMENT COMPANIES AND SERIES

SET FORTH ON APPENDIX A HERETO

 

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Fund Treasurer

 

 

 

STATE STREET BANK AND TRUST COMPANY

 

 

By:/s/ Andrew Erickson

Name: Andrew Erickson

Title: Executive Vice President

 

 
 

 

APPENDIX A

to

Master Custodian Agreement

 

(revised as of December 1, 2020)

Management Investment Companies Registered with the SEC and Portfolios thereof, If Any

 

Federated Hermes Adjustable Rate Securities Trust

Federated Hermes Adjustable Rate Fund

 

Federated Hermes Adviser Series:

Federated Hermes Conservative Microshort Fund

Federated Hermes Conservative Municipal Microshort Fund

 

Federated Hermes Equity Income Fund, Inc.

Federated Hermes Global Allocation Fund

Federated Hermes Government Income Securities, Inc.

Federated Hermes Government Income Trust

Federated Hermes Government Income Fund

 

Federated Hermes High Income Bond Fund, Inc.

Federated Hermes Total Return Bond Fund

 

Federated Hermes Short-Term Government Trust

Federated Hermes Short-Term Government Fund

 

Federated Hermes Short-Intermediate Government Trust

Federated Hermes Short-Intermediate Government Fund

 

Federated Hermes Core Trust:

Bank Loan Core Fund

Federated Mortgage Core Portfolio

High Yield Bond Portfolio

Emerging Markets Core Fund

 

Federated Hermes Core Trust III:

Project and Trade Finance Core Fund

 

Federated Hermes Equity Funds:

Federated Hermes Clover Small Value Fund

Federated Hermes Kaufmann Fund

Federated Hermes Kaufmann Large Cap Fund

Federated Hermes Kaufmann Small Cap Fund

Federated Hermes MDT Mid Cap Growth Fund

Federated Hermes Prudent Bear Fund

Federated Hermes Strategic Value Dividend Fund

 

Federated Hermes Fixed Income Securities, Inc.:

Federated Hermes Strategic Income Fund

 

Federated Hermes High Yield Trust

Federated Hermes Opportunistic High Yield Bond Fund

 

Federated Hermes Income Securities Trust:

Federated Hermes Capital Income Fund

Federated Hermes Floating Rate Strategic Income Fund

Federated Hermes Fund for U.S. Government Securities

Federated Hermes Intermediate Corporate Bond Fund

Federated Hermes Real Return Bond Fund

Federated Hermes Index Trust:

Federated Hermes Max-Cap Index Fund

Federated Hermes Mid-Cap Index Fund

 

Federated Hermes Institutional Trust:

Federated Hermes Government Ultrashort Fund

Federated Hermes Institutional High Yield Bond Fund

Federated Hermes Short-Intermediate Total Return Bond Fund

 

Federated Hermes Insurance Series:

Federated Hermes Fund for U.S. Government Securities II

Federated Hermes High Income Bond Fund II

Federated Hermes Kaufmann Fund II

Federated Hermes Managed Volatility Fund II

Federated Hermes Government Money Fund II

Federated Hermes Quality Bond Fund II

 

Federated Hermes Investment Series Funds, Inc.:

Federated Hermes Corporate Bond Fund

 

Federated Hermes Managed Pool Series:

Federated Hermes Corporate Bond Strategy Portfolio

Federated Hermes High-Yield Strategy Portfolio

Federated Hermes Mortgage Strategy Portfolio

 

Federated Hermes MDT Series:

Federated Hermes MDT All Cap Core Fund

Federated Hermes MDT Balanced Fund

Federated Hermes MDT Large Cap Growth Fund

Federated Hermes MDT Small Cap Growth Fund

Federated Hermes MDT Small Cap Core Fund

 

Federated Hermes Project and Trade Finance Tender Fund

 

Federated Total Return Series, Inc.:

Federated Hermes Select Total Return Bond Fund

Federated Hermes Total Return Bond Fund

Federated Hermes Ultrashort Bond Fund

Federated Hermes Short-Term Income Fund

 

Federated Hermes Money Market Obligations Trust:

Federated Hermes California Municipal Cash Trust

Federated Hermes Georgia Municipal Cash Trust

Federated Hermes Government Obligations Fund

Federated Hermes Massachusetts Municipal Cash Trust

Federated Hermes Institutional Money Market Management

Federated Hermes Municipal Obligations Fund

Federated Hermes New York Municipal Cash Trust

Federated Hermes Pennsylvania Municipal Cash Trust

Federated Hermes Prime Cash Obligations Fund

Federated Hermes Institutional Prime Obligations Fund

Federated Hermes Institutional Prime Value Obligations Fund

Federated Hermes Tax-Free Obligations Fund

Federated Hermes Institutional Tax-Free Cash Trust

Federated Hermes Treasury Obligations Fund

Federated Hermes Trust for U.S. Treasury Obligations

Federated Hermes Virginia Municipal Cash Trust

 

 
 

 

 

 

[          ]

 

 

 
 

 

Appendix A

 

Management Investment Companies Registered with the SEC and Portfolios thereof, If Any

 

Federated Hermes Adjustable Rate Securities Trust

Federated Hermes Equity Income Fund, Inc.

Federated Hermes Global Allocation Fund

Federated Hermes Government Income Securities, Inc.

Federated Hermes Government Income Trust

Federated Hermes High Income Bond Fund, Inc.

Federated Hermes Total Return Government Bond Fund

Federated Hermes Short-Term Government Trust

Federated Hermes Short-Intermediate Government Trust

 

 

Federated Hermes Core Trust:

Bank Loan Core Fund

Mortgage Core Fund

High Yield Bond Core Fund

Emerging Markets Core Fund

 

 

Federated Hermes Core Trust III:

Project and Trade Finance Core Fund

 

Federated Hermes Equity Funds:

Federated Hermes Clover Small Value Fund

Federated Hermes Kaufmann Fund

Federated Hermes Kaufmann Large Cap Fund

Federated Hermes Kaufmann Small Cap Fund

Federated Hermes MDT Mid Cap Growth Fund

Federated Hermes Prudent Bear Fund

Federated Hermes Strategic Value Dividend Fund

 

Federated Hermes Fixed Income Securities, Inc.:

Federated Hermes Strategic Income Fund

 

Federated Hermes High Yield Trust

Federated Hermes Equity Advantage Fund

Federated Hermes Opportunistic High Yield Bond Fund

 

Federated Hermes Income Securities Trust:

Federated Hermes Capital Income Fund

Federated Hermes Floating Rate Strategic Income Fund

Federated Hermes Fund for U.S. Government Securities

Federated Hermes Intermediate Corporate Bond Fund

Federated Hermes Real Return Bond Fund

Federated Hermes Short-Term Income Fund

 

Federated Hermes Index Trust:

Federated Hermes Max-Cap Index Fund

Federated Hermes Mid-Cap Index Fund

 

Federated Hermes Institutional Trust:

Federated Hermes Government Ultrashort Fund

Federated Hermes Institutional High Yield Bond Fund

Federated Hermes Short-Intermediate Total Return Bond Fund

 

Federated Hermes Insurance Series:

Federated Hermes Fund for U.S. Government Securities II

Federated Hermes High Income Bond Fund II

Federated Hermes Hermes Kaufmann Fund II

Federated Managed Volatility Fund II

Federated Hermes Government Money Fund II

Federated Hermes Quality Bond Fund II

 

Federated Hermes Investment Series Funds, Inc.:

Federated Hermes Corporate Bond Fund

 

Federated Hermes Managed Pool Series:

Federated Hermes Corporate Bond Strategy Portfolio

Federated Hermes High-Yield Strategy Portfolio

Federated Hermes Managed Volatility Strategy Portfolio

Federated Hermes Mortgage Strategy Portfolio

 

Federated Hermes MDT Series:

Federated Hermes MDT All Cap Core Fund

Federated Hermes MDT Balanced Fund

Federated Hermes MDT Large Cap Growth Fund

Federated Hermes MDT Small Cap Growth Fund

Federated Hermes MDT Small Cap Core Fund

 

Federated Hermes Project and Trade Finance Tender Fund

 

Federated Hermes Total Return Series, Inc.:

Federated Hermes Select Total Return Bond Fund

Federated Hermes Total Return Bond Fund

Federated Hermes Ultrashort Bond Fund

 

 

Federated Hermes Money Market Obligations Trust:

Federated Hermes California Municipal Cash Trust

Federated Hermes Connecticut Municipal Cash Trust

Federated Hermes Florida Municipal Cash Trust

Federated Hermes Georgia Municipal Cash Trust

Federated Hermes Government Obligations Fund

Federated Hermes Massachusetts Municipal Cash Trust

Federated Hermes Michigan Municipal Cash Trust

Federated Hermes Institutional Money Market Management

Federated Hermes Municipal Obligations Fund

Federated Hermes New York Municipal Cash Trust

Federated Hermes Ohio Municipal Cash Trust

Federated Hermes Pennsylvania Municipal Cash Trust

Federated Hermes Prime Cash Obligations Fund

Federated Hermes Institutional Prime Obligations Fund

Federated Hermes Institutional Prime Value Obligations Fund

Federated Hermes Tax-Free Obligations Fund

Federated Hermes Institutional Tax-Free Cash Trust

Federated Hermes Treasury Obligations Fund

Federated Hermes Trust for U.S. Treasury Obligations

Federated Hermes Virginia Municipal Cash Trust

 

 
 

 

Appendix B

 

[     ]

 

 

 
 

 

LOAN SERVICES ADDENDUM

TO AMENDED AND RESTATED

MASTER CUSTODIAN AGREEMENT

 

ADDENDUM to that certain Amended and Restated Master Custodian Agreement, dated March 1, 2017, as amended (the “Custodian Agreement”) by and among each fund (a “Fund”) identified on Appendix A thereto or made subject thereto pursuant to Section 20.6 thereof and State Street Bank and Trust Company, including its subsidiaries and other affiliates (the “Custodian”). As used in this Addendum, the term “Fund”, in relation to a Loan (as defined below), includes a Portfolio on whose behalf the Fund acts with respect to the Loan.

 

The following provisions will apply with respect to interests in commercial loans, including loan participations, whether the loans are bilateral or syndicated and whether any obligor is located in or outside of the United States (collectively, “Loans”), made or acquired by a Fund on behalf of one or more of its Portfolios.

 

Section 1. Payment Custody. If a Fund wishes the Custodian to receive payments directly with respect to a Loan for credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement,

 

(a)       the Fund will cause the Custodian to be named as the Fund’s nominee for payment purposes under the relevant financing documents, e.g., in the case of a syndicated loan, the administrative contact for the agent bank, and otherwise provide for the payment to the Custodian of the payments with respect to the Loan; and

 

(b)       the Custodian will credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement any payment on or in respect of the Loan actually received by the Custodian and identified as relating to the Loan, but with any amount credited being conditional upon clearance and actual receipt by the Custodian of final payment.

 

Section 2. Monitoring. If a Fund wishes the Custodian to monitor payments on and forward notices relating to a Loan,

 

(a)       the Fund will deliver, or cause to be delivered, to the Custodian a schedule identifying the amount and due dates of the scheduled principal payments, the scheduled interest payment dates and related payment amount information, and such other information with respect to the Loan as the Custodian may reasonably require in order to perform its services hereunder (collectively, “Loan Information”); and

 

(b)       the Custodian will (i) if the amount of a principal, interest, fee or other payment with respect to the Loan is not received by the Custodian on the date on which the amount is scheduled to be paid as reflected in the Loan Information, use best efforts to notify the agent of the obligor and/or any other intermediary banks of the obligor’s failure to make timely payment, and (ii) if such payment is not received, promptly notify the Fund (or the Investment Manager on its behalf) of such obligor’s failure to make the loan payment, and (iii) provide a report to the Fund that the payment has not been received and (iv) if the Custodian receives any consent solicitation, notice of default or similar notice from any syndication agent, lead or obligor on the Loan, undertake reasonable efforts to forward the notice to the Fund.

 

Section 3. Exculpation of the Custodian.

 

(a)       Payment Custody and Monitoring. The Custodian will have no liability for any delay or failure by the Fund or any third party in providing Loan Information to the Custodian or for any inaccuracy or incompleteness of any Loan Information. The Custodian will have no obligation to verify, investigate, recalculate, update or otherwise confirm the accuracy or completeness of any Loan Information or other information or notices received by the Custodian in respect of the Loan. The Custodian will be entitled to (i) rely upon the Loan Information provided to it by or on behalf of the Fund or any other information or notices that the Custodian may receive from time to time from any syndication agent, lead or obligor or any similar party with respect to the Loan and (ii) update its records on the basis of such information or notices as may from time to time be received by the Custodian.

 

(b) Any Service. The Custodian will have no obligation to (i) determine whether any necessary steps have been taken or requirements have been met for the Fund to have acquired good or record title to a Loan, (ii) ensure that the Fund’s acquisition of the Loan has been authorized by the Fund, (iii) collect past due payments on the Loan, preserve any rights against prior parties, exercise any right or perform any obligation in connection with the Loan (including taking any action in connection with any consent solicitation, notice of default or similar notice received from any syndication agent, lead or obligor on the Loan) or otherwise take any other action to enforce the payment obligations of any obligor on the Loan, (iv) become itself the record title holder of the Loan or (v) make any advance of its own funds with respect to the Loan.

 

(c)       Miscellaneous. The Custodian will not be considered to have been or be charged with knowledge of the sale of a Loan by the Fund, unless and except to the extent that the Custodian shall have received written notice of the sale from the Fund and the proceeds of the sale have been received by the Custodian for credit to the bank account maintained by the Custodian for the Fund under the Custodian Agreement. If any question arises as to the Custodian’s duties under this Addendum, the Custodian may request instructions from the Fund and will be entitled at all times to refrain from taking any action unless it has received Proper Instructions from the Fund. The Custodian will in all events have no liability, risk or cost for any action taken or omitted with respect to the Loan pursuant to Proper Instructions. The Custodian will have no responsibilities or duties whatsoever with respect to the Loan except as are expressly set forth in this Addendum.

 

 

 
 

 

Global Custody Network

Schedule A

 

DECEMBER 31, 2016

MARKET SUBCUSTODIAN ADDRESS
Albania Raiffeisen Bank sh.a. Blv. "Bajram Curri" ETC – Kati 14
Tirana, Albania
Argentina Citibank, N.A. Bartolome Mitre 530
1036 Buenos Aires, Argentina
Australia The Hongkong and Shanghai Banking Corporation Limited HSBC Securities Services
Level 3, 10 Smith St.,
Parramatta, NSW 2150, Australia
Austria Deutsche Bank AG Fleischmarkt 1
A-1010 Vienna, Austria
UniCredit Bank Austria AG Custody Department / Dept. 8398-TZ Julius Tandler Platz 3
A-1090 Vienna, Austria
Bahrain HSBC Bank Middle East Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) 1st Floor, Bldg. #2505
Road # 2832, Al Seef 428
Kingdom of Bahrain
Bangladesh Standard Chartered Bank Silver Tower, Level 7
52 South Gulshan Commercial Area
Gulshan 1, Dhaka 1212, Bangladesh
Belgium Deutsche Bank AG, Netherlands (operating through its Amsterdam branch with support from its Brussels branch) De Entrees 99-197
1101 HE Amsterdam, Netherlands
Benin via Standard Chartered Bank Côte d’Ivoire S.A., Abidjan, Ivory Coast 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Bermuda HSBC Bank Bermuda Limited 6 Front Street
Hamilton, HM06, Bermuda
Federation of Bosnia and Herzegovina UniCredit Bank d.d. Zelenih beretki 24
71 000 Sarajevo
Federation of Bosnia and Herzegovina
Botswana Standard Chartered Bank Botswana Limited 4th Floor, Standard Chartered House
Queens Road
The Mall
Gaborone, Botswana
Brazil Citibank, N.A. AV Paulista 1111
São Paulo, SP 01311-920 Brazil
Bulgaria Citibank Europe plc, Bulgaria Branch Serdika Offices, 10th floor
48 Sitnyakovo Blvd.
1505 Sofia, Bulgaria
UniCredit Bulbank AD 7 Sveta Nedelya Square
1000 Sofia, Bulgaria
Burkina Faso via Standard Chartered Bank Côte d’Ivoire S.A., Abidjan, Ivory Coast 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Canada State Street Trust Company Canada 30 Adelaide Street East, Suite 800
Toronto, ON Canada M5C 3G6
Chile Itaú CorpBanca S.A. Presidente Riesco Street # 5537
Floor 18
Las Condes, Santiago de Chile
People’s Republic of China HSBC Bank (China) Company Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) 33rd Floor, HSBC Building, Shanghai IFC
8 Century Avenue
Pudong, Shanghai, China (200120)
China Construction Bank Corporation (for A-share market only) No.1 Naoshikou Street Chang An Xing Rong Plaza Beijing 100032-33, China
Citibank N.A. (for Shanghai – Hong Kong Stock Connect market only) 39/F., Champion Tower
3 Garden Road
Central, Hong Kong
The Hongkong and Shanghai Banking Corporation Limited (for Shanghai – Hong Kong Stock Connect market only) Level 30,
HSBC Main Building
1 Queen's Road
Central, Hong Kong
Standard Chartered Bank (Hong Kong) Limited (for Shanghai – Hong Kong Stock Connect market) 15th Floor Standard Chartered Tower
388 Kwun Tong Road
Kwun Tong, Hong Kong
Colombia Cititrust Colombia S.A. Sociedad Fiduciaria Carrera 9A, No. 99-02
Bogotá DC, Colombia
Costa Rica Banco BCT S.A. 160 Calle Central
Edificio BCT
San José, Costa Rica
Croatia Privredna Banka Zagreb d.d. Custody Department
Radnička cesta 50
10000 Zagreb, Croatia
Zagrebacka Banka d.d. Savska 60
10000 Zagreb, Croatia
Cyprus BNP Paribas Securities Services, S.C.A., Greece (operating through its Athens branch) 2 Lampsakou Str.
115 28 Athens, Greece
Czech Republic Československá obchodní banka, a.s. Radlická 333/150
150 57 Prague 5, Czech Republic
UniCredit Bank Czech Republic and Slovakia, a.s.

BB Centrum – FILADELFIE Želetavská 1525/1 140 92 Praha 4 - Michle, Czech Republic

 

 

Denmark Nordea Bank AB (publ), Sweden (operating through its subsidiary, Nordea Bank Danmark A/S) Strandgade 3
0900 Copenhagen C, Denmark
Skandinaviska Enskilda Banken AB (publ), Sweden (operating through its Copenhagen branch) Bernstorffsgade 50
1577 Copenhagen, Denmark
Egypt HSBC Bank Egypt S.A.E. (as delegate of The Hongkong and Shanghai Banking Corporation Limited) 6th Floor
306 Corniche El Nil
Maadi
Cairo, Egypt
Estonia AS SEB Pank Tornimäe 2
15010 Tallinn, Estonia
Finland Nordea Bank AB (publ), Sweden (operating through its subsidiary, Nordea Bank Finland Plc.) Satamaradankatu 5
00500 Helsinki, Finland
Skandinaviska Enskilda Banken AB (publ), Sweden (operating through its Helsinki branch) Securities Services
Box 630
SF-00101 Helsinki, Finland
France Deutsche Bank AG, Netherlands (operating through its Amsterdam branch with support from its Paris branch) De Entrees 99-197
1101 HE Amsterdam, Netherlands
Republic of Georgia JSC Bank of Georgia 29a Gagarini Str. Tbilisi 0160, Georgia
Germany State Street Bank International GmbH Brienner Strasse 59
80333 Munich, Germany
  Deutsche Bank AG Alfred-Herrhausen-Allee 16-24
D-65760 Eschborn, Germany
Ghana Standard Chartered Bank Ghana Limited P. O. Box 768
1st Floor
High Street Building
Accra, Ghana
Greece BNP Paribas Securities Services, S.C.A. 2 Lampsakou Str.
115 28 Athens, Greece
Guinea-Bissau via Standard Chartered Bank Côte d’Ivoire S.A., Abidjan, Ivory Coast 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Hong Kong Standard Chartered Bank (Hong Kong) Limited 15th Floor Standard Chartered Tower
388 Kwun Tong Road
Kwun Tong, Hong Kong
Hungary Citibank Europe plc Magyarországi Fióktelepe 7 Szabadság tér, Bank Center
Budapest, H-1051 Hungary
UniCredit Bank Hungary Zrt. 6th Floor
Szabadság tér 5-6
H-1054 Budapest, Hungary
Iceland Landsbankinn hf. Austurstræti 11
155 Reykjavik, Iceland
India Deutsche Bank AG Block B1, 4th Floor, Nirlon Knowledge Park
Off Western Express Highway
Goregaon (E)
Mumbai 400 063, India
The Hongkong and Shanghai Banking Corporation Limited 11F, Building 3, NESCO - IT Park, NESCO Complex,
Western Express Highway
Goregaon (East), Mumbai 400 063, India
Indonesia Deutsche Bank AG Deutsche Bank Building, 4th floor
Jl. Imam Bonjol, No. 80
Jakarta 10310, Indonesia
Ireland State Street Bank and Trust Company, United Kingdom branch 525 Ferry Road
Edinburgh EH5 2AW, Scotland
Israel Bank Hapoalim B.M. 50 Rothschild Boulevard
Tel Aviv, Israel 61000
Italy Deutsche Bank S.p.A. Investor Services
Via Turati 27 – 3rd Floor
20121 Milan, Italy
Ivory Coast Standard Chartered Bank Côte d’Ivoire S.A. 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Japan Mizuho Bank, Limited Shinagawa Intercity Tower A
2-15-1, Konan, Minato-ku
Tokyo 108-6009, Japan
The Hongkong and Shanghai Banking Corporation Limited HSBC Building
11-1 Nihonbashi 3-chome, Chuo-ku
Tokyo 1030027, Japan
Jordan Standard Chartered Bank Shmeissani Branch
Al-Thaqafa Street, Building # 2
P.O. Box 926190
Amman 11110, Jordan
Kazakhstan JSC Citibank Kazakhstan Park Palace, Building A,
41 Kazibek Bi street,
Almaty 050010, Kazakhstan
Kenya Standard Chartered Bank Kenya Limited Custody Services
Standard Chartered @ Chiromo, Level 5
48 Westlands Road
P.O. Box 40984 – 00100 GPO Nairobi, Kenya
Republic of Korea Deutsche Bank AG 18th Fl., Young-Poong Building
41 Cheonggyecheon-ro
Jongro-ku-, Seoul 03188, Korea
The Hongkong and Shanghai Banking Corporation Limited 5F
HSBC Building #37
Chilpae-ro
Jung-gu, Seoul 04511, Korea
Kuwait HSBC Bank Middle East Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Kuwait City, Sharq Area Abdulaziz Al Sager Street Al Hamra Tower, 37F
P. O. Box 1683, Safat 13017, Kuwait
Latvia AS SEB banka Unicentrs, Valdlauči
LV-1076 Kekavas pag., Rigas raj., Latvia
Lebanon HSBC Bank Middle East Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) St. Georges Street, Minet El-Hosn
Beirut 1107 2080, Lebanon
Lithuania AB SEB bankas Gedimino av. 12
LT 2600 Vilnius, Lithuania
Malawi Standard Bank Limited Kaomba Centre
Cnr. Victoria Avenue & Sir Glyn Jones
Road
Blantyre, Malawi
Malaysia Deutsche Bank (Malaysia) Berhad Domestic Custody Services
Level 20, Menara IMC
8 Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Standard Chartered Bank Malaysia Berhad Menara Standard Chartered
30 Jalan Sultan Ismail
50250 Kuala Lumpur, Malaysia
Mali via Standard Chartered Bank Côte d’Ivoire S.A., Abidjan, Ivory Coast 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Mauritius The Hongkong and Shanghai Banking Corporation Limited 6F HSBC Centre
18 CyberCity
Ebene, Mauritius
Mexico Banco Nacional de México, S.A. 3er piso, Torre Norte
Act. Roberto Medellín No. 800
Col. Santa Fe
Mexico, DF 01219
Morocco Citibank Maghreb Zénith Millénium Immeuble1
Sidi Maârouf – B.P. 40
Casablanca 20190, Morocco
Namibia Standard Bank Namibia Limited Standard Bank Center
Cnr. Werner List St. and Post St. Mall
2nd Floor
Windhoek, Namibia
Netherlands Deutsche Bank AG De Entrees 99-197
1101 HE Amsterdam, Netherlands
New Zealand The Hongkong and Shanghai Banking Corporation Limited HSBC House
Level 7, 1 Queen St.
Auckland 1010, New Zealand
Niger via Standard Chartered Bank Côte d’Ivoire S.A., Abidjan, Ivory Coast 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Nigeria Stanbic IBTC Bank Plc. Plot 1712
Idejo St
Victoria Island,
Lagos 101007, Nigeria
Norway Nordea Bank AB (publ), Sweden (operating through its subsidiary, Nordea Bank Norge ASA) Essendropsgate 7
0368 Oslo, Norway
Skandinaviska Enskilda Banken AB (publ), Sweden (operating through its Oslo branch) P.O. Box 1843 Vika
Filipstad Brygge 1
N-0123 Oslo, Norway
Oman HSBC Bank Oman S.A.O.G. (as delegate of The Hongkong and Shanghai Banking Corporation Limited) 2nd Floor Al Khuwair
PO Box 1727 PC 111
Seeb, Oman
Pakistan Deutsche Bank AG Unicentre – Unitowers I.I. Chundrigar Road P.O. Box 4925
Karachi - 74000, Pakistan
Panama Citibank, N.A. Boulevard Punta Pacifica Torre de las Americas Apartado
Panama City, Panama 0834-00555
Peru Citibank del Perú, S.A. Canaval y Moreyra 480 
3rd Floor, San Isidro 
Lima 27, Perú
Philippines Deutsche Bank AG Global Transaction Banking
Tower One, Ayala Triangle
1226 Makati City, Philippines
Poland Bank Handlowy w Warszawie S.A. ul. Senatorska 16
00-293 Warsaw, Poland
Bank Polska Kasa Opieki S.A. 31 Zwirki I Wigury Street
02-091, Warsaw, Poland
Portugal Deutsche Bank AG, Netherlands (operating through its Amsterdam branch with support from its Lisbon branch) De Entrees 99-197
1101 HE Amsterdam, Netherlands
Puerto Rico Citibank N.A. 1 Citibank Drive, Lomas Verdes Avenue
San Juan, Puerto Rico 00926
Qatar HSBC Bank Middle East Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) 2 Fl Ali Bin Ali Tower
Building no.: 150
Airport Road
Doha, Qatar
Romania Citibank Europe plc, Dublin – Romania Branch 8, Iancu de Hunedoara Boulevard
712042, Bucharest Sector 1, Romania
Russia AO Citibank 8-10 Gasheka Street, Building 1
125047 Moscow, Russia
Saudi Arabia HSBC Saudi Arabia Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) HSBC Head Office
7267 Olaya - Al Murooj
Riyadh 12283-2255
Kingdom of Saudi Arabia
Senegal via Standard Chartered Bank Côte d’Ivoire S.A., Abidjan, Ivory Coast 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Serbia UniCredit Bank Serbia JSC Rajiceva 27-29
11000 Belgrade, Serbia
Singapore Citibank N.A. 3 Changi Business Park Crescent
#07-00, Singapore 486026
United Overseas Bank Limited 156 Cecil Street
FEB Building #08-03
Singapore 069544
Slovak Republic UniCredit Bank Czech Republic and Slovakia, a.s. Ŝancová 1/A
813 33 Bratislava, Slovak Republic
Slovenia UniCredit Banka Slovenija d.d. Šmartinska 140
SI-1000 Ljubljana, Slovenia
South Africa FirstRand Bank Limited Mezzanine Floor
3 First Place Bank City
Corner Simmonds & Jeppe Sts. Johannesburg 2001
Republic of South Africa
Standard Bank of South Africa Limited 3rd Floor, 25 Pixley Ka Isaka Seme St. Johannesburg 2001
Republic of South Africa
Spain Deutsche Bank S.A.E. Calle de Rosario Pino 14-16, Planta 1
28020 Madrid, Spain
Sri Lanka The Hongkong and Shanghai Banking Corporation Limited 24, Sir Baron Jayatilake Mawatha
Colombo 01, Sri Lanka
Republic of Srpska UniCredit Bank d.d. Zelenih beretki 24
71 000 Sarajevo
Federation of Bosnia and Herzegovina
Swaziland Standard Bank Swaziland Limited Standard House, Swazi Plaza
Mbabane, Swaziland H101
Sweden Nordea Bank AB (publ) Smålandsgatan 17
105 71 Stockholm, Sweden
Skandinaviska Enskilda Banken AB (publ) Sergels Torg 2
SE-106 40 Stockholm, Sweden
Switzerland Credit Suisse (Switzerland) Limited Uetlibergstrasse 231
8070 Zurich, Switzerland
UBS Switzerland AG Max-Högger-Strasse 80-82
CH-8048 Zurich-Alstetten, Switzerland
Taiwan - R.O.C. Deutsche Bank AG 296 Ren-Ai Road
Taipei 106 Taiwan, Republic of China
  Standard Chartered Bank (Taiwan) Limited 168 Tun Hwa North Road
Taipei 105, Taiwan, Republic of China
Tanzania Standard Chartered Bank (Tanzania) Limited 1 Floor, International House
Corner Shaaban Robert St and Garden
Ave
PO Box 9011
Dar es Salaam, Tanzania
Thailand Standard Chartered Bank (Thai) Public Company Limited Sathorn Nakorn Tower 
14th Floor, Zone B 
90 North Sathorn Road
Silom, Bangkok 10500, Thailand
Togo via Standard Chartered Bank Côte d’Ivoire S.A., Abidjan, Ivory Coast 23, Bld de la République
17 BP 1141 Abidjan 17 Côte d’Ivoire
Tunisia Union Internationale de Banques 65 Avenue Bourguiba
1000 Tunis, Tunisia
Turkey Citibank, A.Ş. Tekfen Tower
Eski Buyukdere Caddesi 209
Kat 3
Levent 34394 Istanbul, Turkey
Deutsche Bank A.Ş. Eski Buyukdere Caddesi
Tekfen Tower No. 209
Kat: 17 4
Levent 34394 Istanbul, Turkey
Uganda Standard Chartered Bank Uganda Limited 5 Speke Road
P.O. Box 7111
Kampala, Uganda
Ukraine PJSC Citibank 16-g Dilova St.
Kyiv 03150, Ukraine
United Arab Emirates Dubai Financial Market HSBC Bank Middle East Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) HSBC Securities Services
Emaar Square
Level 3, Building No. 5
P O Box 502601
Dubai, United Arab Emirates
United Arab Emirates Dubai International Financial Center HSBC Bank Middle East Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) HSBC Securities Services
Emaar Square
Level 3, Building No. 5
P O Box 502601
Dubai, United Arab Emirates
United Arab Emirates Abu Dhabi HSBC Bank Middle East Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) HSBC Securities Services
Emaar Square
Level 3, Building No. 5
P O Box 502601
Dubai, United Arab Emirates
United Kingdom State Street Bank and Trust Company, United Kingdom branch 525 Ferry Road
Edinburgh EH5 2AW, Scotland
Uruguay Banco Itaú Uruguay S.A. Zabala 1463
11000 Montevideo, Uruguay
Venezuela Citibank, N.A. Centro Comercial El Recreo
Torre Norte, Piso 19
Avenida Casanova
Caracas, Venezuela 1050
Vietnam HSBC Bank (Vietnam) Limited (as delegate of The Hongkong and Shanghai Banking Corporation Limited) Centre Point
106 Nguyen Van Troi Street
Phu Nhuan District
Ho Chi Minh City, Vietnam
Zambia Standard Chartered Bank Zambia Plc. Standard Chartered House
Cairo Road
P.O. Box 32238
10101, Lusaka, Zambia
Zimbabwe Stanbic Bank Zimbabwe Limited (as delegate of Standard Bank of South Africa Limited) 3rd Floor
Stanbic Centre
59 Samora Machel Avenue
Harare, Zimbabwe

 

 

 

 
 

 

Depositories Operating in Network Markets Schedule B

 

DECEMBER 31, 2016

 

MARKET DEPOSITORY TYPES OF SECURITIES
Albania Bank of Albania Government debt
Argentina Caja de Valores S.A. Equities, government and corporate bonds, and corporate money market instruments
Australia Austraclear Limited Government securities, corporate bonds, and corporate money market instruments
Austria OeKB Central Securities Depository GmbH All securities listed on Wiener Börse AG, the Vienna Stock Exchange (as well as virtually all other Austrian securities)
Bahrain Clearing, Settlement, Depository and Registry System of the Bahrain Bourse Equities
Bangladesh Bangladesh Bank Government securities
Central Depository Bangladesh Limited Equities and corporate bonds
Belgium Euroclear Belgium Equities and most corporate bonds
National Bank of Belgium Government securities, corporate bonds, and money market instruments
Benin Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Bermuda Bermuda Securities Depository Equities, corporate bonds
Federation of Bosnia and Herzegovina Registar vrijednosnih papira u Federaciji Bosne i Hercegovine, d.d. Equities, corporate bonds, government securities, money market instruments
Botswana Bank of Botswana Government debt
Central Securities Depository Company of Botswana Ltd. Equities and corporate bonds
Brazil Central de Custódia e de Liquidação Financeira de Títulos Privados (CETIP) Corporate debt and money market instruments
Companhia Brasileira de Liquidação e Custódia (CBLC) All equities listed on BM&F BOVESPA S.A. and SOMA, and non-financial corporate bonds traded at BM&F BOVESPA S.A.
Sistema Especial de Liquidação e de Custódia (SELIC) Government debt issued by the central bank and the National Treasury
Bulgaria Bulgarian National Bank Government securities
Central Depository AD Eligible equities and corporate bonds
Burkina Faso Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Canada The Canadian Depository for Securities Limited All book-entry eligible securities, including government securities, equities, corporate bonds, money market instruments, strip bonds, and asset- backed securities
Chile Depósito Central de Valores S.A. Government securities, equities, corporate bonds, mortgage-backed securities, and money market instruments
People’s Republic of China China Securities Depository and Clearing Corporation Limited, Shanghai and Shenzhen Branches A shares, B shares, Treasury bonds, local government bonds, enterprise bonds, corporate bonds, open and closed-end funds, convertible bonds, and warrants
China Central Depository and Clearing Co., Ltd. Bonds traded through the China Interbank Bond Market (CIBM), including Treasury bonds, local government bonds, policy bank bonds, central bank bills, medium-term notes, commercial paper, enterprise bonds, and commercial bank bonds
Colombia Depósito Central de Valores Securities issued by the central bank and the Republic of Colombia
  Depósito Centralizado de Valores de Colombia S.A. (DECEVAL) Equities, corporate bonds, money market instruments
Costa Rica Interclear Central de Valores S.A. Securities traded on Bolsa Nacional de Valores
Croatia Središnje klirinško depozitarno društvo d.d. Eligible equities, corporate bonds, government securities, and corporate money market instruments
Cyprus Central Depository and Central Registry Equities, corporate bonds, dematerialized government securities, corporate money market instruments
Czech Republic Centrální depozitář cenných papírů, a.s. All dematerialized equities, corporate debt, and government debt, excluding Treasury bills
Czech National Bank Treasury bills
Denmark VP Securities A/S Equities, government securities, corporate bonds, corporate money market instruments, warrants
Egypt Central Bank of Egypt Treasury bills
Misr for Central Clearing, Depository and Registry S.A.E. Eligible equities, corporate bonds, and Treasury bonds
Estonia AS Eesti Väärtpaberikeskus All registered equity and debt securities
Finland Euroclear Finland Equities, corporate bonds, government securities, money market instruments
France Euroclear France Government securities, equities, bonds, and money market instruments
Republic of Georgia Georgian Central Securities Depository Equities, corporate bonds, and money market instruments
National Bank of Georgia Government securities
Germany Clearstream Banking AG, Frankfurt Equities, government securities, corporate bonds, money market instruments, warrants, investment funds, and index certificates
Ghana Central Securities Depository (Ghana) Limited Government securities and Bank of Ghana securities; equities and corporate bonds
Greece Bank of Greece, System for Monitoring Transactions in Securities in Book-Entry Form Government debt
Hellenic Central Securities Depository Eligible listed equities, government debt, and corporate bonds
Guinea-Bissau Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
  Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Hong Kong Central Moneymarkets Unit Government debt (i.e., exchange fund bills and notes issued by the HKMA), other private debt, and money market instruments
Hong Kong Securities Clearing Company Limited Securities listed or traded on the Stock Exchange of Hong Kong Limited
Hungary KELER Központi Értéktár Zrt. Government securities, equities, corporate bonds, and investment fund notes
Iceland Nasdaq verðbréfamiðstöð hf. Government securities, equities, corporate bonds, and money market instruments
India Central Depository Services (India) Limited Eligible equities, debt securities, and money market instruments
National Securities Depository Limited Eligible equities, debt securities, and money market instruments
Reserve Bank of India Government securities
Indonesia Bank Indonesia Sertifikat Bank Indonesia (central bank certificates), Surat Utang Negara (government debt instruments), and Surat Perbendaharaan Negara (Treasury bills)
PT Kustodian Sentral Efek Indonesia Equities, corporate bonds, and money market instruments
Ireland Euroclear UK & Ireland Limited GBP- and EUR-denominated money market instruments
Euroclear Bank S.A./N.V. Government securities
Israel Tel Aviv Stock Exchange Clearing House Ltd. (TASE Clearing House) Government securities, equities, corporate bonds and trust fund units
Italy Monte Titoli S.p.A. Equities, corporate debt, government debt, money market instruments, and warrants
Ivory Coast Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Japan Bank of Japan – Financial Network System Government securities
Japan Securities Depository Center (JASDEC) Incorporated Equities, corporate bonds, and corporate money market instruments
Jordan Central Bank of Jordan Treasury bills, government bonds, development bonds, and public entity bonds
Securities Depository Center Equities and corporate bonds
Kazakhstan Central Securities Depository Government securities, equities, corporate bonds, and money market instruments
Kenya Central Bank of Kenya Treasury bills and Treasury bonds
Central Depository and Settlement Corporation Limited Equities and corporate debt
Republic of Korea Korea Securities Depository Equities, government securities, corporate bonds and money market instruments
Kuwait Kuwait Clearing Company Money market instruments, equities, and corporate bonds
Latvia Latvian Central Depository Equities, government securities, corporate bonds, and money market instruments
Lebanon Banque du Liban Government securities and certificates of deposit issued by the central bank
Custodian and Clearing Center of Financial Instruments for Lebanon and the Middle East (Midclear) S.A.L. Equities, corporate bonds and money market instruments
Lithuania Central Securities Depository of Lithuania All securities available for public trading
Malawi Reserve Bank of Malawi Reserve Bank of Malawi bills and Treasury bills
Malaysia Bank Negara Malaysia Treasury bills, Bank Negara Malaysia bills, Malaysian government securities, private debt securities, and money market instruments
Bursa Malaysia Depository Sdn. Bhd. Securities listed on Bursa Malaysia Securities Berhad
Mali Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Mauritius Bank of Mauritius Government debt (traded through primary dealers)
Central Depository and Settlement Co. Limited Listed and unlisted equity and debt securities  (corporate debt and T-bills traded on the exchange)
Mexico S.D. Indeval, S.A. de C.V. All securities
Morocco Maroclear Eligible listed equities, corporate and government debt, certificates of deposit, commercial paper
Namibia Bank of Namibia Treasury bills
Netherlands Euroclear Nederland Government securities, equities, corporate bonds, corporate money market instruments, and stripped government bonds
New Zealand New Zealand Central Securities Depository Limited Government securities, equities, corporate bonds, and money market instruments
Niger Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Nigeria Central Bank of Nigeria Treasury bills and government bonds
Central Securities Clearing System Limited Equities and corporate bonds traded on the Nigeria Stock Exchange
Norway Verdipapirsentralen All listed securities
Oman Muscat Clearing & Depository Company S.A.O.G. Equities, corporate bonds, government debt
Pakistan Central Depository Company of Pakistan Limited Equities and corporate bonds
State Bank of Pakistan Government securities
Panama Central Latinoamericana de Valores, S.A. (LatinClear) Equities, government and corporate debt, commercial paper, short-term securities
Peru CAVALI S.A. Institución de Compensación y Liquidación de Valores All securities in book-entry form traded on the stock exchange
Philippines Philippine Depository & Trust Corporation Eligible equities and debt
Registry of Scripless Securities (ROSS) of the Bureau of the Treasury Government securities
Poland Rejestr Papierów Wartościowych Treasury bills
Krajowy Depozyt Papierów Wartościowych, S.A. Equities, corporate bonds, corporate money market instruments, Treasury bonds, warrants, and futures contracts
Portugal INTERBOLSA - Sociedad Gestora de Sistemas de Liquidação e de Sistemas Centralizados de Valores Mobiliários, S.A. All local Portuguese instruments
Qatar Qatar Central Securities Depository Equities, government bonds and Treasury bills listed on the Qatar Exchange
Romania National Bank of Romania Treasury bills and bonds
S.C. Depozitarul Central S.A. Bursa de Valori Bucuresti- (Bucharest Stock Exchange-) listed equities, corporate bonds, government bonds, and municipal bonds
Russia National Settlement Depository Eligible equities, Obligatsii Federal’nogo Zaima (OFZs), and corporate debt denominated in RUB
Saudi Arabia Saudi Arabian Monetary Authority Government securities and Saudi government development bonds (SGDBs)
Tadawul Central Securities Depository Equities
Senegal Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Serbia Central Securities Depository and Clearinghouse All instruments
Singapore Monetary Authority of Singapore Government securities
The Central Depository (Pte.) Limited Eligible listed equities and eligible private debt traded in Singapore
Slovak Republic Centrálny depozitár cenných papierov SR, a.s. All dematerialized securities
Slovenia KDD – Centralna klirinško depotna družba d.d. All publicly traded securities
South Africa Strate (Pty) Ltd. Eligible equities, government securities, corporate bonds, money market instruments, and warrants
Spain IBERCLEAR Government securities, equities, warrants, money market instruments, and corporate bonds
Sri Lanka Central Bank of Sri Lanka Government securities
Central Depository System (Pvt) Limited Equities and corporate bonds
Republic of Srpska Central Registry of Securities in the Republic of Srpska JSC Government securities, equities, and corporate and municipal bonds
Swaziland Central Bank of Swaziland Treasury bills and Treasury bonds
Sweden Euroclear Sweden Government securities, equities, bonds, money market instruments, derivatives, exchange traded funds, and warrants
Switzerland SIX SIS AG Government securities, equities, corporate bonds, money market instruments, derivatives, mutual funds, and warrants
Taiwan - R.O.C. Central Bank of the Republic of China (Taiwan) Government securities
Taiwan Depository and Clearing Corporation Listed equities, short-term bills, and corporate bonds
Tanzania Central Depository System (CDS), a department of the Dar es Salaam Stock Exchange Equities and corporate bonds
Thailand Thailand Securities Depository Company Limited Government securities, equities and corporate bonds
Togo Dépositaire Central – Banque de Règlement All securities traded on Bourse Régionale des Valeurs Mobilières, the West African regional exchange, including securities from the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Banque Centrale des Etats d’Afrique de l’Ouest Treasury bills and Treasury bonds issued by the following West African nations: Benin, Burkina Faso, Guinea-Bissau, the Ivory Coast, Mali, Niger, Senegal and Togo.
Tunisia Tunisie Clearing All eligible listed securities
Turkey Central Bank of Turkey Government securities
Central Registry Agency Equities, corporate bonds, money market instruments, mutual fund certificates, exchange traded funds
Uganda Bank of Uganda Treasury bills and Treasury bonds
Securities Central Depository Equities, corporate bonds
Ukraine National Depository of Ukraine Equities, bonds, and money market instruments
United Arab Emirates – Abu Dhabi Clearing, Settlement, Depository and Registry department of the Abu Dhabi Securities Exchange Equities, government securities, and corporate debt
United Arab Emirates – Dubai Financial Market Clearing, Settlement and Depository Division, a department of the Dubai Financial Market Equities, government securities, and corporate debt listed on the DFM
United Arab Emirates – Dubai International Financial Center Central Securities Depository, owned and operated by NASDAQ Dubai Limited Equities, corporate bonds, and corporate money market instruments
United Kingdom Euroclear UK & Ireland Limited GBP- and EUR-denominated money market instruments
Uruguay Banco Central del Uruguay Government securities
Venezuela Banco Central de Venezuela Government securities
  Caja Venezolana de Valores Equities and corporate bonds
Vietnam Vietnam Securities Depository Equities, government bonds, T-bills, corporate bonds, and public fund certificates
Zambia Bank of Zambia Treasury bills and Treasury bonds
  LuSE Central Shares Depository Limited Treasury bonds, corporate bonds, and equities
Zimbabwe Chengetedzai Depository Company Limited Equities and corporate bonds
  Reserve Bank of Zimbabwe Treasury bills and Treasury bonds

 

 

 

 

 

 

 

TRANSNATIONAL DEPOSITORIES

 

Euroclear Bank S.A./N.V. Domestic securities from more than 40 markets

 

Clearstream Banking, S.A. Domestic securities from more than 50 markets

 

 

 

 
 

 

Global Custody Network Publications

Schedule C

 

Publication / Type of Information

(scheduled update frequency)

Brief Description

The Guide to Custody in World Markets

(regular my.statestreet.com updates)

An overview of settlement and safekeeping procedures, custody practices, and foreign investor considerations for the markets in which State Street offers custodial services.

Global Custody Network Review

(updated annually on my.statestreet.com)

Information relating to Foreign Subcustodians in State Street’s Global Custody Network. The Review stands as an integral part of the materials that State Street provides to its U.S. mutual fund clients to assist them in complying with SEC Rule 17f-5. The Review also gives insight into State Street’s market expansion and Foreign Subcustodian selection processes, as well as the procedures and controls used to monitor the financial condition and performance of our Foreign Subcustodian banks.

Securities Depository Review

(updated annually on my.statestreet.com)

Custody risk analyses of the Foreign Securities Depositories presently operating in Network markets. This publication is an integral part of the materials that State Street provides to its U.S. mutual fund clients to meet informational obligations created by SEC Rule 17f-7.

Global Legal Survey

(updated annually on my.statestreet.com)

With respect to each market in which State Street offers custodial services, opinions relating to whether local law restricts:

 

(i) access of a fund’s independent public accountants to books and records of a Foreign Subcustodian or Foreign Securities System,

 

(ii) a fund’s ability to recover in the event of bankruptcy or insolvency of a Foreign Subcustodian or Foreign Securities System,

 

(iii) a fund’s ability to recover in the event of a loss by a Foreign Subcustodian or Foreign Securities System, and

 

(iv) the ability of a foreign investor to convert cash and cash equivalents to U.S. dollars.

Subcustodian Agreements

(available on CD-ROM annually)

Copies of the contracts that State Street has entered into with each Foreign Subcustodian that maintains U.S. mutual fund  assets in the markets in which State Street offers custodial services.

Global Market Bulletin

(daily or as necessary via email and on my.statestreet.com)

Information on changing settlement and custody conditions in markets where State Street offers custodial services. Includes changes in market and tax regulations, depository developments, dematerialization information, as well as other market changes that may impact State Street’s clients.
Foreign Custody Risk Advisories (provided as necessary and on my.statestreet.com) For those markets where State Street offers custodial services that exhibit special risks or infrastructures impacting custody, State Street maintains market advisories to highlight those unique market factors which might impact our ability to offer recognized custody service levels.

Foreign Custody Manager Material

Change Notices

(quarterly or as necessary and on my.statestreet.com)

Informational letters and accompanying materials, pursuant to our role as Foreign Custody Manager, confirming State Street’s foreign custody arrangements, including a summary of material changes with Foreign Subcustodians that have occurred during the previous quarter. The notices also identify any material changes in the custodial risks associated with maintaining assets with Foreign Securities Depositories.

 

 

Please contact GlobalMarketInformation@statestreet.com with questions about this document.

 

The information contained in this document has been carefully researched and is believed to be reliable as of the publication date. Due to the complexities of the markets and changing conditions, however, State Street cannot guarantee that it is complete or accurate in every respect. This document should not be construed or used as a substitute for appropriate legal or investment counsel. Specific advice should be sought on matters relevant to the investment activities of the reader. This application contains proprietary information and is fully protected by relevant copyright laws worldwide.

 

Copyright 2017 State Street Corporation

 

www.statestreet.com

 

 

 

 
 

 

 

 

 

[     ]

 

 

 

 

 

 

Exhibit 28 (g) (2) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

 

 

CUSTODY AGREEMENT

 

AGREEMENT, dated as of June 7, 2005 between the registered investment companies, on behalf of each Series of such registered investment companies, if any, listed on Schedule I to this Agreement, as it may be amended from time to time (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York, a New York corporation authorized to do a banking business having its principal office and place of business at One Wall Street, New York, New York 10286 (“Custodian” or “Bank”).

 

WITNESSETH:

 

that for and in consideration of the mutual promises hereinafter set forth the Funds and Custodian agree as follows:

 

ARTICLE I

DEFINITIONS

 

Whenever used in this Agreement, the following words shall have the meanings set forth below:

 

1. “Authorized Person” shall be any person, whether or not an officer or employee of the Fund, duly authorized by the Fund's board to execute any Certificate or to give any Oral Instruction with respect to one or more Accounts, such persons to be designated in a “Certificate annexed hereto as Schedule I hereto or such other Certificate as may be received by Custodian from time to time.

 

2. “BNY Affiliate” shall mean any office, branch or subsidiary of The Bank of New York Company, Inc.

 

3. “Book-Entry System” shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering securities, its successors and nominees.

 

4. “Business Day” shall mean any day on which Custodian and relevant Depositories are open for business.

 

5. “Certificate” shall mean any notice, instruction, or other instrument in writing, authorized or required by this Agreement to be given to Custodian, which is actually received by Custodian by letter or facsimile transmission and signed on behalf of a Fund by an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person.

 

6. “Composite Currency Unit” shall mean the Euro or any other composite currency unit consisting of the aggregate of specified amounts of specified currencies, as such unit may be constituted from time to time.

 

 

 

7. “Depository” shall include (a) the Book-Entry System, (b) the Depository Trust Company, { c) any other clearing agency or securities depository registered with the Securities and Exchange Commission identified to the Fund from time to time, and (d) the respective successors and nominees of the foregoing.

 

8. “Foreign Depository” shall mean (a) Euroclear, (b) Clearstream Banking, societe anonyme, (c) each Eligible Securities Depository as defined in Rule 17f-7 under the Investment Company Act of 1940, as amended, identified to the Fund from time to time, and (d) the respective successors and nominees of the foregoing.

 

9. “Instructions” shall mean communications transmitted by electronic or telecommunications media, including S.W.I.F.T., computer-to-computer interface, or dedicated transmission lines.

 

10. “Oral Instructions” shall mean verbal instructions received by Custodian from an Authorized Person or from a person reasonably believed by Custodian to be an Authorized Person.

 

11. “Series” shall mean a “series company” as defined in Rule 18f-2(a) promulgated under the Investment Company Act of 1940.

 

12. “Securities” shall include, without limitation, any common stock and other equity securities, bonds, debentures and other debt securities, notes, mortgages or other obligations, and any instruments representing rights to receive, purchase, or subscribe for the same, or representing any other rights or interests therein (whether represented by a certificate or held in a Depository or by a Subcustodian).

 

13. “Subcustodian” shall mean a bank (including any branch thereof) or other financial institution (other than a Foreign Depository) located outside the U.S. which is utilized by Custodian in connection with the purchase, sale or custody of Securities hereunder and identified to the Fund from time to time, and their respective successors and nominees.

 

14. See Second Amendment, dated 9/5/08

 

ARTICLE II

APPOINTMENT OF CUSTODIAN; ACCOUNTS;

REPRESENTATIONS, WARRANTIES, AND COVENANTS

 

1. (a) The Fund hereby appoints Custodian as Custodian of all Securities and cash at any time delivered to Custodian during the term of this Agreement, and authorizes Custodian to hold Securities in registered form in its name or the name of its nominees. Custodian hereby accepts such appointment and agrees to establish and maintain one or more securities accounts and cash accounts for each Fund in which Custodian will hold Securities and cash as provided herein. Custodian shall maintain books and records segregating the assets of each Fund from the assets of any other Fund. Such accounts (each, an “Account”; collectively, the “Accounts”) shall be in the name of each Fund.

 

(b)        Custodian may from time to time establish on its books and records such sub-accounts within each Account as the Fund and Custodian may agree upon (each a “Special Account”), and Custodian shall reflect therein such assets as the Fund may specify in a Certificate or Instructions.

 

(c)        Custodian may from time to time establish pursuant to a written agreement with and for the benefit of a broker, dealer, future commission merchant or other third party identified in a Certificate or Instruction such accounts on such terms and conditions as the Fund and Custodian shall agree, and Custodian shall transfer to such account such Securities and money as a Fund may specify in a Certificate or Instructions.

 

2.        Each Fund hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each delivery of a Certificate or each giving of Oral Instructions or Instructions by a Fund, that:

 

(a)        It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder;

 

(b)        This Agreement has been duly authorized by resolution of the Funds' boards, executed and delivered by each Fund, constitutes a valid and legally binding obligation of each Fund, enforceable in accordance with its terms, and there is no statute, regulation, role, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or performance of this Agreement;

 

(c)        It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted;

 

(d)        It will not use the services provided by Custodian hereunder in any manner that is, or will result in, a violation of any law, rule or regulation applicable to the Fund;

 

(e)        Its foreign custody manager, if the foreign custody manager is not the Custodian, as defined in Rule 17f-5 under the Investment Company Act of 1940, as amended (the “'40 Act”), has determined that use of each Subcustodian (including any Replacement Custodian) which Custodian is authorized to utilize in accordance with Section 1 (a) of Article ill hereof satisfies the applicable requirements of the '40 Act and Rule 17f-5 thereunder;

 

(f)        It is fully informed of the protections and risks associated with various methods of transmitting Instructions and Oral Instructions and delivering Certificates to Custodian, shall, and shall cause each Authorized Person, to safeguard and treat with reasonable care any user and authorization codes, passwords and/or authentication keys, understands that there may be more secure methods of transmitting or delivering the same than the methods selected by it, agrees that the security procedures (if any) to be utilized provide a commercially reasonable degree of protection in light of its particular needs and circumstances, and acknowledges and agrees that Instructions may conclusively be presumed by Custodian to have been given by person(s) duly authorized, and may be acted upon as given;

 

(g)        It shall manage its borrowings, including, without limitation any advance or overdraft (including any day-light overdraft) in the Accounts, so that the aggregate of its total borrowings for each Fund does not exceed the amount such Fund is permitted to borrow under the '40 Act;

 

(h)        Its transmission or giving of, and Custodian acting upon and in reliance on Certificates, Instructions, or Oral Instructions pursuant to this Agreement shall at all times comply with the '40 Act; and

 

(i)        It has the right to grant the security interest and security entitlement to Custodian contained in Section 1 of Article V hereof, free of any right of redemption or prior claim of any other person or entity, such pledge and such grants shall have a first priority subject to no setoffs, counterclaims, or other liens or grants prior to or on a parity therewith, and it shall take such additional steps as Custodian may require to assure such priority;

 

(j)        Each Fund or its investment adviser has considered the custody risks of maintaining assets with each Foreign Depository with which it maintains its assets.

 

(k)        Each Fund shall cause procedures to be maintained on the manner in which Instructions pursuant to which cash is distributed shall be given to Custodian.

 

3.        The Fund hereby covenants that it shall from time to time complete and execute and deliver to Custodian upon Custodian's request a Form FR U-1 (or successor form) whenever the Fund borrows from Custodian any money to be used for the purchase or carrying of margin stock as defined in Federal Reserve Regulation U .

 

4.        The Bank hereby represents and warrants, which representations and warranties shall be continuing that:

 

(a)        It is a bank having the qualifications prescribed in paragraph (1) of section 26(a) of the '40 Act;

 

(b)        It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder;

 

(c)        It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted.

 

(d)        In connection with the Funds' obligations under Rule 38a-l of the 1940 Act the Bank agrees as follows:

 

(1)        the Bank agrees to reasonably cooperate with the Funds and the Funds' Chief Compliance Officer in the administration of the Funds' compliance program (“Compliance Program”) as required by the Securities and Exchange Commission (“SEC”);

 

(2)        the Bank has implemented and maintains policies and procedw.-es reasonably designed to prevent, detect and promptly correct any violations of Federal Securities Laws with respect to services the Bank provides to the Funds (“Compliance Procedures”);

 

(3)        the Bank Will provide summaries of any Compliance Procedures that may affect in any material respect, the services provided hereunder by the Bank to the Funds;

 

(4)        the Bank periodically reviews the adequacy of such Compliance Procedures and the effectiveness of their implementation and upon the request of a Fund, Will provide the then current interval between such reviews;

 

(5)        in the event that an officer or employee of the Bank administering this Agreement has actual knowledge of the occurrence of a “Material Compliance Matter” (as defined in Rule 38a-l(e)(2)) which the Bank reasonably believes is related to or Will affect the Fund, the Bank will, if permitted by law and the Bank's regulators, notify the Fund of such occurrence;

 

(6)        except where prohibited bylaw, regulation or rule or as may be directed or instructed by the Bank's regulators, the Bank agrees to notify the Funds following quarter-end of any inspections by, or other inquiries received from, the SEC or any other regulatory or law enforcement agency after the date of this certification, which relate to the services provided by the Bank to the Funds hereunder. For the avoidance of doubt, such notification obligation shall be satisfied if the notice is contained in any publicly available regulatory filing.

 

(d)        The Bank will maintain throughout the term of this Agreement, such contingency plans as it reasonably believes to be necessary and appropriate to recover its operations from the occurrence of a disaster and which are consistent with any statue or regulation to which it is subject that imposes business resumption and contingency planning standards. The Bank agrees to provide the Funds With a summary of its contingency plan as it relates to the systems used to provide the services hereunder and to provide the Funds with periodic updates of such summary upon the Funds' reasonable request.

 

ARTICLE III

CUSTODY AND RELATED SERVICES

 

1. (a) Subject to the terms hereof, each Fund hereby authorizes Custodian to hold any Securities received by it from time to time for the Fund's account. Custodian shall be entitled to utilize, subject to subsection (c) of this Section I, Depositories, Subcustodians, and, subject to subsection (d) of this Section 1, Foreign Depositories, to the extent possible in connection With its performance hereunder. Securities and cash held in a Depository or Foreign Depository will be held subject to the rules, terms and conditions of such entity .Securities and cash held through Subcustodians shall be held subject to the terms and conditions of Custodian's agreements with such Subcustodians. Subcustodians may be authorized to hold Securities in Foreign Depositories in which such Subcustodians participate. Unless otherwise required by local law or practice or a particular Subcustodian agreement, Securities deposited with a Subcustodian, a Depositary or a Foreign Depository Will be held in a commingled account, in the name of Custodian, holding only Securities held by Custodian as Custodian for its customers.

 

Custodian shall identify on its books and records the Securities and cash belonging to the Fund, whether held directly or indirectly through Depositories, Foreign Depositories, or Subcustodians. Custodian shall, directly or indirectly, through Subcustodians, Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold Securities in the country or other jurisdiction in which the principal trading market for such Securities is located, where such Securities are to be presented for cancellation and/or payment and/or registration, or where such Securities are acquired. Custodian at any time may cease utilizing any Subcustodian and/or may replace a Subcustodian with a different Subcustodian (the “Replacement Subcustodian”). In the event Custodian selects a Replacement Subcustodian, Custodian shall not utilize such Replacement Subcustodian until after the Fund's foreign custody manager has determined that utilization of such Replacement Subcustodian satisfies the requirements of the' 40 Act and Rule 17f-5 thereunder.

 

(b)        Unless Custodian has received a Certificate or Instructions to the contrary, Custodian shall hold Securities indirectly through a Subcustodian only if (i) the Securities are not subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors or operators, including a receiver or trustee in bankruptcy or similar authority, except for a claim of payment for the safe custody or administration of Securities on behalf of a Fund by such Subcustodian, and (ii) beneficial ownership of the Securities is freely transferable without the payment of money or value other than for safe custody or administration.

 

(c)        With respect to each Depository, Custodian (i) shall exercise due care in accordance with reasonable commercial standards in discharging its duties as a securities intermediary to obtain and thereafter maintain Securities or financial assets deposited or held in such Depository, and (ii) will provide, promptly upon request by a Fund, such reports as are available concerning the internal accounting controls and financial strength of Custodian.

 

(d)        With respect to each Foreign Depository, Custodian shall exercise reasonable care, prudence, and diligence (i) to provide the Fund with an analysis of the custody risks associated with maintaining assets with the Foreign Depository, and (ii) to monitor such custody risks on a continuing basis and promptly notify the Fund of any material change in such risks. The Fund acknowledges and agrees that such analysis and monitoring shall be made on the basis of, and limited by, information gathered from Subcustodians or through publicly available information otherwise obtained by Custodian, and shall not include any evaluation of Country Risks. As used herein the term “Country Risks” shall mean with respect to any Foreign Depository: (a) the financial infrastructure of the country in which it is organized, (b) such country's prevailing custody and settlement practices, (c) nationalization, expropriation or other governmental actions, (d) such country's regulation of the banking or securities industry, (e) currency controls, restrictions, devaluations or fluctuations, and (f) market conditions which affect the order execution of securities transactions or affect the value of securities.

 

2.        Custodian shall furnish the Fund with an advice of daily transactions (including a confirmation of each transfer of Securities) and a monthly summary of all transfers to or from the Accounts.

 

3.        With respect to all Securities held hereunder, Custodian shall, unless otherwise instructed to the contrary:

 

(a)        Receive all income and other payments and advise the Fund as promptly as practicable of any such amounts due but not paid;

 

(b)        Present for payment and receive the amount paid upon all Securities which may mature and advise the Fund as promptly as practicable of any such amounts due but not paid;

 

(c)        Forward to the Fund copies of all information or documents that it may actually receive from an issuer of Securities which, in the opinion of Custodian, are intended for the beneficial owner of Securities;

 

(d)        Execute, as Custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax. laws now or hereafter in effect in connection with the collection of bond and note coupons;

 

(e)        Hold directly or through a Depository, a Foreign Depository, or a Subcustodian all rights and similar Securities issued with respect to any Securities credited to an Account hereunder; and

 

(f)        Endorse for collection checks, drafts or other negotiable instruments.

 

(1)       Custodian shall notify the Fund of rights or discretionary actions with respect to Securities held hereunder, and of the date or dates by when such rights must be exercised or such action must be taken, provided that Custodian has actually received, from the issuer or the relevant Depository (with respect to Securities issued in the United States) or from the relevant Subcustodian, Foreign Depository, or a nationally or internationally recognized bond or corporate action service to which Custodian subscribes, timely notice of such rights or discretionary corporate action or of the date or dates such rights must be exercised or such action must be taken. Absent actual receipt of such notice, Custodian shall have no liability for failing to so notify the Fund.

 

(2)        Whenever Securities (including, but not limited to, warrants, options, tenders, options to tender or non-mandatory puts or calls) confer discretionary rights on the Fund or provide for discretionary action or alternative courses of action by the Fund, the Fund shall be responsible for making any decisions relating thereto and for directing Custodian to act. In order for Custodian to act, it must receive the Fund's Certificate or Instructions at Custodian's offices, addressed as Custodian may from time to time request, not later than noon (New York time) at least two (2) Business Days prior to the last scheduled date to act with respect to such Securities (or such earlier date or time as Custodian may specify to the Fund). Absent Custodian's timely receipt of such Certificate or Instructions, Custodian shall not be liable for failure to take any action relating to or to exercise any rights conferred by such Securities.

 

4.        All voting rights with respect to Securities, however registered, shall be exercised by the Fund or its designee. For Securities issued in the United States, Custodian's only duty shall be to mail to the Fund ally documents (including proxy statements, annual reports and signed proxies) actually received by Custodian relating to the exercise of such voting rights. With respect to Securities issued outside of the United States, the Custodian will use reasonable commercial efforts to facilitate the exercise of voting and other shareholder rights, subject always to the laws, regulations and practical constraints that may exist in the country which such securities are issued. Notwithstanding the foregoing, the Custodian's only duty shall be to provide the Funds with access to a provider of global proxy services at the Fund's request and to coordinate the provision of services between each Fund and the global proxy service provider. The Fund shall be responsible for all costs associated with its use of such services.

 

5.        Custodian shall promptly advise the Fund upon Custodian's actual receipt of notification of the partial redemption, partial payment or other action affecting less than all Securities of the relevant class. If Custodian, any Subcustodian, any Depository, or any Foreign Depository holds any Securities in which the Fund has an interest as part of a fungible mass, Custodian, such Subcustodian, Depository, or Foreign Depository may select the Securities to participate in such partial redemption, partial payment or other action in any non-discriminatory manner that it customarily uses to make such selection.

 

6.        Custodian shall not under any circumstances accept bearer interest coupons which have been stripped from United States federal, state or local government or agency securities unless explicitly agreed to by Custodian in writing. ,

 

7.        The Fund shall be liable for all taxes, assessments, duties and other governmental charges, including any interest or penalty with respect thereto (“Taxes”), with respect to any cash or Securities held on behalf of the Fund or any transaction related thereto. The Fund shall indemnify Custodian and each Subcustodian for the amount of any Tax that Custodian, any such Subcustodian or any other withholding agent is required under applicable laws (whether by assessment or otherwise) to pay on behalf of, or in respect of income earned by or payments or distributions made to or for the account of the Fund (including any payment of Tax required by reason of an earlier failure to withhold). Custodian shall, or shall instruct the applicable Subcustodian or other withholding agent to, withhold the amount of any Tax which is required to be withheld under applicable law upon collection of any dividend, interest or other distribution made with respect to any Security and any proceeds or income from the sale, loan or other transfer of any Security .In the event that Custodian or any Subcustodian is required under applicable law to pay any Tax on behalf of the Fund, Custodian is hereby authorized to withdraw cash from any cash account in the amount required to pay such Tax and to use such cash, or to remit such cash to the appropriate Subcustodian or other withholding agent, for the timely payment of such Tax in the manner required by applicable law. If the aggregate amount of cash in all cash accounts is not sufficient to pay such Tax, Custodian shall promptly notify the Fund of the additional amount of cash (in the appropriate currency) required, and the Fund shall directly deposit such additional amount in the appropriate cash account promptly after receipt of such notice, for use by Custodian as specified herein. In the event that Custodian reasonably believes that Fund is eligible, pursuant to applicable law or to the provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax which is otherwise required to be withheld or paid on behalf of the Fund under any applicable law, Custodian shall, or shall instruct the applicable Subcustodian or withholding agent to, either withhold or pay such Tax at such reduced rate or refrain from withholding or paying such Tax, as appropriate; provided that Custodian shall have received from the Fund all documentary evidence of residence or other qualification for such reduced rate or exemption required to be received under such applicable law or treaty .In the event that Custodian reasonably believes that a reduced rate of, or exemption from, any Tax is obtainable only by means of an application for refund, Custodian and the applicable Subcustodian shall have no responsibility for the accuracy or validity of any forms or documentation provided by the Fund to Custodian hereunder. The Fund hereby agrees to indemnify and hold harmless Custodian and each Subcustodian in respect of any liability arising from any underwithholding or underpayment of any Tax which results from the inaccuracy or invalidity of any such forms or other documentation, and such obligation to indemnify shall be a continuing obligation of the Fund, its successors and assigns notwithstanding the termination of this Agreement.

 

8. (a) For the purpose of settling Securities and foreign exchange transactions, the Fund shall provide Custodian with sufficient immediately available funds for all transactions by such time and date as conditions in the relevant market dictate. As used herein, “sufficient immediately available funds” shall mean either (i) sufficient cash denominated in U .S. dollars to purchase the necessary foreign currency, or (ii) sufficient applicable foreign currency, to settle the transaction. Custodian shall provide the Fund with immediately available funds each day which result from the actual settlement of all sale transactions, based upon advices received by Custodian from Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in U.S. dollars or such other currency as the Fund may specify to Custodian.

 

(b)        Any foreign exchange transaction effected by Custodian in connection with this Agreement may be entered with Custodian or a BNY Affiliate acting as principal or otherwise through customary banking channels. The Fund may issue a standing Certificate or Instructions with respect to foreign exchange transactions, but Custodian may establish roles or limitations concerning any foreign exchange facility made available to the Fund. The Fund shall bear all risks of investing in Securities or holding cash denominated in a foreign currency.

 

9.        Until such time as Custodian receives a certificate to the contrary with respect to a particular Security, Custodian may release the identity of the Fund to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and shareholder.

 

ARTICLE IV

PURCHASE AND SALE OF SECURITIES;

CREDITS TO ACCOUNT

 

1.        Promptly after each purchase or sale of Securities by the Fund, the Fund shall deliver to Custodian a Certificate or Instructions, or with respect to a purchase or sale of a Security generally required to be settled on the same day the purchase or sale is made, Oral Instructions specifying all information Custodian may reasonably request to settle such purchase or sale. Custodian shall account for all purchases and sales of Securities on the actual settlement date unless otherwise agreed by Custodian,

 

2.        Custodian shall release and deliver securities owned by a Fund which are held by the Custodian or in a Depository account of the Custodian only upon receipt of Instructions, which may be continuing instructions when deemed appropriate by the parties. Unless an Instruction states to the contrary, Custodian shall only release and deliver securities from the account of a Fund upon receipt of payment thereof, In the case of a sale through a Depository, the Custodian shall transfer securities sold for the account of a Fund upon (i) receipt of advice from the Depository that payment for such securities has been transferred to the account of the Custodian at the Depository, and {ii) the making of an entry on the records of the Custodian to reflect such transfer and payment for the account of the Fund.

 

3.        Upon receipt of Instructions, which may be continuing instructions when deemed appropriate by the parties, the Custodian shall payout moneys of a Fund upon the purchase of securities for the account of the Fund against the delivery of such securities to the Custodian. In the case of a purchase effected through a Depository the Custodian shall pay for securities purchased for the account of each Fund upon (i) receipt of advice from the Depository that such securities have been transferred to the account of the Custodian at the Depository, and (ii) the making of an entry on the records of the Custodian to reflect such payment and transfer for the account of the Fund.

 

4.        Custodian may, as a matter of bookkeeping convenience or by separate agreement with the Fund, credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest, dividends or other distributions payable on Securities prior to its actual receipt of final payment therefor. All such credits shall be conditional until Custodian's actual receipt of final payment and may be reversed by Custodian to the extent that final payment is not received. Payment with respect to a transaction will not be “final” until Custodian shall have received immediately available funds which under applicable local law, rule and/or practice are irreversible and not subject to any security interest, levy or other encumbrance, and which are specifically applicable to such transaction.

 

ARTICLE V

OVERDRAFTS OR INDEBTEDNESS

 

1.        See Second Amendment, dated 9/5/08. If Custodian should in its sole discretion advance funds on behalf of any Fund which results in an overdraft {this shall specifically not include any day-light overdraft) because the money held by Custodian in an Account for such Fund shall be insufficient to pay the total amount payable upon a purchase of Securities specifically allocated to such Fund, as set forth ill a Certificate, Instructions or Oral Instructions, or if an overdraft arises in the separate account of a Fund for some other reason, including, without limitation, because of a reversal of a conditional credit or the purchase of any currency, or if the Fund is for any other reason indebted to Custodian with respect to a Fund due to a borrowing from a Fund from the Custodian, (except a borrowing for investment or for temporary or emergency purposes using Securities as collateral pursuant to a separate agreement and subject to the provisions of Section 2 of this Article), such overdraft or indebtedness shall be deemed to be a loan made by Custodian to the Fund for such Fund payable on demand and shall bear interest from the date incurred at a rate per annum as disclosed on the Fee Schedule between the Funds and Custodian, as such Fee Exhibit may be amended from time to time. In addition, the Fund hereby agrees that Custodian shall to the maximum extent permitted by law have a continuing lien, security interest, and security entitlement in and to any property, including, without limitation, any investment property or any financial asset, of such Fund at any time held by Custodian for the benefit of such Fund or in which such Fund may have an interest (which is then in Custodian's possession or control or in possession or control of any third party acting in Custodian's behalf. The Fund authorizes Custodian, in its sole discretion, at any time to charge any such overdraft or indebtedness together with interest due thereon against any balance of account standing to such Fund's credit on Custodian's books. Notwithstanding, anything in this Agreement to the contrary, provided that Custodian and a Fund are parties to a Custodial Undertaking in Connection with Master Repurchase Agreement or a Subcustodial Undertaking in Connection with Master Repurchase Agreement (collectively the “Custodial Undertakings”), Custodian agrees that any securities held by Custodian in connection with a repurchase agreement entered into by such Fund and subject to the Custodial Undertakings shall not be subject to any security interest, lien or right of setoff by Custodian or any third pep claiming through Custodian and Custodian shall not pledge, encumber, hypothecate, transfer, dispose of, or otherwise grant any third party an interest in, any such securities.

 

2.        If the Fund borrows money from any bank (including Custodian if the borrowing is pursuant to a separate agreement) for investment or for temporary or emergency purposes using Securities held by Custodian hereunder as collateral for such borrowings, the Fund shall deliver to Custodian a Certificate specifying with respect to each such borrowing: (a) the Fund to which such borrowing relates; (b) the name of the bank, (c) the amount of the borrowing, (d) the time and date, if known, on which the loan is to be entered into, (e) the total amount payable to the Fund on the borrowing date, (f) the Securities to be delivered as collateral for such loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities, and (g) a statement specifying whether such loan is for investment purposes or for temporary or emergency purposes and that such loan is in conformance with the '40 Act and the Fund's prospectus. Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral against payment by the lending bank of the total amount of the loan payable, provided that the same conforms to the total amount payable as set forth in the Certificate. Custodian may, at the option of the lending bank, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank by virtue of any promissory note or loan agreement. Custodian shall deliver such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in this Section. The Fund shall cause all Securities released from collateral status to be returned directly to Custodian, and Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that the Fund fails to specify in a Certificate the Fund, the name of the issuer, the title and number of shares or the principal amount of any particular Securities to be delivered as collateral by Custodian, Custodian shall not be under any obligation to deliver any Securities.

 

 
 

ARTICLE VI

SALE AND REDEMPTION OF SHARES

 

1.        Whenever the Fund shall sell any shares issued by the Fund (“Shares”) it shall deliver to Custodian a Certificate or, Instructions specifying the amount of money and/or Securities to be received by Custodian for the sale of such Shares and specifically allocated to an Account for such Fund.

 

2.        Upon receipt of such money, Custodian shall credit such money to an Account in the name of the Fund for which such money was received.

 

3.        Except as provided hereinafter, whenever the Fund desires Custodian to make payment out of the money held by Custodian hereunder in connection with a redemption of any Shares, it shall furnish to Custodian a Certificate or Instructions specifying the total amount to be paid for such Shares. Custodian shall make payment of such total amount to the transfer agent specified in such Certificate or Instructions out of the money held in an Account of the appropriate Fund.

 

4.        Notwithstanding the above provisions regarding the redemption of any Shares, whenever any Shares are redeemed pursuant to any check redemption privilege which may from time to time be offered by the Fund, Custodian, unless otherwise instructed by a Certificate or Instructions, shall, upon presentment of such check;, charge the amount thereof against the money held in the Account of the Fund of the Shares being redeemed, provided, that if the Fund or its agent timely advises Custodian that such check is not to be honored, Custodian shall return such check unpaid.

 

ARTICLE VII

PAYMENT OF DIVIDENDS OR DISTRIBUTIONS

 

1.        Whenever the Fund shall determine to pay a dividend or distribution on Shares it shall furnish to Custodian Instructions or a Certificate setting forth with respect to the Fund specified therein the date of the declaration of such dividend or distribution, the total amount payable, and the payment date.

 

2.        Upon the payment date specified in such Instructions or Certificate, Custodian shall payout of the money held for the account of such Fund the total amount payable to the dividend agent of the Fund specified therein.

 

ARTICLE VIII

CONCERNING CUSTODIAN

 

1. (a) The Custodian shall be held to a standard of reasonable care in carrying out the provisions of this Agreement; provided, however, that the Custodian shall be held to different standard of care of imposed by any other provision of this Agreement or imposed upon Custodian by any applicable law or regulation, which by its terms cannot be contractually modified or waived. Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys' and accountants' fees (collectively, “Losses”), incurred by or asserted against the Fund, except those Losses arising out of Custodian's own negligence or willful misconduct. Custodian shall have no liability whatsoever for the action or inaction of any Depositories or of any Foreign Depositories, except in each case to the extent such action or inaction is a direct result of the Custodian' s failure to fulfill its duties hereunder. With respect to any Losses incurred by the Fund as a result of the acts or any failures to act by any Subcustodian (other than a BNY Affiliate), Custodian shall take appropriate action to recover such Losses from such Subcustodian; and Custodian's sole responsibility and liability to the Fund shall be limited to amounts so received from such Subcustodian ( exclusive of costs and expenses incurred by Custodian). In no event shall Custodian be liable to the Fund or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Agreement, nor shall Custodian or any Subcustodian be liable: (i) for acting in accordance with any Certificate or Oral Instructions actually received by Custodian and reasonably believed by Custodian to be given by an Authorized Person; (ii) for acting in accordance with Instructions without reviewing the same; (iii) for conclusively presuming that all Instructions are given only by person(s) duly authorized; (00 for conclusively presuming that all disbursements of cash directed by the Fund, whether by a Certificate, an Oral Instruction, or an Instruction, are in accordance with Section 2(i) of Article II hereof; (y) for holding property in any particular country, including, but not limited to, Losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; exchange or currency controls or restrictions, devaluations or fluctuations; availability of cash or Securities or market conditions which prevent the transfer of property or execution of Securities transactions or affect the value of property; (yi) for any Losses due to forces beyond the control of Custodian, including without limitation strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God, or interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services; (yii) for the insolvency of any Subcustodian (other than a BNY Affiliate), any Depository, or, except to the extent such action or inaction is a direct result of the Custodian's failure to fulfill its duties hereunder, any Foreign Depository; or (yiii)l for any Losses arising from the applicability of any law or regulation now or hereafter in effect, or from the occurrence of any event, including, without limitation, implementation or adoption of any rules or procedures of a Foreign Depository, which may affect, limit prevent or impose costs or burdens on, the transferability, convertibility, or availability of any currency or Composite Currency Unit in any country or on the transfer of any Securities, and in no event shall Custodian be obligated to substitute another currency for a currency (including a currency that is a component of a Composite Currency Unit) whose transferability, convertibility or availability has been affected, limited, or prevented by such law, regulation or event and to the extent that any such law, regulation or event imposes a cost or charge upon Custodian in relation to the transferability, convertibility, or availability of any cash currency or Composite Currency Unit, such cost or charge shall be for the account of the Fund, and Custodian may treat any account denominated in an affected currency as a group of separate accounts denominated in the relevant component currencies.

 

(b)        Custodian may enter into subcontracts, agreements and understandings with any BNY Affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Custodian from its obligations hereunder.

 

(c)        The Fund agrees to indemnify Custodian and hold Custodian harmless from and against any and all Losses sustained or incurred by or asserted against Custodian by reason of or as a result of any action or inaction, or arising out of Custodian's performance hereunder, including reasonable fees and expenses of counsel incurred by Custodian in a successful defense of claims by the Fund; provided however, that the Fund shall not indemnify Custodian for those Losses arising out of Custodian's own negligence or willful misconduct. This indemnity shall be a continuing obligation of the Fund, its successors and assigns, notwithstanding the termination of this Agreement.

 

2.        Without limiting the generality of the foregoing, Custodian sep be under no obligation to inquire into, and shall not be liable for:

 

(a)        Any Losses incurred by the Fund or any other person as a result of the receipt or acceptance of fraudulent, forged or invalid Securities, or Securities which are otherwise not freely transferable or deliverable without encumbrance in any relevant market;

 

(b)        The validity of the issue of any Securities purchased, sold, or written by or for the Fund, the legality of the purchase, sale or writing thereof, or the propriety of the amount paid or received therefor;

 

(c)        The legality of the sale or redemption of any Shares, or the propriety of the amount to be received or paid therefor;

 

(d)        The legality of the declaration or payment of any dividend or distribution by the Fund;

 

(e)        The legality of any borrowing by the Fund;

 

(f)        The legality of any loan of portfolio Securities, nor shall Custodian be under any duty or obligation to see to it that any cash or collateral delivered to it by a broker, dealer or financial institution or held by it at any time as a result of such loan of portfolio Securities is adequate security for the Fund against any loss it might sustain as a result of such loan, which duty or obligation shall be the sole responsibility of the Fund. In addition, Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however that Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due;

 

(g)        The sufficiency or value of any amounts of money and/or Securities held in any Special Account in connection with transactions by the Fund; whether any broker, dealer, futures commission merchant or clearing member makes payment to the Fund of any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or clearing member, or whether any payment received by Custodian from any broker, dealer, futures commission merchant or clearing member is the amount the Fund is entitled to receive, or to notify the Fund of Custodian's receiptor non-receipt of any such payment; or

 

(h)        Whether any Securities at any time delivered to, or held by it or by any Subcustodian, for the account of a Fund are such as properly may be held by the Fund under the provisions of its then current prospectus and statement of additional information, or to ascertain whether any transactions by the Fund, whether or not involving Custodian, are such transactions as may properly be engaged in by the Fund.

 

3.        Custodian may, with respect to questions of law specifically regarding an Account, obtain the advice and opinion of counsel to the independent trustees of a Fund or other counsel that is mutually agreed upon by the Funds and the Custodian and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice.

 

4.        Custodian shall be under no obligation to take action to collect any amount payable on Securities in default, or if payment is refused after due demand and presentment.

 

5.        Custodian shall have no duty or responsibility to inquire into, make recommendations, supervise, or determine the suitability of any transactions affecting any Account.

 

6.        The Fund shall pay to Custodian the fees and charges as may be specifically agreed upon from time to time and such other fees and charges at Custodian's standard rates for such services as maybe applicable. The Fund shall reimburse Custodian for all costs associated with the conversion of the Fund's Securities hereunder and the transfer of Securities and records kept in connection with this Agreement. The Fund shall also reimburse Custodian, at cost, for out-of-pocket expenses which are a normal incident of the services provided hereunder.

 

7.        Custodian has the right to debit any cash account for any amount payable by the Fund in connection with any and all obligations of the Fund to Custodian. In addition to the rights of Custodian under applicable law and other agreements, at any time when the Fund shall not have honored any of its obligations to Custodian, Custodian shall have the right without notice to the Fund to retain or set-off, against such obligations of the Fund, any Securities or cash Custodian or a BNY Affiliate may directly or indirectly hold for the account of the Fund, and any obligations (whether matured or unmatured) that Custodian or a BNY Affiliate may have to the Fund in any currency or Composite Currency Unit. Any such asset of, or obligation to, the Fund may be transferred to Custodian and any BNY Affiliate in order to effect the above rights.

 

8.        The Fund agrees to forward to Custodian a Certificate or Instructions confirming Oral Instructions by the close of business of the same day that such Oral Instructions are given to Custodian. The Fund agrees that the fact that such confirming Certificate or Instructions are not received or that a contrary Certificate or contrary Instructions are received by Custodian shall in no way affect the validity or enforceability of transactions authorized by such Oral Instructions and effected by Custodian. If the Fund elects to transmit Instructions through an on-line communications system offered by Custodian, the Fund's use thereof shall be subject to the Terms and Conditions attached as Appendix J hereto, and Custodian shall provide user and authorization codes, passwords and authentication keys only to an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person.

 

9.        The books and records pertaining to the Fund which are in possession of Custodian shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the '40 Act and the rules thereunder. The Fund, or its authorized representatives, shall have access to such books and records during Custodian's normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by Custodian to the Fund or its authorized representative. Upon the reasonable request of the Fund, Custodian shall provide in hard copy or on computer disc any records included in any such delivery which are maintained by Custodian on a computer disc, or are similarly maintained.

 

10.        It is understood that Custodian is authorized to supply any information regarding the Accounts which is required by any law, regulation or rule now or hereafter in effect. The Custodian shall provide the Fund with any report obtained by the Custodian on the system of internal accounting control of a Depository, and with such reports on its own system of internal accounting control as the Fund may reasonably request from time to time.

 

11.        Custodian shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against Custodian in connection with this Agreement.

 

ARTICLE IX

TERMINATION

 

1.        Either of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be not less than ninety (90) days after the date of giving of such notice. In the event such notice is given by the Fund, it shall be accompanied by a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, electing to terminate this Agreement and designating a successor Custodian or Custodians, each of which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. In the event such notice is given by Custodian, the Fund shall, on or before the termination date, deliver to Custodian a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, designating a successor Custodian or Custodians. In the absence of such designation by the Fund, Custodian may designate a successor Custodian which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. Upon the date set forth in such notice this Agreement shall terminate, and Custodian shall upon receipt of a notice of acceptance by the successor Custodian on that date deliver directly to the successor Custodian all Securities and money then owned by the Fund and held by it as Custodian, after deducting an fees, expenses and other accounts for the payment or reimbursement of which it shall then be entitled.

 

2.        If a successor Custodian is not designated by the Fund or Custodian in accordance with the preceding Section, the Fund shall upon the date specified in the notice of termination of this Agreement and upon the delivery by Custodian of all Securities (other than Securities which cannot be delivered to the Fund) and money then owned by the Fund be deemed to be its own Custodian and Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities which cannot be delivered to the Fund to hold such Securities hereunder in accordance with this Agreement.

 

ARTICLE X

MISCELLANEOUS

 

1.        The Fund agrees to furnish to Custodian a new Certificate of Authorized Persons in the event of any change in the then present Authorized Persons. Until such new Certificate is received, Custodian shall be fully protected in acting upon Certificates or Oral Instructions of such present Authorized Persons.

 

2.        Any notice or other instrument in writing, authorized or required by this Agreement to be given to Custodian, shall be sufficiently given if addressed to Custodian and received by it at its offices at One Wall Street, New York, New York 10286, or at such other place as Custodian may from time to time designate in writing.

 

3.        Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Fund shall be sufficiently given if addressed to the Fund and received by it at its offices at 5800 Corporate Drive, Pittsburgh PA, J5237-7000 or at such other place as the Fund may from time to time designate in writing.

 

4.        Each and every right granted to either party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of either party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by either party of any right preclude any other or future exercise thereof or the exercise of any other right.

 

5.        In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any exclusive jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties, except that any amendment to the Schedule I hereto need be signed only by the Fund and any amendment to Appendix I hereto need be signed only by Custodian. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other.

 

6.        This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. The Fund and Custodian hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Fund hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Fund and Custodian each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

 

7.        This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

 

8.        The Custodian is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of those registered investment companies which are business trusts and agrees that the obligations and liabilities assumed by a registered investment company or any Series pursuant to this Agreement, including, without limitation, any obligation or liability to indemnify the Custodian, shall be limited in any case to the relevant Fund and its assets and that the Custodian shall not seek satisfaction of any such obligation from the shareholders of the relevant Fund, from any other Fund or its shareholders or from the Trustees, Officers, employees or agents of the registered investment company or Series, or any of them. In addition, in connection with the discharge and satisfaction of any claim made by the Custodian involving more than one Fund, the Trustees or Officers of such Funds shall have the exclusive right to determine the appropriate allocations of liability for any claim between or among the Funds.

 

9.        The Bank hereby represents and warrants that it has implemented and shall maintain appropriate measures designed to satisfy the requirements of federal and New York law applicable to the Bank with respect to the confidentiality of the portfolio holdings and transactions of each Fund. Upon request, the Bank shall annually make available to each Fund such summaries or audit reports, including any SAS 70 report, as the Bank generally makes available to its similar customers.

See Tenth Amendment dated 3/25/11 for new Article XI

 

IN WITNESS WHEREOF, the Funds and Custodian have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

 

Each of the registered investment companies or series thereof listed on Schedule II to this Agreement

 

 

By: /s/ Richard J. Thomas

Title: Treasurer

 

THE BANK OF NEW YORK

 

 

By: /s/ Edward G. McGann

Title: EDWARD G. McGANN

MANAGING DIRECTOR

 
 

SCHEDULE I

CERTIFICATE OF AUTHORIZED PERSONS

 

 

[          ]

 

 
 

See Amendment dated 11/8/07

 

SCHEDULE II

 

Federated Capital Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust a portfolio of Money Market Obligations Trust

 
 

APPENDIX I

 

THE BANK OF NEW YORK

 

ON-LINE COMMUNICATIONS SYSTEM (THE “SYSTEM”)

 

TERMS AND CONDITIONS

 

1.       License; Use. Upon delivery to an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person of the Fund of software enabling the Fund to obtain access to the System (the “Software”), Custodian grants to the Fund a personal, nontransferable and nonexclusive license to use the Software solely for the purpose of transmitting Written Instructions, receiving reports, making inquiries or otherwise communicating with Custodian in connection with the Account(s). The Fund shall use the Software solely for its own internal and proper business purposes and not in the operation of a service bureau. Except as set forth herein, no license or right of any kind is granted to the Fund with respect to the Software. The Fund acknowledges that Custodian and its suppliers retain and have title and exclusive proprietary rights to the Software, including any trade secrets or other ideas, concepts, know-how, methodologies, or information incorporated therein and the exclusive rights to any copyrights, trademarks and patents (including registrations and applications for registration of either), or other statutory or legal protections available in respect thereof. The Fund further acknowledges that all or a part of the Software may be copyrighted or trademarked (or a registration or claim made therefor) by Custodian or its suppliers. The Fund shall not take any action with respect tot the Software inconsistent with the foregoing acknowledgement, nor shall the Fund attempt to decompile, reverse engineer or modify the Software. The Fund may not coy, sell, lease or provide, directly or indirectly, any of the Software of any portion thereof to any other person or entity without Custodian’s prior written consent. The Fund may not remove any statutory copyright notice or other notice included in the Software or on any media containing the Software. The Fund shall reproduce any such notice on any reproduction of the Software and shall add any statutory copyright notice or other notice to the Software or media upon Custodian’s request.

 

2.       Equipment. The Fund shall obtain and maintain at its own cost and expense all equipment and services, including but not limited to communications services, necessary for it to utilize the Software and obtain access to the System, and Custodian shall not be responsible for the reliability or availability of any such equipment or services.

 

3.       Proprietary Information. The Software, any data base and any proprietary data, processes, information and documentation made available to the Fund (other than which are or become part of the public domain or are legally required to be made available to the public) (collectively, the “Information”), are the exclusive and confidential property of Custodian or its suppliers. The Fund shall keep the Information confidential by using the same care and discretion that the Fund uses with respect to its own confidential property and trade secrets, but not less than reasonable care. Upon termination of the Agreement or the Software license granted herein for any reason, the Fund shall return to Custodian any and all copies of the Information which are in its possession or under its control.

 

4.       Modifications. Custodian reserves the right to modify the Software from time to time and the Fund shall install new releases of the Software as Custodian may direct. The Fund agrees not to modify or attempt to modify the Software without the Custodian’s prior written consent. The Fund acknowledges that any modifications to the Software, whether by the Fund or Custodian and whether with or without Custodian’s consent, shall become the property of Custodian.

 

5.       NO REPRESENTATIONS OR WARRANTIES. CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE, SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE PROVIDED “AS IS.” IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF CUSTODIAN OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL.

 

6.       Security; Reliance; Unauthorized Use. The Fund will cause all persons utilizing the Software and System to treat all applicable user and authorization codes, passwords and authentication keys with extreme care, and it will establish internal control and safekeeping procedures to restrict the availability of the same to persons duly authorized to give Instructions. Custodian is hereby irrevocably authorized to act in accordance with and rely on Instructions received by it through the System. The Fund acknowledges that it is its sole responsibility to assure that only persons duly authorized use the System and that Custodian shall not be responsible nor liable for any unauthorized use thereof.

 

7.       System Acknowledgements. Custodian shall acknowledge through the System its receipt of each transmission communicated through the System, and in the absence of such acknowledgment Custodian shall not be liable for any failure to act in accordance with such transmission and the Fund may not claim that such transmission was received by Custodian.

 

8.       EXPORT RESTRICTIONS. EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS PROHIBITED. The Fund hereby authorizes Custodian to report its name and address to government agencies to which Custodian is required to provide such information by law.

 

9.       ENCRYPTION. The Fund acknowledges and agrees that encryption may not be available for every communication through the System, or for all data. The Fund agrees that Custodian may deactivate any encryption features at any time, without notice or liability to the Fund, for the purpose of maintaining, repairing or troubleshooting the System or the Software.

 
 

JOINT TRADING ACCOUNT CUSTODY AGREEMENT

 

(Repurchase Transactions)

 

Agreement made as of June 7, 2005, between the Funds listed on Schedule I hereto (individually, a “Fund”; collectively, the “Funds”) and The Bank of New York (the “Custodian”).

 

WITNESSETH

 

WHEREAS, Custodian is presently the custodian for each Fund pursuant to a separate custody agreement between such Funds and Custodian (each, a “Custody Agreement”; collectively, the “Custody Agreements”); and

 

WHEREAS, the Funds are permitted to enter into repurchase transactions through joint trading accounts; and

 

WHEREAS, Custodian is willing to act as custodian of the assets of each Fund maintained in joint trading accounts in accordance with the Custody Agreements and this Agreement; and

 

WHEREAS, all capitalized terms used by not defined herein shall have the meanings given them in the Custody Agreements;

 

NOW, THEREFORE, in consideration of the mutual promises hereinafter set forth, the parties agree as follows:

 

1.       The Funds hereby request Custodian to establish and maintain certain joint trading accounts (the “Joint Trading Accounts”) to be used by the Funds for the purpose of engaging in repurchase transactions. Custodian agrees to establish and maintain the Joint Trading Accounts and hold cash transferred to the Joint Trading Account as provided herein.

 

2.       On each business day that Funds intend to enter into repurchase transactions through a Joint Trading Account, an Authorized Person shall on behalf of the applicable Funds deliver to Custodian a Certificate or Written Instructions disclosing each Fund’s interest in the monies transferred to each Joint Trading Account. Upon transfer on monies from the Joint Trading Account against receipt of securities into Joint Trading Account or a similar Joint Trading Account established by a subcustodial bank pursuant to repurchase transactions (“Repo Assets”), Custodian shall confirm to each Fund the purchase of its proportionate interest in the Repo Assets, and shall identify such interest in Custodian’s books and records as belonging to such Fund by including the Funds’ Certificate or Written Instructions in the books and records of all appropriate Funds or otherwise. The following business day Custodian shall transfer the monies received upon completion of repurchase transactions from each Joint Trading Account or from a similar Joint Trading Account established at a bank pursuant to a Subcustodial Undertaking in connection with a Master Repurchase Agreement, plus any accrued income received, to each Fund’s Account in proportion to such Fund’s interest in such repurchase transactions.

 

3.       If Custodian in its sole discretion advances funds, or if there shall arise for whatever reason an overdraft or other indebtedness in connection with a Joint Trading Account, such advance, overdraft or indebtedness shall be deemed a loan made by Custodian to a Fund to which such advance, overdraft or indebtedness relates, payable on demand and bearing interest pursuant to the terms of such Fund’s Custody Agreement with Custodian. The Funds agree to furnish to Custodian promptly (and in any event by the close of business on the day of such advance, overdraft or indebtedness) with a Certificate or Written Instructions identifying each Fund to which such advance, overdraft or indebtedness relates, and the amount allocable to such Fund. In order to secure repayment of each Fund’s indebtedness to Custodian hereunder, each Fund hereby agrees that Custodian shall have a continuing lien and security interest in and to any property at any time held by it for the benefit of the Fund either hereunder or under Such Fund’s Custody Agreement with Custodian, or in which the Fund may have an interest which is then in Custodian’s possession or control or in possession or control of any third party acting in Custodian’s behalf, including in its behalf as Custodian under the Fund’s Custody Agreement with Custodian. Each Fund authorizes Custodian, in its sole discretion, at any time to charge any advance, overdraft or indebtedness together with interest due thereon against any balance of accounts standing to the Fund’s credit on the books of Custodian, including those books maintained by Custodian in its capacity as Custodian for the Fund under is Custody Agreement with the Fund. Notwithstanding, anything in this Agreement to the contrary, provided that Custodian and a Fund are parties to a Custodial Undertaking in Connection with Master Repurchase Agreement (collectively, the “Custodial Undertakings”), Custodian agrees that any securities held by Custodian in connection with a repurchase agreement entered into by such Fund and subject to the Custodian Undertakings shall not be subject to any security interest, lien or right of setoff by Custodian or any third party claiming through Custodian and Custodian shall not pledge, encumber, hypothecate, transfer, dispose of, or otherwise grant any third party an interest in, any such securities.

 

3.       It is expressly understood and agreed that in performing hereunder, Custodian is relying solely upon information contained in Certificates and Written Instructions received by it from time to time, has no independent knowledge of the terms and conditions of any repurchase transactions entered by or on behalf of any Funds, and shall have no duty to inquire into any of such terms and conditions nor any valuation responsibilities (including mark-to-market) with regard to securities and monies which are the subject of repurchase transactions hereunder. Custodian’s sole responsibility in settling transactions through the Joint Trading Account shall be to receive and deliver securities and monies in accordance with instructions contained in Certificates and Written Instructions and to comply with paragraph 2 of this Agreement.

 

4.       Each Fund hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each instruction given by each Fund, that

 

(a)       its execution and delivery of this Agreement and its performance hereunder has been duly authorized by its Board of Directors or Board of Trustees (as the case may be) and constitutes is several, but not joint, binding obligation;

 

(b)       the person or persons executing this Agreement on its behalf has and have been duly and properly authorized to do so;

 

(c)       upon allocation of any advance, overdraft or indebtedness to its account pursuant to paragraph 2 above, its total borrowings from all sources (including Custodian) shall be in conformity with the requirements and limitations set forth in the Investment Company Act of 1940, as amended, and its Prospectus.

 

5.       This Agreement is supplemental to the Custody Agreement between Custodian and each Fund and the assets of each Fund shall be maintained and administered by Custodian subject to the terms and conditions of the Custody Agreement. In the event of any conflict between the terms and conditions of this Agreement and the Custody Agreement of any Fund, the terms and conditions of this Agreement shall govern and control.

 

6.       This Agreement shall be construed in accordance with the laws of the State of New York without giving effect to the conflict of law principles thereof. This Agreement may not be amended or modified in any manner except by a written instrument executed by each Fund and Custodian. This Agreement may be terminated with respect to any Fund by either Custodian or such Fund upon thirty (30) days prior written notice.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

 

By: /s/ Richard J. Thomas

On behalf of each Fund listed on
Schedule I hereto

Title: Treasurer

 

THE BANK OF NEW YORK

 

By: /s/ Edward G. McGann

Title: Managing Director

 
 

See Amendment dated 11/8/07

 

SCHEDULE I

 

Federated Capital Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust a portfolio of Money Market Obligations Trust

 
 

JOINT TRADING ACCOUNT

 

REPURCHASE TRANSACTION CONFIRMATION

 

 

The Bank of New York hereby confirms the purchase by each Fund identified in the attached Certificate of its proportionate share of an undivided interest in the securities transferred to the Joint Trading Account # , as such interests are set forth in the attached Certificate.

 

 

Date:

 

THE BANK OF NEW YORK

 

 

 

By:

(Authorized Signature)

 
 

EXHIBIT C

 

FOREIGN CUSTODY MANAGER AGREEMENT

AGREEMENT made as of November 8, 2007 between the Funds listed on Schedule I to this Agreement (the “Funds”) and The Bank of New York (“BNY”).

W I T N E S S E T H:

WHEREAS, the Funds desire to appoint BNY as a Foreign Custody Manager on the terms and conditions contained herein;

WHEREAS, BNY desires to serve as a Foreign Custody Manager and perform the duties set forth herein on the terms and conditions contained herein;

NOW THEREFORE, in consideration of the mutual promises hereinafter contained in this Agreement, the Funds and BNY hereby agree as follows:

ARTICLE I
DEFINITIONS

Whenever used in this Agreement, the following words and phrases, unless the context otherwise requires, shall have the following meanings:

1. “Board” shall mean the board of directors or board of trustees, as the case may be, of the Funds.
2. “Eligible Foreign Custodian” shall have the meaning provided in the Rule.
3. “Monitoring System” shall mean a system established by BNY to fulfill the Responsibilities specified in clauses (d) and (e) of Section 1 of Article III of this Agreement.
4. “Responsibilities” shall mean the responsibilities delegated to BNY under the Rule as a Foreign Custody Manager with respect to each Specified Country and each Eligible Foreign Custodian selected by BNY, as such responsibilities are more fully described in Article III of this Agreement.
5. “Rule” shall mean Rule 17f-5 under the Investment Company Act of 1940, as amended.
6. “Specified Country” shall mean each country listed on Schedule II attached hereto and each country, other than the United States, constituting the primary market for a security with respect to which the Funds has given settlement instructions to The Bank of New York as custodian (the “Custodian”) under its Custody Agreement with the Funds.

ARTICLE II
BNY AS A FOREIGN CUSTODY MANAGER

1.       The Funds on behalf of its Board hereby delegate to BNY with respect to each Specified Country the Responsibilities.

2.       BNY accepts the Board’s delegation of Responsibilities with respect to each Specified Country and agrees in performing the Responsibilities as a Foreign Custody Manager to exercise reasonable care, prudence and diligence such as a person having responsibility for the safekeeping of the Funds’ assets would exercise.

3.       BNY shall provide to the Board at such times as the Board deems reasonable and appropriate based on the circumstances of the Funds’ foreign custody arrangements written reports notifying the Board of the placement of assets of the Funds with a particular Eligible Foreign Custodian within a Specified Country and of any material change in the arrangements (including the contract governing such arrangements) with respect to assets of the Funds with any such Eligible Foreign Custodian.

ARTICLE III
RESPONSIBILITIES

1.       Subject to the provisions of this Agreement, BNY shall with respect to each Specified Country select an Eligible Foreign Custodian. In connection therewith, BNY shall: (a) determine that assets of the Funds held by such Eligible Foreign Custodian will be subject to reasonable care, based on the standards applicable to custodians in the relevant market in which such Eligible Foreign Custodian operates, after considering all factors relevant to the safekeeping of such assets, including, without limitation, those contained in paragraph (c)(1) of the Rule; (b) determine that the Funds’ foreign custody arrangements with each Eligible Foreign Custodian are governed by a written contract with the Custodian which will provide reasonable care for the Funds’ assets based on the standards specified in paragraph (c)(1) of the Rule; (c) determine that each contract with an Eligible Foreign Custodian shall include the provisions specified in paragraph (c)(2)(i)(A) through (F) of the Rule or, alternatively, in lieu of any or all of such (c)(2)(i)(A) through (F) provisions, such other provisions as BNY determines will provide, in their entirety, the same or a greater level of care and protection for the assets of the Funds as such specified provisions; (d) monitor pursuant to the Monitoring System the appropriateness of maintaining the assets of the Funds with a particular Eligible Foreign Custodian pursuant to paragraph (c)(1) of the Rule and the performance of the contract governing such arrangement; and (e) advise the Funds whenever BNY determines under the Monitoring System that an arrangement (including, any material change in the contract governing such arrangement) described in preceding clause (d) no longer meets the requirements of the Rule.

2.       For purposes of preceding Section 1 of this Article, BNY’s determination of appropriateness shall not include, nor be deemed to include, any evaluation of Country Risks associated with investment in a particular country. For purposes hereof, “Country Risks” shall mean systemic risks of holding assets in a particular country including but not limited to (a) an Eligible Foreign Custodian’s use of any depositories that act as or operate a system or a transnational system for the central handling of securities or any equivalent book-entries; (b) such country’s financial infrastructure; (c) such country’s prevailing custody and settlement practices; (d) nationalization, expropriation or other governmental actions; (e) regulation of the banking or securities industry; (f) currency controls, restrictions, devaluations or fluctuations; and (g) market conditions which affect the orderly execution of securities transactions or affect the value of securities.

ARTICLE IV
REPRESENTATIONS

1.       The Funds hereby represent that: (a) this Agreement has been duly authorized, executed and delivered by the Funds, constitutes a valid and legally binding obligation of the Funds enforceable in accordance with its terms, and no statute, regulation, rule, order, judgment or contract binding on the Funds prohibits the Funds’ execution or performance of this Agreement; and (b) this Agreement has been approved and ratified by the Board.

2.       BNY hereby represents that: (a) BNY is duly organized and existing under the laws of the State of New York, with full power to carry on its businesses as now conducted, and to enter into this Agreement and to perform its obligations hereunder; (b) this Agreement has been duly authorized, executed and delivered by BNY, constitutes a valid and legally binding obligation of BNY enforceable in accordance with its terms, and no statute, regulation, rule, order, judgment or contract binding on BNY prohibits BNY’s execution or performance of this Agreement; and (c) BNY has established the Monitoring System.

ARTICLE V

CONCERNING BNY

1.       BNY shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees, sustained or incurred by, or asserted against, the Funds except to the extent the same arises out of the failure of BNY to exercise the care, prudence and diligence required by Section 2 of Article II hereof. In no event shall BNY be liable to the Funds, the Board, or any third party for special, indirect or consequential damages, or for lost profits or loss of business, arising in connection with this Agreement.

2.       The Funds shall indemnify BNY and hold it harmless from and against any and all costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees, sustained or incurred by, or asserted against, BNY by reason or as a result of any action or inaction, or arising out of BNY’s performance hereunder, provided that the Funds shall not indemnify BNY to the extent any such costs, expenses, damages, liabilities or claims arises out of BNY’s failure to exercise the reasonable care, prudence and diligence required by Section 2 of Article II hereof.

3.       For its services hereunder, the Funds agree to pay to BNY such compensation and out-of-pocket expenses as provided in the Custodian Agreement entered into between BNY and the Funds.

4.       BNY shall have only such duties as are expressly set forth herein. In no event shall BNY be liable for any Country Risks associated with investments in a particular country.

ARTICLE VI

MISCELLANEOUS

1.       This Agreement constitutes the entire agreement between the Funds and BNY as a foreign custody manager, and no provision in the Custody Agreement between the Funds and the Custodian shall affect the duties and obligations of BNY hereunder, nor shall any provision in this Agreement affect the duties or obligations of the Custodian under the Custody Agreement.

2.       Any notice or other instrument in writing, authorized or required by this Agreement to be given to BNY, shall be sufficiently given if received by it at its offices at 100 Church Street, 10th Floor, New York, New York 10286, or at such other place as BNY may from time to time designate in writing.

3.       Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Funds shall be sufficiently given if received by it at its offices at 5800 Corporate Drive, Pittsburgh PA, J5237-7000 or at such other place as the Funds may from time to time designate in writing.

4.       In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided however, that this Agreement shall not be assignable by either party without the written consent of the other.

5.       This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. The Funds and BNY hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Funds hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Funds and BNY each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

6.       The parties hereto agree that in performing hereunder, BNY is acting solely on behalf of the Funds and no contractual or service relationship shall be deemed to be established hereby between BNY and any other person by reason of this Agreement.

7.       This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

8.       This Agreement shall terminate simultaneously with the termination of the Custody Agreement between the Funds and the Custodian, and may otherwise be terminated by either party giving to the other party a notice in writing specifying the date of such termination, which shall be not less than thirty (30) days after the date of such notice.

9.       The Custodian is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of those registered investment companies which are business trusts and agrees that the obligations and liabilities assumed by a registered investment company or any Series pursuant to this Agreement, including, without limitation, any obligation or liability to indemnify the Custodian, shall be limited in any case to the relevant Fund and its assets and that the Custodian shall not seek satisfaction of any such obligation from the shareholders of the relevant Fund, from any other Fund or its shareholders or from the Trustees, Officers, employees or agents of the registered investment company or Series, or any of them. In addition, in connection with the discharge and satisfaction of any claim made by the Custodian involving more than one Fund, the Trustees or Officers of such Funds shall have the exclusive right to determine the appropriate allocations of liability for any claim between or among the Funds.

 

IN WITNESS WHEREOF, the Funds and BNY have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the date first above written.

 

THE FUNDS LISTED ON SCHEDULE I

By: /s/ Richard A. Novak

Title: Treasurer

THE BANK OF NEW YORK

By: Joseph F. Keenan

Title: Managing Director

 
 

SCHEDULE I

 

Federated Capital Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust, a portfolio of Money Market Obligations Trust

 

Government Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust

 

U.S. Treasury Cash Reserves, a portfolio of Money Market Obligations Trust

 

Automated Government Cash Reserves, a portfolio of Money Market Obligations Trust

 

Federated Market Opportunity Fund, a portfolio of Federated Equity Funds

 

Federated Stock Trust

 

 
 

SCHEDULE II

Specified Countries

Australia National Australia Bank Ltd
Austria Bank Austria Creditanstalt A.G.
Belgium ING Belgium SA/NV
Brazil Citibank N.A.
Canada Royal Bank of Canada
Czech Republic ING Bank N.V. Prague
Denmark Danske Bank
Egypt Citibank, N.A.
Finland Nordea Bank Finland plc
France BNP Paribas Securities Services/ CACEIS Bank
Germany BHF-BANK AG
Hong Kong HSBC
Hungary ING Bank (Hungary) Rt.
India Deutsche Bank AG Mumbai/ HSBC
Indonesia HSBC
Israel Bank Hapoalim B.M.
Italy Intesa Sanpaolo S.p.A.
Japan The Bank of Tokyo-Mitsubishi UFJ Ltd/ Mizuho Corporate Bank, Ltd.
Malaysia HSBC Bank Malaysia Berhad
Mexico Banco Nacional de Mexico
Netherlands ING Bank
New Zealand National Australia Bank
Norway DnB NOR Bank ASA
Poland ING Bank Slaski
Portugal Banco Comercial Portugues
Singapore United Overseas Bank Limited/ DBS Bank Ltd.
South Africa Standard Bank of South Africa Limited
South Korea HSBC
Spain Banco Bilbao Vizcaya Argentaria S.A./ Santander Investment, S.A.
Sweden Skandinaviska Enskilda Banken
Switzerland Credit Suisse, Zurich
Taiwan HSBC
Turkey Garanti Bank
United Kingdom The Bank of New York/ Deutsche Bank AG London (Depository and Clearing Centre)
 
 

EXHIBIT D

 

 

Non-Money Market Funds Fee Schedule

 

DOMESTIC CUSTODY (U.S. Securities Processing)

 

Safekeeping, Income Collection, Transaction Processing, Account Administration

 

0.25 of a basis point per annum on the average net assets of the Fund.

 

U.S. Security Transaction Charges (per transaction):

 

$4.50 DTC/FRB Book Entry Settlements

$4.00 Repurchase Agreements (each leg)

$5.00 Time Deposits

$5.00 Maturities

$20.00 Physical Settlements, Euroclear, Options, and Futures Transactions

$5.00 Paydowns

$4.00 Wire Transfers/Checks (not related to securities settlements)

$2.00 Interfund/Account Transactions

 

Manual Instruction Surcharge

Transactions instructed in a manner which does not facilitate Straight-Through-Processing will incur an additional $15 per transaction.

 

Out-of-Pocket Expenses

In addition to the above fee-schedule, Out-of-Pocket expenses will be charged as incurred. These charges would include but are not limited to:

 

See Second Amendment, dated 9/5/08

Compensating Balance Arrangement

 

The Funds and The Bank of New York have entered into a compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance the next day. Conversely, on any day the Funds maintain a positive balance, they will be allowed to overdraw the account as compensation. In both cases, Federal Reserve requirements, currently 10%, will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of 90% of the total.

 

Balances for the tax-exempt portfolios will be permitted an open-ended roll forward. The taxable portfolios are closed out on a quarterly basis with no carry-over to the subsequent quarter. At the end of each quarter, the average overdraft will be assessed a fee of 1% above the actual Federal Funds rate at the end of the period. Any average positive balance will receive an earnings credit computed at the daily effective 90 day T-bill rate minus 0.25 bps on the last day of the period. Earnings credits will be offset against the Funds’ safekeeping fees.

 

 
 

GLOBAL CUSTODY (Non-US Securities Processing)

 

 

  Global  
  Safekeeping Fee Transaction Fee
Countries *(in basis points)1 (U.S. Dollars)2
Argentina 17.00 55
Australia 1.50 25
Austria 3.00 40
Bahrain 50.00 140
Bangladesh 50.00 145
Belgium 2.50 35
Bermuda 17.00 70
Botswana 50.00 140
Brazil 12.00 30
Bulgaria 30.00 85
Canada 1.00 10
Chile 20.00 80
China “A” Shares 15.00 80
China “B” Shares 15.00 60
Colombia 50.00 95
Costa Rica 14.00 65
Croatia 25.00 70
Cyprus 15.00 35
Czech Republic 18.00 50
Denmark 2.00 35
Ecuador 30.00 55
Egypt 30.00 85
Estonia 10.00 60
Euromarket/Euroclear3 1.00 10
Euromarket/Clearstream 1.00 10
Finland 3.50 35
France 2.00 30
Germany 1.50 25
Ghana 50.00 140
Greece 9.00 40
Hong Kong 3.00 45
Hungary 20.00 55
Iceland 11.00 35
India 13.00 105
Indonesia 11.00 80
Ireland (Equities) 3.00 33
Ireland (Gov’t Bonds) 1.00 13
Israel 20.00 40
Italy 1.50 35
Ivory Coast 50.00 140
Jamaica 50.00 60
Japan 1.75 20
Jordan 50.00 140
Kazakhstan 53.00 140
Kenya 48.00 140
Latvia 50.00 45
Lebanon 50.00 140
Lithuania 20.00 43
Luxembourg 10.00 80
Malaysia 4.50 45
Malta 20.00 63
Mauritius 25.00 100
Mexico 6.50 30
Morocco 50.00 95
Namibia 50.00 60
Netherlands 2.00 25
New Zealand 2.00 35
Nigeria 50.00 60
Norway 2.50 35
Oman 50.00 140
Pakistan 50.00 140
Peru 50.00 83
Philippines 6.00 60
Poland 15.00 63
Portugal 5.00 50
Qatar 50.00 140
Romania 30.00 80
Russia Equities 40.00 95
Singapore 3.50 45
Slovak Republic 23.00 95
Slovenia 50.00 60
South Africa 2.50 30
South Korea 6.50 45
Spain 2.50 40
Sri Lanka 13.00 70
Swaziland 50.00 60
Sweden 2.00 30
Switzerland 2.00 35
Taiwan 10.00 60
Thailand 5.00 50
Trinidad & Tobago 50.00 53
Tunisia 50.00 53
Turkey 12.50 60
Ukraine 75.00 250
United Kingdom 0.50 10
Uruguay 75.00 83
Venezuela 50.00 140
Zambia 50.00 140
Zimbabwe 50.00 140
       

 

Not In Bank/Not in Custody Assets USA4………………………$500 per line per annum

 

Third Party Foreign Exchange Settlements      
$70 per non-USD currency movement        
           
Minimum charges imposed by Agent Banks/Local Administrators    
Brazil - 15 basis points for annual administrative charges      
           
Colombia - USD $600 per month minimum administration charge      
Ecuador - USD $800 monthly minimum per relationship      
Egypt - USD $400 monthly minimum per relationship      
           
Additional Charges        
Local taxes, stamp duties or other assessments, including stock exchange fees, postage and  
insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual  
expenses, which are unique to a country in which the Funds are investing  
       

 

 

 
 

EXHIBIT E

 

Money Market Funds Fee Schedule

 

DOMESTIC CUSTODY (U.S. Securities Processing)

 

Safekeeping, Income Collection, Transaction Processing, Account Administration

 

0.25 of a basis point per annum on the average net assets of the Fund.

 

U.S. Security Transaction Charges (per transaction):

 

$4.50 DTC/FRB Book Entry Settlements

$4.00 Repurchase Agreements (each leg)

$5.00 Time Deposits

$5.00 Maturities

$20.00 Physical Settlements, Euroclear, Options, and Futures Transactions

$5.00 Paydowns

$4.00 Wire Transfers/Checks (not related to securities settlements)

$2.00 Interfund/Account Transactions

 

Manual Instruction Surcharge

Transactions instructed in a manner which does not facilitate Straight-Through-Processing will incur an additional $15 per transaction.

 

Out-of-Pocket Expenses

In addition to the above fee-schedule, Out-of-Pocket expenses will be charged as incurred. These charges would include but are not limited to:

 

See Second Amendment, dated 9/5/08

Compensating Balance Arrangement

 

The Funds and The Bank of New York have entered into a compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance the next day. Conversely, on any day the Funds maintain a positive balance, they will be allowed to overdraw the account as compensation. In both cases, Federal Reserve requirements, currently 10%, will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of 90% of the total.

 

Balances for the tax-exempt portfolios will be permitted an open-ended roll forward. The taxable portfolios are closed out on a quarterly basis with no carry-over to the subsequent quarter. At the end of each quarter, the average overdraft will be assessed a fee of 1% above the actual Federal Funds rate at the end of the period. Any average positive balance will receive an earnings credit computed at the daily effective 90 day T-bill rate minus 0.25 bps on the last day of the period. Earnings credits will be offset against the Funds’ safekeeping fees.

 

 
 

GLOBAL CUSTODY (Non-US Securities Processing)

 

 

  Global  
  Safekeeping Fee Transaction Fee
Countries *(in basis points)1 (U.S. Dollars)2
Argentina 17.00 55
Australia 1.50 25
Austria 3.00 40
Bahrain 50.00 140
Bangladesh 50.00 145
Belgium 2.50 35
Bermuda 17.00 70
Botswana 50.00 140
Brazil 12.00 30
Bulgaria 30.00 85
Canada 1.00 10
Chile 20.00 80
China “A” Shares 15.00 80
China “B” Shares 15.00 60
Colombia 50.00 95
Costa Rica 14.00 65
Croatia 25.00 70
Cyprus 15.00 35
Czech Republic 18.00 50
Denmark 2.00 35
Ecuador 30.00 55
Egypt 30.00 85
Estonia 10.00 60
Euromarket/Euroclear3 1.00 10
Euromarket/Clearstream 1.00 10
Finland 3.50 35
France 2.00 30
Germany 1.50 25
Ghana 50.00 140
Greece 9.00 40
Hong Kong 3.00 45
Hungary 20.00 55
Iceland 11.00 35
India 13.00 105
Indonesia 11.00 80
Ireland (Equities) 3.00 33
Ireland (Gov’t Bonds) 1.00 13
Israel 20.00 40
Italy 1.50 35
Ivory Coast 50.00 140
Jamaica 50.00 60
Japan 1.75 20
Jordan 50.00 140
Kazakhstan 53.00 140
Kenya 48.00 140
Latvia 50.00 45
Lebanon 50.00 140
Lithuania 20.00 43
Luxembourg 10.00 80
Malaysia 4.50 45
Malta 20.00 63
Mauritius 25.00 100
Mexico 6.50 30
Morocco 50.00 95
Namibia 50.00 60
Netherlands 2.00 25
New Zealand 2.00 35
Nigeria 50.00 60
Norway 2.50 35
Oman 50.00 140
Pakistan 50.00 140
Peru 50.00 83
Philippines 6.00 60
Poland 15.00 63
Portugal 5.00 50
Qatar 50.00 140
Romania 30.00 80
Russia Equities 40.00 95
Singapore 3.50 45
Slovak Republic 23.00 95
Slovenia 50.00 60
South Africa 2.50 30
South Korea 6.50 45
Spain 2.50 40
Sri Lanka 13.00 70
Swaziland 50.00 60
Sweden 2.00 30
Switzerland 2.00 35
Taiwan 10.00 60
Thailand 5.00 50
Trinidad & Tobago 50.00 53
Tunisia 50.00 53
Turkey 12.50 60
Ukraine 75.00 250
United Kingdom 0.50 10
Uruguay 75.00 83
Venezuela 50.00 140
Zambia 50.00 140
Zimbabwe 50.00 140
       

 

Not In Bank/Not in Custody Assets USA4………………………$500 per line per annum

 

 

 

Third Party Foreign Exchange Settlements      
$70 per non-USD currency movement        
           
Minimum charges imposed by Agent Banks/Local Administrators    
Brazil - 15 basis points for annual administrative charges      
           
Colombia - USD $600 per month minimum administration charge      
Ecuador - USD $800 monthly minimum per relationship      
Egypt - USD $400 monthly minimum per relationship      
           
Additional Charges        
Local taxes, stamp duties or other assessments, including stock exchange fees, postage and  
insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual  
expenses, which are unique to a country in which the Funds are investing  
       

 

 

 

 
 

Amendment to

Custody Agreement

between

The Bank of New York

and

The Funds listed on Schedule II to the Custody Agreement, as amended from time to time

 

 

This Amendment (the “Amendment”) dated as of November 8, 2007 between The Bank of New York (“Custodian”) and the Funds listed on Schedule II to the Custody Agreement, as amended by Exhibit A attached hereto (each a “Fund”).

 

WHEREAS, the Federated Capital Reserves Fund, Federated Government Reserves Fund and Federated Municipal Trust (collectively, the “Federated Reserves Funds”), and Custodian, having executed the Custody Agreement dated June 7, 2005, now wish to make certain changes to the Custody Agreement and provisions thereof which provisions the Federated Reserves Funds and Custodian agree shall be deemed by them, and each of them, to be included as of the date of this Amendment within the Custody Agreement as if originally stated therein; and

 

WHEREAS, the Federated Reserves Funds and the Custodian agree to the addition of the following funds to the Custody Agreement: Government Obligations Tax-Managed Fund, U.S. Treasury Cash Reserves, and Automated Government Cash Reserves, each a portfolio of Money Market Obligations Trust; Federated Market Opportunity Fund, a portfolio of Federated Equity Funds; and Federated Stock Trust; and

 

WHEREAS, the Funds’ Board desires to delegate certain of its responsibilities for performing the services set forth in paragraphs (c)(1), (c)(2) and (c)(3) of Rule 17f-5 of the Investment Company Act of 1940 to the Custodian as Foreign Custody Manager and the Custodian agrees to accept such delegation of responsibilities; and

 

WHEREAS, the Custody Agreement is amended to include a Fee Schedule for non-money market funds;

 

WHEREAS, the Custody Agreement Fee Schedule for non-money market funds is amended to reduce the interest rate on overdrafts from 2% to 1% and to include a Global Custody Fee Schedule; and

 

WHEREAS, the Custody Agreement Fee Schedule for money market funds is amended to, include three new money market funds, to reduce the interest rate on overdrafts from 2% to 1% and to include a Global Custody Fee Schedule.

 

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Funds and Custodian hereby agree as follows:

 

1.       Schedule II of the Custody Agreement and Schedule I of the Joint Trading Account Agreement are each replaced with the Schedule II and Schedule I respectively, attached to this Amendment as Exhibits A and B, respectively.

 

2. The Custodian shall serve as Foreign Custody Manager in accordance with the Foreign Custody Management Agreement, attached to this Amendment as Exhibit C.

 

3. The Custody Agreement is amended to include a Fee Schedule for non-money market funds, attached to this Amendment as Exhibit D.

 

4. The Fee Schedule for non-money market funds is hereby added to the Custody Agreement in the form attached to this Amendment as Exhibit D.

 

5. The Fee Schedule for money funds is amended to include Government Obligations Tax-Managed Fund, U.S. Treasury Cash Reserves, and Automated Government Cash Reserves, each a portfolio of Money Market Obligations Trust, to reduce the interest rate on overdrafts from 2% to 1% above the actual Federal Funds rate at the end of the period and to provide a Global Custody Fee schedule, attached to this Amendment as Exhibit E.

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly designated officers below as of the day and year first above written.

 

ACKNOWLEDGED AND AGREED:

Custodian:

 

THE BANK OF NEW YORK

On behalf of each of the funds indicated on Schedule II of the Custody Agreement, as amended from time to time.

 

   
   
By:  /s/ Joseph F. Keenan By:  /s/ Richard A. Novak
Title:  Managing Director Title:  Treasurer

 

 

 
 

EXHIBIT A

 

CUSTODY AGREEMENT

SCHEDULE II

 

Federated Capital Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust, a portfolio of Money Market Obligations Trust

 

Government Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust

 

U.S. Treasury Cash Reserves, a portfolio of Money Market Obligations Trust

 

Automated Government Cash Reserves, a portfolio of Money Market Obligations Trust

 

Federated Market Opportunity Fund, a portfolio of Federated Equity Funds

 

Federated Stock Trust

 

 

 
 

EXHIBIT B

 

JOINT TRADING ACCOUNT AGREEMENT

SCHEDULE I

 

Federated Capital Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Government Reserves Fund, a portfolio of Money Market Obligations Trust

 

Federated Municipal Trust, a portfolio of Money Market Obligations Trust

 

Government Obligations Tax-Managed Fund, a portfolio of Money Market Obligations Trust

 

U.S. Treasury Cash Reserves, a portfolio of Money Market Obligations Trust

 

Automated Government Cash Reserves, a portfolio of Money Market Obligations Trust

 

Federated Market Opportunity Fund, a portfolio of Federated Equity Funds

 

Federated Stock Trust

 

 

 
 

Second Amendment to the Custody Agreement

 

 

This Amendment is made as of September 5, 2008 to the Custody Agreement (the “Agreement”) dated June 7, 2005 and amended November 8, 2007 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendments.

 

1.       Section 14. “Internal Operating Account” to Article I of the Agreement shall be revised as follows:

 

14. “Internal Operating Account” shall mean accounts established by the Custodian at the direction of a Fund to facilitate the intraday transfer of monies to or from the Custodian representing aggregated subscriptions or redemptions for allocation to individual Funds as indicated by the Fund or its agent.

 

And;

 

Each Fund and the Custodian hereby amend Article V. Section 1 of the Agreement by replacing the first sentence of the section as follows:

 

If Custodian should in its sole discretion advance funds on behalf of any Fund which results in an overdraft at the end of any day, because the money held by Custodian in an Account, including an Internal Operating Account, for such Fund shall be insufficient to pay the total amount payable upon a purchase of Securities specifically allocated to such Fund, as set forth in a Certificate, Instructions or Oral Instructions, or if an overdraft arises in the separate account of a Fund for some other reason, including, without limitation, because of a reversal of a conditional credit or the purchase of any currency, or if the Fund is for any other reason indebted to Custodian with respect to a Fund, due to borrowing by a Fund from the Custodian, (except a borrowing for investment or for temporary or emergency purposes using Securities as collateral pursuant to a separate agreement and subject to the provisions of Section 2 of this Article), such overdraft or indebtedness shall be deemed to be a loan made by Custodian to the Fund for such Fund payable on demand and shall bear interest from the date incurred at a rate per annum as disclosed on the Fee Schedule between the Funds and the Custodian as such Fee Exhibit may be amended from time to time. 

 

2.       Within Exhibit D, the section entitled “Compensating Balance Arrangement” is replaced in its entirety with the following Amended and Restated section entitled “Compensating Balance Arrangement” as attached hereto.

 

3.       Within Exhibit E, the section entitled “Compensating Balance Arrangement” is replaced in its entirety with the following Amended and Restated section entitled “Compensating Balance Arrangement” as attached hereto.

 

4.       Each Exhibit A, Exhibit B, and Schedule I to Exhibit C, the Foreign Custody Manager Agreement, are updated to include the following new Funds:

 

Federated California Municipal Income Fund

Federated New York Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Bruce L. Baumann

Title: Vice President

 
 

Amended and Restated

Exhibit D

 

Compensating Balance Arrangement

 

Each of the Funds listed below and The Bank of New York Mellon have entered into an earnings credit balance arrangement pursuant to which it has been agreed that 90% of any positive balances will be compensated at the 90 day T-Bill rate and 100% of overdrawn balances will be charged at a rate of 1% over the Fed Funds rate. Monthly, the net resultant credit or charge will be applied to the each Funds’ respective safekeeping fees. Credits that exceed the safekeeping fee may be carried over into the next billing period at the discretion of Custodian.

 

FUNDS

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 
 

See Fifth Amendment dated 11/13/09 for Compensating Balance Arrangement

 

Amended and Restated

Exhibit E

 

Compensating Balance Arrangement

Each Fund listed below and The Bank of New York Mellon (the “Bank”) have entered into a average compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation.

 

In each instance, Federal Reserve requirements (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part on the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending March, June, September and December for FGRF, FCRF and FMUTR; and ending February, May, August, and November for AGCR, USTCR and GOTMF). Average balances will be computed at the end of the quarter. Net positive balances will receive an earnings credit computed at the daily effective 90 – day T-Bill rate on the last day of a period. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net credits or charges will be applied to the safekeeping fees. Credits that exceed the safekeeping fee will be carried over into the next billing period but must be applied in a 12 month cycle; all accumulated unapplied credits will expire in the final quarter of the cycle, i.e. in November or December. However, upon specific request from Fund, Custodian at its discretion may agree to carry forward into the next 12 month cycle any accumulated credits, contingent on their application within a specified time period.

 

Credits are not redeemable for cash and will expire in the event the relationship with the Funds is terminated.

 

FUNDS

Federated Capital Reserves Fund (FCRF)

Federated Government Reserve Fund (FGRF)

Federated Municipal Trust Fund (FMUTR)

US Treasury Cash Reserve Fund (USTCR)

Automated Government Cash Reserves (AGCR)

Government Obligations Tax Managed Fund (GOTMF)

 

 

 
 

 

Third Amendment to the Custody Agreement

 

 

This Amendment is made as of September 8, 2009 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007 and September 5, 2008 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendments.

 

1.       Within Exhibit C, the section entitled Schedule II is replaced in its entirety with Amended and Restated Schedule II as attached hereto.

 

2.       Exhibit D, the fee schedule for non-money market funds, is amended to include a fee for the safekeeping of gold bullion and a transaction charge for settlement of trades involving same with restated Exhibit D as attached hereto.

 

3.       A Precious Metals Supplement is added as Exhibit F to include provisions for the custody of assets consisting of precious metals held for the Federated Market Opportunity Fund.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

 

By: /s/ Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

Custody Agreement

Schedule II

 

 

 

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

Federated Capital Reserves Fund

Federated Government Reserve Fund

Federated Municipal Trust Fund

US Treasury Cash Reserve Fund

Automated Government Cash Reserves

Government Obligations Tax Managed Fund

 

 

 

 

See Fourth Amendment adding new funds, effective 10/23/09

 
 

Custody Agreement

Amended and Restated

Exhibit C, Schedule II

 

Specified Countries

 

 

Country/Market Subcustodian(s)
Argentina Citibank N.A.
Australia National Australia Bank Limited
Austria UniCredit Bank Austria AG
Bahrain HSBC Bank Middle East Limited
Bangladesh Standard Chartered Bank
Belgium ING Belgium, SA/NV
Benin Société Générale de Banques en Côte d’Ivoire
Bermuda Bank of Bermuda Limited
Botswana Barclays Bank of Botswana Ltd.
Brazil Citibank N.A.  
Bulgaria ING Bank N.V.
Burkina Faso Société Générale de Banques en Côte d’Ivoire
Canada CIBC Mellon Trust Company
Cayman Islands The Bank of New York Mellon  
Channel Islands The Bank of New York Mellon
Chile Banco de Chile
China HSBC Bank (China) Company Limited
Colombia Cititrust Colombia S.A.
Costa Rica Banco BCT
Croatia Privredna Banka Zagreb d.d.
Cyprus EFG Eurobank Ergasias S.A.
Czech Republic ING Bank  N.V.
Denmark Danske Bank
Ecuador Banco de la Produccion S.A.
Egypt HSBC Bank Egypt S.A.E.   
Estonia SEB Pank AS
Euromarket Clearstream Banking Luxembourg S.A.
Euromarket Euroclear Bank
Finland Skandinaviska Enskilda Banken
France BNP Paribas Securities Services
France CACEIS Bank
Germany BHF Asset Servicing GmbH
Ghana Barclays Bank of Ghana Ltd.
Greece EFG Eurobank Ergasias S.A.
Guinea Bissau Société Générale de Banques en Côte d’Ivoire
Hong Kong HSBC Ltd.
Hungary ING Bank N.V.
Iceland New Landsbanki Islands
India Deutsche Bank AG
Indonesia HSBC Ltd.
Ireland The Bank of New York Mellon
Israel Bank Hapoalim B.M.
Italy Intesa Sanpaolo S.p.A
Ivory Coast Société Générale de Banques en Côte d’Ivoire
Japan Mizuho Corporate Bank Ltd. (MHCB)
Japan The Bank of Tokyo – Mitsubishi UFJ Ltd.
Jordan HSBC Bank Middle East Ltd.
Kazakhstan HSBC Kazakhstan
Kenya Barclays Bank of Kenya Ltd.
Kuwait HSBC Bank Middle East Ltd.
Latvia AS SEB banka
Lebanon HSBC Bank Middle East Ltd.
Lithuania SEB Bankas
Luxembourg Banque et Caisse d’Epargne de l’Etat (BCEEL)
Malaysia HSBC Bank Malaysia Berhad
Mali Société Générale de Banques en Côte d’Ivoire
Malta HSBC Bank Malta plc
Mauritius HSBC Ltd.
Mexico Banco Nacional de Mexico (BANAMEX)
Morocco Citibank Maghreb
Namibia Standard Bank Namibia Ltd
Netherlands BNY Mellon Asset Servicing BV
New Zealand National Australia Bank
Niger Société Générale de Banques en Côte d’Ivoire
Nigeria Stanbic IBTC Bank Plc  
Norway DnB NOR Bank ASA
Oman HSBC Bank Middle East Ltd.
Pakistan Deutsche Bank AG
Palestinian Autonomous Area HSBC Bank Middle East Ltd.
Peru Citibank del Peru, S.A.
Philippines HSBC Ltd.
Poland ING Bank Slaski
Portugal Banco Comercial Portugues
Qatar HSBC Bank Middle East Ltd.  
Romania ING Bank N.V.
Russia ING Bank (Eurasia)
Saudi Arabia SABB Securities Limited
Senegal Société Générale de Banques en Côte d’Ivoire
Serbia UniCredit Bank Austria AG
Singapore DBS Bank Ltd.
Singapore United Overseas Bank Ltd.
Slovak Republic ING Bank N.V.
Slovenia UniCredit Banka Slovenia d.d.
South Africa Standard Bank of South Africa
South Korea HSBC Ltd.  
Spain Banco Bilbao Vizcaya Argentaria S.A. (BBVA)
Spain Santander Investment S.A.
Sri Lanka HSBC Ltd.  
Swaziland Standard Bank Swaziland Ltd
Sweden Skandinaviska Enskilda Banken
Switzerland Credit Suisse
Taiwan Standard Chartered Bank (Taiwan) Ltd. / HSBC
Thailand Bangkok Bank Public Company Ltd.
Thailand HSBC Ltd
Togo Société Générale de Banques en Côte d’Ivoire  
Trinidad & Tobago Republic Bank Ltd.
Tunisia Banque Internationale Arabe de Tunisie
Turkey Deutsche Bank AS  
Ukraine ING Bank Ukraine
United Arab Emirates HSBC Bank Middle East Ltd.
United Kingdom Deutsche Bank AG
United Kingdom The Bank of New York Mellon
United States The Bank of New York Mellon
Uruguay Banco Itaú Uruguay S.A.
Venezuela Citibank N.A.  
Vietnam HSBC Bank (Vietnam) Ltd
Zambia Barclays Bank of Zambia Ltd
Zimbabwe Barclays Bank of Zimbabwe Ltd

 

 

 
 

Custody Agreement

Amended and Restated

Exhibit D

Non-Money Market Funds Fee Schedule

 

 

Domestic Custody (U.S. Securities Processing)

 

Safekeeping, Income Collection, Transaction Processing, Account Administration

0.25        of a basis point per annum on the average net assets of the Fund.

 

Gold Bullion Safekeeping – at the following rates, minimum $75,000 per annum:

$20 per 400oz bar per month

$10 per 100oz bar per month

 

U.S. Security Transaction Charges (per transaction):

$4.50 DTC/FRB Book Entry Settlements

$4.00 Repurchase Agreements (each leg)

$5.00 Time Deposits

$5.00 Maturities

$20.00 Physical Settlements, Euroclear, Options, and Futures Transactions

$5.00 Paydowns

$4.00 Wire Transfers/Checks (not related to securities settlements)

$2.00 Interfund/Account Transactions

 

Gold Bullion Transaction Charges

$ 5 per receipt trade

$20 per delivery per 400oz bar

$10 per delivery per 100oz bar

 

Manual Instruction Surcharge

Transactions instructed in a manner which does not facilitate Straight-Through-Processing will incur an additional $15 per transaction.

 

Out-of-Pocket Expenses

In addition to the above fee-schedule, Out-of-Pocket expenses will be charged as incurred. These charges would include but are not limited to:

 

 
 

Global Custody (non-U.S. securities processing)

 

  Global  
  Safekeeping Fee Transaction Fee5
Countries *(in basis points)6 (U.S. Dollars)
Argentina 17.00 55
Australia 1.50 25
Austria 3.00 40
Bahrain 50.00 140
Bangladesh 50.00 145
Belgium 2.50 35
Bermuda 17.00 70
Botswana 50.00 140
Brazil 12.00 30
Bulgaria 30.00 85
Canada 1.00 10
Chile 20.00 80
China “A” Shares 15.00 80
China “B” Shares 15.00 60
Colombia 50.00 95
Costa Rica 14.00 65
Croatia 25.00 70
Cyprus 15.00 35
Czech Republic 18.00 50
Denmark 2.00 35
Ecuador 30.00 55
Egypt 30.00 85
Estonia 10.00 60
Euromarket/Euroclear7 1.00 10
Euromarket/Clearstream 1.00 10
Finland 3.50 35
France 2.00 30
Germany 1.50 25
 
 

 

 

 

Global  
  Safekeeping Fee Transaction Fee
Countries *(in basis points) (U.S. Dollars)
Ghana 50.00 140
Greece 9.00 40
Hong Kong 3.00 45
Hungary 20.00 55
Iceland 11.00 35
India 13.00 105
Indonesia 11.00 80  
Ireland (Equities) 3.00 33  
Ireland (Gov’t Bonds) 1.00 13  
Israel 20.00 40  
Italy 1.50 35  
Ivory Coast 50.00 140  
Jamaica 50.00 60  
Japan 1.75 20  
Jordan 50.00 140  
Kazakhstan 53.00 140  
Kenya 48.00 140  
Latvia 50.00 45  
Lebanon 50.00 140  
Lithuania 20.00 43  
Luxembourg 10.00 80  
Malaysia 4.50 45  
Malta 20.00 63  
Mauritius 25.00 100  
Mexico 6.50 30  
Morocco 50.00 95  
Namibia 50.00 60  
Netherlands 2.00 25  
New Zealand 2.00 35  
Nigeria 50.00 60  
Norway 2.50 35  
Oman 50.00 140  
Pakistan 50.00 140  
Peru 50.00 83  
Philippines 6.00 60  
Poland 15.00 63  
Portugal 5.00 50  
Qatar 50.00 140  
Romania 30.00 80  
Russia Equities 40.00 95  

 

 

Global    
  Safekeeping Fee Transaction Fee  
Countries *(in basis points) (U.S. Dollars)  
Singapore 3.50 45  
Slovak Republic 23.00 95  
Slovenia 50.00 60  
South Africa 2.50 30  
South Korea 6.50 45  
Spain 2.50 40  
Sri Lanka 13.00 70  
Swaziland 50.00 60  
Sweden 2.00 30  
Switzerland 2.00 35  
Taiwan 10.00 60  
Thailand 5.00 50  
Trinidad & Tobago 50.00 53  
Tunisia 50.00 53  
Turkey 12.50 60  
Ukraine 75.00 250  
United Kingdom 0.50 10  
Uruguay 75.00 83  
Venezuela 50.00 140  
Zambia 50.00 140  
Zimbabwe 50.00 140  
           

 

Not In Bank/Not in Custody Assets USA8 ………………………$500 per line per annum

 

Third Party Foreign Exchange Settlements      
$70 per non-USD currency movement        
           
Minimum charges imposed by Agent Banks/Local Administrators    
Brazil - 15 basis points for annual administrative charges      
           
Colombia - USD $600 per month minimum administration charge      
Ecuador - USD $800 monthly minimum per relationship      
Egypt - USD $400 monthly minimum per relationship      
           
Additional Charges        
Local taxes, stamp duties or other assessments, including stock exchange fees, postage and  
insurance for shipping, facsimile reporting, extraordinary telecommunications fees or other unusual  
expenses, which are unique to a country in which the Funds are investing.  
       

 

 

Earnings Credit Arrangement

Each of the Funds listed below and The Bank of New York Mellon have entered into an earnings credit balance arrangement pursuant to which it has been agreed that 90% of any positive balances will be compensated at the 90 day T-Bill rate and 100% of overdrawn balances will be charged at a rate of 1% over the Fed Funds rate. Monthly, the net resultant credit or charge will be applied to the each Funds’ respective safekeeping fees. Credits that exceed the safekeeping fee may be carried over into the next billing period at the discretion of the Custodian.

 

FUNDS See Seventh Amendment, dated 9/1/10

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

 

See Fourth Amendment adding new funds, effective 10/23/09

 
 

Custody Agreement

Exhibit F

PRECIOUS METALS SUPPLEMENT

(Precious Metals Physically Held in the USA)

 

 

In addition to the provisions of that certain Global Custody Agreement dated as of June 7, 2005, as amended, pursuant to which the registered investment company, the Federated Market Opportunity Fund, (the “Customer”) has appointed The Bank of New York Mellon, formerly known as The Bank of New York (the “Custodian”) as its custodian of securities and cash and to perform related services (the “Agreement”), the following provisions shall apply to the custody of assets consisting of precious metals.

 

ARTICLE I

APPOINTMENT OF CUSTODIAN; CUSTODIAL SERVICES TO BE PROVIDED BY SUBCUSTODIAN

 

1.       Customer hereby appoints the Custodian as custodian to hold and maintain certain property consisting of the metals described in the attached Addendum A (the “Precious Metals”) and which are specified in each authenticated trade instruction sent by the Customer or it’s Authorized Representative to the Custodian.

 

2.       Custodian hereby accepts appointment as such custodian of Precious Metals and agrees to perform its duties in respect thereof pursuant to the provisions of this Supplement. Customer acknowledges that Custodian shall utilize the services of one or more subcustodians, identified to Customer from time to time (each, for purposes of this Supplement, a “Subcustodian”), to serve as warehouseman of the Precious Metals held hereunder. Precious Metals held through a Subcustodian shall be held subject to the terms and conditions of Custodian’s agreement with such Subcustodian. Custodian at any time may cease utilizing any Subcustodian and/or may replace a Subcustodian with a different Subcustodian. In the event Custodian selects a replacement Subcustodian, Custodian shall not utilize such replacement Subcustodian until after providing Customer with commercially reasonable notice.

 

 

ARTICLE II

RESPONSIBILITIES OF CUSTODIAN AND SUBCUSTODIANS

 

1.       Custodian shall receive, hold and keep the Precious Metals at a secure facility maintained by a Subcustodian which shall be identified to Customer from time to time (the “Secure Facility”).

 

2.       Custodian shall be responsible for the safekeeping of the Precious Metals in the form and condition in which they are delivered to its Subcustodian acting as its warehouseman. Custodian shall cause the Subcustodian to keep the Precious Metals held for Customer hereunder separately identified and segregated and to maintain records identifying the Precious Metals belonging to Customer.

 

3.       Custodian shall provide Customer with reporting by a means agreed between the parties detailing Precious Metals received, delivered and held at the Subcustodian. Customer agrees that it shall promptly review all such statements and shall advise Custodian of any error, omission or inaccuracy therein within a commercially reasonable time.

 

4.       Custodian shall cause the Subcustodian it designates to take delivery of Precious Metals from Customer and to acknowledge receipt from Customer of the Precious Metals. The Subcustodian may, at its option, record certain specifications indicated on the Precious Metals. It is understood and agreed that neither Custodian nor its Subcustodians are responsible for the authenticity of markings on or for the weight, fineness or contents of any of the Precious Metals, delivered to them by Customer or a third party for the account of Customer.

 

5.       Custodian shall maintain insurance protection covering the Custodian’s duties and activities hereunder in such amounts and insuring against such risks as Custodian deems reasonable and appropriate under the circumstances. Subcustodians may maintain such insurance in regard to their business on such terms as they consider appropriate, but the Custodian shall have no liability for the terms or sufficiency of the insurance maintained by any Subcustodian or for the failure of any Subcustodian to maintain insurance.

 

ARTICLE III

DELIVERY OF PRECIOUS METALS TO, AND WITHDRAWAL OF PRECIOUS METALS FROM, CUSTODY

 

1.       Each delivery of Precious Metals to be held in custody in accordance with this Supplement shall be made pursuant to an authenticated trade instruction sent by the Customer or its Authorized Representative to the Custodian. Such instruction must be received by the published trade instruction deadlines and by the agreed communication method. Such instruction shall be acknowledged by the Custodian. The authorized trade instruction shall identify the Precious Metal to be delivered, in such customary manner as specified by the Custodian, and the delivery date, and the Custodian’s acknowledgment shall identify the Subcustodian and Secure Facility to which the Customer shall deliver the Precious Metal. Delivery shall be made only to the Secure Facility of the Subcustodian designated by the Custodian. Customer acknowledges and agrees that neither the Custodian nor the Subcustodian has any responsibility or liability for any loss, damage or destruction of any Precious Metals prior to the time the Subcustodian identified by the Custodian accepts the care, custody and control of the Precious Metals at the specified Subcustodian’s Secure Facility, and Customer hereby releases Custodian and each Subcustodian from any responsibility or liability prior to the time the Subcustodian identified by the Custodian accepts the care, custody and control of the Precious Metals. In the event the Precious Metal delivered to the Subcustodian differs from the identification provided by the Customer, the Custodian shall endeavor promptly to notify the Customer. Neither the Custodian nor any Subcustodian shall be liable for any loss resulting from the failure of the Precious Metal actually delivered to conform to the identification provided by the Customer in the authorized trade instruction.

 

2. Each withdrawal of Precious Metals from custody in accordance with this Supplement shall be made pursuant to an authenticated trade instruction sent by the Customer or its Authorized Representative to the Custodian. Such instruction must be received by the published trade instruction deadlines and by the agreed communication method. Such instruction shall be acknowledged by the Custodian. The authorized trade instruction shall identify the Precious Metal to be withdrawn, in such customary manner as specified by the Custodian, and the delivery date and the Custodian’s acknowledgment shall identify the Subcustodian and Secure Facility from which the Customer shall take delivery of the Precious Metal. Customer must collect or arrange for the collection of the Precious Metal being withdrawn from the Subcustodian having physical possession thereof. All risk in and to the Precious Metal withdrawn shall pass at the specified Secure Facility at the time Customer or its Authorized Representative acknowledges receipt.

 

3.       Customer shall be responsible for all expenses associated with the delivery and withdrawal of Precious Metals to and from the Secure Facility, as well as all insurance, safekeeping, security and secure transport arrangements for the Precious Metals while either in storage outside the terms of this agreement or in transit to or from the Custodians appointed Subcustodian. Customer shall pay or reimburse the Custodian from time to time for any taxes or other governmental charges payable, and actually paid, by Custodian upon storage or transfer of the Precious Metals made hereunder.

 

4.       If, in Custodian’s opinion, any authenticated trade instruction is unclear or ambiguous, Custodian shall endeavor to obtain clarification from Customer. In the absence of such clarification Custodian may, in its absolute discretion, either (i) decline to take action until clarification is received or (ii) act on what it believes, in good faith, to be such instruction.

 

 

ARTICLE IV

CONCERNING CUSTODIAN

 

Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees (collectively, “Losses”), incurred by or asserted against Customer, except those Losses arising out of Custodian’s own negligence or willful misconduct. Custodian shall have no liability whatsoever for the action or inaction of any commodities exchange. With respect to any Losses incurred by Customer as a result of the acts or failures to act by a Subcustodian acting as warehouseman hereunder, Custodian shall take appropriate action to recover such Losses, and Custodian’s liability shall be limited to the amount recovered net of Custodian’s costs and expenses. In no event shall Custodian be liable to Customer or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Supplement.

 

ARTICLE V

MISCELLANEOUS.

 

The provisions of this Supplement shall apply solely with respect to the custody of Precious Metals. All provisions of the Agreement shall nevertheless remain in full force and effect with respect to assets held pursuant to this Supplement, and all capitalized terms and provisions contained in the Agreement shall be read so as to apply fully to the services and activities contemplated by this Supplement; provided, that in the event of any conflict between the provisions of the Agreement and the provisions of this Supplement, the provisions of this Supplement shall control.

 

 

Federated Equity Funds on behalf of its

Dated: Federated Market Opportunity Fund

 

 

/s/ Richard A. Novak

By: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Andrew Pfeifer

Title: Vice President

 

 

 

 
 

Precious Metals Supplement

Addendum A

 

 

Gold Bullion

 

 

 
 

Fourth Amendment to the Custody Agreement

 

This Amendment is made as of October 23, 2009 to the Custody Agreement (as amended, the “Custody Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, and September 8, 2009 between the Funds listed on Schedule II to the Custody Agreement (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

RECITALS

 

WHEREAS, the custody of the securities, cash and other portfolio assets of the funds specified in this Amendment are being converted to the Custodian as of the close of business on October 23, 2009;

 

WHEREAS, the parties agree that the list of Funds that are parties to the Custody Agreement is set forth on Schedule II to the Custody Agreement (which has been amended and attached as Exhibit A to prior amendments to the Custody Agreement) (“Schedule II to the Custody Agreement” or “Exhibit A”), and the parties desire to amend the list of Funds to add the funds specified in this Amendment;

 

WHEREAS, the parties agree that the list of Funds that are parties to the Joint Trading Account Custody Agreement, which is part of the Custody Agreement, is set forth on Schedule I to the Joint Trading Account Custody Agreement (which has been amended and attached as Exhibit B to prior amendments to the Custody Agreement) (“Schedule I to the Joint Trading Account Agreement” or “Exhibit B”), and the parties desire to amend the list of Funds to add the funds specified in this Amendment;

 

WHEREAS, the parties agree that the list of Funds that are parties to the Foreign Custody Agreement, which is part of the Custody Agreement, is set forth on Schedule I to the Foreign Custody Agreement (which has been attached as Exhibit C to in prior amendments) (“Schedule I to Foreign Custody Agreement” or “Exhibit C”), and the parties desire to amend the list of Funds to add the funds specified in this Amendment; and

 

WHEREAS, the parties agree that the Fee Schedule for Non-Money Market Funds, which is part of the Custody Agreement (which has been attached as Exhibit D in prior amendments (“Fee Schedule for Non-Money Market Funds” or “Exhibit D”), will apply to the funds specified herein, and the parties desire to add the funds specified in this Amendment to the funds subject to the Fee Schedule for Non-Money Market Funds.

 

AMENDMENT

 

NOW THEREFORE, intending to be legally bound, each of the Funds and the Custodian agree to the following amendments:

 

Each of Schedule II to the Custody Agreement (or Exhibit A), Schedule I to the Joint Trading Account Agreement (or Exhibit B), Schedule I to the Foreign Custody Agreement (or Exhibit C), and the Fee Schedule for Non-Money Market Funds (or Exhibit D) shall be, and hereby are, amended and updated to include the following new Funds:

 

Federated Municipal Securities Fund, Inc.

Federated Intermediate Municipal Trust, a portfolio of Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust, a portfolio of Federated Municipal Securities Income Trust

Federated Municipal High Yield Advantage Fund, a portfolio of Federated Municipal Securities Income Trust

 

The agreements referenced herein shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

ON BEHALF OF EACH OF THE FUNDS INDICATED ON SCHEDULE II OF THE CUSTODY AGREEMENT, AS AMENDED FROM TIME TO TIME

 

By: /s/ Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Andrew Pfeiffer

Title: Vice President

 

 

 
 

Fifth Amendment to the Custody Agreement

 

 

This Amendment is made as of November 13, 2009 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, and October 23, 2009 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

Recitals

 

WHEREAS, the parties agree that the Fee Schedule for Money Market Funds, which is part of the Custody Agreement, which has been attached as Exhibit E in prior amendments (“Fee Schedule for Money Market Funds” or “Exhibit E”), will apply to the funds specified herein.

 

Amendment

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendments.

 

Within Exhibit E, the section entitled “Compensating Balance Arrangement” is replaced in its entirety with Amended and Restated Exhibit E as attached hereto.

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

 

By: /s/ Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Peter D. Holland

Title: Managing Director

 

 
 

 

Amended and Restated

Exhibit E

 

 

Compensating Balance Arrangement

 

Each Fund listed below and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow the Funds to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for each fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part on the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending March, June, September and December for FGRF, FCRF and FMUTR; and ending February, May, August, and November for AGCR, USTCR and GOTMF). Average balances will be computed at the end of the quarter. Net positive balances will receive an earnings credit computed at the daily effective 90 – day T-Bill rate on the last day of a period. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net credits or charges will be applied to the safekeeping fees. Credits that exceed the safekeeping fee will be carried over into the next billing period but must be applied in a 12 month cycle; all accumulated unapplied credits will expire in the final quarter of the cycle, i.e. in November or December. However, upon specific request from the Fund, Custodian at its discretion may agree to carry forward into the next 12 month cycle any accumulated credits, contingent on their application within a specified time period.

 

Credits are not redeemable for cash and will expire in the event the relationship with the Funds is terminated.

 

Maximum Daily Balances (“MDB”) limits have been determined for each fund. On days where the Funds exceed their MDBs, interest will be credited on 90% of the excess balance at the 90-day T-Bill rate or charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB’s were exceeded.

 

Maximum Daily Balance +/- $175 million

US Treasury Cash Reserves Fund (USTCR)

Government Obligations Tax Managed Fund (GOTMF)

 

Maximum Daily Balance +/- $75 million

Federated Municipal Trust Fund (FMUTR)

 

Maximum Daily Balance +/- $25 million

Federated Capital Reserves Fund (FCRF)

Federated Government Reserves Fund (FGRF)

Automated Government Cash Reserves (AGCR)

 
 

See Seventh Amendment, dated 9/1/10

 

 

Schedule II

 

 

 

Federated Capital Reserves Fund

Federated Government Reserve Fund

Federated Municipal Trust Fund

US Treasury Cash Reserve Fund

Automated Government Cash Reserves

Government Obligations Tax Managed Fund

 

 
 

 

Sixth Amendment to the Custody Agreement

 

 

This Amendment is made as of January 13, 2010 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, and November 13, 2009 between the Funds listed on Schedule II attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each the Fund and the Custodian agree to the following amendment.

 

Each Exhibit A (“Schedule II to the Agreement”), Exhibit B (“Joint Trading Account Agreement Schedule I”), and Exhibit D (“Fee Schedule for Non-Money Market Funds”) is updated to include the following new Fund:

 

Federated Enhanced Treasury Income Fund

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Schedule II attached hereto

 

By: /s/ Richard A. Novak

By: Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Peter D. Holland

By: Peter D. Holland

Title: Managing Director

 
 

See Seventh Amendment, dated 9/1/10

 

Amended and Restated

Custody Agreement

Schedule II

 

 

 

Federated Stock Trust

Federated Market Opportunity Fund

Federated California Municipal Income Fund

Federated North Carolina Municipal Income Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Municipal Securities Fund

Intermediate Municipal Trust Fund

Michigan Intermediate Municipal Trust Fund

Federated Municipal High Yield Advantaged Fund

Federated Enhanced Treasury Income Fund

 

Federated Capital Reserve Fund

Federated Government Reserves Fund

Federated Municipal Trust Fund

US Treasury Cash Reserves Fund

Automated Government Cash Reserves

Government Obligations Tax Managed Fund

 

 

 

 

 
 

Seventh Amendment to the Custody Agreement

 

 

This Amendment is made as of September 1, 2010 to the Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009 and January 13, 2010, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund and the Custodian wish to modify the provisions of the Agreement as set forth below;

 

NOW THEREFORE, each Fund and the Custodian agree to the following amendment.

 

1.       The funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto:

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

On behalf of each of the Funds indicated on Exhibit A attached hereto

 

By: /s/ Richard A. Novak

By: Richard A. Novak

Title: Treasurer

 

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Peter D. Holland

By: Peter D. Holland

Title: Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

 

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated Global Macro Bond Fund

Federated Intermediate Municipal Trust

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated Global Macro Bond Fund

Federated Intermediate Municipal Trust

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

 
 

EIGHTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010 and September 1, 2010, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian.

 

WHEREAS, each Fund is registered as a management investment company, or a series thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       Article IX of the Agreement is hereby deleted in its entirety and replaced with the following language:

 

1.       The Agreement shall become effective on March 1, 2011 and shall remain in full force and effect for a period of four (4) years (the “Initial Term”) and shall automatically continue in full force and effect after such Initial Term unless either party terminates this Agreement by written notice to the other party at least six (6) months prior to the expiration of the Initial Term. Additionally, if the Custodian (or any of its affiliates) engages in (i) any act or omission which constitutes a breach of any representation, warranty, term, or obligation contained in this Agreement, which upon notice the Custodian has not cured within 5 business days or (ii) any act or omission which constitutes negligence, reckless misconduct, willful malfeasance, or lack of good faith in fulfilling the terms and obligations of this Agreement, then each Fund shall have the right to immediately terminate this Agreement.

In the event such notice is given by the Fund, it shall be accompanied by a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, electing to terminate this Agreement and designating a successor Custodian or Custodians, each of which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits.

In the event such notice is given by Custodian, the Fund shall, on or before the termination date, deliver to Custodian a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, designating a successor Custodian or Custodians. In the absence of such designation by the Fund, Custodian may designate a successor Custodian which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. Upon the date set forth in such notice this Agreement shall terminate, and Custodian shall upon receipt of a notice of acceptance by the successor Custodian on that date deliver directly to the successor Custodian all Securities and money then owned by the Fund and held by it as Custodian, after deducting any fees, expenses and other accounts for the payment or reimbursement of which it shall then be entitled.

2.        If a successor Custodian is not designated by the Fund or Custodian in accordance with the preceding Section, the Fund shall upon the date specified in the notice of termination of this Agreement and upon the delivery by Custodian of all Securities (other than Securities which cannot be delivered to the Fund) and money then owned by the Fund be deemed to be its own Custodian and Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities which cannot be delivered to the Fund to hold such Securities hereunder in accordance with this Agreement.

 

2.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2011.

 

Each of the registered investment companies or series

thereof listed on Schedule II to the Custody

Agreement, as amended from time to time

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

NINTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, and March 1, 2011, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add Funds to Schedule II, effective March 25, 2011; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 25, 2011.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

 

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

TENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT (“Amendment”) TO THE CUSTODY AGREEMENT dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011 and March 25, 2011 (the “Agreement”), by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”), and The Bank of New York Mellon (the “Custodian”).

 

WHEREAS, each Fund is registered as a management investment company, or certain services thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       All capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.

 

2.       The following article shall be added to the Agreement as a new Article XI “CUSTODY OF LOAN DOCUMENT FILES AND RELATED SERVICES”:

1.       As used in this Article XI, the following terms shall have the meanings set forth below:

“Loan Document File” shall mean a hard copy file delivered to and received by Custodian hereunder.

“Loan Documents” shall mean all documents and instruments relating to any Loans (as hereinafter defined), including, without limitation, loan or credit agreements, assignment and acceptance agreements, promissory notes, participation agreements, deeds, mortgages and security agreements contained in a Loan Document File.

“Loans” shall mean the bank loans or loan commitments held in the Fund.

“Servicer” shall mean the agent appointed by the applicable Fund to service the Loans, which initially shall be the Custodian, provided that the parties have entered into a separate loan servicing agreement (the “Loan Servicing Agreement”).

2.       It is understood and agreed that unless Custodian and the Fund enter into a duly executed Loan Servicing Agreement, all references to the Servicer hereunder shall refer to a person or entity other than Custodian. Upon execution of such Loan Servicing Agreement, all such references shall be to Custodian.

3.       The Servicer, as agent for the Fund, shall be solely responsible for the servicing of all Loans. All payments by or on behalf of borrowers under the Loans received by Custodian shall be credited to the Account.

4.       It is understood and agreed that Custodian shall have no responsibility for maintaining any records of account activity relating to each Loan, including without limitation, all amortization schedules, records of transfer, pay-off, assignment, participation, sale, modification, termination or other changes in the Loans, except as provided for in the Loan Servicing Agreement between the Funds and Custodian dated March 25, 2011.

5.       Upon origination, modification or other change in any Loan, the Fund shall promptly deliver or cause to be delivered to Custodian all relevant Loan Documents. It is understood and agreed that Custodian will accept any file purporting to be a Loan Document File for custody hereunder “as is” and without any examination. Any duty Custodian may have to review or inspect any Loan Documents or to determine the contents of Loan Document Files shall only be pursuant to the terms and conditions of the Loan Servicing Agreement. No such duties or obligations shall be imposed on Custodian under the Agreement. Under no circumstances will Custodian be required to issue a trust receipt (or similar instrument) with respect to the Loan Document Files or their contents. Account statements will only reflect an inventory of the Loan Document Files that Custodian holds in custody hereunder without any representation as to the contents thereof.

6.       No director, officer, employee or agent of the Fund shall have physical access to the Loan Document Files or be authorized or permitted to withdraw any Loan Documents nor shall Custodian deliver any Loan Documents to any such person, unless such access or withdrawal has been duly authorized by a resolution of the board of directors of the Fund. All such access shall be by two or more persons jointly, at least one of whom is an officer of the Fund.

 

3.       All Loan Documents and Loan Document Files in the possession of the Custodian are and shall remain the property of the Fund.

 

4.       This Amendment shall be governed by and construed in accordance with the laws of the State of New York. This Amendment shall become effective as of the date hereof upon execution by the parties hereto. From and after the execution hereof, any reference to the Agreement shall be a reference to the Agreement as amended hereby. In the event of any conflict between the terms of this Amendment and the terms of the Agreement, the terms of the Amendment shall control. Except as amended hereby, the Agreement shall remain in full force and effect and is hereby ratified and confirmed by the parties thereto.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 25, 2011.

 

Each of the registered investment companies or series
thereof listed on Schedule II to the Agreement

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Mary Jean Milner

Title: Vice President

 
 

LOAN SERVICING ANNEX AND SUPPLEMENT

TO THE CUSTODY AGREEMENT

 

This Loan Servicing Annex and Supplement (the “Loan Servicing Agreement”) a part of the Custody Agreement dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, and March 25, 2011 (the “Custody Agreement”), between the registered investment companies listed on Schedule II to the Custody Agreement, as may be amended from time to time (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”). Capitalized terms used but not defined shall have the meanings ascribed to them in the Custody Agreement.

 

WHEREAS, the Funds and the Custodian desire to supplement the Custody Agreement to provide for the servicing of loans held as assets of the Funds, subject to the terms and conditions set forth herein.

 

NOW THEREFORE, in consideration of the premises and the agreements, covenants and representations herein contained, the parties hereto agree as follows:

 

1.       The Services. Custodian shall provide to the Funds the services described in Exhibit A attached hereto (which services are hereinafter referred to as the “Services”). The Funds shall, promptly after the date hereof, deliver or cause to be delivered to Custodian copies of all documents and information listed on Schedule II to this Loan Servicing Agreement relating to the loans or loan commitments (the “Loans”) being serviced for the loan portfolio(s) described on Exhibit A-1 (the “Portfolio(s)”).

 

2.       Service Fees. In consideration of the performance of the Services by Custodian, each Fund shall pay Custodian in accordance with the fee arrangements set forth on Schedule I to this Loan Servicing Agreement (the “Service Fees”). Except for such sums as are payable upon the execution hereof, if any, Custodian shall send an invoice for the Service Fees to the applicable Fund within thirty (30) days after the end of each calendar quarter during the term hereof and such invoice shall be payable upon receipt.

 

3.       Delegation. Custodian is hereby authorized to assign its rights and delegate its duties hereunder to a BNY Affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder, without any further notice to the Funds. The Funds agree to be bound by all actions taken by such BNY Affiliate pursuant to the preceding sentence to the same extent as if they were taken by Custodian, it being understood and agreed that no such assignment or delegation shall discharge Custodian from its obligations hereunder. Accordingly, Custodian is fully responsible to the Funds for the acts or omissions of such BNY Affiliate under the Agreement to the same extent that Custodian would be liable for such acts or omissions had Custodian not delegated such services to such BNY Affiliate. If so advised by Custodian, the Funds shall provide Instructions or other information directly to such BNY Affiliate rather than to Custodian.

 

4.       Notice of Default. Custodian shall not be deemed to have knowledge or notice of the occurrence of any default or event of default under the Loans unless Custodian has received notice from a Fund referring to this Loan Servicing Agreement, describing such default or event of default and stating that such notice is a “notice of default.” Such notice will be delivered in a manner permitted under the Custody Agreement. Custodian shall take such action with respect to such default or event of default as shall be reasonably directed by such Fund; provided that unless and until Custodian shall have received such directions, Custodian may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such default or event of default as it shall deem advisable in the best interests of such Fund.

 

5.       Non-Reliance by the Funds. The Funds expressly acknowledge that neither Custodian nor any of its officers, directors, employees, agents, attorneys, attorneys-in-fact or affiliates have made any representations or warranties pursuant to this Loan Servicing Agreement and that no act by Custodian hereafter taken, including, without limitation, any review of the affairs of any borrower or any affiliate of any borrower, shall be deemed to constitute any representation or warranty by Custodian with respect to the Loans. The Funds represent to Custodian that they have, independently and without reliance upon Custodian, and based on such documents and information as they shall deem appropriate at the time, made their own appraisal of and investigation into the business, operations, property, financial and other condition and creditworthiness of any borrower and its affiliates and made their own decisions to make and/or purchase the Loans. The Funds also represent that they will, independently and without reliance upon Custodian, and based on such documents and information as they shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action with respect to the Loans, and to make such investigation as they deem necessary to inform them as to the business, operations, property, financial and other condition and creditworthiness of any borrower. Except for notices, reports and other documents expressly required to be furnished to the Funds by the Custodian, Custodian shall not have any duty or responsibility to provide the Funds with any credit or other information concerning the business, operations, property, condition (financial or otherwise), prospects or creditworthiness of any borrower that may come into the possession of the Custodian or any of its officers, directors, employees, agents, attorneys, attorneys-in-fact or affiliates.

 

6.       Advances. Custodian shall not be obligated to make any advances or make any payments to any party out of its own funds and no provision of this Loan Servicing Agreement or any other document executed in connection herewith shall require Custodian to expend or risk its own funds in the performance of any of its duties hereunder.

 

7.       Event of Default by Custodian. The following shall constitute a “Custodian Event of Default” hereunder:

 

The commencement of a case or other proceeding seeking liquidation, reorganization or other similar relief with respect to Custodian or its debts under any bankruptcy, insolvency or similar law or seeking the appointment of a receiver, trustee, liquidator, conservator, administrator, custodian or other similar official for Custodian or Custodian’s property and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days.

 

8.       Event of Default by a Fund. The following shall constitute a “Fund Event of Default” hereunder:

 

The commencement of a case or other proceeding seeking liquidation, reorganization or other similar relief with respect to a Fund or its debts under any bankruptcy, insolvency or similar law or seeking the appointment of a receiver, trustee, liquidator, conservator, administrator, custodian or other similar official for such Fund or such Fund’s property and such decree or order shall have remained in force undischarged or unstayed for a period of thirty (30) days.

 

9.       Remedies.

 

(a) If a Custodian Event of Default shall occur, the Funds may terminate this Loan Servicing Agreement immediately upon the delivery of written notice to Custodian, and shall, subject to the limitations contained in the Custody Agreement, be entitled to any and all other rights and remedies under law or in equity.

 

(b) If a Fund Event of Default shall occur, Custodian may terminate this Loan Servicing Agreement and resign immediately upon the delivery of written notice to the Funds, and shall, subject to the limitations contained in the Custody Agreement, be entitled to any and all other rights and remedies under law or in equity.

 

10.       Termination for No Cause. Either Custodian or the Funds may terminate: (a) this Loan Servicing Agreement in its entirety or (b) the Services as to any particular portfolio of loans or as to a loan or loans without terminating this Loan Servicing Agreement in its entirety, for any or no reason upon the providing of ninety (90) days’ advance written notice to the other parties.

 

11.       NOTICE REQUIRED BY THE USA PATRIOT ACT. Each Fund hereby acknowledges that Custodian is subject to federal laws, including the Customer Identification Program (CIP) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which Custodian must obtain, verify and record information that allows Custodian to identify its customers. Accordingly Custodian will ask the Funds to provide certain information including, but not limited to, the name of each Fund, physical address, tax identification number and other information that will help Custodian to identify and verify each Fund’s identity such as organizational documents, ownership, certificate of good standing, license to do business, or other pertinent identifying information.

 

12.       Custody Agreement. The parties understand and agree that this Loan Servicing Agreement shall be subject to the term and conditions of the Custody Agreement. In the event of any inconsistency between the terms and conditions of the Custody Agreement and the Loan Servicing Agreement, the terms and conditions of the Loan Servicing Agreement shall govern.

 

 

[The Remainder of this page is intentionally left blank]

 
 

IN WITNESS WHEREOF, the parties have caused this Loan Servicing Agreement to be executed by their respective officers, thereunto duly authorized, as of March 25, 2011.

 

 

THE BANK OF NEW YORK MELLON

Each of the registered investment companies or

series thereof listed on Schedule II to the Custody Agreement

   
By:  /s/ Mary Jean Milner By:  /s/ Richard A. Novak
Name:  Mary Jean Milner Name:  Richard A. Novak
Title:  Vice President Title:  Treasurer

 

 

 
 

EXHIBIT A

Schedule of Services

1. With respect to the Loans to be serviced hereunder, the parties agree that Custodian shall perform the following services for each Fund whose Portfolio(s) are identified in Exhibit A-1 (the “Services”):

 

(a) Set-Up / File Maintenance.
(i) Custodian shall accept from the Fund or its designee, the relevant information pertaining to the Loans, and thereafter maintain paper or electronic copies of same in Custodian’s system, including as available or appropriate, copies of all new assignment and acceptance agreements, participation agreements, funding memoranda, current loan or credit agreements. Copies of such information shall be retained by Custodian for the period(s) required by the Investment Company Act of 1940, as amended, and the rules thereunder.
(ii) Enter into the Custodian’s loan tracking system, and maintain a loan database containing information provided to the Custodian from time to time by the Fund or agent banks for the Loans with respect to (i) the obligor name for each Loan, (ii) the principal and interest payments made or to be made on the Loans, (iii) the applicable interest rate, interest rate resets and interest accrual periods of each Loan, (iv) the principal balance of each Loan and (v) the funded and commitment balances of, and commitment fees for, each Loan (“Loan Information”).
(iii) Notwithstanding the foregoing, Custodian as servicer for the Loans, shall not be obligated to accept nor be responsible for holding or safekeeping originals of any securities, promissory notes, certificates of equity or debt ownership or obligations, deeds, mortgages, bonds, security agreements, any other type of negotiable instrument, or any other document related to the Loans.
(iv) Additionally, the parties agree that, whereas it is necessary hereunder for Custodian to expeditiously obtain and process information, including notices, derived from third-parties, including agents for the Loans, (particularly in connection with providing any reports to the Fund), Custodian shall be entitled to rely upon such third-party information and shall not be required to verify or authenticate in any manner such information. Custodian will be deemed to have acted reasonably in accepting, using and transmitting such information, as contemplated herein.

(b)       Assignments / Pay-Offs / Terminations.

(i) Custodian shall further maintain records of information it receives regarding the transfer, pay-off, assignment, participation, sale, modification, termination or other changes in the Loans, and reflect such changes in its system, and in the Reports.

(c)       Inquiries/ Record Keeping.

(i) Custodian shall maintain electronic records of material notices it receives from the administrative agents of the Loans regarding the Loans and transactions with respect to the Loans for a period of seven years from receipt.
(ii) Custodian will provide initial response to e-mail or telephone inquiries by the Fund about the Loan within 2 Business Days.
 
 

 

EXHIBIT A-1

 

List of Portfolios

 

Federated Emerging Market Debt Fund

 
 

 

Schedule I

Fee Schedule

 

Custodian agrees to waive its Service Fees for Services provided to the Federated Emerging Market Debt Fund for the servicing of the following Loan:

 

Cooperativa dos Agricultores da Regiao de Orlandia (CAROL BL) – Term Loan, 4.050%, 9/28/2011

Asset ID: 1439999D4

Par: 600,000

 

 

 

 

 

 

 

 

 

 
 

Schedule II

 

For each Loan purchased by the Portfolio acquired after the execution of this Loan Servicing Agreement:

 

1. Assignment and Acceptance Agreement or Participation Agreement
2. Funding Memorandum
3. Credit Agreement, if necessary
4. Amendments to the Credit Agreement, if any
5. Current Amortization Schedule for each Loan, if any

 

 

 

 

 
 

ELEVENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, March 25, 2011 and August 1, 2012, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds to Schedule II, effective August 1, 2012; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of August 1, 2012.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Mary Jean Milner

Title: Vice President

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 8/1/12

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Prudent Absolute Return Fund (formerly, Federated Market Opportunity Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Prudent Absolute Return Fund (formerly, Federated Market Opportunity Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

 
 

 

TWELFTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, March 25, 2011, August 1, 2012 and December 31, 2012, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds to Schedule II, effective December 31, 2012; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 31, 2012.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By:

Title:

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/31/12

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund (formerly, Federated Prudent Absolute Return Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/31/12

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund (formerly, Federated Prudent Absolute Return Fund)

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

 

Execution Copy

 

 

THIRTEENTH AMENDMENT

TO CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”):

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010 September 1, 2010, March 1, 2011 and through two separate amendments each on March 25, 2011, between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto (each a “Fund”) and The Bank of New York Mellon (the “Custodian”).

 

WHEREAS, each Fund is registered as a management investment company, or a series thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.        Article V of the Agreement is hereby supplemented to include Section 3. As follows:

 

 

3.        Notwithstanding the foregoing, Custodian will not charge the Fund any overdraft fees, penalties, or related custody charges in connection with any transaction or series of related transactions for which Custodian did not provide Fund with notice, as soon as reasonably practicable under the circumstances, of any refusal to accept or provide a price for an Actionable Trade Request as such term is defined in the FX Standing Instructions Session Range Program Description dated December 18, 2012.

 

2.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 
 

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 24, 2013.

 

Each of the registered investment companies or series thereof listed on Schedule II to the Custody Agreement, as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President

Managing Director

 
 

 

FOURTEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, two separate amendments dated March 25, 2011, August 1, 2012, December 31, 2012, September 24, 2013 and April 28, 2014, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds to Schedule II, effective April 28, 2014; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 28, 2014.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 4/28/14

 

A.       Non-Money Market Funds

 

Federated Enhanced Treasury Income Fund

Federated Emerging Markets Equity Fund (formerly, Federated Global Equity Fund)

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 4/28/14

 

FUNDS

 

Federated Enhanced Treasury Income Fund

Federated Emerging Markets Equity Fund (formerly, Federated Global Equity Fund)

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

 

FIFTEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010, September 1, 2010, March 1, 2011, two separate amendments dated March 25, 2011, August 1, 2012, December 31, 2012, September 24, 2013, April 28, 2014, and December 1, 2014 and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2014.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/1/14

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/1/14

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 
 

 

Sixteenth Amendment to the Custody Agreement

 

 

This Sixteenth Amendment to the Custody Agreement, is made on May 14, 2015 with certain varying effective dates with respect to certain entities as set forth herein (this “Amendment”), by and between the registered investment companies listed on Schedule II to the Agreement (as defined below), as may be amended from time to time (each stand-alone registered investment company and each Series a “Fund” and collectively the “Funds”), and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the parties have entered into that certain Custody Agreement, dated June 7, 2005 (as amended fourteen times previously, supplemented and/or restated, the “Agreement”), by and between the Funds and the Custodian;

 

WHEREAS, the parties previously amended the Agreement to add or modify (1) the section entitled “Earnings Credit Arrangement” in the Fee Schedule for Non-Money Market Funds attached to the Agreement as Exhibit D thereto (“Exhibit D”) and (2) the section entitled “Compensating Balance Arrangement” in the Fee Schedule for Money Market Funds attached to the Agreement as Exhibit E thereto (“Exhibit E”);

 

WHEREAS, each of the Funds and the Custodian wish to confirm that the “Earnings Credit Arrangement” section in Exhibit D as set forth in Schedule 1 to this Amendment continues to apply to all Non-Money Market Funds to which it currently applies, except as specified below;

 

WHEREAS, each of the Funds and the Custodian also wish to modify the “Earnings Credit Arrangement” section in Exhibit D as set forth in Schedule 2 to this Amendment with respect to the Non-Money Market Funds identified below and in Schedule 2 to this Amendment; and

 

WHEREAS, each of the Funds and the Custodian also wish to modify the “Compensating Balance Arrangement” section in Exhibit E as set forth in Schedule 3, Schedule 4 and Schedule 5 to this Amendment with respect to the Money Market Funds identified below and in Schedule 3, Schedule 4 and Schedule 5 to this Amendment.

 

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:

 

1.                  Amendment to Exhibit D. The parties hereby confirm and agree that the “Earnings Credit Arrangement” section in Exhibit D set forth in Schedule 1 to this Amendment continues to apply to all Non-Money Market Funds to which it currently applies, except that, effective from and after April 1, 2014, with respect to Federated Short-Intermediate Duration Municipal Trust and Federated Municipal Ultrashort Fund, such section in Exhibit D will be deleted in its entirety and replaced with the “Compensating Balance Arrangement” section set forth in Schedule 2 to this Amendment.

 

2.                  Amendment to Exhibit E. The parties hereby confirm and agree that the “Compensating Balance Arrangement” section in Exhibit E shall be amended as follows:

 

(a)       Effective from and after April 1, 2014, with respect to Federated Capital Reserves Fund and Federated Government Reserves Fund, such section in Exhibit E will be deleted in its entirety and replaced with the “Hard Dollar Compensation Arrangement” section set forth in Schedule 3 to this Amendment;

 

(b)       Effective from and after April 1, 2014, with respect to Federated Municipal Trust, such section in Exhibit E will be deleted in its entirety and replaced with the “Compensating Balance Arrangement” section set forth in Schedule 4 to this Amendment;

 

(c)       Effective from and after June 1, 2014, with respect to US Treasury Cash Reserves, Automated Government Cash Reserves, and Government Obligations Tax Managed Fund, such section in Exhibit E will be deleted in its entirety and replaced with the “Compensating Balance Arrangement” section set forth in Schedule 5 to this Amendment.

 

3.      Miscellaneous. This Amendment constitutes the complete understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior communications with respect thereto. The Agreement, as amended hereby, shall remain in full force and effect. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but such counterparts shall, together, constitute only one instrument. The facsimile signature of any party to this Amendment shall constitute the valid and binding execution hereof by such party. This Amendment shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof.

 

[Signature Page Follows]

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

THE BANK OF NEW YORK MELLON EACH OF THE REGISTERED INVESTMENT COMPANIES OR SERIES THEREOF LISTED ON SCHEDULE II TO THE AGREEMENT
   
   
By: /s/ Armando Fernandez By:  /s/ Lori A. Hensler

 

Name: Armando Fernandez

 

Name: Lori A. Hensler

 

Title: Vice President/Managing Director

 

Title: Treasurer for the Funds

 
 

 

SCHEDULE 1

 

 

[          ]

 

 

 

 

 

 
 

 

SCHEDULE 2

 

“COMPENSATING BALANCE ARRANGEMENT” SECTION IN EXHIBIT D

AS APPLICABLE TO FEDERATED SHORT-INTERMEDIATE DURATION MUNICIPAL TRUST AND FEDERATED MUNICIPAL ULTRASHORT FUND

 

Compensating Balance Arrangement

 

Each Fund and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow a Fund to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for each Fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part of the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending March, June, September, and December). Average balances will be computed at the end of the quarter. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net charges will be applied to the safekeeping fees. Credit is not given for net positive balances.

 

Maximum Daily Balance (“MDB”) limits have been determined for each Fund. On days where a Fund exceeds its MDB, interest will be charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB was exceeded.

 

Maximum Daily Balance +/- $25 million

Federated Short-Intermediate Duration Municipal Trust

Federated Municipal Ultrashort Fund

 

 
 

SCHEDULE 3

 

“HARD DOLLAR COMPENSATION ARRANGEMENT” SECTION IN EXHIBIT E

AS APPLICABLE TO Federated Capital Reserves Fund and
Federated Government Reserves Fund

 

Hard Dollar Compensation Arrangement

 

Each Fund and The Bank of New York Mellon (the “Bank”) have entered into a hard dollar compensation arrangement with respect to overdrafts as follows: (1) 100% of overdrawn balances with respect to a particular Fund will be charged at a rate of 50 basis points over the Fed Funds rate; (2) Monthly, such charge with respect to a particular Fund will be applied to such Fund’s safekeeping fees; and (3) Positive balances with respect to a Fund earn zero compensation.

 

 
 

SCHEDULE 4

 

“COMPENSATING BALANCE ARRANGEMENT” SECTION IN EXHIBIT E

AS APPLICABLE TO FEDERATED MUNICIPAL TRUST

 

Compensating Balance Arrangement

 

The Fund and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow the Fund to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day the Fund maintains a positive balance, the Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for the Fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part of the Bank, in which case the positive balance would be assessed at 100%). The Fund shall maintain the average compensating balance over quarterly periods (ending March, June, September, and December). Average balances will be computed at the end of the quarter. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net charges will be applied to the safekeeping fees. Credit is not given for net positive balances.

 

Maximum Daily Balance (“MDB”) limits have been determined for the Fund. On days where the Fund exceeds its MDB, interest will be charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB was exceeded.

 

Maximum Daily Balance +/- $25 million

Federated Municipal Trust

 

 
 

SCHEDULE 5

 

“COMPENSATING BALANCE ARRANGEMENT” SECTION IN EXHIBIT E

AS APPLICABLE TO US TREASURY CASH RESERVES, AUTOMATED GOVERNMENT CASH RESERVES, AND GOVERNMENT OBLIGATIONS TAX MANAGED FUND

 

Compensating Balance Arrangement

 

Each Fund and The Bank of New York Mellon (the “Bank”) have entered into an average compensating balance arrangement, which would allow a Fund to compensate the Bank for any overdrafts by maintaining a positive cash balance and conversely, on any day a Fund maintains a positive balance, the respective Fund will be permitted to overdraw the account as compensation, within the Maximum Daily Balance limits as established for each Fund as listed below.

 

In each instance, Federal Reserve requirements for minimum balances (currently 10%), will be assessed. Therefore, all overdrafts must be compensated at 100% of the total and all positive balances will allow for an overdraft of up to 90% of the total (unless the positive balance is the result of an error on the part on the Bank, in which case the positive balance would be assessed at 100%). The Funds shall maintain the average compensating balance over quarterly periods (ending February, May, August, and November). Average balances will be computed at the end of the quarter. Net negative balances will be charged at the Fed Funds rate plus 1% on the last day of the period. Quarterly net charges will be applied to the safekeeping fees. Credit is not given for net positive balances.

 

Maximum Daily Balance (“MDB”) limits have been determined for each Fund. On days where a Fund exceeds its MDB, interest will be charged on 100% of the excess overdraft balance at the Fed Funds rate plus 1%, based on the day(s) the MDB was exceeded.

 

Maximum Daily Balance +/- $150 million

Federated U.S. Treasury Cash Reserves

 

Maximum Daily Balance +/- $100 million

Federated Government Obligations Tax Managed Fund

 

Maximum Daily Balance +/- $25 million

Federated Automated Government Cash Reserves

 

 
 

 

SEVENTEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 26, 2015.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President, Managing Director

 
 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 6/26/15

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

Federated Unconstrained Bond Fund

 

 

B.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 6/26/15

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 

 
 

Eighteenth Amendment to the Custody Agreement

 

 

This Eighteenth Amendment to the Custody Agreement, is effective as of May 1, 2016 (this “Amendment”), by and between the registered investment companies listed on Schedule II to the Agreement (as defined below), as may be amended from time to time (each stand-alone registered investment company and each Series a “Fund” and collectively the “Funds”), and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the parties have entered into that certain Custody Agreement, dated June 7, 2005 (as amended seventeen times previously, supplemented and/or restated, the “Agreement”), by and between the Funds and the Custodian;

 

WHEREAS, the parties have previously amended the Agreement with respect to various overdraft and compensating balance arrangements set forth in the Fee Schedule for Non-Money Market Funds attached to the Agreement as Exhibit D thereto (“Exhibit D”) and the Fee Schedule for Money Market Funds attached to the Agreement as Exhibit E thereto (“Exhibit E”), including to add or modify various “Earnings Credit Arrangements,” “Compensating Balance Arrangements” and “Hard Dollar Compensation Arrangements”; and

 

WHEREAS, each of the Funds and the Custodian wish to amend the overdraft and compensating balance arrangements between each of the Funds and the Custodian, including as set forth in the “Earnings Credit Arrangements,” “Compensating Balance Arrangements” and “Hard Dollar Compensation Arrangements” set forth in Exhibit D and Exhibit E, as set forth below.

 

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:

 

4.       Amendment. The parties hereby confirm and agree that the overdraft and compensating balance arrangements between each of the Funds and the Custodian, including as set forth in the “Earnings Credit Arrangements,” “Compensating Balance Arrangements” and “Hard Dollar Compensation Arrangements” set forth in Exhibit D and Exhibit E, are hereby amended and restated to provide as follows:

 

Each Fund and the Custodian have entered into the following arrangement, which is applicable separately with respect to each separate Fund:

(1) On a daily basis, 100% of overdrawn balances with respect to the Fund will be charged at a rate of 175 basis points over the daily effective Fed Funds rate, such charges to be applied to the Fund’s safekeeping fees on a monthly basis.
(2) On a daily basis, 90% of positive end of day balances with respect to the Fund will earn a credit at a rate of the greater of 0 or the daily effective Fed Funds rate less 50 basis points, such credits to be applied to the Fund’s safekeeping fees on a monthly basis.
(3) On a monthly basis, the net resultant charge or credit will be applied to the Fund’s safekeeping fees. Net credits that exceed the monthly safekeeping fees may be carried over into the next billing period at the discretion of the Custodian.
(4) The Funds will not be responsible for overdrafts resulting from errors or corrections by the Custodian in the reporting of available cash balances for which the Custodian is responsible under the Agreement.

 

5.       Miscellaneous. This Amendment constitutes the complete understanding and agreement of the parties with respect to the subject matter hereof and supersedes all prior communications with respect thereto. The Agreement, as amended hereby, shall remain in full force and effect. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but such counterparts shall, together, constitute only one instrument. The facsimile signature of any party to this Amendment shall constitute the valid and binding execution hereof by such party. This Amendment shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof.

 

[Signature Page Follows]

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of the day and year first written above.

 

THE BANK OF NEW YORK MELLON EACH OF THE REGISTERED INVESTMENT COMPANIES OR SERIES THEREOF LISTED ON SCHEDULE II TO THE AGREEMENT

 

 

By: _/s/ Armando Fernandez_____________ By: __/s/ Lori A. Hensler______

Title: Vice President, Managing Director Title: Treasurer for the Funds

 

 

 
 

 

NINETEENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names to certain Funds and add certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2016.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori Hensler

Name: Lori Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/1/16

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund (formerly Federated International Bond Fund)

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund (formerly Federated MDT Stock Trust)

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/1/16

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund (formerly Federated International Bond Fund)

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund (formerly Federated MDT Stock Trust)

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 
 

 

TWENTIETH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to amend the names of certain Funds, to add certain Funds to, and to remove certain Funds from Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of August 1, 2017.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 8/1/17

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

*a portfolio of Federated MDT Equity Trust to be effective August 31, 2017

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 8/1/17

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated InterContinental Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Prudent DollarBear Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

*a portfolio of Federated MDT Equity Trust to be effective August 31, 2017.

 

 

 
 

 

TWENTY-FIRST AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds from Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of October 1, 2017.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 10/1/17

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 10/1/17

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large-Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017.

 

 

 

 
 

 

TWENTY-SECOND AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds from Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2017.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised 12/1/17

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised 12/1/17

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund*

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

*a portfolio of Federated MDT Equity Trust became effective August 31, 2017.

 

 

 

 

 

 
 

 

TWENTY-THIRD AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each stand alone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, amended November 7, 2007, September 5, 2008, September 8, 2009, October 23, 2009, November 13, 2009, January 13, 2010 September 1, 2010, March 1, 2011, two separate amendments dated March 25, 2011, August 1, 2012, December 31, 2012, September 24, 2013, April 28, 2014, December 1, 2014, May 14, 2015, June 26, 2015, May 1, 2016, December 1, 2016, August 1, 2017, October 1, 2017 and December 1, 2017 between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto (each a "Fund") and The Bank of New York Mellon (the "Custodian").

 

WHEREAS, each Fund is registered as a management investment company, or a series thereof, under the Investment Company Act of 1940, as amended; and

 

WHEREAS, the Funds and the Custodian desire to amend the Agreement subject to the terms and conditions set forth herein.

 

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:

 

1.       Section 3 of Article V of the Agreement is hereby deleted in its entirety and replaced with the following language:

 

3.       Notwithstanding the foregoing, Custodian will not charge the Fund any overdraft fees, penalties, or related custody charges in connection with any transaction or series of related transactions for which Custodian did not provide Fund with notice, as soon as reasonably practicable under the circumstances, of any refusal to accept or provide a price for an Actionable Trade Request as such term is defined in the FX Standing Instructions Session Range Program Description, dated March 25, 2016 or the FX Benchmark Pricing Program Description, dated March 25, 2016, as applicable.

 

2.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

 

 

 

[Remainder of Page Intentionally Left Blank]

 

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 16, 2018.

 

Each of the registered investment companies or series thereof listed on Schedule II to the Custody Agreement, as amended from time to time.

 

By: /s/ Lori A. Hensler

Name: Lori Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: _/s/ Armando Fernandez

Name: Armando Fernandez

Title: Managing Director

 
 

 

AMENDMENT TO TERMS OF

FOREIGN EXCHANGE BENCHMARK PRICING PROGRAM

AND

FOREIGN EXCHANGE STANDING INSTRUCTION SESSION RANGE PROGRAM

 

FX PROGRAM SELECTION FORM

Federated Investment Management Company (“Federated”) has received the FX Standing Instructions Session Range Program Description, dated March 25, 2016 (as amended from time to time, the “Session Range Program Description”), and the FX Standing Instructions Benchmark Pricing Program Description, dated March 25, 2016 (as amended from time to time, the “Benchmark Program Description” and collectively with the Session Range Program Description, the “Documents”).

Capitalized Terms not otherwise defined herein shall bear the meanings given to them in the Session Range Program Description or Benchmark Program Description, as applicable.

The parties agree that the terms of the Documents are amended as described herein:

  1. By executing this amendment and the FX Program Selection Form attached hereto as Exhibit A (collectively, the “Opt-In Form”), the parties express their agreement regarding the pricing and processing of FX Transactions executed pursuant to the terms of the Documents, as amended by this Opt-In Form. For avoidance of doubt, this is an agreement concerning the pricing and processing of FX Transactions, and not an agreement by either party hereto to enter into any particular FX Transaction. BNY Mellon is not in any way obligated to enter into any FX Transaction with the Customer as a result of the Customer providing instructions to BNY Mellon under either the FX Benchmark Pricing Program (the “Benchmark Program”) or the FX Standing Instructions Session Range Program Description (the “Session Range Program”). BNY Mellon may refuse to accept or provide a price for the Actionable Trade Request for any reason, including without limitation, because of market restrictions, legal, regulatory, credit or operational reasons.
  2. BNY Mellon’s Asset Servicing Representative dedicated to Federated will provide Federated with notice as soon as reasonably practicable: (i) of any refusal to accept or provide a price for the Actionable Trade Request, and (ii) of any market, legal, regulatory, credit or operational restrictions that render BNY Mellon incapable of accepting or providing a price for an Actionable Trade Request with respect to a particular currency. Such notice will be provided by email alert to Federated at the email address(es) provided below or at such other e-mail address as may be provided by Federated in writing hereafter.
  3. Federated acknowledges that each Customer identified in Exhibit B will engage in FX Transactions with BNY Mellon under the Benchmark Program for Developed Market Currencies, and under the Session Range Program for all other currencies. Federated may amend the accounts listed on Exhibit B hereto at any time by sending BNY Mellon an instruction in writing to either add account(s) or to remove account(s). The instruction shall identify the name of the account(s), account number(s), legal name(s), and the instruction to add or remove such accounts from Exhibit B. An instruction to add a new account will be thereby incorporated hereunder upon BNY Mellon’s written consent (or upon execution of an FX Transaction with respect to such account, which shall be deemed BNY Mellon’s written consent). An instruction to remove an account shall cause such account to be automatically terminated from the scope of the Documents upon receipt of such instruction without requiring BNY Mellon’s consent, provided that such termination shall not affect any obligations of such terminated account outstanding at the time of termination and including a reasonable time to act thereon.
  4. As used in the Documents, each separate legal entity is deemed to be a Customer.  Unless checked below, Federated understands and acknowledges that Netting (as defined in Annex A and described in Annex B and C of the applicable Document) will occur among accounts belonging to the same Customer. In the case of multiple accounts, if Federated does not identify which accounts belong to the same Customer, netting will occur at the account level.

We are requiring you to apply Netting across different Customers.  We have specified the exact legal names associated with each account in Exhibit B and provided that we have elected to apply Netting across different Customers, the following Indemnity shall apply:

Indemnity

The accounts listed in Exhibit B do not belong to the same Customer, they belong to various Customers. In consideration of making Netting available across the accounts of various Customers and enabling the FX trading activity of one Customer to benefit another Customer, we agree to indemnify and hold BNY Mellon and any affiliate of BNY Mellon harmless from and against any claim, loss, liability, damage, cost or expense of any nature whatsoever (including reasonable attorneys’ fees and expenses as they become due), arising out of or related to any claim of breach of any Law  in connection with the Netting across the accounts of various Customers. "Law" means any law, rule or regulation, including without limitation the Investment Company Act of 1940, Employee Retirement Income Securities Act of 1974, each as amended, or any successor federal statute.

  1. Reporting for FX Transactions shall be in the form attached, which may be modified from time to time. In the event that such modifications result in a material reduction in the information contained in the form and thereafter Federated reasonably requests such information, then BNY Mellon will provide such information as it relates to the Benchmark Program or the Session Range Program, so long as Federated’s request does not include third party information, violate any policy of BNY Mellon, conflict with any other customer’s confidentiality, and is information that BNY Mellon can produce (as reasonably determined by BNY Mellon).
  2. The parties agree that, if executing an Actionable Trade Request, prior to determining that it will not price such Actionable Trade Request in accordance with the terms of the Documents, BNY Mellon must make a reasonable and good faith determination that an Extraordinary Event has occurred or is expected to occur.
  3. Notwithstanding any provisions in the Documents to the contrary, BNY Mellon may only charge an additional or separate fee for its services outside of such fees earned by BNY Mellon in the form of Spreads or otherwise described in the Pricing sections of the Documents as part of either the Benchmark Program or the Session Range Program with the prior written agreement of Federated.
  4. The parties agree that in the event Federated chooses to terminate the agreement on behalf of a Customer or to revoke advance instructions on behalf of a Customer in accordance with Section 2.b of Annex D to each of the Documents, that such termination or revocation will be effective after the lapse of a reasonable time for BNY Mellon to act on such termination or revocation and in any event will be effective no later than 10 business days after receipt by BNY Mellon.
  5. In no event will BNY Mellon be liable for any indirect, special, incidental, consequential or punitive damages (including loss of profit, expense of use of other services, or attorney's fees), arising out of or in connection with this agreement, regardless of whether such damages arise in tort, contract or otherwise, even if BNY Mellon has been advised of the possibility of such damages. Notwithstanding the foregoing, the Documents shall not be construed to exclude or limit the liability of BNY Mellon or any of its affiliates for losses incurred in connection with any FX Transaction executed pursuant to the Documents attributable to: (i) fraud (ii) actions taken in bad faith; (iii) negligence (which shall be determined in accordance with the reasonable commercial standards of the banking industry); or (iv) any other liability that cannot be excluded or limited by Applicable Law. For purposes of the Documents and this Opt-in Form, “Applicable Law” shall mean all applicable United States or foreign federal, state and local laws, rules, regulations, interpretations, orders, judgments and decrees of any applicable regulatory authority or self-regulatory organization or of any national exchange, market or clearinghouse where foreign exchange transactions are executed.
  6. Either party may terminate this agreement upon thirty (30) days’ (or in the case of a termination for cause, five (5) days’) prior written notice to the other party. The termination shall not affect the rights, obligations and liabilities of any party hereto accrued as of the date of such termination. Notices under these Documents may be sent by electronic mail or regular mail to the other party at the addresses set forth below:

BNY Mellon: Ed McGann

BNY Mellon Asset Servicing

101 Barclay St., 3rd Floor

New York, NY 10286

Tel 212-815-5493

Edward.mcgann@bnymellon.com

Federated:       Lori Hensler

Federated Investment Management Company

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Tel 412-288-1277

lhensler@federatedinv.com

 

Tim Trebilcock

Federated Investment Management Company

1001 Liberty Avenue

Pittsburgh, PA 15222-3779

Tel 412-288-2954

ttrebilcock@federatedinv.com

11. This agreement will be governed by and construed in accordance with the law of the State of New York (without reference to choice of law doctrine). Each party hereby waives the right to trial by jury in any action or proceeding instituted with respect to this agreement.

[Remainder of this page is intentionally left blank.]

 
 

 

 

Accepted and Agreed:    
Federated Investment Management Company   The Bank of New York Mellon
     
     

By: /s/ John B. Fisher

 

  By: /s/ Edward G. McGann
Name: John B. Fisher   Name: Edward G. McGann
Title: President   Title: Managing Director
Date: April 26, 2018   Date: April 24, 2018

 

 
 

 

EXHIBIT A

FX Program Selection Form

 

 
 

 

Version Date: 17th July, 2014

1.

 

2.

 

* Max size is 35 alphanumeric characters

3.

* Please note that the Questionnaire contains dropdown menus

4.

We hereby confirm, that the information provided in this Questionnaire is correct, and that any future amendments must be notified to BNY Mellon in writing.

FX Program Selection Form - For Asset Owner to complete

***** Please fully complete the Questionnaire, then sign and return (including the original excel file) to FXPricingProgramElections@bnymellon.com*****

 

 

 

FX Program Selection Form - For Asset Owner to complete

 

We understand that The Bank of New York Mellon (“BNY Mellon”) offers two standard pricing options for custody related Foreign Exchange (FX): (1) the Session Range Program; and (2) the Defined Spread Program. There is an additional alternative pricing option called FX Benchmark Pricing which applies to developed market currencies only as defined in its latest Program Description.

 

We understand that if we do not specifically select the Defined Spread Program or the FX Benchmark Pricing option, or fail to execute an FX Program Election Form, any custody related foreign exchange instructions we send will be priced either in accordance with another arrangement to which we and BNY Mellon have agreed or if no such agreement has occured, such instructions will be priced in accordance with BNY Mellon's then-applicable default program for handling such instructions. Currently, Session Range is the default program for handling such instructions.

 

If we have any questions concerning BNY Mellon’s FX pricing options, we shall contact our Relationship Manager.

We are instructing BNY Mellon to price FX transactions involving the currency pairs as specified below (please select one of the following): For FX transactions involving two Developed Market currencies:

Developed Market currencies mean each of the following (ISO Codes): AUD, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HUF, ILS, JPY, MXN, NOK, NZD, PLN, RON, SEK, SGD, TRY, USD , ZAR.
Please select the service offering to apply to custody related FX FX Benchmark Pricing
https://workbench.bnymellon.com/reference/wb_reference.jsp#mfep

 

Fixing Time 4:00 PM EST (20L – London Close)

 

We, the undersigned Customer, have received the latest version of the FX Benchmark Pricing Program Description available at the above web link. We are directly dealing with you, BNY Mellon, on our own behalf and/or have appointed one or more investment advisers or investment managers (a “Manager”) as our agents to deal with you, as we have notified you in writing from time to time. We on our own behalf agree that each Customer identified as part of this set up form will engage in FX Transactions with you under the FX Benchmark Pricing Program (as described in the Program Description), for those trade requests identified in the Program Description. We understand that in addition to this form, we (if applicable) may have to sign other administrative forms to participate in the service.

 

For FX transactions involving one or more Emerging Market currencies:

 
Emerging Market currencies mean any other currency that is not a Developed Market currency.
Please select the service offering to apply to custody related FX Session Range (Default)

 

We, the undersigned Customer, have received the latest version of the Session Range Program Description available at the above web link. We are directly dealing with you, BNY Mellon, on our own behalf and/or have appointed one or more investment advisers or investment managers (a “Manager”) as our agents to deal with you, as we have notified you in writing from time to time. We on our own behalf agree that each Customer identified as part of this set up form will engage in FX Transactions with you under the Session Range Pricing Program (as described in the Program Description), for those trade requests identified in the Program Description. We understand that in addition to this form, we (if applicable) may have to sign other administrative forms to participate in the service.

Federated Investment Management Company

 

 

By: /s/ John B. Fisher

 

Please complete the Account List tab.

Title:

Date:

 

FX Program Election

 

 

 
 

FX Program Selection Form - Account List - For Asset Owner to complete

 

We understand that BNY Mellon offers Price Netting (as defined in the relevant program description) to foreign exchange transactions ("FX Transactions") at the legal entity level (across accounts of the same legal entity) provided that we direct BNY Mellon as to which accounts belong to the respective legal entity (which can be provided below). Without such direction, Price Netting will default to the account level.

 

 

Please select the netting option to be applied to the FX Program group (Choose drop-down option)

 

Across Accounts of the Same Legal Entity

 

If we apply "Netting Across Accounts of Different (but related) Legal Entities", then the following indemnity shall apply:

 

Indemnity

The accounts listed in the account list do not belong to the same Customer, they belong to various Customers. In consideration of making Netting available across the accounts of various Customers and enabling the FX trading activity of one Customer to benefit another Customer, we agree to indemnify and hold BNY Mellon and any affiliate harmless from and against any claim, loss, liability, damage, cost or expense of any nature whatsoever (including reasonable attorneys’ fees and expenses as they become due), arising out of or related to any claim of breach of any Law in connection with the Netting across the accounts of various Customers. "Law" means any law, rule or regulation.

 

Account List

 

 

 
 

EXHIBIT B

List of Customers

Account Name Account Number Legal Entity Name
157877 FARF FEDERATED ABSOLUTE RETURN FUND
557219 FEMDF FEDERATED EMERGING MARKET DEBT FUND
385540 FGSVF FEDERATED GLOBAL STRATEGIC VALUE DIVIDEND FUND
557217 FGTRB FEDERATED GLOBAL TOTAL RETURN BOND FUND
557218 FIBSP FEDERATED INTERNATIONAL BOND STRATEGY PORTFOLIO
557242 FIDSP FEDERATED INTERNATIONAL DIVIDEND STRATEGY PORTFOLIO
557220 FILF FEDERATED INTERNATIONAL LEADERS FUND

 

 

 
   
   
   
By:/s/ John B. Fisher  
Name: John B. Fisher  
Title: President  
Date: April 26, 2018  
       

 

 
 

 

TWENTY-FOURTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds from Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 1, 2018.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised April 1, 2018

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised April 1, 2018

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 
 

 

TWENTY-FIFTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds and remove certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 1, 2018.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised September 1, 2018

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes SDG Engagement Equity Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised September 1, 2018

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes SDG Engagement Equity Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 
 

 

TWENTY-SIXTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2018.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice-President, Managing Director

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised December 1, 2018

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised December 1, 2018

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 

 
 

 

TWENTY-SEVENTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised March 1, 2019

 

 

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

 

 
 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised March 1, 2019

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

 

 

 

 

 
 

 

TWENTY-EIGHTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By:/s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised April 1, 2019

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

*The effective date of the Amendment is April 1, 2019, except that with respect to such Funds, it is acknowledged that BNYM may be required to establish procedures in its trade settlement system with respect to trades executed between March 28 and March 29, 2019 that may settle between April 1 and April 2, 2019.  Only with respect to these Funds and these very limited services, will the parties agree to abide by the terms of the Agreement prior to April 1, 2019.

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised April 1, 2019

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

 

 

 

 

 

 

 

 

 

 

TWENTY-NINTH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds to the Schedules; 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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised June 1, 2019

 

 

A.       Non-Money Market Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised June 1, 2019

 

FUNDS

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

 

 

 

 

 
 

 

THIRTIETH AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove certain Funds and add certain other funds to the Schedules;

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 1, 2019.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised September 1, 2019

 

 

A.       Non-Money Market Funds

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised September 1, 2019

 

FUNDS

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

 
 

 

 

THIRTY-FIRSTAMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add certain Funds and add certain other funds to the Schedules;

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2020.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Deborah Molini Kraus

Name: Deborah Molini Kraus

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised March 1, 2020

 

 

A.       Non-Money Market Funds

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised March 1, 2020

 

FUNDS

 

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Intermediate Municipal Trust

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

*Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

*Federated Mid-Cap Index Fund

Federated Michigan Intermediate Municipal Trust

Federated Muni and Stock Advantage Fund

Federated Municipal High Yield Advantage Fund

Federated Municipal Ultrashort Fund

Federated Municipal Bond Fund, Inc.

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

*Federated Strategic Value Dividend Fund

 
 

 

THIRTY-SECOND AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to add Hermes to certain fund names change and change the names on other funds to the Schedules;

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 29, 2020.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised June 29, 2020

 

 

A.       Non-Money Market Funds

 

Federated Hermes Emerging Market Debt Fund

Federated Hermes Emerging Markets Equity Fund

Federated Hermes Intermediate Municipal Fund

Federated Hermes Global Strategic Value Dividend Fund

Federated Hermes Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Developed Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated Hermes International Bond Strategy Portfolio

Federated Hermes International Dividend Strategy Portfolio

Federated Hermes International Equity Fund

Federated Hermes International Growth Fund

Federated Hermes International Leaders Fund

Federated Hermes International Small-Mid Company Fund

Federated Hermes International Strategic Value Dividend Fund

Federated Hermes Max-Cap Index Fund

Federated Hermes MDT Large Cap Value Fund

Federated Hermes Mid-Cap Index Fund

Federated Hermes Michigan Intermediate Municipal Fund

Federated Hermes Muni and Stock Advantage Fund

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Municipal Ultrashort Fund

Federated Hermes Municipal Bond Fund, Inc.

Federated Hermes Ohio Municipal Income Fund

Federated Hermes Pennsylvania Municipal Income Fund

Federated Hermes Premier Municipal Income Fund

Federated Hermes Short-Intermediate Duration Municipal Fund

Federated Hermes Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Hermes Capital Reserves Fund

Federated Hermes Government Obligations Tax-Managed Fund

Federated Hermes Government Reserves Fund

Federated Hermes U.S. Treasury Cash Reserves

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised June 29, 2020

 

FUNDS

 

Federated Hermes Emerging Market Debt Fund

Federated Hermes Emerging Markets Equity Fund

Federated Hermes Intermediate Municipal Fund

Federated Hermes Global Strategic Value Dividend Fund

Federated Hermes Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Developed Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated Hermes International Bond Strategy Portfolio

Federated Hermes International Dividend Strategy Portfolio

Federated Hermes International Equity Fund

Federated Hermes International Growth Fund

Federated Hermes International Leaders Fund

Federated Hermes International Small-Mid Company Fund

Federated Hermes International Strategic Value Dividend Fund

Federated Hermes Max-Cap Index Fund

Federated Hermes MDT Large Cap Value Fund

Federated Hermes Mid-Cap Index Fund

Federated Hermes Michigan Intermediate Municipal Fund

Federated Hermes Muni and Stock Advantage Fund

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Municipal Ultrashort Fund

Federated Hermes Municipal Bond Fund, Inc.

Federated Hermes Ohio Municipal Income Fund

Federated Hermes Pennsylvania Municipal Income Fund

Federated Hermes Premier Municipal Income Fund

Federated Hermes Short-Intermediate Duration Municipal Fund

Federated Hermes Strategic Value Dividend Fund

 

 

 
 

 

THIRTY-THIRD AMENDMENT TO

CUSTODY AGREEMENT

 

THIS AMENDMENT TO CUSTODY AGREEMENT (“Amendment”) is by and between the registered investment companies listed on Schedule II to the Agreement, as may be amended from time to time, (each standalone registered investment company and each Series a “Fund” and collectively the “Funds”) and The Bank of New York Mellon (the “Custodian”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Custodian are parties to that certain Custody Agreement (the “Agreement”) dated June 7, 2005, as amended, and between the Funds listed on Schedule II of the Agreement, as amended and restated by Exhibit A attached hereto and the Custodian;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Custodian desire to remove funds from the Schedules;

 

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:

 

1.       The Funds listed in Schedule II to the Agreement, Schedule I of the Joint Trading Account Agreement, and Schedule I of the Foreign Custody Manager Agreement are amended and restated to include the funds listed on Exhibit A attached hereto.

 

2.       Within the Non-Money Market Fund Fee Schedule, the section entitled “Funds” following the section entitled “Earnings Credit Arrangement” is replaced in its entirety with the section entitled “Funds” attached hereto as Exhibit B.

 

3.       The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2020.

 

Each of the registered investment companies or series

thereof listed on Exhibit A attached hereto

 

By: ____________________________________

Name: Ronald J. Ecoff

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: ___________________________________

Name: James Farrell

Title: Vice-President

 
 

 

Exhibit A

Schedule II of the Custody Agreement;

Schedule I of the Joint Trading Account Agreement;

Schedule I of the Foreign Custody Manager Agreement

 

Revised December 1, 2020

 

 

A.       Non-Money Market Funds

 

Federated Hermes Emerging Market Debt Fund

Federated Hermes Emerging Markets Equity Fund

Federated Hermes Intermediate Municipal Fund

Federated Hermes Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Developed Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated Hermes International Bond Strategy Portfolio

Federated Hermes International Dividend Strategy Portfolio

Federated Hermes International Equity Fund

Federated Hermes International Growth Fund

Federated Hermes International Leaders Fund

Federated Hermes International Small-Mid Company Fund

Federated Hermes International Strategic Value Dividend Fund

Federated Hermes Max-Cap Index Fund

Federated Hermes MDT Large Cap Value Fund

Federated Hermes Mid-Cap Index Fund

Federated Hermes Michigan Intermediate Municipal Fund

Federated Hermes Muni and Stock Advantage Fund

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Municipal Ultrashort Fund

Federated Hermes Municipal Bond Fund, Inc.

Federated Hermes Ohio Municipal Income Fund

Federated Hermes Pennsylvania Municipal Income Fund

Federated Hermes Premier Municipal Income Fund

Federated Hermes Short-Intermediate Duration Municipal Fund

Federated Hermes Strategic Value Dividend Fund

 

 

B.       Money Market Funds

 

Federated Hermes Capital Reserves Fund

Federated Hermes Government Obligations Tax-Managed Fund

Federated Hermes Government Reserves Fund

Federated Hermes U.S. Treasury Cash Reserves

 
 

 

 

 

Exhibit B

Amended and Restated

Section entitled “Funds”

of the Non-Money Market Fund Fee Schedule

(Exhibit D to Amendment dated November 8, 2007)

 

Revised December 1, 2020

 

FUNDS

 

Federated Hermes Emerging Market Debt Fund

Federated Hermes Emerging Markets Equity Fund

Federated Hermes Intermediate Municipal Fund

Federated Hermes Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Developed Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated Hermes International Bond Strategy Portfolio

Federated Hermes International Dividend Strategy Portfolio

Federated Hermes International Equity Fund

Federated Hermes International Growth Fund

Federated Hermes International Leaders Fund

Federated Hermes International Small-Mid Company Fund

Federated Hermes International Strategic Value Dividend Fund

Federated Hermes Max-Cap Index Fund

Federated Hermes MDT Large Cap Value Fund

Federated Hermes Mid-Cap Index Fund

Federated Hermes Michigan Intermediate Municipal Fund

Federated Hermes Muni and Stock Advantage Fund

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Municipal Ultrashort Fund

Federated Hermes Municipal Bond Fund, Inc.

Federated Hermes Ohio Municipal Income Fund

Federated Hermes Pennsylvania Municipal Income Fund

Federated Hermes Premier Municipal Income Fund

Federated Hermes Short-Intermediate Duration Municipal Fund

Federated Hermes Strategic Value Dividend Fund

 

 

1 Fee is expressed in basis points (b.p.) per annum where 1b.p. equals one hundredth of one percent (i.e. 0.01%) and is calculated based upon month-end market value, unless stated otherwise.

2 A transaction is defined as a receipt or deliver-versus-payment, a free receive or deliver, maturities, or security transaction related to corporate events.

3 Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds) will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge (surcharge schedule available upon request). NOTE: For all other markets listed above, surcharges may apply if a security is held outside of the local market.

4 This fee will be applicable for assets held on The Bank of New York Mellon’s custody or accounting systems but not held in custody within The Bank of New York Mellon’s network of subcustodian banks and agents.

1 Fee is expressed in basis points (b.p.) per annum where 1b.p. equals one hundredth of one percent (i.e. 0.01%) and is calculated based upon month-end market value, unless stated otherwise.

2 A transaction is defined as a receipt or deliver-versus-payment, a free receive or deliver, maturities, or security transaction related to corporate events.

3 Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds) will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge (surcharge schedule available upon request). NOTE: For all other markets listed above, surcharges may apply if a security is held outside of the local market.

4 This fee will be applicable for assets held on The Bank of New York Mellon’s custody or accounting systems but not held in custody within The Bank of New York Mellon’s network of subcustodian banks and agents

5 A transaction is defined as a receipt or deliver-versus-payment, a free receive or deliver, maturities, or security transaction related to corporate events.

6 Fee is expressed in basis points (b.p.) per annum where 1b.p. equals one hundredth of one percent (i.e. 0.01%) and is calculated based upon month-end market value, unless stated otherwise.

7 Eurobonds are held in Euroclear at a standard rate, but other types of securities (including but not limited to equities, domestic market debt and mutual funds) will be subject to a surcharge. In addition, certain transactions that are delivered within Euroclear or from a Euroclear account to a third party depository or settlement system, will be subject to a surcharge (surcharge schedule available upon request). NOTE: For all other markets listed above, surcharges may apply if a security is held outside of the local market.

8 This fee will be applicable for assets held on The Bank of New York Mellon’s custody or accounting systems but not held in custody within The Bank of New York Mellon’s network of subcustodian banks and agents.

Exhibit 28 (h) (1) (a) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

SERVICES AGREEMENT

THIS AGREEMENT, dated and effective as of January 1, 2004 (this “Agreement”) between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the “Adviser”), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust (“FASC”),

WITNESSETH:

WHEREAS, the Adviser serves pursuant to advisory or subadvisory agreements (“Advisory Agreements”) as investment advisor or subadvisor to investment companies registered under the Investment Company Act of 1940 (the “1940 Act”) and/or separate accounts not required to be so registered (collectively, “Accounts”); and

WHEREAS, the Adviser desires to engage FASC to provide certain services to Adviser in connection with the services to be provided by the Adviser under the Advisory Agreements;

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1. Services. FASC agrees to provide to the Adviser the services indicated in Exhibit A to this Agreement (the “Services”).

2. Fees. For its Services under this Agreement, Adviser agrees to pay FASC the Services Fees calculated and payable in accordance with Exhibit B to this Agreement.

3. Records. FASC 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 1940 Act and the rules thereunder, as the same may be amended from time to time, pertaining to the Services performed by it and not otherwise created and maintained by another party. Where applicable, such records shall be maintained by FASC for the periods and in the places required by Rule 31a-2 under the 1940 Act. The books and records pertaining to any Account which are in the possession of FAS shall be the property of such Account. The Account, or its owners or authorized representatives, shall have access to such books and records at all times during FASC's normal business hours. Upon reasonable request, copies of any such books and records shall be provided promptly by FASC to the Account or the Account's owners or authorized representatives.

4. Limitation of Liability and Indemnification.

(a) FASC shall not be responsible for any error of judgment or mistake of law or for any loss suffered by the Advisor or any Account in connection with the matters to which this Agreement relates, except a loss resulting from willful malfeasance, 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.

(b) The Adviser shall indemnify FASC and shall hold FASC harmless from and against any liability to any Account or to any other person which may incurred by or asserted against FASC for any action taken or omitted by it in performing the Services in accordance with the above standards, and any expenses (including the reasonable fees and expenses of its counsel) which may be incurred by FASC in investigating or defending itself against the assertion of any such liability. FASC shall give prompt notice to the Adviser of the assertion of any claim or liability which is reasonably likely to result in a claim for indemnification under this Section; provided that the failure to give such notice, or any delay in giving such notice, shall not lessen the obligation of the Adviser to indemnify FASC except to the extent it results in actual prejudice. The Adviser shall have the option, by notice to FASC, to assume the defense of any claim which may be the subject of indemnification hereunder. In the event such notice is given, the Adviser shall assume the defense of the claim, and FASC shall cooperate with the Adviser in such defense, subject to the obligation of the Adviser to reimburse FASC for the expenses resulting therefrom. In the event Adviser gives notice that it will assume the defense of any claim, the Adviser shall not be obligated to indemnify FASC for any further legal or other expenses incurred in investigating or defending such claim, except those incurred at the request of the Adviser or its counsel. FASC shall in no event compromise or settle any claim for which it may seek indemnification hereunder, except with the prior written consent of the Adviser or unless the Adviser fails, within 30 days after notice of the terms of such settlement, to notify FASC that it has assumed the defense of such claim and will indemnify FASC for any liability resulting therefrom.

(c) The Adviser and FASC are each hereby expressly put on notice of the limitation of liability set forth in the Declaration of Trust of the other party. Each party agrees that the obligations of the other party pursuant to this Agreement shall be limited solely to such party and its assets, and neither party shall seek satisfaction of any such obligation from the shareholders, trustees, officers, employees or agents of the other party, or any of them.

5. Duration and Termination.

(a) Subject to the remaining provisions of this Section, the term of this Agreement shall begin on the effective date first above written and shall continue until terminated by mutual agreement of the parties hereto or by either party on not less than 60 days’ written notice to the other party hereto.

(b) Notwithstanding the foregoing, to the extent that the Services to be provided with respect to any Account which is registered as an investment company under the 1940 Act (herein referred to as a “registered investment company”) are services referred to in the definition of “investment advisor” under Section 202(a)(11) of the Investment Company Act of 1940 (herein referred to as “investment advisory services”), then with respect to such Account, this Agreement:

(i) shall not commence until the effective date of its approval by the board of directors or trustees (“Board”) of such Account;

(ii) shall continue from year to year thereafter, subject to the provisions for termination and all other terms and conditions hereof, only if such continuation shall be specifically approved at least annually by a majority of the Board, including a majority of the members of the Board who are not parties to this Agreement or interested persons of any such party (other than as members of the Board) cast in person at a meeting called for that purpose;

(iii) may be terminated at any time without the payment of any penalty by the Board or by a vote of a majority of the outstanding voting securities (as defined in Section 2(a)(42) of the 1940 Act) of the Account on 60 days’ written notice to the Adviser;

(iv) shall automatically terminate in the event of (A) its assignment (as defined in the 1940 Act) or (B) termination of the Advisory Agreement for any reason whatsoever.

6. Amendment. This Agreement may be amended at any time by mutual written agreement of the parties hereto; provided, however, that no Amendment to this Agreement shall be effective with respect to any investment advisory services to be provided to any Account which is registered investment company unless, to the extent required by Section 15(a)(2) of the 1940 Act, such amendment has been approved both by the vote of a majority of the Board of the Account, including a majority of the members of the Board who are not parties to this Agreement or interested persons of any such party (other than as members of the Board), cast in person at a meeting called for that purpose and, where required by Section 15(a)(2) of the 1940 Act, on behalf of the Account by a majority of the outstanding voting securities of such Account as defined in Section 2(a)(42) of the 1940 Act.

7. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

8. Section Headings; Counterparts. The underlined Section headings in this Agreement are for convenience of reference only and shall not affect its construction or interpretation. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Agreement as of the effective date first above written.

FEDERATED INVESTMENT MANAGEMENT COMPANY

By: /s/ G. Andrew Bonnewell

Name: G. Andrew Bonnewell

Title: Vice President

FEDERATED ADVISORY SERVICES COMPANY

By: /s/ Keith M. Schappert

Name: Keith M. Schappert

Title: President

 

 
 

EXHIBIT A

DESCRIPTION OF SERVICES

The following are the categories of Services to be provided by FASC to the Adviser pursuant to the Agreement:

1.         Performance attribution.  Performance attribution enables portfolio managers and senior management to identify the specific drivers behind each portfolio’s performance.  Performance attribution analysts are responsible for data integrity, creation of attribution reports and maintenance of attribution models.
2.         Administration and Risk Management.  Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers.  Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc.

 

Categories 1 and 2 above shall not be treated as “investment advisory services” for purposes of Section 5(b) of the Agreement.

 

 
 

EXHIBIT B

CALCULATION AND PAYMENT OF SERVICES FEES

For each Category of Services referenced in Exhibit A, Adviser shall pay FASC a Services Fee, payable monthly in arrears, determined according to the following formula:

Services Fee = Cost of Services x Adviser’s Assets under Management
Total Assets Under Management 		x (1 + Applicable Margin)

 

Where:

“Cost of Services” is FASC’s total Operating Costs incurred in providing the applicable Category of Services during the month to all investment advisers for which FASC provides that Category of Services.

“Adviser’s Assets under Management” is the total average assets under management for the month for all Accounts or portions thereof for which the Adviser acts as investment adviser or subadvisor and which utilize the Category of Services.

“Total Assets under Management” is the total average assets under management for the month for all Accounts or portions thereof for which all investment advisers (including the Adviser) to which FASC provides that Category of Services act as investment adviser or subadviser and which utilize the Category of Services.

“Applicable Margin” is 0.10.

“Operating Costs” means all operating expenses and non-operating expenses of FASC for the cost center(s) providing the applicable Category of Services.

 
 

AMENDMENT TO SERVICES AGREEMENT

This AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 30, 2009 (this “Amendment”), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the “Adviser”), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust (“FASC”). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below).

RECITALS

WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the “Services Agreement”), pursuant to which FASC provides certain performance attribution, administration and risk management, equity trading and transaction settlement, fundamental analysis, and quantitative analysis services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 (“1940 Act”) and/or separate accounts not required to be so registered (collectively, “Accounts”); and

WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts.

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

1.       Amendment to Exhibit A to Services Agreement. Solely with respect to Accounts that are not investment companies registered under the 1940 Act, the section of Exhibit A to the Services Agreement entitled “Administration and Risk Management” shall be, and hereby is, deleted in its entirety and replaced with the following:

“2. Administration and Risk Management. Employees of Federated Advisory Services Company provide support to portfolio managers and other employees of affiliated advisers. Such services may include development of risk management programs, production of portfolio and compliance reports for clients and/or fund Boards, coordination of client portfolios and related fixed income trade execution implementation and administration, completion of required broker and custody documentation, development and documentation of operational procedures, coordination of proxy voting activities, on-site support of hardware and software, etc.”

2.       Miscellaneous. This Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by this Amendment with respect to Accounts that are not investment companies registered under the 1940 Act, shall remain in full force and effect. The Services Agreement also shall remain in full force and effect without amendment with respect to Accounts that are investment companies under the 1940 Act. This Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.

IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Amendment as of the date first above written.

 

FEDERATED INVESTMENT MANAGEMENT COMPANY FEDERATED ADVISORY SERVICES COMPANY
By:  /s/ John B. Fisher By:  /s/ J. Christopher Donahue
Name:  John B. Fisher Name:  J. Christopher Donahue
Title:  President Title:  Chairman

 

 
 

 

SECOND AMENDMENT TO SERVICES AGREEMENT

 

This SECOND AMENDMENT TO SERVICES AGREEMENT, dated and effective as of March 1, 2016, (this “Second Amendment”), is made between FEDERATED INVESTMENT MANAGEMENT COMPANY, a Delaware statutory trust (the “Adviser”), and FEDERATED ADVISORY SERVICES COMPANY, a Delaware statutory trust (“FASC”). Capitalized terms used, but not defined, in this Amendment have the meanings given to such terms in the Services Agreement (as defined below).

 

RECITALS

 

WHEREAS, the Adviser and FASC have entered into that certain Services Agreement dated as of January 1, 2004 (as amended, the “Services Agreement”), pursuant to which FASC provides certain performance attribution and administration and risk management services to Adviser in connection with Adviser providing investment advisory or sub-advisory services to investment companies registered under the Investment Company Act of 1940 (“1940 Act”) and/or separate accounts not required to be so registered (collectively, “Accounts”);

 

WHEREAS, the Adviser and FASC have entered into the Amendment to Services Agreement dated as of March 30, 2009 (the “Amendment”), pursuant to which the Services indicated in Exhibit A to the Services Agreement were amended solely with respect to Accounts that are not investment companies registered under the 1940 Act, to provide that, as part of the administration and risk management services provided by FASC, FASC may provide certain coordination of client portfolios and related fixed income trade execution implementation and administration services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts; and

 

WHEREAS, the Adviser and FASC desire to amend the Services indicated in Exhibit A to the Services Agreement, as amended, solely with respect to Accounts for which the Adviser trades in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account, to provide that FASC may provide equity trading and transaction settlement, fundamental analysis and quantitative analysis services to Adviser when Adviser is acting as adviser or sub-adviser with respect to such Accounts.

 

NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as follows:

 

1.       Second Amendment to Exhibit A to Services Agreement. Exhibit A to the Services Agreement shall be, and here by is, supplemented with the following:

 

“3. Equity Trading and Transaction Settlement. The equity trading desks execute buy and sell order based on instructions provided by affiliated advisers. The trading staff either places orders electronically or contacts brokers to place orders, find liquidity and seek price levels. Upon completion of a transaction, the transaction settlement group works with the broker and the account custodian to ensure timely and accurate exchange of securities and monies.

 

4. Fundamental Analysis. The equity investment analysts provide independent research and analysis of specific companies within a sector. Typically, analysis includes review of published reports, interviews of company management, on-site observation of company operations, and the use of various financial models. In addition, analysts read trade journals, attend industry conferences, and focus on trends within the sector and industry. Based on this proprietary analysis, the analyst makes buy, sell or hold recommendations to the Adviser.

 

5. Quantitative Analysis. Quantitative analysts develop and apply financial models designed to enable equity portfolio managers and fundamental analysts to screen potential and current investments, assess relative risk and enhance performance relative to benchmarks and peers.

 

To the extent that such services are to be provided with respect to any Account which is a registered investment company, Categories 3, 4 and 5 above shall be treated as “investment advisory services” for purposes of Section 5(b) of the Agreement.”

 

2.       Miscellaneous. This Second Amendment shall be effective as of the date first above written upon its execution and delivery by each of the parties hereto. The Services Agreement, as amended by the Amendment and this Second Amendment with respect to Accounts for which the Adviser trades in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account, shall remain in full force and effect. The Services Agreement, as amended by the Amendment, also shall remain in full force and effect without this Second Amendment with respect to Accounts for which the Adviser does not trade in equity securities, equity derivatives and other related equity investments as part of the investment strategy for the Account. This Second Amendment shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania. This Second Amendment may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Second Amendment and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

IN WITNESS WHEREOF, the parties hereto, through their duly authorized officers, have executed this Second Amendment as of the date first above written.

 

 

FEDERATED INVESTMENT MANAGEMENT COMPANY FEDERATED ADVISORY SERVICES COMPANY
By:  /s/ John B. Fisher By:  /s/ J. Christopher Donahue
Name:  John B. Fisher Name:  J. Christopher Donahue
Title:  President Title:  Chairman

 

 

 

 

 
 

LIMITED POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, dated as of January 1, 2004, that FEDERATED INVESTMENT MANAGEMENT COMPANY, a statutory trust duly organized under the laws of the State of Delaware (the “Adviser”), does hereby nominate, constitute and appoint FEDERATED ADVISORY SERVICES COMPANY, a statutory trust duly organized under the laws of the State of Delaware ("FASC"), to act hereunder as the true and lawful agent and attorney-in-fact of the Adviser, acting on behalf of each of the funds or accounts for which Adviser acts as investment adviser or subadviser shown on Schedule 1 attached hereto and incorporated by reference herein (each such fund or account being hereinafter referred to as a "Fund" and collectively as the "Funds"), for the specific purpose of executing and delivering all such agreements, instruments, contracts, assignments, bond powers, stock powers, transfer instructions, receipts, waivers, consents and other documents, and performing all such acts, as Adviser, or FASC acting as agent for the Adviser pursuant to the Services Agreement dated as of January 1, 2004 between the Adviser and FASC (such agreement, as may be amended, supplemented or otherwise modified from time to time is hereinafter referred to as the “Services Agreement”), may deem necessary or reasonably desirable, related to the acquisition, disposition and/or reinvestment of the funds and assets of a Fund in accordance with Adviser's supervision of the investment, sale and reinvestment of the funds and assets of each Fund pursuant to the authority granted to the Adviser as investment adviser or subadviser of each Fund under the Adviser’s investment advisory or subadvisory contract for such Fund (such investment advisory or subadvisory contract, as may be amended, supplemented or otherwise modified from time to time is hereinafter referred to as the "Investment Advisory Contract").

The Adviser hereby ratifies and confirms as good and effectual, at law or in equity, all that FASC, and its officers and employees, may do by virtue hereof. However, despite the above provisions, nothing herein shall be construed as imposing a duty on FASC to act or assume responsibility for any matters referred to above or other matters even though FASC may have power or authority hereunder to do so. Nothing in this Limited Power of Attorney shall be construed (i) to be an amendment or modifications of, or supplement to, the Investment Advisory Contract, (ii) to amend, modify, limit or denigrate any duties, obligations or liabilities of the Adviser under the terms of the Investment Advisory Contract or (iii) exonerate, relieve or release the Adviser from any losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against the Adviser (x) under the terms of the Investment Advisory Contract or (y) at law, or in equity, for the performance of its duties as the investment adviser or subadviser of any of the Funds.

The Adviser hereby agrees to indemnify and save harmless FASC and its trustees, officers and employees (each of the foregoing an "Indemnified Party" and collectively the "Indemnified Parties") against and from any and all losses, obligations, penalties, actions, judgments and suits and other costs, expenses and disbursements of any kind or nature whatsoever which may be imposed on, incurred by or asserted against an Indemnified Party, other than as a consequence of gross negligence or willful misconduct on the part of an Indemnified Party, arising out of or in connection with this Limited Power of Attorney or any other agreement, instrument or document executed in connection with the exercise of the authority granted to FASC herein to act on behalf of the Adviser, including without limitation the reasonable costs, expenses and disbursements in connection with defending such Indemnified Party against any claim or liability related to the exercise or performance of any of FASC's powers or duties under this Limited Power of Attorney or any of the other agreements, instruments or documents executed in connection with the exercise of the authority granted to FASC herein to act on behalf of the Adviser, or the taking of any action under or in connection with any of the foregoing. The obligations of the Adviser under this paragraph shall survive the termination of this Limited Power of Attorney with respect to actions taken by FASC on behalf of the Adviser during the term of this Limited Power of Attorney.

Any person, partnership, corporation or other legal entity dealing with FASC in its capacity as attorney-in-fact hereunder for the Adviser on behalf of any Fund is hereby expressly put on notice that FASC is acting solely in the capacity as an agent of the Adviser as agent for the Fund and that any such person, partnership, corporation or other legal entity must look solely to the Fund in question for enforcement of any claim against the Fund, as FASC assumes no personal liability whatsoever for obligations of the Fund entered into by FASC in its capacity as attorney-in-fact for the Adviser.

Each person, partnership, corporation or other legal entity which deals with a Fund through FASC in its capacity as agent and attorney-in-fact of the Adviser, is hereby expressly put on notice (i) that all persons or entities dealing with the Fund must look solely to the assets of the Fund on whose behalf FASC is acting pursuant to its powers hereunder for enforcement of any claim against the Fund, as the trustees, officers and/or agents of such Fund, the shareholders of the various classes of shares of the Fund, and the other Funds of the trust or corporation of which a Fund may be a series, assume no personal liability whatsoever for obligations entered into on behalf of such Fund, and (ii) that the rights, liabilities and obligations of any one Fund are separate and distinct from those of any other Fund.

The execution of this Limited Power of Attorney by the Adviser acting on behalf of the several Funds shall not be deemed to evidence the existence of any express or implied joint undertaking or appointment by and among any or all of the Funds. Liability for or recourse under or upon any undertaking of FASC pursuant to the power or authority granted to FASC under this Limited Power of Attorney under any rule of law, statute or constitution or by the enforcement of any assessment or penalty or by legal or equitable proceedings or otherwise shall be limited only to the assets of the Fund on whose behalf FASC was acting pursuant to the authority granted hereunder.

The Adviser hereby agrees that no person, partnership, corporation or other legal entity dealing with FASC shall be bound to inquire into FASC's power and authority hereunder and any such person, partnership, corporation or other legal entity shall be fully protected in relying on such power or authority unless such person, partnership, corporation or other legal entity has received prior written notice from the Adviser that this Limited Power of Attorney has been revoked. This Limited Power of Attorney shall be revoked and terminated automatically upon the cancellation or termination of the Services Agreement or as to any Fund upon the cancellation or termination of the Adviser’s Investment Advisory Contract for such Fund. Except as provided in the immediately preceding sentence, the powers and authorities herein granted may be revoked or terminated by the Adviser at any time provided that no such revocation or termination shall be effective until FASC has received actual notice of such revocation or termination in writing from the Adviser.

This Limited Power of Attorney constitutes the entire agreement between the Adviser and FASC and may be changed only by a writing signed by both of them, except that the Adviser may at any time change the list of Funds to which this Limited Power of Attorney relates by executing and delivering to FASC a later dated version of Schedule 1. This Limited Power of Attorney shall bind and benefit the respective successors and assigns of the Adviser and FASC; provided, however, that FASC shall have no power or authority hereunder to appoint a successor or substitute attorney in fact for the Adviser or any Fund.

This Limited Power of Attorney shall be governed and construed in accordance with the laws of the Commonwealth of Pennsylvania without reference to principles of conflicts of laws. If any provision hereof, or any power or authority conferred upon FASC herein, would be invalid or unexercisable under applicable law, then such provision, power or authority shall be deemed modified to the extent necessary to render it valid or exercisable while most nearly preserving its original intent, and no provision hereof, or power or authority conferred upon FASC herein, shall be affected by the invalidity or the non-exercisability of another provision hereof, or of another power or authority conferred herein.

This Limited Power of Attorney may be executed in as many identical counterparts as may be convenient and by the different parties hereto on separate counterparts. This Limited Power of Attorney shall become binding on the Adviser when the Adviser shall have executed at least one counterpart and FASC shall have accepted its appointment by executing this Limited Power of Attorney. Immediately after the execution of a counterpart original of this Limited Power of Attorney and solely for the convenience of the parties hereto, the Adviser and FASC will execute sufficient counterparts so that FASC shall have a counterpart executed by it and the Adviser, and the Adviser shall have a counterpart executed by the Adviser and FASC. Each counterpart shall be deemed an original and all such taken together shall constitute but one and the same instrument, and it shall not be necessary in making proof of this Limited Power of Attorney to produce or account for more than one such counterpart.

 
 

IN WITNESS WHEREOF, the Adviser has caused this Limited Power of Attorney to be executed by its duly authorized officer as of the date first written above.

 

FEDERATED INVESTMENT MANAGEMENT COMPANY

By: /s/ Keith M. Schappert

Name Keith M. Schappert

Title: President

Accepted and agreed to this

January 1, 2004

 

FEDERATED ADVISORY SERVICES COMPANY

By: /s/ G. Andrew Bonnewell

Name: G. Andrew Bonnewell

Title: Vice President

 

 
 

 

Schedule 1
to Limited Power of Attorney
dated as of January 1, 2004
revised December 1, 2020
by FEDERATED INVESTMENT MANAGEMENT COMPANY (the Adviser "),
acting on behalf of each of the funds and accounts listed below, and appointing
FEDERATED ADVISORY SERVICES COMPANY
the attorney-in-fact of the Adviser

 

List of Funds and Accounts

 

Emerging Markets Core Fund

Federated Hermes Adjustable Rate Fund

Bank Loan Core Fund

Federated Hermes Corporate Bond Fund

Federated Hermes California Municipal Cash Trust

Federated Hermes Capital Reserves Fund

Federated Hermes Corporate Bond Strategy Portfolio

Federated Hermes Emerging Market Debt Fund

Federated Hermes Floating Rate Strategic Income Fund

Federated Hermes Fund for U.S. Government Securities

Federated Hermes Fund for U.S. Government Securities II

Federated Hermes Government Income Securities, Inc.

Federated Hermes Government Income Fund

Federated Hermes Government Obligations Fund

Federated Hermes Government Obligations Tax-Managed Fund

Federated Hermes Government Reserves Fund

Federated Hermes Government Ultrashort Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes High Income Bond Fund II

Federated Hermes High Income Bond Fund, Inc.

Federated Hermes High Yield Strategy Portfolio

Federated Hermes Opportunistic High Yield Bond Fund

Federated Hermes Institutional High Yield Bond Fund

Federated Hermes Intermediate Corporate Bond Fund

Federated Hermes Intermediate Municipal Fund

Federated Hermes Global Total Return Bond Fund

Federated Hermes International Bond Strategy Portfolio

Federated Hermes Managed Volatility Fund II

Federated Hermes Michigan Intermediate Municipal Fund

Federated Hermes Conservative Microshort Fund

Federated Hermes Conservative Municipal Microshort Fund

Federated Hermes Institutional Money Market Management

Federated Mortgage Core Portfolio

Federated Hermes Select Total Return Bond Fund

Federated Hermes Mortgage Strategy Portfolio

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Municipal Obligations Fund

Federated Hermes Municipal Ultrashort Fund

Federated Hermes New York Municipal Cash Trust

Federated Hermes Ohio Municipal Income Fund

Federated Hermes Pennsylvania Municipal Income Fund

Federated Hermes Premier Municipal Income Fund

Federated Hermes Prime Cash Obligations Fund

Federated Hermes Prime Money Fund II

Federated Hermes Institutional Prime Obligations Fund

Federated Hermes Institutional Prime Value Obligations Fund

Project and Trade Finance Core Fund

Federated Hermes Quality Bond Fund II

Federated Hermes Real Return Bond Fund

Federated Hermes Short-Intermediate Municipal Fund

Federated Hermes Short-Intermediate Total Return Bond Fund

Federated Hermes Short-Term Income Fund

Federated Hermes Strategic Income Fund

Federated Hermes Tax-Free Obligations Fund

Federated Hermes Institutional Tax-Free Cash Trust

Federated Hermes Total Return Bond Fund

Federated Hermes Total Return Government Bond Fund

Federated Trade Finance Income Fund

Federated Hermes Treasury Obligations Fund

Federated Hermes Trust for U.S. Treasury Obligations

Federated Hermes Short-Term Government Fund

Federated Hermes Short-Intermediate Government Fund

Federated Hermes U.S. Treasury Cash Reserves

Federated Hermes Ultrashort Bond Fund

Short Fixed Income Fund

AS - Federated High Yield Bond Fund

AS - Federated High Yield Portfolio

BB&T Funds Prime Money Market

Chesapeake Investors

Gartmore- Federated GVIT High Income

Great West- Maxim Federated Bond Fund

IDEX Federated Tax Exempt

ONatl - High Income Bond Portfolio

SA - Corporate Bond Portfolio

Trav - High Yield Portfolio

 

 

Exhibit 28 (h) (1) (c) 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:

SECTION 1.                    Agreement to Provide Services

(a)                 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.

(b)                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.

(i) 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.
(ii) 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.
(iii) 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.

(c)                 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.

SECTION 2.                    Service Fees Payable to FSSC

(a)                 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.

(b)                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.

 

(c)                 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.

SECTION 3.                    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.

SECTION 4.                    Representations

(a)                 Each party represents and warrants to the other party that:

(i) 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.
(ii) 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.
(iii) 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.
(iv) 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).
(v) 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.
SECTION 5.                    Indemnification and Limitation of Liability

(a)                 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.

(b)                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.

(c)                 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.

(d)                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.

(e)                 The provisions of this Section shall survive the termination of this Agreement.

 
 
SECTION 6.                    Privacy Policy

(a)                 The parties acknowledge that:

(i) 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;
(ii) 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 § 248.14); for specified law enforcement and miscellaneous purposes (17 CFR § 248.15); and to service providers or in connection with joint marketing arrangements (17 CFR § 248.13); and
(iii) 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 § 248.7 and 17 CFR § 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 § 248.13).

(b)                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.

(c)                 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 §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.

(d)                FSSC represents and warrants that, in accordance with 17 CFR § 248.30, it has implemented, and will continue to carry out for the term of the Agreement, policies and procedures reasonably designed to:

(i) Insure the security and confidentiality of records and NPI of Fund customers;
(ii) Protect against any anticipated threats or hazards to the security or integrity of Fund customer records and NPI; and
(iii) 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.

(e)                 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 (§248.14) or miscellaneous (§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 (§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.

(f)                  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.

(g)                The provisions of this Section shall survive the termination of the Agreement.

SECTION 7.                    Notices

(a)                 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).

(b)                Unless otherwise notified in writing, all notices to any Fund shall be given or sent to such Fund at:

5800 Corporate Drive

Pittsburgh, Pennsylvania 15237-7000

Attention: President

(c)                 Unless otherwise notified in writing, all notices to FSSC shall be given or sent to:

Federated Investors Tower

1001 Liberty Avenue

Pittsburgh, Pennsylvania 15222-3779

Attention: President

SECTION 8.                    Assignments and No Third-Party Rights

(a)                 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.

(b)                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.

SECTION 9.                    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:

(i) 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;
(ii) the suspension of obligations is of no greater scope and of no longer duration than is required by the Force Majeure;
(iii) no obligations of either party that accrued before the Force Majeure are excused as a result of the Force Majeure;
(iv) the non-performing party uses all reasonable efforts to remedy its inability to perform as quickly as possible.
SECTION 10.                  Definition of Terms

(a)                 “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.

(b)                “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.

(c)                 “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.

(d)                “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.

SECTION 11.                  Miscellaneous

(a)                 This Agreement may be terminated by either party by giving the other party at least sixty (60) days' written notice thereof.

(b)                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.

(c)                 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.

(d)                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.

(e)                 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.

(f)                  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.

(g)                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/ John W. McGonigle By:/s/ John F. Donahue
John W. McGonigle John F. Donahue
Secretary Chairman
   
Attest: Federated Shareholder Services Company
   
   
/s/ Timothy S. Johnson By:  /s/ Arthur L. Cherry, Jr.
Timothy S. Johnson Arthur L. Cherry, Jr.
Secretary  

 

 

 

 
 

 

SCHEDULE 1

TO SECOND AMENDED AND RESTATED SERVICES AGREEMENT

(revised 12/1/2020)

 

The following lists the Funds and Shares subject to the Second Amended and Restated Services Agreement (“Agreement”) which have the ability to charge the maximum 0.25% Service Fee payable by the Funds pursuant to the Agreement.

 

FEDERATED HERMES ADJUSTABLE RATE SECURITIES TRUST Institutional Shares
    Service Shares
 
FEDERATED HERMES ADVISER SERIES
  Federated Hermes Emerging Markets Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Absolute Credit Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Global Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Global Small Cap Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes International Developed Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes SDG Engagement Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes SDG Engagement High Yield Credit Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Unconstrained Credit Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes US SMID Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes International Equity Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes International Growth Fund Class A Shares
    Class C Shares
    Institutional Shares
     
     
  Federated Hermes MDT Large Cap Value Fund Service Shares
    Class A Shares
    Class C Shares
     
FEDERATED EQUITY FUNDS
  Federated Hermes  Clover Small Value Fund Class A Shares
    Class C Shares
  Federated Hermes International Strategic Value Dividend Fund Class A Shares
    Class C Shares
  Federated Hermes Kaufmann Fund Class A Shares
    Class C Shares
    Class R Shares
  Federated Hermes Kaufmann Large Cap Fund Class A Shares
    Class C Shares
  Federated Hermes Kaufmann Small Cap Fund Class A Shares
    Class C Shares
  Federated Hermes MDT Mid Cap Growth Fund Class A Shares
    Class C Shares
  Federated Hermes Prudent Bear Fund Class A Shares
    Class C Shares
  Federated Hermes Strategic Value Dividend Fund Class A Shares
    Class C Shares
 
FEDERATED HERMES EQUITY INCOME FUND, INC. Class A Shares
    Class C Shares
    Class F Shares
FEDERATED HERMES FIXED INCOME SECURITIES, INC.
  Federated Hermes Municipal Ultrashort Fund Class A Shares
     
  Federated Hermes Strategic Income Fund Class A Shares
    Class C Shares
    Class F Shares
     
FEDERATED HERMES GLOBAL ALLOCATION FUND Class A Shares
    Class C Shares
   
FEDERATED HERMES GOVERNMENT INCOME SECURITIES, INC. Class A Shares
    Class C Shares
    Class F Shares
    Institutional Shares
     
FEDERATED HERMES GOVERNMENT INCOME TRUST
  Federated Hermes Government Income Fund Institutional Shares
    Service Shares
     
FEDERATED HERMES HIGH INCOME BOND FUND, INC. Class A Shares
    Class C Shares
FEDERATED HERMES HIGH YIELD TRUST  
  Federated Hermes Opportunistic High Yield Fund Service Shares
    Class A Shares
    Class C Shares
FEDERATED HERMES INCOME SECURITIES TRUST
  Federated Hermes Capital Income Fund Class A Shares
    Class C Shares
    Class F Shares
  Federated Hermes Floating Rate Strategic Income Fund Class A Shares
    Class C Shares
  Federated Hermes  Fund for U.S. Government Securities Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Intermediate Corporate Bond Fund Institutional Shares
    Service Shares
  Federated Hermes Muni and Stock Advantage Fund Class A Shares
    Class C Shares
    Class F Shares
  Federated Hermes  Real Return Bond Fund Class A Shares
    Class C Shares
    Institutional Shares
  Federated Hermes Short-Term Income Fund Class A Shares
    Service Shares
     
FEDERATED HERMES INDEX TRUST
  Federated Hermes Max-Cap Index Fund Class C Shares
    Institutional Shares
    Service Shares
  Federated Hermes Mid-Cap Index Fund Service Shares
     
FEDERATED HERMES INSTITUTIONAL TRUST
  Federated Hermes Government Ultrashort Fund Class A Shares
    Service Shares
  Federated Hermes  Institutional High Yield Bond Fund  
     
  Federated Hermes Short-Intermediate Total Return Bond Fund Class A Shares
    Service Shares
 
FEDERATED HERMES INSURANCE SERIES
  Federated Hermes Fund for US Government Securities II  
  Federated Hermes High Income Bond Fund II Primary Shares
    Service Shares
  Federated Hermes Kaufmann Fund II Primary Shares
    Service Shares
  Federated Hermes Managed Volatility Fund II  
  Federated Hermes Government Money Fund II Primary Shares
  Service Shares
   
FEDERATED HERMES INTERNATIONAL SERIES, INC.
  Federated Hermes Global Total Return Bond Fund Class A Shares
    Class C Shares
     
FEDERATED HERMES INVESTMENT SERIES FUNDS, INC.
  Federated Hermes Corporate Bond Fund Class A Shares
    Class C Shares
    Class F Shares
     
FEDERATED HERMES MDT SERIES
  Federated Hermes MDT All Cap Core Fund Class A Shares
    Class C Shares
     
  Federated Hermes MDT Large Cap Growth Fund Class A Shares
    Class C Shares
     
  Federated Hermes MDT Small Cap Core Fund Class A Shares
    Class C Shares
     
  Federated Hermes  MDT Small Cap Growth Fund Class A Shares
    Class C Shares
     
  Federated Hermes MDT Balanced Fund Class A Shares
    Class C Shares
     
   
     
     
FEDERATED HERMES MUNICIPAL BOND FUND, INC. Class A Shares
    Class C Shares
    Class F Shares
     
    Institutional Shares
FEDERATED HERMES MUNICIPAL SECURITIES INCOME TRUST
  Federated Hermes Michigan Intermediate Municipal Fund Class A Shares
    Institutional Shares
  Federated Hermes Municipal High Yield Advantage Fund Class A Shares
    Class C Shares
    Class F Shares
  Federated Hermes Ohio Municipal Income Fund Class A Shares
    Class F Shares
    Institutional Shares
  Federated Hermes Pennsylvania Municipal Income Fund Class A Shares
    Class A Shares
    Institutional Shares
     
FEDERATED HERMES SHORT-INTERMEDIATE MUNICIPAL FUND Class A Shares
    Institutional Shares
    Service Shares
     
FEDERATED HERMES TOTAL RETURN GOVERNMENT BOND FUND Service Shares
     

FEDERATED HERMES TOTAL RETURN SERIES, INC.
  Federated Hermes Select Total Return Bond Fund Institutional Shares
    Service Shares
     
  Federated Hermes Total Return Bond Fund Class A Shares
    Class C Shares
    Service Shares
     
     
  Federated Hermes Ultrashort Bond Fund Class A Shares
    Institutional Shares
    Service Shares
 
FEDERATED HERMES SHORT-TERM GOVERNMENT TRUST Institutional Shares
    Service Shares
     
FEDERATED HERMES SHORT-INTERMEDIATE GOVERNMENT TRUST Institutional Shares
    Service Shares
     
FEDERATED HERMES WORLD INVESTMENT SERIES, INC.
  Federated Hermes Emerging Market Debt Fund Class A Shares
    Class C Shares
     
  Federated Hermes International Leaders Fund Class A Shares
    Class C Shares
  Federated Hermes International Small-Mid Company Fund Class A Shares
    Class C Shares
     
FEDERATED HERMES INTERMEDIATE MUNICIPAL TRUST
  Federated Hermes Intermediate Municipal Fund Institutional Shares
     
FEDERATED HERMES MONEY MARKET OBLIGATIONS TRUST
  Federated Hermes California Municipal Cash Trust Capital Shares
    Cash II Shares
    Cash Series Shares
    Wealth Shares
    Service Shares
  Federated Hermes Capital Reserves Fund  
  Federated Hermes Government Obligations Fund Advisor Shares
    Capital Shares
    Cash II Shares
    Cash Series Shares
    Institutional Shares
    Select Shares
    Service Shares
    Trust Shares
  Federated Hermes Government Obligations Tax-Managed Fund Automated Shares
    Institutional Shares
    Service Shares
  Federated Hermes Government Reserves Fund Class A Shares
    Class C Shares
    Class F Shares
    Class P Shares
  Federated Hermes Institutional Money Market Management Capital Shares
    Eagle Shares
    Institutional Shares
    Service Shares
  Federated Hermes Municipal Obligations Fund Automated Shares
    Capital Shares
    Cash II Shares
    Cash Series Shares
    Wealth Shares
    Investment Shares
    Service Shares
  Federated Hermes New York Municipal Cash Trust Cash II Shares
    Cash Series Shares
    Service Shares
    Wealth Shares
  Federated Hermes Prime Cash Obligations Fund Advisor Shares
    Automated Shares
    Capital Shares
    Cash II Shares
    Cash Series Shares
    Class R Shares
    Wealth Shares
    Service Shares
    Trust Shares
  Federated Hermes Institutional Prime Obligations Fund Capital Shares
    Institutional Shares
    Service Shares
  Federated Hermes Institutional Prime Value Obligations Fund Capital Shares
    Institutional Shares
    Service Shares
  Federated Hermes Tax-Free Obligations Fund Advisor Shares
    Service Shares
    Wealth Shares
  Federated Hermes Institutional Tax-Free Cash Trust Institutional Shares
    Premier Shares
  Federated Hermes Treasury Obligations Fund Automated Shares
    Capital Shares
    Institutional Shares
    Service Shares
    Trust Shares
  Federated Hermes Trust for U.S. Treasury Obligations Cash II Shares
    Cash Series Shares
    Institutional Shares
  Federated Hermes U.S. Treasury Cash Reserves Institutional Shares
    Service Shares
         

 

Exhibit 28 (h) (3) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

 

 

SECOND AMENDED AND RESTATED

AGREEMENT

for

ADMINISTRATIVE SERVICES

 

This Second Amended and Restated Agreement for Administrative Services (the “Agreement”) is made, severally and not jointly, as of September 1, 2017, by each of the registered investment companies listed on Exhibit A hereto, each having its principal office and place of business at 4000 Ericsson Drive, Warrendale, Pennsylvania 15086 (collectively, the “Investment Company”), and FEDERATED ADMINISTRATIVE SERVICES, a Delaware statutory trust, having its principal office and place of business at Federated Investors Tower, Pittsburgh, Pennsylvania 15222-3779 (“FAS”). The Agreement amends and restates in its entirety that Amended and Restated Agreement for Administrative Services by and between the Investment Company and FAS dated September 1, 2012, as amended, (the “Superseded Agreement”).

WHEREAS, each investment company subject to this Agreement is registered as a 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, certain investment companies subject to this Agreement are “series companies” as defined in Rule 18f-2 under the 1940 Act and, as used in this Agreement, the term “Fund” refers to either (i) an individual portfolio of such a series company or (ii) an investment company that is not organized as a series company, and the term “Funds” refers to all such portfolios and investment companies, collectively;

WHEREAS, Shares of each Fund may be subdivided into classes (each a “Class”) as provided in Rule 18f-3 under the 1940 Act;

WHEREAS, the Investment Company wishes to appoint FAS as its administrator to provide it with Administrative Services (as herein defined) and FAS desires to accept such appointment;

WHEREAS, Investment Company and FAS are parties to the Superseded Agreement with respect to the subject matter hereof; and

WHEREAS, Investment Company and FAS desire to amend the Superseded Agreement by amending and restating the same in its entirety on the terms set forth herein;

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:

Article 1. Appointment.

The Investment Company hereby appoints FAS as Administrator for the period on the terms and conditions set forth in this Agreement. FAS hereby accepts such appointment and agrees to furnish the services set forth in Article 2 of this Agreement in return for the compensation set forth in Article 5 of this Agreement.

Article 2. FAS Duties.

As Administrator, and subject to the supervision and control of the Investment Company’s Board of Trustees/Directors (the “Board”), FAS will provide facilities, equipment, and personnel to perform or cause to be performed the following “Administrative Services” for operation of the business and affairs of the Investment Company and each of its Funds and any additional Administrative Services that FAS shall agree in writing to perform, or cause to be performed, for the Investment Company from time to time:

A. LEGAL AND COMPLIANCE ADMINISTRATIVE SERVICES

1. Prepare, file, and maintain the Investment Company's governing documents and any amendments thereto, including the charter documents, the by-laws and minutes of meetings of the Board, Board Committees and Shareholders.
2. Prepare and file with the Securities and Exchange Commission (the “SEC”) and the appropriate state securities authorities: (i) the registration statements for the Investment Company and the Investment Company's Shares and all amendments thereto, (ii) annual and semi-annual reports to shareholders and other applicable regulatory reports and communications,; (iii) proxy materials; (iv) notices pursuant to Rule 24f-2; and (v) such other documents all as may be necessary to enable the Investment Company to continuously offer its shares.
3. Prepare and administer contracts on behalf of the Investment Company and supervise relationships with the Investment Company’s other service providers, including , the Investment Company's investment advisers, sub-advisers, fund accountants, custodians, transfer agents and distributors, subject to any terms and conditions established by the Board and the requirements of the 1940 Act, such supervision may include the engagement of outside consultants from time to time, at FAS’s expense, to review the relationship contracts and recommend changes designed to reduce Fund expenses.
4. Provide due diligence of the Investment Company’s other service providers, including , the Investment Company's investment advisers, sub-advisers, fund accountants, custodians, transfer agents and distributors, to the extent not otherwise provided by the Investment Company’s other service providers.
5. Arrange for and attend shareholders’ meetings; prepare the Investment Company’s representatives who will attend shareholder meetings and all necessary materials in connection with such meetings including, without limitation, a written script for such meetings, minutes and any follow-up documents.
6. Provide the Investment Company with legal guidance with respect to its regulated activities, including prospectus disclosures, investment activities, affiliated transactions, investment in senior securities, sales, redemptions and exchanges, distribution of income and capital gains, distribution of Shares, board composition, code of ethics, fidelity bond, custodial services and service provider contracts and the general application of securities laws and regulations to the Investment Company’s business and provide or arrange for all other legal services that constitute Administrative Service required by the Investment Company and not otherwise provided for under this Agreement (it being understood that various legal services will be provided to the Investment Company, the Board and the Independent Trustees at the expense of the Investment Company, as described herein).
7. Supervise outside legal counsel retained at the expense of the Investment Company with respect to litigation brought by the Investment Company and against the Investment Company and negotiate litigation settlements and pre-litigation settlements and work-out arrangements.
8. Obtain the required documentation to be filed in connection with any lawsuits against the Investment Company and provide information and expertise on administrative matters affecting such litigation.
9. Supervise outside legal counsel retained at the expense of the Investment Company with respect to, and review all contracts, filings and required documentation concerning, the acquisition of other investment companies or the liquidation of the Fund; provide guidance on the manner such transactions should be structured to comply with applicable law and obtain at the Investment Company’s expense, legal opinions and regulatory authority rulings necessary for such transactions to comply with applicable law.
10. Seek formal guidance from regulatory authorities concerning the application of various regulations to the Investment Company and seek exemptive relief, where appropriate.
11 Subject to the Board’s direction, coordinate meetings of the Board (and its committees), including: (i) the creation of notices, agendas, legal memoranda and administrative reports, and (ii) the review and compilation of other materials prepared by the Investment Company’s adviser, distributor, portfolio accountant, custodian, transfer agent, auditor, independent counsel or other service providers to support the Board’s discussions and actions taken.
12. Negotiate and secure for the Investment Company and its directors and officers: (i) a fidelity bond in an amount that is at least adequate to satisfy the requirements of the 1940 Act, (ii) directors and officer’s coverage and (iii) professional liability or errors and omissions coverage, in each case, under terms that are acceptable to the Board.
13. Monitor changes in applicable regulations and make corresponding changes in, or develop new, policies and procedures for the Fund or for the applicable service provider.
14. Prepare, review and negotiate standard forms of indentures, guarantees, agreements, certificates, confirmations and other documentation relating to the legal terms of securities eligible for purchase by money market funds, provided that FAS shall not have any obligation to: (i) provide any written legal opinions regarding such securities; or (ii) prepare, review or negotiate any document for which a standard form has not been developed and accepted for use by the investment company industry.
15. Perform the following “blue sky” services, either itself or through one or more affiliated or unaffiliated service providers: (1) provide a system to monitor the total number of Shares of the Investment Company (and/or Class) sold in each State, (2) monitor the total number of Shares of such Investment Company (and/or Class) sold in each State and, where appropriate, increase the number of Shares registered in such State, (3) with respect to shareholders of the Investment Company whose shareholdings are fully-disclosed on the transfer agent’s recordkeeping system, (a) identify those transactions and assets to be treated as exempt from blue sky reporting for each State and (b) verify the classification of transactions for each State on the transfer agent’s recordkeeping system, and (4) with respect to shareholders of the Investment Company whose shareholdings are not fully-disclosed on the transfer agent’s recordkeeping system, rely upon information provided by the relevant financial intermediary transacting for such holder of Shares in performing the obligations set forth in subsection (2) above.
16. Provide compliance services, as directed by the Investment Company’s Chief Compliance Officer, which include monitoring the Investment Company’s compliance with its policies and procedures, and with applicable federal, state and foreign securities laws, and the rules and regulations thereunder, as applicable.
17. Administer the Investment Company’s code of ethics.
18. Monitor the Investment Company’s compliance with its investment policies, objectives and restrictions as set forth in its currently effective registration statement.
19. Implement and maintain, together with affiliated companies, a business continuation and disaster recovery program for the Investment Company.
20. Assist the Investment Company in regulatory examinations, inspections or investigations of the Investment Company.
21. Provide the following administrative and compliance services with regard Commodity Futures Trading Commission (“CFTC”) Rule 4.5 (as may be amended from time to time): (i) monitor the Investment Company’s compliance with the rule; (ii) with respect to those Funds that are required under the rule to register as ‘commodity pools’ from time to time (the “Registered Funds”) prepare, file and maintain the Registered Funds’ registrations with the CFTC or applicable self-regulatory authority, as appropriate; (iii) with respect to those Funds that are subject to the rule but qualify for an exemption from registration as ‘commodity pools’, prepare, file and monitor the companies’ exemptive filings with the CFTC or applicable self-regulatory authority, as appropriate; (iv) in relation to the Registered Funds’ commodity pool status, prepare, file and maintain the Registered Funds advisers’ registrations as ‘commodity pool operators’ (“CPOs”) and prepare and file such reports as are required to be filed by the CPOs with the CFTC or applicable self-regulatory authority, as appropriate; and (v) any additional administrative and compliance services with regard to the Investment Company’s and CPOs’ CFTC Rule 4.5 activities, as directed by the Investment Company’s Chief Compliance Officer, from time to time (collectively, “CFTC Rule 4.5 Administrative Services”).
B. FINANCIAL ADMINISTRATIVE SERVICES
1. Prepare and file the Investment Company’s tax returns.
2. Evaluate and obtain custody services from a financial institution that meets the requirements of the 1940 Act.
3. Compare, as applicable, the fund accountant’s calculation of the Investment Company’s net asset value, yield, dividends, fund total return and performance and total assets with the fund accountant’s previous calculations and with changes in the relevant securities market on a daily basis for reasonableness of changes.
4. Review and compare, as applicable, the calculation of the Investment Company’s average maturity with the previous calculations for reasonableness of changes.
5. Evaluate and recommend the pricing services used by the Investment Company; participate in the fair valuation of portfolio securities as required by the Investment Company’s fair valuation procedures; review and recommend changes to the Investment Company’s fair valuation procedures.
6. Compare the fund accountant’s calculations of the Investment Company’s undistributed net income balances with the fund accountant’s previous calculations for reasonableness of changes.
7. Perform daily reviews, as applicable, of the fund accountant’s shadow net asset value calculations with the previous calculations for reasonableness of changes; notify designated parties, as necessary, of deviations in compliance with the Investment Company’s Rule 2a-7 procedures, if any.
8. Perform monthly comparison of the fund accountant’s performance calculations with previous calculations for reasonableness of changes.
9. Perform quarterly comparison of the fund accountant’s projected annual fund expenses with previous projections for reasonableness of changes; prepare monthly budgets for specific expense categories to be used in monthly updates to the Investment Company’s expense accruals and projections.
10. Review fund expense reports prepared by the fund accountant; monitor compliance with the expense limits stated in the prospectus fee tables, including disclosure regarding which expense categories should be accrued in addition to the expense limits.
11. Coordinate and track the payment of all fund expenses by the Investment Company’s fund accountant.
12. Compare the fund accountant’s calculation of dividend recommendations with previous recommendations for reasonableness of changes; consult with portfolio managers concerning recommendations for fixed dividend resolution funds.
13. Calculate and determine capital gain distributions, if any, for the Investment Company.
14. Review the fund accountant’s calculations for shareholder tax reporting of AUM income percentages, state income percentages and government income percentages.
15. Monitor and confirm the Investment Company’s status as a regulated investment company under the current Internal Revenue Code (“IRC”); monitor and confirm compliance with IRC section 817(h) diversification requirements, as applicable.
16. Review and/or prepare, for shareholder tax reporting purposes, as applicable, (i) calculations for qualifying dividend income (QDI), dividends received deduction (DRD), and interest-related and short-term capital gain dividends (QII), and (ii) IRC section 1250 gain amounts, as well as assessing compliance with various states’ threshold requirements for reporting certain tax characteristics to shareholders in those states.
C. OTHER ADMINISTRATIVE SERVICES
1. Coordinate the layout, printing and electronic delivery of publicly disseminated prospectuses and shareholder reports, make recommendations to improve their effectiveness or reduce expenses.
2. Perform internal audit examinations in accordance with a charter adopted by the Investment Company.
3. Monitor enterprise level risks associated with the services provided herein in accordance with a charter adopted by Investment Company.
4. Develop and recommend changes in the investment strategy and operation of the Investment Company that may be in the interest of its Shareholders.
5. Provide individuals reasonably acceptable to the Board for nomination, appointment, or election as the following officers of the Investment Company, who will be responsible for the management of certain of the Investment Company's affairs as specified in the Investment Company's charter documents and by-laws, subject to direction by the Investment Company’s Board: (i) the president and principal executive officer, (ii) the treasurer and principal financial and accounting officer; (iii) the secretary, and (iv) such other officers as are mutually agreeable.
6. Monitor trading activity to help identify market timers and recommend policies to deter market timing.
7. Review potential intermediary clients and existing intermediary clients as appropriate to determine/monitor the client’s ability to adhere to the terms of any servicing agreement between the client and Investment Company.
8. Review and recommend changes to the transfer agent’s policies and procedures to mitigate fraud, enhance shareholder services or reduce expenses.
9. Review and recommend changes to policies and procedures and operating processes designed to reduce Fund expenses.
10. Respond to all inquiries or other communications from shareholders and other parties, not otherwise provided by the Investment Company’s other service providers; if the inquiry is more properly responded to by another of the Investment Company’s service providers, referring the individual making the inquiry to the appropriate person.
11. Perform the following services, either itself or through its affiliate, Federated Shareholder Services company; (i) select and perform due diligence regarding proposed new owners of omnibus accounts as proposed recordkeeping agents for the Investment Company, (ii) enter into agreements as agent for the Investment Company, or any of them, substantially in the form most recently approved by the Investment Company’s board, with the registered owners of omnibus accounts for the provision of services necessary for the recordkeeping or sub-accounting of share positions held in underlying sub-accounts (“Recordkeeping Agreements”), together with such changes thereto as may be agreed to by Company so long as such changes do not (a) increase the fees payable by the Investment Company under the Recordkeeping Agreements, (b) alter the indemnity obligations of the Investment Company owing to or from the Investment Company thereunder or (c) otherwise materially alter the obligations of the Investment Company under the Recordkeeping Agreements, (iii) agree, on behalf of the Investment Company, to make payments for services rendered under Recordkeeping Agreements out of the assets of the Investment Company in amounts not to exceed the amounts determined from time to time by the Board of the Investment Company, and (iv) give instructions to the transfer agent of the Investment Company (the “Transfer Agent”), for and on behalf of the Investment Company as “Proper Instructions” of the Investment Company under and pursuant to the agreement for transfer agency services with the Transfer Agent, to perform the services of Company and/or the Investment Company under each such Recordkeeping Agreement, excepting only the indemnity obligations owning from the Investment Company or Company thereunder.

D.       SUBCONTRACTORS

1. FAS may without further consent on the part of the Investment Company at FAS’s own expense, subcontract for the performance of Administrative Services with a sub-contractor selected by FAS. FAS 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.
2. FAS 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 D.1. above, provided, however, that FAS shall in no way be responsible to the Investment Company for the acts and omissions of the agent and the expenses of such agent shall be the responsibility of FAS or the Investment Company, as the parties may agree from time to time.

Article 3. Records.

FAS 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 1940 Act, 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 FAS 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 FAS 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 FAS's normal business hours. Upon the reasonable request of the Investment Company, copies of any such books and records shall be provided promptly by FAS to the Investment Company or the Investment Company's authorized representatives.

Article 4. Expenses.

A. FAS shall be responsible for all expenses (i) expressly assumed by FAS under this Agreement; (ii) incurred in the ordinary course of providing (or causing to be provided) the Administrative Services, including CFTC Rule 4.5 Administrative Services, to the Investment Company and the equipment, office space, and facilities necessary to perform its obligations under this Agreement; and (iii) incurred in maintaining its staff and personnel, including the compensation of FAS employees who serve as trustees or directors or officers of the Investment Company
B. Each Fund shall be solely responsible for (i) all expenses expressly assumed by the Funds under this Agreement; (ii) all other fees and expenses incurred in the operation of the Funds, including:

(a) investment advisory fees and expenses associated with the investment management of the Fund’s portfolios;

(b) shareholder servicing, recordkeeping and distribution and marketing expenses of the Funds;

(c) expenses for transfer agent(s), registrar(s) and dividend disbursing agent(s);

(d) expenses for custodian(s) and related custodial services;

(e) costs of Fund accounting services provided by third parties to the Funds;

(f) costs of services provided by independent auditors;

(g) costs and services of outside legal and tax counsel (other than counsel sub-contracted with by FAS to perform services under this Agreement) and counsel to the Funds and the Independent Trustees;

(h)       ratings agency fees;

(i)       costs related to short selling (e.g., prime brokerage fees);

(j) postage and courier expenses;

(k) printing expenses;

(l) expenses for XRBL tagging and regulatory document production (e.g., ArcPro) provided by third parties;

(m) travel and lodging expenses;

(n) Fund registration fees, listing fees and filing fees and other Fund organizational expenses;

(o) taxes;

(p) insurance premiums;

(q) costs, including interest expenses, commitment fees, facilities fees and unused line fees of any borrowings made by the Funds;

(r) fees payable to persons who are not FAS employees and not FAS subcontractors;

(s) Fund-allocation of trade association dues;

(t) expenses of obtaining quotations and other pricing information for calculating the value of the Fund’s net assets, including the Fund-allocation of costs of independent pricing services;

(u) expenses related to the Fund’s Directors and Fund Board meetings, including Director’s fees and costs of electronic board books;

(v) fees charged by third party custodians for calculating Form N-PORT and Form N-CEN information requirements;

(w) expenses incurred in connection with bankruptcies, workouts and restructures, proceedings and other claims against the Funds;

(x) costs of third-party legal, tax, accounting or other expert advice incurred in connection with any litigation, threatened litigation or other regulatory proceeding, by or against the Funds, including third-party record-retention costs related to litigation holds; and

(iii) any other expenses approved from time to time by the Fund’s Board as properly payable by the Funds (any such expenses under (i), (ii) and (iii) above reasonably incurred by FAS on the Fund’s behalf “Out of Pocket Expenses”) provided that, any Out of Pocket Expenses incurred by FAS that are payable to or by an affiliate of FAS will not be duplicative of services to be provided by those affiliates under any other agreement with the Funds.

Article 5. Compensation.

A. In addition to Out of Pocket Expenses, for the Administrative Services provided hereunder, excluding CFTC Rule 4.5 Administrative Services, the Investment Company hereby agrees to pay and FAS hereby agrees to accept as full compensation for such services a pro rata “Administrative Services Fee” at the annual rates set forth below on the average daily net assets of each Fund listed on Exhibit A to this Agreement; provided however, that no Administrative Services Fee will be charged for those Funds also listed on Exhibit B to this Agreement.

 

Administrative Services Fee Rate Average Daily Net Assets
of the Investment Complex
0.100% up to$50 billion
0.075% on assets over $50 billion

For purposes of calculating the applicable breakpoint under this Agreement, “Investment Complex” is defined as those Funds listed on Exhibit A to this Agreement but not also listed on Exhibit B.

B. For the CFTC Rule 4.5 Administrative Services provided hereunder, each Registered Fund agrees to pay, and FAS hereby agrees to accept as full compensation for such services, an annual “Administrative Service Charge” of $125,000 per Registered Fund.
C. The Administrative Services Fee, Administrative Services Charge and Out of Pocket Expenses attributable to each Fund shall be accrued by such Fund and paid to FAS no less frequently than monthly, and shall be paid daily upon request of FAS. For the payment period in which this Agreement becomes effective or terminates with respect to any Fund, there shall be an appropriate proration of Administrative Service Fee and Administrative Service Charge payments, on the basis of the number of days that this Agreement is in effect during the month. FAS will maintain detailed information about the Administrative Services Fee, Administrative Service Charge and Out of Pocket Expenses paid by each Fund.

Article 6. Standard of Care and Indemnification.

A. FAS 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 duties under this Agreement. Any person, even though also an officer, director, trustee, partner, employee or agent of FAS, 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 FAS 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 FAS, even though paid by FAS.
B. FAS 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.
C. FAS shall not be responsible for and the Investment Company or Fund shall indemnify and hold FAS, 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, fund accountant, distributor, transfer agent or other party contracted by or approved by the Investment Company or Fund.
2. The reliance on or use by FAS or its agents or subcontractors of information, records and documents in proper form which:

(a)       are received by FAS or its agents or subcontractors from any adviser, sub-adviser, fund accountant, distributor, transfer agent or other third party contracted by or approved by the Investment Company or Fund for use in the performance of services under this Agreement; or

(b)       have been prepared and/or maintained by the Investment Company or its affiliates or any other person or firm on behalf of the Investment Company.

3. The reliance on, or the carrying out by FAS or its agents or subcontractors of a Proper Instruction of the Investment Company or the Fund.

“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) FAS 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 FAS 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 FAS are satisfied that such procedures afford adequate safeguards for the Fund's assets. Proper Instructions may only be amended in writing.

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.
5. Any untrue statement or alleged untrue statement of a material fact contained in the Investment Company’s registration statement, any prospectus or statement of additional information (“SAI”) (as from time to time amended or supplemented) or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Investment Company about FAS by or on behalf of FAS expressly for the use in the registration statement, any prospectus or SAI, or any amendment or supplement thereof.

Provided, however, that FAS shall not be protected by this Article 6.C. from liability for any act or omission resulting from FAS's willful misfeasance, bad faith, gross negligence in the performance of or reckless disregard of its duties under this Agreement.

D. At any time FAS may apply to any officer of the Investment Company or Fund for instructions, and may consult with legal counsel or the Investment Company’s independent accountants with respect to any matter arising in connection with the services to be performed by FAS under this Agreement, and FAS 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 or independent accountant provided such action is not in violation of applicable federal or state laws or regulations.
E. The Investment Company or Fund shall not be responsible for and FAS shall indemnify and hold the Investment Company or Fund harmless against any and all losses, damages, costs, charges, counsel fees, payments, expenses and liabilities arising out of or attributable to FAS’s willful misfeasance, bad faith or gross negligence on its part in the performance of its duties or reckless disregard by it of its duties under this Agreement.
F. In order that the indemnification provisions contained in this Article 6 shall apply, upon the assertion of a claim for which any party may be required to indemnify another, the party seeking indemnification (the “Claimant”), shall promptly notify the indemnifying party (the “Indemnifier”) of such assertion. It is further understood that each party will use all reasonable care to identify and notify the Indemnifier promptly concerning any situation that presents or appears likely to present the probability of such a claim for indemnification against the Indemnifier, provided that the failure to give notice as required by this paragraph 6.F. in a timely fashion shall not result in a waiver of any right to indemnification hereunder unless the Indemnifier is prejudiced thereby and then only to the extent of such prejudice. The Claimant shall permit the Indemnifier to assume the defense of any such claim or any litigation resulting from it, provided that Indemnifier’s counsel that is conducting the defense of such claim or litigation shall be approved by the Claimant (which approval shall not be unreasonably withheld), and that the Claimant may participate in such defense at its expense.

The Indemnifier, in the defense of any such claim or litigation, shall not, without the consent of the Claimant, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term the giving by the alleging party or plaintiff to the Claimant of a release from all liability in respect to such claim or litigation.

Article 7. Assignment.

A. This Agreement shall inure to the benefit of and be binding upon the parties and their respective permitted successors and assigns.
B. FAS may, without further consent on the part of the Investment Company, assign its rights and obligations under this Agreement to any entity ultimately controlled by Federated Investors, Inc.

 

C Except as provided in Paragraph 7.B., FAS may not assign its rights and obligations under this Agreement, whether directly or by operation of law, without the prior written consent of the Investment Company, which consent may not be unreasonably withheld.

Article 8. Representations and Warranties.

FAS represents and warrants to the Investment Company that:

1. It is a statutory 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 each jurisdiction where the nature of its business requires such qualification, and 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; and
4. All requisite corporate proceedings have been taken to authorize it to enter into and perform its obligations under this Agreement.

Article 9. Term and Termination of Agreement.

A. This Agreement shall be effective from the date set forth above and shall continue indefinitely with respect to each Investment Company and Fund until terminated as follows:
1. the Agreement may be terminated by FAS at any time, without payment of any penalty, upon eighteen (18) months’ written notice to the Investment Company;
2. the Agreement may be terminated by the Investment Company at any time, without payment of any penalty, upon eighteen (18) months’ written notice to FAS; however, in the event, of willful misfeasance, bad faith, gross negligence or reckless disregard of its duties by FAS, the Investment Company may terminate the Agreement upon 60 days’ written notice to FAS, provided that FAS has not cured such willful misfeasance, bad faith, gross negligence or reckless disregard of its duties within the 60 day period of such notice of termination.
B. The termination of this Agreement with respect to one Investment Company or Fund shall not result in the termination of this Agreement with respect to any other Investment Company or Fund. Investment Companies that merge or dissolve during the term of the Agreement, shall, upon payment of all outstanding fees and Out of Pocket Expenses, cease to be a party on the effective date of such merger or dissolution.
C. Articles 6 and 19, 20, 21 and 22 shall survive the termination of this Agreement.

Article 10. Amendment.

This Agreement may be amended or modified only by a written agreement executed by both parties.

Article 11. Interpretive and Additional Provisions.

In connection with the operation of this Agreement, FAS 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 any charter document.

Article 12. Governing Law.

This Agreement shall be construed and the provisions hereof interpreted under and in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to any conflicts or choice of laws rule or provision that would result in the application of the domestic substantive laws of any other jurisdiction.

Article 13. Notices.

Except as otherwise specifically provided herein, notices and other writings delivered or mailed postage prepaid to the Investment Company at 4000 Ericsson Drive, Warrendale, Pennsylvania 15086, or to FAS at Federated Investors Tower, Pittsburgh, Pennsylvania, 15222-3779, or to such other address as the Investment Company or FAS may hereafter specify, shall be deemed to have been properly delivered or given hereunder to the respective address.

Article 14. Counterparts.

This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original.

Article 15. 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 16. Successor Administrator.

If a successor Administrator for the Investment Company shall be appointed by the Investment Company, FAS shall upon termination of this Agreement deliver to such successor Administrator at the office of FAS all properties of the Investment Company held by it hereunder. If no such successor Administrator shall be appointed, FAS shall at its office upon receipt of Proper Instructions deliver such properties in accordance with such instructions.

Each Fund will bear all out-of-pocket expenses arising from the transition of Administrative Services to a successor Administrator, including without limitation the expenses of moving or transmitting materials to the successor Administrator.

Article 17. 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 such period shall not exceed fifteen (15) business days), provided that:

1. 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;
2. the suspension of obligations is of no greater scope and of no longer duration than is required by the Force Majeure;
3. no obligations of either party that accrued before the Force Majeure are excused as a result of the Force Majeure; and
4. the non-performing Party uses reasonable efforts to remedy its inability to perform as quickly as possible.

Article 18. Severability.

In the event any provision of this Agreement is held illegal, void or unenforceable, the balance shall remain in effect.

Article 19. Limitations of Liability of the Board and Shareholders of the Investment Company.

The execution and delivery of this Agreement have been authorized by the Board of the Investment Company and signed by an authorized officer of the Investment Company, acting as such, and neither such authorization by the Board 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 member of the Board or Shareholders of the Investment Company, but bind only the property of the Fund, or Class, as provided in the Declaration of Trust.

Article 20. Limitations of Liability of Trustees and Shareholders of the  Company.

The execution and delivery of this Agreement have been authorized by the Trustees of FAS and signed by an authorized officer of FAS, 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 FAS, but bind only the property of FAS, as provided in FAS’s Declaration of Trust.

Article 21. Confidential Information.

A.    Definition. Each party shall safeguard and hold confidential from disclosure to unauthorized parties all Confidential Information of the other party. For purposes of this Article, “Confidential Information” shall mean any and all non-public information which is in any way connected with, derived from or related to the business of the other party which is either designated as confidential or which, by its nature or under the circumstances surrounding its disclosure, reasonably ought to be treated as confidential, and any notes, memoranda, analyses compilations, studies and other documents, whether prepared by the party or others, to the extent they contain or otherwise reflect such information.

B.     Exceptions. Confidential Information shall not include information to the extent such information (i) is already known to the receiving party free of any restriction at the time obtained, including information in the public domain; (ii) is subsequently learned from an independent third party free of restriction; (iii) becomes publicly known through no breach of this Article; or (iv) is independently developed by one party without reference to information which is confidential.

C.     Security. Each party shall take reasonable security precautions, at least as great as the precautions it takes to protect its own confidential information, to keep confidential the Confidential Information.

D.       Use of Information. Confidential Information may be disclosed, reproduced, used, summarized or distributed only as necessary in the ordinary course of business to provide the services identified in the Agreement, and only as otherwise provided hereunder or as specifically required or permitted by applicable law.

Article 22. Privacy.

A. The Investment Company may disclose shareholder/customer non-public information (“NPI”) to FAS as agent of the Investment Company and solely in furtherance of fulfilling FAS’s contractual obligations under this Agreement in the ordinary course of business to support the Investment Company and its shareholders.
B. FAS hereby agrees to be bound to use and redisclose such NPI (i) for the limited purpose of fulfilling its duties and obligations under this Agreement; (ii) as permitted under Regulation S-P; and (iii) as required by any applicable federal or state law or regulation or request of or by any governmental or regulatory authority or self-regulatory organization having jurisdiction over FAS or the Investment Company.
C. FAS represents and warrants that it has implemented, and will continue to carry out for the term of this Agreement, policies and procedures in compliance with all applicable laws and regulations regarding the privacy of shareholder information which are reasonably designed to:
1. insure the security and confidentiality of records and NPI of Investment Company shareholders/customers, including but not limited to encrypting such information as required by applicable federal and state laws or regulations;
2. protect against any anticipated threats or hazards to the security or integrity of Investment Company customer records and NPI; and
3. protect against unauthorized access to or use of such Investment Company customer records or NPI that could result in substantial harm or inconvenience to any Investment Company customer.

 

Article 23. Further Assurance.

Each party agrees to promptly sign all documents and take any additional actions reasonably requested by the other to accomplish the purposes of this Agreement.

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.

 

INVESTMENT COMPANIES
(listed on Exhibit A hereto)

 

 

 

By: /s/ J. Christopher Donahue
Name:  J. Christopher Donahue
Title:  President
 
FEDERATED ADMINISTRATIVE SERVICES

 

 

 

By: /s/ Peter J. Germain
Name:  Peter J. Germain
Title:  President
 
 

 

Second Amended and Restated Agreement for Administrative Services

EXHIBIT A

This contract is for Federated Funds only.

(Revised as of December 1, 2020

 

 

CONTRACT

DATE INVESTMENT COMPANY
11/1/03 Federated Hermes Adjustable Rate Securities Trust
11/1/03   Federated Hermes Adjustable Rate Fund Institutional Shares
11/1/03     Service Shares
6/1/17 Federated Hermes Adviser Series  
6/1/19   Federated Hermes Emerging Markets Equity Fund Class A Shares
6/1/19     Class C Shares
6/1/19     Institutional Shares
6/1/19     Class R6 Shares
12/1/18   Federated Hermes Absolute Return Credit Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
12/1/18   Federated Hermes Global Equity Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
12/1/18   Federated Hermes Global Small Cap Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
3/1/19   Federated Hermes International Developed Equity Fund  
3/1/19     Class A Shares
3/1/19     Class C Shares
3/1/19     Institutional Shares
3/1/19     Class R6 Shares
9/1/18   Federated Hermes SDG Engagement Equity Fund  
9/1/18     Class A Shares
9/1/18     Class C Shares
9/1/18     Class R6 Shares
9/1/18     Institutional Shares
9/1/18   Federated Hermes SDG Engagement High Yield Credit Fund  
9/1/18     Class A Shares
9/1/18     Class C Shares
9/1/18     Class R6 Shares
9/1/18     Institutional Shares
       
12/1/18   Federated Hermes Unconstrained Credit Fund  
12/1/18     Class A Shares
12/1/18     Class C Shares
12/1/18     Institutional Shares
12/1/18     Class R6 Shares
3/1/20   Federated Hermes US SMID Fund  
3/1/20     Class A Shares
3/1/20     Class C shares
3/1/20     Institutional Share
3/1/20     Class R6 Shares
6/1/19   Federated Hermes International Equity Fund  
6/1/19     Class A Shares
6/1/19     Class C Shares
6/1/19     Class R6 Shares
      Institutional Shares
       
       
6/1/19   Federated Hermes International Growth Fund  
6/1/19     Class A Shares
6/1/19     Class C Shares
6/1/19     Class R6 Shares
      Institutional Shares
6/1/19      
6/1/17   Federated Hermes MDT Large Cap Value Fund  
6/1/17     Class A Shares
6/1/17     Class B Shares
6/1/17     Class C Shares
6/1/17     Class R Shares
6/1/17     Class R6 Shares
6/1/17     Institutional Shares
6/1/17     Service Shares
11/1/03 Federated Hermes Core Trust
03/1/16   Emerging Markets Core Fund  
9/1/10   Bank Loan Core Fund  
11/1/03   Federated Mortgage Core Portfolio  
11/1/03   High-Yield Bond Portfolio  
3/1/08 Federated Hermes Core Trust III
    Project and Trade Finance Core Fund  
11/1/03 Federated Hermes Equity Funds
12/1/08   Federated Hermes Clover Small Value Fund  
12/1/08     Class A Shares
12/1/08     Class C Shares
12/1/08     Institutional Shares
12/29/10     Class R Shares
3/1/16     Class R6 Shares
3/1/08   Federated Hermes International Strategic Value Dividend Fund  
3/1/08     Class A Shares
3/1/08     Class C Shares
9/1/16     Class R6 Shares
9/1/16     Institutional Shares
11/1/03   Federated Hermes Kaufmann Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class R Shares
9/1/16     Institutional Shares
9/17/07   Federated Hermes Kaufmann Large Cap Fund  
9/17/07     Class A Shares
9/17/07     Class C Shares
9/17/07     Class R Shares
12/30/13     Class R6 Shares
9/17/07     Institutional Shares
11/1/03   Federated Hermes Kaufmann Small Cap Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
9/1/05     Class R Shares
9/1/17     Class R6 Shares
9/1/15     Institutional Shares
11/1/03   Federated Hermes MDT Mid Cap Growth Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
9/1/06     Class R6 Shares
12/1/09     Institutional Shares
9/1/08   Federated Hermes Prudent Bear Fund  
9/1/08     Class A Shares
9/1/08     Class C Shares
9/1/08     Institutional Shares
12/1/04   Federated Hermes Strategic Value Dividend Fund  
12/1/04     Class A Shares
12/1/04     Class C Shares
3/1/05     Class R6 Shares
6/1/16     Institutional Shares
11/1/03 Federated Hermes Equity Income Fund, Inc.
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
1/25/13     Class R Shares
3/1/12     Institutional Shares
11/1/03 Federated Hermes Fixed Income Securities, Inc.
11/1/03   Federated Hermes Strategic Income Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
1/27/17     Class R6 Shares
9/1/07     Institutional Shares
       
11/1/03   Federated Hermes Municipal Ultrashort Fund  
11/1/03     Class A Shares
11/1/03     Institutional Shares
3/1/19     Class R6 Shares
6/1/08 Federated Hermes Global Allocation Fund
6/1/08     Class A Shares
6/1/08     Class B Shares
6/1/08     Class C Shares
6/1/08     Class R Shares
3/1/16     Class R6 Shares
3/1/09     Institutional Shares
11/1/03 Federated Hermes Government Income Securities, Inc.
11/1/03     Class A Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
3/1/20     Institutional Shares
11/1/03 Federated Hermes Government Income Trust
11/1/03   Federated Hermes Government Income Fund Institutional Shares
11/1/03     Service Shares
11/1/03 Federated Hermes High Income Bond Fund, Inc.
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
1/27/17     Class R6 Shares
1/27/17     Institutional Shares
   
11/1/03 Federated Hermes High Yield Trust
3/1/14   Federated Hermes Opportunistic High Yield Bond Fund Class A Shares
3/1/14     Class C Shares
4/30/10     Service Shares
6/1/13     Institutional Shares
9/1/16     Class R6 Shares
11/1/03 Federated Hermes Income Securities Trust
11/1/03   Federated Hermes Capital Income Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class F Shares
6/1/13     Class R Shares
3/1/12     Institutional Shares
9/1/10   Federated Hermes Floating Rate Strategic Income Fund  
9/1/10     Class A Shares
9/1/10     Class C Shares
9/1/10     Institutional Shares
9/1/16     Class R6 Shares
11/1/03   Federated Hermes Fund for U.S. Government Securities  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
3/1/20     Institutional Shares
11/1/03   Federated Hermes Intermediate Corporate Bond Fund  
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Muni and Stock Advantage Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
5/29/07     Class F Shares
12/1/10     Institutional Shares
12/1/05   Federated Hermes Real Return Bond Fund  
12/1/05     Class A Shares
12/1/05     Class C Shares
12/1/05     Institutional Shares
11/1/03   Federated Hermes Short-Term Income Fund  
12/1/03     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
9/1/16     Class R6 Shares
11/1/03 Federated Hermes Institutional Trust
11/1/03   Federated Hermes Government Ultrashort Fund  
11/1/03     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
3/1/16     Class R6 Shares
11/1/03   Federated Hermes Institutional High Yield Bond Fund  
12/1/07     Institutional Shares
03/1/16     R6 Shares
6/1/05   Federated Hermes Short-Intermediate Total Return Bond Fund  
1/31/14     Class A Shares
9/1/16     Class R6 Shares
6/1/05     Institutional Shares
6/1/05     Service Shares
11/1/03 Federated Hermes Insurance Series
11/1/03   Federated Hermes Fund for U.S. Government Securities II  
11/1/03   Federated Hermes High Income Bond Fund II  
11/1/03     Primary Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Kaufmann Fund II  
11/1/03     Primary Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Managed Volatility Fund II  
6/1/18     Primary Shares
6/1/18     Service Shares
11/1/03   Federated Hermes Government Money Fund II  
9/1/15     Primary Shares
9/1/15     Service Shares
11/1/03   Federated Hermes Quality Bond Fund II  
11/1/03     Primary Shares
11/1/03     Service Shares
11/1/03 Federated Hermes International Series, Inc.
11/1/03   Federated Hermes Global Total Return Bond Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
9/1/16     Institutional Shares
11/1/03 Federated Hermes Investment Series Funds, Inc.
11/1/03   Federated Hermes Corporate Bond Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03
9/1/16 		   

Class F Shares

Class R6 Shares

9/1/07     Institutional Shares
12/1/05 Federated Hermes Managed Pool Series
12/1/05   Federated Hermes Corporate Bond Strategy Portfolio  
12/1/05   Federated Hermes High-Yield Strategy Portfolio  
12/1/05   Federated Hermes International Bond Strategy Portfolio  
12/1/14   Federated Hermes International Dividend Strategy Portfolio  
12/1/05   Federated Hermes Mortgage Strategy Portfolio  
     
7/31/06 Federated Hermes MDT Series
7/31/06   Federated Hermes MDT All Cap Core Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
9/1/16     Class R6 Shares
7/31/06     Institutional Shares
7/31/06   Federated Hermes MDT Balanced Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
9/1/16     Class R6 Shares
7/31/06     Institutional Shares
7/31/06   Federated Hermes MDT Large Cap Growth Fund  
7/31/06     Class A Shares
3/1/07     Class B Shares
7/31/06     Class C Shares
7/31/06     Institutional Shares
7/31/06   Federated Hermes MDT Small Cap Core Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
7/31/06     Institutional Shares
3/1/16     Class R6 Shares
7/31/06   Federated Hermes MDT Small Cap Growth Fund  
7/31/06     Class A Shares
7/31/06     Class C Shares
7/31/06     Institutional Shares
3/1/16     Class R6 Shares
   
11/1/03 Federated Hermes Municipal Bond Fund, Inc.
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
5/29/07     Class F Shares
6/1/17     Institutional Shares
11/1/03 Federated Hermes Municipal Securities Income Trust
11/1/03   Federated Hermes Michigan Intermediate Municipal Fund  
12/1/04     Class A Shares
3/1/20     Institutional Shares
6/1/06   Federated Hermes Municipal High Yield Advantage Fund  
6/1/06     Class A Shares
6/1/06     Class B Shares
6/1/06     Class C Shares
6/1/06     Class F Shares
6/1/13     Institutional Shares
11/1/03   Federated Hermes Ohio Municipal Income Fund  
9/1/08     Class A Shares
11/1/03     Class F Shares
3/1/20     Institutional Shares
11/1/03   Federated Hermes Pennsylvania Municipal Income Fund  
11/1/03     Class A Shares
3/1/20     Institutional Shares
11/1/03 Federated Hermes Premier Municipal Income Fund
  (limited purpose of Administrative Services)
11/1/03     Common Shares
      Auction Market Preferred Shares
10/1/16

Federated Hermes Project and Trade Finance Tender Fund

(limited purpose of Administrative Services)

11/1/03 Federated Hermes Short-Intermediate Municipal Fund
7/1/06     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Federated Hermes Total Return Government Bond Fund
11/1/03     Institutional Shares
11/1/03     Service Shares
3/1/16     R6 Shares
11/1/03 Federated Hermes Total Return Series, Inc.
11/1/03   Federated Hermes Select Total Return Bond Fund  
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Total Return Bond Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
11/1/03     Class R Shares
4/17/15     Class R6 Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Ultrashort Bond Fund  
11/1/03     Class A Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
3/1/19     Class R6 Shares
11/1/03 Federated Hermes Short-Term Government Fund
11/1/03     Class Y Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03

Federated Hermes Short-Intermediate Government Fund

 

11/1/03     Class R Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Federated Hermes World Investment Series, Inc.
11/1/03   Federated Hermes Emerging Market Debt Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
3/1/12     Institutional Shares
11/1/03   Federated Hermes International Leaders Fund  
11/1/03     Class A Shares
11/1/03     Class B Shares
11/1/03     Class C Shares
6/1/13     Class R Shares
6/1/13     Class R6 Shares
6/15/10     Institutional Shares
11/1/03   Federated Hermes International Small-Mid Company Fund  
11/1/03     Class A Shares
11/1/03     Class C Shares
3/1/08     Institutional Shares
11/1/03 Federated Hermes Intermediate Municipal Trust
11/1/03   Federated Hermes Intermediate Municipal Fund  
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03 Federated Hermes Money Market Obligations Trust
11/1/03   Federated Hermes California Municipal Cash Trust  
12/1/04     Capital Shares
11/1/03     Cash II Shares
12/1/04     Cash Series Shares
11/1/03     Wealth Shares
11/1/03     Service Shares
12/1/04   Federated Hermes Capital Reserves Fund  
11/1/03   Federated Hermes Government Obligations Fund  
9/1/17     Administrative Shares
6/1/17     Advisor Shares
12/1/04     Capital Shares
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
12/1/15     Class R Shares
11/1/03     Institutional Shares
12/1/14     Premier Shares
11/1/03     Service Shares
11/1/03     Trust Shares
11/1/03   Federated Hermes Government Obligations Tax Managed Fund  
6/1/15     Automated Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
12/1/04   Federated Hermes Government Reserves Fund  
6/1/15     Class A Shares
6/1/15     Class B Shares
6/1/15     Class C Shares
6/1/15     Class F Shares
6/1/15     Class P Shares
11/1/03   Federated Hermes Institutional Money Market Management  
3/1/14     Capital Shares
9/1/07     Eagle Shares
9/1/07     Institutional Shares
3/1/14     Service Shares
11/1/03   Federated Hermes Institutional Prime Obligations Fund  
11/1/03     Capital Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Institutional Prime Value Obligations Fund  
11/1/03     Capital Shares
11/1/03     Institutional Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Institutional Tax-Free Cash Trust  
12/1/15     Premier Shares
12/1/15     Institutional Shares
11/1/03   Federated Hermes Municipal Obligations Fund  
10/27/17     Automated Shares
11/1/03     Capital Shares
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
6/1/15     Investment Shares
11/1/03     Service Shares
11/1/03     Wealth Shares
11/1/03   Federated Hermes New York Municipal Cash Trust  
11/1/03     Cash II Shares
12/1/04     Cash Series Shares
12/1/04     Wealth Shares
11/1/03     Service Shares
11/1/03   Federated Hermes Prime Cash Obligations Fund  
6/1/17     Advisor Shares
6/1/15     Automated Shares
11/1/03     Capital Shares
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
6/1/15     Class R Shares
11/1/03     Wealth Shares
11/1/03     Service Shares
6/1/15     Trust Shares
11/1/03   Federated Hermes Tax-Free Obligations Fund  
6/1/17     Advisor Shares
11/1/03     Service Shares
11/1/03     Wealth Shares
11/1/03   Federated Hermes Treasury Obligations Fund  
6/13/14     Automated Shares
11/1/03     Capital Shares
11/1/03     Institutional Shares
      Service Shares
11/1/03     Trust Shares
11/1/03   Federated Hermes Trust for U.S. Treasury Obligations  
6/1/15     Cash II Shares
6/1/15     Cash Series Shares
6/1/15     Institutional Shares
11/1/03   Federated Hermes U.S. Treasury Cash Reserves  
11/1/03     Institutional Shares
11/1/03     Service Shares

 

 

 

 

 
 

EXHIBIT B

Funds Not Charged an Administrative Services Fee

 

Emerging Markets Core Fund

Federated Mortgage Core Portfolio

High Yield Bond Core Portfolio

Bank Loan Core Fund

Project and Trade Finance Core Fund

 

 

Exhibit 28 (h) (4) (b) under Form N-1A
Exhibit 10 under Item 601/Reg. S-K

 

 

FUND ACCOUNTING AGREEMENT

 

THIS AGREEMENT dated as of March 1, 2011 is made, severally and not jointly (except that the parties agree that the calculation required by paragraph 31 hereunder shall be joint and not several) by and between the registered investment companies listed on Schedule I to this Agreement, as it may be amended from time to time (each stand-alone registered investment company and each series company of a registered investment company a “Fund” and collectively the “Funds”) and The Bank of New York Mellon, a New York corporation authorized to do a banking business, having its principal place of business at One Wall Street, New York, New York 10286 (hereinafter called the “Bank”).

 

WITNESSETH:

 

In consideration of the mutual agreements herein contained, the Funds and the Bank hereby agree as follows:

 

1.       The Funds hereby appoint the Bank to perform the duties hereinafter set forth.

 

2.       The Bank hereby accepts appointment and agrees to perform the duties hereinafter set forth.

 

3.       Subject to the provisions of paragraphs 4 and 5 below, the Bank shall compute the net asset value per share of each class of shares of each Fund listed on Schedule I hereto (all references to “Fund” shall be deemed to include all classes of the Fund) and shall value the securities held by each Fund (the “Securities”) at such times and dates and in the manner specified in the then currently effective registration statement or offering memorandum (the “Offering Materials”) of each Fund, except that notwithstanding any language in the Offering Materials, in no event shall the Bank be required to determine, or have any obligations with respect to, whether a market price represents any fair or true value, nor to adjust any price to reflect any events or announcements, including, without limitation, those with respect to the issuer thereof, it being agreed that all such determinations and considerations shall be solely for each Fund. However, the Bank agrees to incorporate into its calculation of a Fund’s net asset value any price or factor given by a Fund or by a third party valuation service upon instruction by a Fund.

 

4.       To the extent valuation of Securities or computation of a Fund’s net asset value as specified in the Fund’s then currently effective Offering Materials is at any time inconsistent with any applicable laws or regulations, the Fund shall immediately so notify the Bank in writing and thereafter shall either furnish the Bank at all appropriate times with the values of such Securities and each Fund’s net asset value, or subject to the prior approval of the Bank, instruct the Bank in writing to value the Securities and compute each Fund’s net asset value in a manner which the Fund then represents in writing to be consistent with all applicable laws and regulations. A Fund may also from time to time, subject to the prior approval of the Bank, instruct the Bank in writing to compute the value of the Securities or a Fund’s net asset value in a manner other than as specified in paragraph 3 of this Agreement. By giving such instruction, the Fund shall be deemed to have represented that such instruction is consistent with all applicable laws and regulations and the then currently effective Offering Materials of the Fund. The Fund shall have sole responsibility for determining the method of valuation of Securities and the method of computing each Fund’s net asset value.

 

5.       The Fund shall furnish the Bank with any and all instructions, explanations, information, specifications and documentation as deemed reasonably necessary by the Bank in the performance of its duties hereunder, including, without limitation, the amounts or written formula for calculating the amounts and times of accrual of Fund’s liabilities and expenses. The Bank shall not be required to include as a Fund’s liabilities and expenses, nor as a reduction of net asset value, any accrual for any federal, state, or foreign income taxes unless the Fund shall have specified to the Bank the precise amount of the same to be included in liabilities and expenses or used to reduce net asset value. In calculating the prices for Securities the Bank will use the price services authorized by an authorized person for a Fund listed on Appendix B to this Agreement (“Authorized Persons List”). Such authorized person shall provide the list of authorized pricing services to the Bank in a writing signed by such authorized person substantially in the form of Appendix C to this Agreement. The Bank shall be entitled to rely on the last Appendix C signed by an authorized person actually received by the Bank. A Fund shall also furnish the Bank with bid, offer, or market values of Securities if the Bank notifies the Fund that same are not available to the Bank from a Fund’s Authorized Pricing Services. At any time and from time to time, a Fund also may furnish the Bank with bid, offer, or market values of Securities and instruct the Bank to use such information in its calculations hereunder.

 

6.       The Bank shall advise the Fund, the Fund’s custodian and the Fund’s transfer agent of the net asset value of each Fund upon completion of the computations required to be made by the Bank pursuant to this Agreement.

 

7.       The Bank shall, as agent for the Fund, maintain and keep current the books, accounts and other documents, if any, and perform the additional duties, listed in Appendix A hereto and made a part hereof, as such Appendix A may be amended from time to time. Such books, accounts and other documents shall be made available upon reasonable request for inspection by officers, employees and auditors of a Fund during the Bank’s normal business hours, and shall be preserved for a period of seven (7) years. The Bank and the Fund’s intend to enter into a Service Level Guidelines Agreement (“SLA”), that may be amended from time to time by the parties, that will outline the Fund’s expectations with respect to specific services to be provided by the Bank and the operational mechanics of providing such services.

 

8.       All records maintained and preserved by the Bank pursuant to this Agreement which a Fund is required to maintain and preserve in accordance with the above-mentioned Rules shall be and remain the property of a Fund and shall be surrendered to a Fund promptly upon request in the form in which such records have been maintained and preserved. Upon reasonable request of a Fund, the Bank shall provide in hard copy or electronic format, whichever the Bank shall elect, any records included in any such delivery which are maintained by the Bank on a computer disc, or are similarly maintained, and a Fund shall reimburse the Bank for its expenses of providing the same.

 

9.       The Bank, in performing the services required of it under the terms of this Agreement, shall be entitled to rely fully on the accuracy and validity of any and all instructions, explanations, information, specifications and documentation furnished to it by the Fund and shall have no duty or obligation to review the accuracy, validity or propriety of such instructions, explanations, information, specifications or documentation, including, without limitation, evaluations of Securities; the amounts or formula for calculating the amounts and times of accrual of a Fund’s liabilities and expenses; the amounts receivable and the amounts payable on the sale or purchase of Securities; the amounts receivable or amounts payable for the sale or redemption of Fund shares effected by or on behalf of the Fund. In the event the Bank’s computations hereunder rely, in whole or in part, upon information, including, without limitation, bid, offer or market values of Securities or other assets, or accruals of interest or earnings thereon, from Authorized Pricing Services, the Bank shall not be responsible for, under any duty to inquire into, or deemed to make any assurances with respect to, the accuracy or completeness of such information.

 

10.       The Bank shall not be required to inquire into any valuation of Securities or other assets by a Fund or any third party described in preceding paragraph 9 hereof, even though the Bank in performing services similar to the services provided pursuant to this Agreement for others may receive different valuations of the same or different securities of the same issuers.

 

11.        The Bank, in performing the services required of it under the terms of this Agreement, shall not be responsible for determining whether any interest accruable to a Fund is or will be actually paid, but will accrue such interest until otherwise instructed by a Fund.

 

12.       The Bank shall not be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; interruptions; loss, malfunctions of utilities or communication services, accidents; labor disputes; acts of civil or military authority or governmental actions. Nor shall the Bank be responsible for delays or failures to supply the information or services specified in this Agreement where such delays or failures are caused by the failure of any person(s) other than the Bank to supply any instructions, explanations, information, specifications or documentation deemed reasonably necessary by the Bank in the performance of its duties under this Agreement.

 

13.       No provision of this Agreement shall prevent the Bank from offering services similar or identical to those covered by this Agreement to any other corporations, associations or entities of any kind. Any and all operational procedures, techniques and devices developed by the Bank in connection with the performance of its duties and obligations under this Agreement, including those developed in conjunction with a Fund, shall be and remain the property of the Bank, and the Bank shall be free to employ such procedures, techniques and devices in connection with the performance of any other contract with any other person whether or not such contract is similar or identical to this Agreement.

 

14.       The Bank may, with respect to questions of law, apply to and obtain the advice and opinion of counsel to the independent trustees of a Fund or counsel that is mutually agreed upon by a Fund and Bank and shall be entitled to rely on the advice or opinion of such counsel.

 

15.       The Bank shall be entitled to rely upon any oral instructions received by the Bank and reasonably believed by the Bank to be given by or on behalf of a Fund, even if the Bank subsequently receives written instructions contradicting such oral instructions. The books and records of the Bank with respect to the content of any oral instruction shall be binding and conclusive.

 

16.       Notwithstanding any other provision in this Agreement, the Bank shall have no duty or obligation with respect to, including without limitation, any duty or obligation to determine, or advise or notify a Fund of: (a) the taxable nature of any distribution or amount received or deemed received by, or payable to, a Fund; (b) the taxable nature or effect on a Fund or its shareholders of any corporate actions, class actions, tax reclaims, tax refunds, or similar events; (c) the taxable nature or taxable amount of any distribution or dividend paid, payable or deemed paid, by a Fund to its shareholders; or (d) the effect under any federal, state, or foreign income tax laws of a Fund making or not making any distribution or dividend payment, or any election with respect thereto.

 

17.       The Bank shall be held to a standard of reasonable care in carrying out the provisions of this Agreement except as otherwise provided in this Agreement. The Bank shall not be liable for any loss, damage or expense, including counsel fees and other costs and expenses of a defense against any claim or liability, resulting from, arising out of, or in connection with its performance hereunder, including its actions or omissions, the incompleteness or inaccuracy of any specifications or other information furnished by the Fund, or for any delays caused by circumstances beyond the Bank’s control, unless such loss, damage or expense arises out of the negligence or willful misconduct of the Bank. In no event shall the Bank be liable to the Funds or any third party for special, indirect, or consequential damages, or for lost profits or loss of business, arising under or in connection with this Agreement, even if previously informed of the possibility of such damages and regardless of the form of action.

 

18.       Without limiting the generality of the foregoing, the Fund shall indemnify the Bank against and save the Bank harmless from any loss, damage or expense, including counsel fees and other costs and expenses of a defense against any claim or liability, arising from any one or more of the following:

 

(a) Errors in records or instructions, explanations, information, specifications or documentation of any kind, as the case may be, supplied to the Bank by any third party described in preceding paragraph 9 hereof or by or on behalf of a Fund;

 

(b) Action or inaction taken or omitted to be taken by the Bank pursuant to written or oral instructions of the Fund or otherwise without negligence or willful misconduct;

 

(c) Any action taken or omitted to be taken by the Bank in good faith in accordance with the advice or opinion of counsel for the independent trustees of a Fund;

 

(d) Any improper use by a Fund or its agents, distributor or investment advisor of any valuations or computations supplied by the Bank pursuant to this Agreement;

 

(e) The method of valuation of the Securities, provided that such valuation is carried out in accordance with preceding paragraph 5 of this Agreement, and the method of computing each Fund’s net asset value; or

 

(f) Any valuations of Securities or net asset value provided by the Fund.

 

19.       In consideration for all of the services to be performed by the Bank as set forth herein the Bank shall be entitled to receive reimbursement for all out-of-pocket expenses and such compensation as may be agreed upon in writing from time to time between the Bank and the Fund.

 

20.        Attached hereto as Appendix B is a list of persons duly authorized to give any written or oral instructions, or written or oral specifications, by or on behalf of the Fund. From time to time the Fund may deliver a new Appendix B to add or delete any person and the Bank shall be entitled to rely on the last Appendix B actually received by the Bank.

 

21.       The Fund represents and warrants to the Bank that it has all requisite power to execute and deliver this Agreement, to give any written or oral instructions contemplated hereby, and to perform the actions or obligations contemplated to be performed by it hereunder, and has taken all necessary action to authorize such execution, delivery, and performance.

 

22.       The Bank represents and warrants to each Fund that:

 

(a) it has all requisite powers to execute and deliver this Agreement and to perform the actions or obligations contemplated to be performed by it hereunder, and has taken all necessary action to authorize such execution, delivery and performance;

 

(b) it is conducting its business in material compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted.

 

(c) In connection with the Funds’ obligations under Rule 38a-1 of the Investment Company Act of 1940, as amended (the “1940 Act”) the Bank agrees as follows:

 

(1) the Bank agrees to reasonably cooperate with the Funds and the Funds’ Chief Compliance Officer in the administration of the Funds’ compliance program (“Compliance Program”) as required by the Securities and Exchange Commission (“SEC”);

 

(2) the Bank has implemented and maintains policies and procedures reasonably designed to prevent, detect and promptly correct any violations of Federal Securities Laws with respect to services the Bank provides to the Funds (“Compliance Procedures”);

 

(3) the Bank will provide summaries of such Compliance Procedures that may affect in any material respect, the services provided hereunder by the Bank to the Funds;

 

(4) the Bank periodically reviews the adequacy of such Compliance Procedures and the effectiveness of their implementation and upon the request of a Fund, will provide the then current summaries of internal Compliance Procedures between such reviews;

 

(5) in the event that an officer or employee of the Bank administering this Agreement has actual knowledge of the occurrence of a “Material Compliance Matter” (as defined in Rule 38a-1(e)(2)) which the Bank reasonably believes is related to or will affect the Fund, the Bank will, if permitted by law and the Bank’s regulators, notify the Fund of such occurrence;

 

(6) except where prohibited by law, regulations or rule or as may be directed or instructed by the Bank’s regulators, the Bank agrees to notify the Funds following quarter-end of any inspections by, or other inquiries received from, the SEC or any other regulatory or law enforcement agency after the date of this certification, which relate to the services provided by the Bank to the Funds hereunder. For the avoidance of doubt, such notification obligation shall be satisfied if the notice is contained in any publicly available regulatory filing.

 

(d) The Bank will maintain throughout the term of this Agreement, such contingency plans as it reasonably believes to be necessary and appropriate to recover its operations from the occurrence of a disaster and which are consistent with any statute or regulations to which it is subject that imposes business resumption and contingency planning standards. The Bank agrees to provide the Funds with a summary of its contingency plan as it relates to the systems used to provide the services hereunder and to provide the Funds with periodic updates of such summary upon the Funds’ reasonable request.

 

(e)       The Bank shall perform the services listed in Appendix A hereto, as such Appendix A may be amended from time to time.

 

23.       This Agreement shall not be assignable by a Fund without the prior written consent of the Bank, or by the Bank without the prior written consent of each Fund.

 

24.       This Agreement shall become effective on the date first written above and shall remain in full force and effect for a period of four (4) years from the effective date of the Agreement (the “Initial Term”) and shall automatically continue in full force and effect after such Initial Term unless either party terminates this Agreement by written notice to the other party at least six (6) months prior to the expiration of the Initial Term. Additionally, if the Bank (or any of its affiliates) engages in (i) any act or omission which constitutes a breach of any representation, warranty, term, or obligation contained in this Agreement, which upon notice the Bank has not cured within 5 business days or (ii) any act or omission which constitutes negligence, reckless misconduct, willful malfeasance, or lack of good faith in fulfilling the terms and obligations of this Agreement, then each Fund shall have the right to immediately terminate this Agreement.

 

25.       Either party may terminate this Agreement at any time after the Initial Term upon at least ninety (90) days prior written notice to the other party. Upon the date set forth in such notice, the Bank shall deliver to the Fund all records then the property of the Fund and, upon such delivery, the Bank shall be relieved of all duties and responsibilities under the Agreement.

 

26.       This Agreement may not be amended or modified in any manner except by written agreement executed on behalf of both parties hereto.

 

27.        All laws and rules of construction of the State of New York (other than those relating to choice of laws) shall govern the rights, duties and obligations of the parties hereto. The Fund and the Bank hereby consent to the exclusive jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Fund hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Fund and the Bank each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

 

28.       The performance and provisions of this Agreement are intended to benefit only the Bank and each Fund, and no rights shall be granted to any other person by virtue of this Agreement.

 

29.       The Bank hereby represents and warrants that it has implemented and shall maintain appropriate measures designed to satisfy the requirements of federal and New York law applicable to the Bank with respect to the confidentiality of the portfolio holdings and transactions of each Fund. Upon request, the Bank shall annually make available to each such Fund such summaries or audit reports, including any SAS 70 report, as the Bank generally makes available to its similar customers.

 

30.       The Bank is expressly put on notice of the limitation of liability as set forth in the Declaration of Trust of those registered investment companies which are business trusts and agrees that the obligations and liabilities assumed by a registered investment company or any Fund pursuant to this Agreement, including without limitation, any obligations or liability to indemnify the Bank, shall be limited in any case to the relevant Fund and its assets and that the Bank shall not seek satisfaction of any such obligation from the shareholders of the relevant Fund, from any other Fund nor its shareholders, from the Trustees, Officers, employees or agents of the registered investment company or Fund, or any of them. In addition, in connection with the discharge and satisfaction of any claim made by the Bank involving more than one Fund, the Trustees or Officers of such Funds shall have the exclusive right to determine the appropriate allocations of liability for any claim between or among the Funds.

 

31.       [          ]

 

 

 
 

 

Each of the registered investment companies or series thereof listed on Schedule I to this Agreement

 

By:_/s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

Attest:_not attested

 

THE BANK OF NEW YORK MELLON

 

By: /s Andrew Pfeifer

Name: Andrew Pfeifer

Title: Vice President

 

Attest:_not attested

 
 

APPENDIX A TO FUND ACCOUNTING AGREEMENT

BETWEEN

THE BANK OF NEW YORK MELLON

AND

THE FEDERATED FUNDS

 

I.       The Bank of New York Mellon (the “Bank”), as agent for The Federated Funds (the “Fund”), shall maintain the following records on a daily basis for each Fund.

1.       Report of priced portfolio securities

2.       Statement of net asset value per share

 

II.       The Bank shall maintain the following records on a monthly basis for each Fund:

1.       General Ledger

2.       General Journal

3.       Cash Receipts Journal

4.       Cash Disbursements Journal

5.       Subscriptions Journal

6.       Redemptions Journal

7.       Accounts Receivable Reports

8.       Accounts Payable Reports

9.       Open Subscriptions/Redemption Reports

10.       Transaction (Securities) Journal

11.       Broker Net Trades Reports

 

III.       The Bank shall prepare a Holdings Ledger on a quarterly basis, and a Buy-Sell Ledger (Broker’s Ledger) on a semiannual basis for each Fund

 

The above reports may be printed according to any other required frequency to meet the requirements of the Internal Revenue Service, the Securities and Exchange Commission and the Fund’s Auditors.

 

IV.       For internal control purposes, the Bank uses the Account Journals provided by The Bank of New York Mellon Custody System to record daily settlements of the following for each Fund:

1.       Securities bought

2.       Securities sold

3.       Interest received

4.       Dividends received

5.       Capital stock sold

6.       Capital stock redeemed

7.       Other income and expenses

 

All portfolio purchases for the Fund are recorded to reflect expected maturity value and total cost including any prepaid interest.

 

V.       The Bank shall monitor the triggers used to determine when the ITG fair value pricing procedures may be invoked, as further detailed in the SLA, and inform the appropriate Federated personnel that triggers had been met.

 

VI.       The Bank shall complete monthly preferred shares “asset coverage” test (as that term is defined in Section 18(h) of the Investment Company Act of 1940, as amended) following the compliance procedures contained in the SLA, as such SLA may be amended from time to time by mutual agreement of the parties (the “Compliance Procedures”).

 

VII.       The Bank shall complete monthly preferred shares basic maintenance amount test for Fitch Ratings, Ltd. (“Fitch”) following the Compliance Procedures.

 

VIII.       The Bank shall complete monthly preferred shares basic maintenance amount test for Moody’s Investors Service, Inc. (“Moody’s”) following the Compliance Procedures.

 
 

APPENDIX B

 

 

The Authorized Persons List, as amended from time to time, is hereby incorporated by reference.

 
 

CERTIFICATE OF AUTHORIZED PERSONS

[          ]

 

 

 

 
 

 

APPENDIX C

 

FAIR PRICING AUTHORIZATION MATRIX

 

 

[          ]

 

 
 

SCHEDULE I

 

(UPDATED AS OF 8/1/12)

 

 

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Emerging Market Debt Fund

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Prudent Absolute Return Fund (formerly, Federated Market Opportunity Fund)

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

Federated Unconstrained Bond Fund

 

 

 
 

SCHEDULE II

 

Accounting, Administration and Custody Fee Schedule

Effective March 1, 2011

 

 

[          ]

 

 

 
 

SCHEDULE III

 

Security Pricing Fee Rate Card  
(per day per security)  
Vendor Asset Type Asset Group Daily Fee  
StatPro (FRI) Fixed FOREIGN BOND 0.80  
JP Morgan (Bear Stearns PricingDirect) Derivatives CR.DEFAULT SWAPS 4.00  
  INT.RATE. SWAPS 0.50  
  SWAPTION 1.00  
Fixed CMO 2.00  
  FHLMC 0.80  
  FNMA 0.80  
  FOREIGN BOND 0.80  
  INTEREST ONLY BOND 0.80  
  MORTGAGE RELATED 0.80  
  CORPORATE BOND 0.40  
  INFLATION INDEX 0.40  
  PRINCIPAL ONLY BOND 0.40  
  GNMA1 0.25  
  GNMA2 0.25  
  GOVERNMENT BOND 0.25  
  TREASURY BILL 0.25  
  TREASURY BOND 0.25  
  TREASURY NOTE 0.25  
IDC Derivatives FUTURE 0.15  
  OPTION 0.15  
  SWAPTIONS 0.10  
Equity FOREIGN STOCK 0.50  
  EQUITY(COMMON STOCK) 0.15  
  MUTUAL FUND 0.15  
  PREFERRED STOCK 0.15  
  RIGHT 0.15  
  WARRANTS 0.15  
Fixed FOREIGN BOND 1.11  
  MORTGAGE RELATED 0.89  
  CONVERTIBLE BOND 0.56  
  CORPORATE BOND 0.56  
  DEMAND NOTE 0.56  
  FHLMC 0.56  
  FNMA 0.56  
  GNMA1 0.56  
  GNMA2 0.56  
  GOVERNMENT BOND 0.56  
  INFLATION INDEX 0.56  
  INTEREST ONLY BOND 0.56  
  PRINCIPAL ONLY BOND 0.56  
  STEPPED BOND 0.56  
  TREASURY BILL 0.56  
  TREASURY BOND 0.56  
  TREASURY NOTE 0.56  
Money Market CERTIFICATE OF DEPOSIT 0.56  
  COMMERCIAL PAPER 0.56  
  MONEY MARKET 0.56  
JJ Kenny Money Market MONEY MARKET 0.28  
Muni MUNICIPAL BOND 0.60  
Markit Partners Derivatives Cr. Df. Swap In.Tranche 4.55  
  Swaption on CDS 3.48  
  Swaption on CDX 3.48  
  CMBX Index Swap 2.27  
  CDSwap Single Name ABS 2.27  
  ABX Index Swap 2.27  
  Volatility Swap 2.17  
  Interest Rate Swaption 1.52  
  Cr.Df.Swap Single Name 1.52  
  Cr. Default Swap Index 1.52  
  Swaption on IRS 1.45  
  Option 1.27  
  Index Option 1.27  
  Equity Option 1.27  
  Debt Option 1.27  
  Total Return Swap 1.14  
  FX / Currency Option 0.99  
  Zero Coupon IR Swap 0.99  
  Currency Swap 0.61  
  Interest Rate Swap 0.61  
Muller (IDC) Fixed CORPORATE BOND 0.56  
  DEMAND NOTE 0.56  
  FHLMC 0.56  
  FNMA 0.56  
  FOREIGN BOND 1.11  
  GOVERNMENT BOND 0.56  
  MORTGAGE RELATED 0.89  
  TREASURY BILL 0.56  
  TREASURY BOND 0.56  
  TREASURY NOTE 0.56  
Money Market CERTIFICATE OF DEPOSIT 0.56  
  COMMERCIAL PAPER 0.56  
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FIRST AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS FIRST AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and Bank desire to amend the Agreement subject to the terms and conditions set forth herein; 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:

 

1.       Schedule I to the Agreement is hereby amended and updated to add the following Funds, effective March 25, 2011:

 

Muni Fixed Income Funds:

 

· Federated Municipal Ultrashort Fund, a portfolio of Federated Fixed Income Securities, Inc.
· Federated Premier Municipal Income Fund
· Federated Premier Intermediate Municipal Income Fund
· Federated Short-Intermediate Duration Municipal Trust

Other Funds:

· Federated Muni and Stock Advantage Fund, a portfolio of Federated Income Securities Trust
· Federated International Bond Fund, a portfolio of Federated International Series, Inc.
· Federated International Bond Strategy Portfolio, a portfolio of Federated Managed Pool Series
· Federated Emerging Market Debt Fund, a portfolio of Federated World Investment Series, Inc.
· Federated Prudent DollarBear Fund, a portfolio of Federated Income Securities Trust
· Federated InterContinental Fund, a portfolio of Federated Equity Funds
· Federated International Leaders Fund, a portfolio of Federated World Investment Series, Inc.
· Federated International Small-Mid Company Fund, a portfolio of Federated World Investment Series, Inc.
· Federated International Strategic Value Dividend Fund, a portfolio of Federated Equity Funds

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

[Remainder of Page Intentionally Left Blank]

 

 
 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 25, 2011.

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

By: /s/ Andrew Pfeifer

Title: Vice President

 
 

 

 

COMPLIANCE SUPPORT SERVICES ADDENDUM

TO

FUND ACCOUNTING AGREEMENT

 

 

This Compliance Support Services Addendum is effective as of May 31, 2012 by and between the investment companies listed on Exhibit 1 to this Addendum (each a “Fund” and collectively, the “Funds”) and THE BANK OF NEW YORK MELLON (“BNY Mellon”).

 

BACKGROUND:

 

A. The Funds and BNY Mellon are parties to a certain Fund Accounting Agreement dated March 1, 2011, as amended (the “Agreement”).

 

B. This Addendum is intended to supplement the Agreement with regard to additional services offered by BNY Mellon and shall be applicable solely to the Funds identified at Exhibit 1 hereto.

 

C. Each Fund hereby instructs BNY Mellon to provide the compliance support services (“Support Services”) described in this Addendum, and BNY Mellon acknowledges such instruction and is willing to provide such Support Services pursuant to the terms set forth herein.

 

D. This Background section is hereby incorporated by reference in and made a part of this Addendum.

 

TERMS:

 

In consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

 

1. BNY Mellon shall provide, or cause its affiliates to provide, the Support Services, as they are described at Exhibit 2 hereto, subject to all applicable terms and conditions of the Agreement.

 

2. As compensation for providing the Support Services, the Funds shall pay BNY Mellon a fee or fees as may be agreed to from time to time in writing by the parties hereto.

 

Each Fund hereby represents and warrants to BNY Mellon that (i) the terms of this Addendum, (ii) the fees and expenses associated with this Addendum and (iii) any benefits accruing to BNY Mellon and/or any affiliate of such Fund relating to this Addendum have been fully disclosed to the Board of Trustees of the Fund and that, if required by applicable law, such Board of Trustees has approved or will approve the terms of this Addendum, any such fees and expenses, and any such fees and expenses, and any such benefits.

 

3. Notwithstanding any provision of this Addendum, the Support Services are not, nor shall they be construed as constituting, legal advice or the provision of legal services for or on behalf of a Fund or any other person. Neither this Addendum nor the provision of the Support Services establishes or is intended to establish an attorney-client relationship between BNY Mellon and a Fund or any other person.

 

4. While BNY Mellon, when providing certain of the Support Services, may identify out-of-compliance conditions, BNY Mellon does not, and could not for the fees charged, make any guarantees, representations or warranties with respect to its ability to identify any or all such conditions.

 

5. The parties hereto acknowledge that all work produced by BNY Mellon in providing the Support Services, and the performance of the Support Services in general, by BNY Mellon pursuant to this Addendum will be a the request and direction of each Fund and Fund’s chief compliance officer (“CCO”). BNY Mellon disclaims liability to the Fund, and the Fund is solely responsible, for the selection, qualifications and performance of the Fund’s CCO and the adequacy and effectiveness of the Fund’s compliance program.

 

6. BNY Mellon shall not be responsible for: (a) delays in the transmission to it by the Funds, the Funds’ adviser and entities unaffiliated with BNY Mellon (collectively, for this Addendum, “Third Parties”) of data required for the Support Services, (b) inaccuracies of, errors in or omissions of, such data provided to it by any Third Party, and (c) review of such data provided to it by any Third Party. This Section 6 is a limitation of responsibility provision for the benefit of BNY Mellon, and shall not be used to imply any responsibility or liability against BNY Mellon.

 

7. Miscellaneous.

 

(a) As hereby supplemented, the Agreement shall remain in full force and effect. In the event of a conflict between the terms of this Addendum and the terms of the Agreement, the terms of this Addendum shall control with respect to the Support Services.

 

(b) This Addendum may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The facsimile signature of any party to the Addendum shall constitute the valid and binding execution hereof by such party.

 

(c) If any provision or provisions of this Addendum shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

 

 

(Signature page follows.)

 
 

IN WITNESS WHEREOF, the parties hereto have caused this Addendum to be executed by their duly authorized officers designated below on the date and year noted below.

 

 

 

On behalf of each of the Funds indicated on Exhibit 1,

as may be amended from time to time

 

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Jay F. Nusblatt

Name: Jay F. Nusblatt

Title: Head of U.S. Fund Accounting and Authorized Signer

 

 

 

Effective Date: May 31, 2012

 
 

EXHIBIT 1

 

Fund/Portfolio Name

 

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Municipal Ultrashort Fund

Federated Premier Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

 

C.       Other Funds

 

Federated Enhanced Treasury Income Fund

Federated Global Equity Fund

Federated Unconstrained Bond Fund

Federated Market Opportunity Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated Emerging Market Debt Fund

Federated Prudent DollarBear Fund

Federated InterContinental Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

 
 

EXHIBIT 2

 

Compliance Support Services

 

Description Frequency

1.       Provision of compliance policies and procedures for each applicable BNY Mellon line of business, summary and regulatory mapping of procedures

 

2.       Certification letter attesting BNY Mellon’s compliance with such policies and procedures.

 

3.       Host the Fund’s CCO at BNY Mellon’s operations location.

 

4.       CCO group meetings with Fund’s CCO and other CCOs on regulatory issues and industry best practices.

Annually, with interim updates on an as-needed basis.

 

 

 

Quarterly or annually at client’s request.

 

 

Annually.

 

 

Annually.

 

 
 

 

THE BANK OF NEW YORK MELLON

 

May 31, 2012

 

The Federated Family of Funds

 

 

Re: Compliance Support Services Fees

 

Dear Sir/Madam:

 

This letter constitutes our agreement with respect to compensation to be paid to The Bank of New York Mellon (“BNY Mellon”) under the terms of the Compliance Support Services Addendum dated on or about the date hereof (the “Addendum”) to the Fund Accounting Agreement dated March 1, 2011, as amended (the “Agreement”) between the investment companies listed on Exhibit 1 thereto (each a “Fund” and collectively, the “Funds”) and BNY Mellon for compliance support services provided to or on behalf of the Funds as set forth on Exhibit 2 to the Addendum. The fee for the compliance support services set forth on such Exhibit 2 to the Addendum shall be $5,000 per year for the fund accounting and financial reporting service line. This fee shall be allocated evenly among the Funds.

 

Such fees are in addition to, and in no way affect, other fees to which the parties hereto have agreed (or in the future agree) with respect to the Agreement or any amendment thereto.

 

All services provided pursuant to the Addendum are provided subject to reimbursement of BNY Mellon’s out-of-pocket expenses. Out-of-pocket expenses are assessed at cost and include, but are not limited to, independent compliance reviews, overnight express charges, travel costs, transmission expenses, and all other miscellaneous fees incurred on behalf of the Funds in connection with such services.

 

If the foregoing accurately sets forth our agreement regarding the fees for the services referred to herein and you intend to be legally bound hereby, please execute a copy of this letter and return it to BNY Mellon.

 

Very truly yours,

 

THE BANK OF NEW YORK MELLON

 

By: Jay F. Nusblatt

Name: Jay F. Nusblatt

Title: Head of U.S. Fund Accounting and

Authorized Signer

Agreed and accepted:

 

On behalf of each of the Funds indicated on Exhibit 1 to the Addendum,
as may be amended from time to time.

 

 

By: /s/ Richard A. Novak

Name: Richard A. Novak

Title: Treasurer

 
 

 

Second amendment never completed.

 

 

THIRD AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated June 7, 2005, amended March 25, 2011, December 31, 2012 and April 28, 2014, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to amend the names of certain Funds to Schedule I, effective April 28, 2014; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 28, 2014.

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 4/28/14)

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Enhanced Treasury Income Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund (formerly, Federated Global Equity Fund)

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Absolute Return Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

Federated Unconstrained Bond Fund

 
 

 

FOURTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated June 7, 2005, amended March 25, 2011, December 31, 2012, April 28, 2014, and December 1, 2014, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2014.

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 12/1/14)

A.       Money Market Funds

 

Federated Automated Government Cash Reserves

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

Federated Unconstrained Bond Fund

 

 
 

 

FIFTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated June 7, 2005, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

2. The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 26, 2015.

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 6/25/15)

 

 

A. Money Market Funds

Federated Automated Government Cash

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated International Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Stock Trust

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

 

 

 

 
 

 

 

SIXTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to amend the names to certain Funds and add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2016.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: _/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: _/s/ Armando Fernandez_

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 12/01/16)

 

 

A. Money Market Funds

Federated Automated Government Cash

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Securities Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Emerging Markets Equity Fund

Federated Enhanced Treasury Income Fund

Federated InterContinental Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund (formerly Federated International Bond Fund)

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund (formerly Federated MDT Stock Trust)

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

 

 
 

 

SEVENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to amend the names to certain Funds and delete certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of August 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: _/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /a/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

SCHEDULE I

(UPDATED AS OF 08/1/17)

 

 

B. Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated InterContinental Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

Federated Prudent DollarBear Fund

 

 

*a portfolio of Federated MDT Equity Trust to be effective August 31, 2017.

 

 

 

 

 

 
 

 

 

EIGHTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of October 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: __/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

 

SCHEDULE I

(UPDATED AS OF 10/1/17)

 

 

C. Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated Municipal Trust

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

 

 

*a portfolio of Federated MDT Equity Trust which became effective August 31, 2017.

 

 

 

 

 
 

 

NINTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of November 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: _/s/ Armando Fernandez___________________

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

SCHEDULE I

(UPDATED AS OF 11/1/17)

 

 

A. Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Intermediate Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Markets Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

 

 

*a portfolio of Federated MDT Equity Trust which became effective August 31, 2017.

 

 

 

 

 

 

 
 

 

TENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2017.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez___________________

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 12/1/17)

 

 

A. Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated New York Municipal Income Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated MDT Large Cap Value Fund *

Federated Muni and Stock Advantage Fund

 

 

*a portfolio of Federated MDT Equity Trust which became effective August 31, 2017.

 

 
 

 

ELEVENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to and remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of September 1, 2018.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By:_/s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

SCHEDULE I

(UPDATED AS OF 09/01/18)

 

 

A. Money Market Funds

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes SDG Engagement Equity Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Muni and Stock Advantage Fund

 

 

 

 

 

 

 
 

TWELFTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2018.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 
 

 

 

SCHEDULE I

(UPDATED AS OF 12/01/18)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Muni and Stock Advantage Fund

 

 

 
 

 

THIRTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2019

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

 

SCHEDULE I

(UPDATED AS OF 03/01/19)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated MDT Large Cap Value Fund

Federated Muni and Stock Advantage Fund

 

 

 
 

 

FOURTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of April 1, 2019

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah M. Molini

Name: Deborah M. Molini

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

By: _/s/ Armando Fernandez

Name: Armando Fernandez

Title: Vice President/Managing Director

 

 
 

 

SCHEDULE I

(UPDATED AS OF 04/01/19)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

Federated Mid-Cap Index Fund

Federated Muni and Stock Advantage Fund

Federated Strategic Value Dividend Fund

 

 
 

 

 

FIFTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 1, 2019

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah Molini Kraus

Name: Deborah Molini Kraus

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 
 

 

 

SCHEDULE I

(UPDATED AS OF 06/01/19)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

Federated Mid-Cap Index Fund

Federated Muni and Stock Advantage Fund

Federated Strategic Value Dividend Fund

 

 

 
 

SIXTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to add certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of March 1, 2020.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Deborah Molini Kraus

Name: Deborah Molini Kraus

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell_

Name: James Farrell

Title: Vice-President

 

 
 

 

 

SCHEDULE I

(UPDATED AS OF 03/01/2020)

 

 

A.       Money Market Funds

 

Federated Capital Reserves Fund

Federated Government Obligations Tax-Managed Fund

Federated Government Reserves Fund

Federated U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Intermediate Municipal Trust

Federated Michigan Intermediate Municipal Trust

Federated Municipal High Yield Advantage Fund

Federated Municipal Bond Fund, Inc.

Federated Municipal Ultrashort Fund

Federated Ohio Municipal Income Fund

Federated Pennsylvania Municipal Income Fund

Federated Premier Municipal Income Fund

Federated Short-Intermediate Duration Municipal Trust

 

C.       Other Funds

 

Federated Absolute Return Fund

Federated Emerging Market Debt Fund

Federated Emerging Markets Equity Fund

Federated Global Strategic Value Dividend Fund

Federated Global Total Return Bond Fund

Federated Hermes Absolute Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated International Bond Strategy Portfolio

Federated International Dividend Strategy Portfolio

Federated International Equity Fund

Federated International Growth Fund

Federated International Leaders Fund

Federated International Small-Mid Company Fund

Federated International Strategic Value Dividend Fund

Federated Max-Cap Index Fund

Federated MDT Large Cap Value Fund

Federated Mid-Cap Index Fund

Federated Muni and Stock Advantage Fund

Federated Strategic Value Dividend Fund

 
 

 

SEVENTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to change the name to certain Funds and add Hermes to certain Funds to Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of June 29, 2020.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: /s/ James Farrell

Name: James Farrell

Title: Vice-President

 

 

 

 

SCHEDULE I

(UPDATED AS OF 06/29/2020)

 

 

B. Money Market Funds

Federated Hermes Capital Reserves Fund

Federated Hermes Government Obligations Tax-Managed Fund

Federated Hermes Government Reserves Fund

Federated Hermes U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Hermes Intermediate Municipal Fund

Federated Hermes Michigan Intermediate Municipal Fund

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Municipal Bond Fund, Inc.

Federated Hermes Municipal Ultrashort Fund

Federated Hermes Ohio Municipal Income Fund

Federated Hermes Pennsylvania Municipal Income Fund

Federated Hermes Premier Municipal Income Fund

Federated Hermes Short-Intermediate Duration Municipal Fund

 

C.       Other Funds

 

Federated Hermes Emerging Market Debt Fund

Federated Hermes Emerging Markets Equity Fund

Federated Hermes Global Strategic Value Dividend Fund

Federated Hermes Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Developed Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated Hermes International Bond Strategy Portfolio

Federated Hermes International Dividend Strategy Portfolio

Federated Hermes International Equity Fund

Federated Hermes International Growth Fund

Federated Hermes International Leaders Fund

Federated Hermes International Small-Mid Company Fund

Federated Hermes International Strategic Value Dividend Fund

Federated Hermes Max-Cap Index Fund

Federated Hermes MDT Large Cap Value Fund

Federated Hermes Mid-Cap Index Fund

Federated Hermes Muni and Stock Advantage Fund

Federated Hermes Strategic Value Dividend Fund

 

 
 

 

EIGHTEENTH AMENDMENT TO

FUND ACCOUNTING AGREEMENT

THIS AMENDMENT TO FUND ACCOUNTING AGREEMENT (“Amendment”) is by and between each of the investment companies listed on Schedule I to the Agreement, as defined below (each, a “Fund”), and The Bank of New York Mellon (“Bank”).

 

W I T N E S S E T H:

 

WHEREAS, the Funds and the Bank are parties to that certain Fund Accounting Agreement (the “Agreement”) dated March 1, 2011, as amended, between the Funds listed on Schedule I of the Agreement, as amended and restated and attached hereto and the Bank;

 

WHEREAS, each Fund is registered as a management investment company under the Investment Company Act of 1940, as amended;

 

WHEREAS, the Funds and the Bank desire to remove certain Funds from Schedule I; and

 

WHEREAS, the Funds and Bank are parties to that certain Fund Accounting Agreement (the

 

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:

 

The Funds listed in Schedule I to the Agreement is amended and restated to include the funds listed on Schedule I attached hereto.

 

The Agreement shall remain in full force and effect as amended by this Amendment.

 

IN WITNESS WHEREOF, this Amendment has been executed for and on behalf of the undersigned as of December 1, 2020.

 

 

On behalf of each of the Funds indicated on

Schedule I of the Fund Accounting Agreement,

as amended from time to time

 

By: _________________________________

Name: Ronald J. Ecoff

Title: Assistant Treasurer

 

THE BANK OF NEW YORK MELLON

 

 

By: __________________________________

Name: James Farrell

Title: Vice-President

 

 

 

 

 

 

 

 

 

SCHEDULE I

(UPDATED AS OF 12/1/2020)

 

A. Money Market Funds
B.

Federated Hermes Capital Reserves Fund

Federated Hermes Government Obligations Tax-Managed Fund

Federated Hermes Government Reserves Fund

Federated Hermes U.S. Treasury Cash Reserves

 

B.       Muni Fixed Income Funds

 

Federated Hermes Intermediate Municipal Fund

Federated Hermes Michigan Intermediate Municipal Fund

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Municipal Bond Fund, Inc.

Federated Hermes Municipal Ultrashort Fund

Federated Hermes Ohio Municipal Income Fund

Federated Hermes Pennsylvania Municipal Income Fund

Federated Hermes Premier Municipal Income Fund

Federated Hermes Short-Intermediate Duration Municipal Fund

 

C.       Other Funds

 

Federated Hermes Emerging Market Debt Fund

Federated Hermes Emerging Markets Equity Fund

Federated Hermes Global Total Return Bond Fund

Federated Hermes Absolute Return Credit Fund

Federated Hermes Global Equity Fund

Federated Hermes Global Small Cap Fund

Federated Hermes International Developed Equity Fund

Federated Hermes SDG Engagement Equity Fund

Federated Hermes SDG Engagement High Yield Credit Fund

Federated Hermes Unconstrained Credit Fund

Federated Hermes US SMID Fund

Federated Hermes International Bond Strategy Portfolio

Federated Hermes International Dividend Strategy Portfolio

Federated Hermes International Equity Fund

Federated Hermes International Growth Fund

Federated Hermes International Leaders Fund

Federated Hermes International Small-Mid Company Fund

Federated Hermes International Strategic Value Dividend Fund

Federated Hermes Max-Cap Index Fund

Federated Hermes MDT Large Cap Value Fund

Federated Hermes Mid-Cap Index Fund

Federated Hermes Muni and Stock Advantage Fund

Federated Hermes Strategic Value Dividend Fund

 
 

 

EXECUTION

INVESTMENT COMPANY REPORTING

MODERNIZATION SERVICES AMENDMENT TO

FUND ACCOUNTING AGREEMENT

 

 

This Investment Company Reporting Modernization Services Amendment (the “Amendment”) is made as of March 1, 2018 by and between each of the registered investment companies listed on Schedule I to the Agreement (as defined below) as such Schedule I may be amended from time to time (each registered investment company, the “Fund”) and THE BANK OF NEW YORK MELLON (“BNY Mellon”).

 

BACKGROUND:

 

A. WHEREAS, the Fund and BNY Mellon are parties to a Fund Accounting Agreement dated as of March 1, 2011, as amended (the “Agreement”);

 

B. WHEREAS, this Amendment is an amendment to the Agreement and shall be applicable solely to the portfolios of the Fund identified at Exhibit 1 hereto (the “Portfolios”);

 

C. WHEREAS, the Fund desires that BNY Mellon provide the investment company reporting modernization services described in this Amendment;

 

D. WHEREAS, capitalized terms used in this Amendment shall have the meanings set forth in the Agreement unless otherwise defined herein, and all forms and rules referenced herein are in reference to forms and rules promulgated under the Investment Company Act of 1940, as amended; and

 

E. WHEREAS, the Fund and BNY Mellon desire to amend the Agreement with respect to the foregoing;

 

TERMS:

 

NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

 

1. BNY Mellon shall provide the following services to the Fund for the Portfolios and the Agreement is hereby amended to include the following with the services described therein:

 

1.1 As selected by the Fund, BNY Mellon shall provide services following a shared service operating model. This operating model requires the Fund or adviser to file the reports described in the services noted below.

 

1.2 FORM N-PORT. BNY Mellon, subject to the limitations described herein and its timely receipt of all necessary information related thereto, will collect, aggregate and normalize the data required for the submission of Form N-PORT, related filing types, and any forms adopted to replace such forms. BNY Mellon will review and transmit to the Funds’ third party filing agent each draft N-PORT and provide reasonable cooperation to the relevant Fund and/or such Fund’s third party agent as necessary to resolve any issues with the receipt of the Form N-PORT data provided.

 

1.2.1 The timely receipt of necessary information referred to above will be determined by mutual agreement of BNY Mellon and the Fund in advance of the preparation of the initial Form N-PORT.

 

1.3 FORM N-CEN. BNY Mellon, subject to the limitations described herein and its timely receipt of all necessary information related thereto, will collect, aggregate and normalize the data required for the submission of Form N-CEN, related filing types, and any forms adopted to replace such forms. BNY Mellon will review and transmit to the Funds’ third party filing agent each draft N-CEN and provide reasonable cooperation to the relevant Fund and/or such Fund’s third party agent as necessary to resolve any issues with the receipt of the Form N-CEN data provided.

 

1.3.1 The timely receipt of necessary information referred to above will be determined by mutual agreement of BNY Mellon and the Fund in advance of the preparation of the initial Form N-CEN.

 

2. BNY Mellon shall not be responsible for: (a) delays in the transmission to it by the Fund, the Fund’s adviser and entities unaffiliated with BNY Mellon (collectively, for this Amendment, “Third Parties”) of data required for the reports described herein, (b) inaccuracies of, errors in or omissions of, such data provided to it by any Third Party, and (c) validation of such data provided to it by any Third Party. This Section 2 is a limitation of responsibility provision for the benefit of BNY Mellon, and shall not be used to imply any responsibility or liability against BNY Mellon.

 

3. The Fund shall be responsible for the retention of the filed reports described herein in accordance with any applicable rule or regulation.

 

4. Notwithstanding any provision of this Amendment, the services described herein are not, nor shall they be construed as constituting, legal advice or the provision of legal services for or on behalf of the Fund or any other person. Neither this Amendment nor the provision of the services establishes or is intended to establish an attorney-client relationship between BNY Mellon and the Fund or any other person.

 

5. As compensation for the services described herein, the Fund will pay to BNY Mellon such fees as may be agreed to in writing by the Fund and BNY Mellon.
 
 
6. Miscellaneous.

 

(a) As hereby amended and supplemented, the Agreement shall remain in full force and effect. In the event of a conflict between the terms of this Amendment and the terms of the Agreement, the terms of this Amendment shall control with respect to the services described herein.

 

(b) This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. The facsimile signature of any party to this Amendment shall constitute the valid and binding execution hereof by such party.

 

(c) If any provision or provisions of this Amendment shall be held to be invalid, unlawful or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

 

 

 

(Signature page follows.)

 
 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly authorized officers designated below on the date and year first above written.

 

 

 

EACH OF THE REGISTERED INVESTMENT

COMPANIES LISTED ON EXHIBIT I

 

 

By: /s/ Lori A. Hensler

Name: Lori A. Hensler

Title: Treasurer

 

 

II.     THE BANK OF NEW YORK MELLON

 

 

By: /s/Armando Fernandez

Name: Armando Fernandez

Title: Vice President

 

Date: March 2, 2018

 

 
 

 

 

EXHIBIT 1

 

N-PORT Services

 

Portfolio Name ID, Cusip or Ticker Symbol
Federated Hermes Emerging Market Debt Fund 31428U771
Federated Hermes Emerging Market Debt Fund 31428U763
Federated Hermes Emerging Market Debt Fund 31428U755
Federated Hermes Emerging Market Debt Fund 31428U615
Federated Hermes Intermediate Municipal Fund 458810108
Federated Hermes Intermediate Municipal Fund   458810603
Federated Hermes Global Strategic Value Dividend Fund 31421N865
Federated Hermes Global Strategic Value Dividend Fund 31421N857
Federated Hermes Global Strategic Value Dividend Fund 31421N840
Federated Hermes Global Strategic Value Dividend Fund 31421N832
Federated  Hermes Global Total Return Bond Fund 31420G408
Federated Hermes Global Total Return Bond Fund 31420G507
Federated Hermes Global Total Return Bond Fund 31420G606
Federated Hermes Global Total Return Bond Fund 31420G879
Federated Hermes International Bond Strategy Portfolio 31421P308
Federated Hermes International Dividend Strategy Portfolio 31421P605
Federated Hermes International Leaders Fund 31428U847
Federated Hermes International Leaders Fund 31428U839
Federated Hermes International Leaders Fund 31428U821
Federated Hermes International Leaders Fund 31428U623
Federated Hermes International Leaders Fund 31428U599
Federated Hermes International Leaders Fund 31428U581
Federated Hermes International Small-Mid Company Fund 31428U748
Federated Hermes International Small-Mid Company Fund 31428U730
Federated Hermes International Small-Mid Company Fund 31428U722
Federated Hermes International Small-Mid Company Fund 31428U631
Federated Hermes  International Strategic Value Dividend Fund 314172388
Federated Hermes International Strategic Value Dividend Fund 314172370
Federated Hermes International Strategic Value Dividend Fund 314172362
Federated Hermes International Strategic Value Dividend Fund 31421N824
Federated Hermes Michigan Intermediate Municipal Fund 313923302
Federated Hermes Muni and Stock Advantage Fund 31420C837
Federated Hermes Muni and Stock Advantage Fund 31420C829
Federated Hermes Muni and Stock Advantage Fund 31420C811
Federated Hermes Muni and Stock Advantage Fund 31420C720
Federated Hermes Muni and Stock Advantage Fund 31420C654
Federated Hermes  Municipal High Yield Advantage Fund 313923864
Federated Hermes Municipal High Yield Advantage Fund 313923856
Federated Hermes Municipal High Yield Advantage Fund 313923849
Federated Hermes Municipal High Yield Advantage Fund 313923831
Federated Hermes Municipal High Yield Advantage Fund 313923815
Federated Hermes Municipal Bond Fund, Inc. 313913105
Federated Hermes Municipal Bond Fund, Inc. 313913204
Federated Hermes Municipal Bond Fund, Inc. 313913303
Federated Hermes Municipal Bond Fund, Inc. 313913402
Federated Hermes Municipal Bond Fund, Inc. 313913600
Federated Hermes Municipal Ultrashort Fund 31417P866
Federated Hermes Municipal Ultrashort Fund 31417P858
Federated Hermes Ohio Municipal Income Fund 313923823
Federated Hermes Ohio Municipal Income Fund 313923609
Federated Hermes Pennsylvania Municipal Income Fund 313923708
Federated Hermes Pennsylvania Municipal Income Fund 313923807
Federated Hermes Premier Municipal Income Fund 31423P108
Federated Hermes Short-Intermediate Municipal Fund 313907305
Federated Hermes Short-Intermediate Municipal Fund 313907107
Federated Hermes Short-Intermediate Municipal Fund 313907206

 

 
 

N-CEN Services

 

Portfolio Name ID, Cusip or Ticker Symbol and Fund
Federated  Hermes Emerging Market Debt Fund 31428U771
Federated Hermes Emerging Market Debt Fund 31428U763
Federated Hermes Emerging Market Debt Fund 31428U755
Federated Hermes Emerging Market Debt Fund 31428U615
Federated Hermes Government Obligations Tax-Managed Fund 60934N856
Federated Hermes Government Obligations Tax-Managed Fund 60934N849
Federated Hermes Government Obligations Tax-Managed Fund 608919494
Federated Hermes Government Reserves Fund 608919205
Federated Hermes Government Reserves Fund 608919544
Federated Hermes Government Reserves Fund 608919536
Federated Hermes Government Reserves Fund 608919528
Federated Hermes Government Reserves Fund 908919510
Federated Hermes Intermediate Municipal Fund 458810108
Federated Hermes Intermediate Municipal Fund 458810603
Federated Hermes Global Strategic Value Dividend Fund 31421N865
Federated Hermes Global Strategic Value Dividend Fund 31421N857
Federated Hermes Global Strategic Value Dividend Fund 31421N840
Federated Hermes Global Strategic Value Dividend Fund 31421N832
Federated Hermes Global Total Return Bond Fund 31420G408
Federated Hermes Global Total Return Bond Fund 31420G507
Federated Hermes Global Total Return Bond Fund 31420G606
Federated Hermes Global Total Return Bond Fund 31420G879
Federated Hermes International Bond Strategy Portfolio 31421P308
Federated Hermes International Dividend Strategy Portfolio 31421P605
Federated Hermes International Leaders Fund 31428U847
Federated Hermes International Leaders Fund 31428U839
Federated Hermes International Leaders Fund 31428U821
Federated Hermes International Leaders Fund 31428U623
Federated Hermes International Leaders Fund 31428U599
Federated Hermes International Leaders Fund 31428U581
Federated Hermes International Small-Mid Company Fund 31428U748
Federated Hermes International Small-Mid Company Fund 31428U730
Federated Hermes International Small-Mid Company Fund 31428U722
Federated Hermes International Small-Mid Company Fund 31428U631
Federated Hermes International Strategic Value Dividend Fund 314172388
Federated  Hermes International Strategic Value Dividend Fund 314172370
Federated Hermes International Strategic Value Dividend Fund 314172362
Federated Hermes International Strategic Value Dividend Fund 31421N824
Federated Hermes Michigan Intermediate Municipal Fund 313923302
Federated Hermes Muni and Stock Advantage Fund 31420C837
Federated Hermes Muni and Stock Advantage Fund 31420C829
Federated Hermes Muni and Stock Advantage Fund 31420C811
Federated Hermes Muni and Stock Advantage Fund 31420C720
Federated Hermes Muni and Stock Advantage Fund 31420C654
Federated Hermes Municipal High Yield Advantage Fund 313923864
Federated Hermes Municipal High Yield Advantage Fund 313923856
Federated Hermes Municipal High Yield Advantage Fund 313923849
Federated Hermes Municipal High Yield Advantage Fund 313923831
Federated Hermes Municipal High Yield Advantage Fund 313923815
Federated Hermes Municipal Bond Fund, Inc. 313913105
Federated Hermes Municipal Bond Fund, Inc. 313913204
Federated Hermes Municipal Bond Fund, Inc. 313913303
Federated Hermes Municipal Bond Fund, Inc. 313913402
Federated Hermes Municipal Bond Fund, Inc. 313913600
Federated Hermes Municipal Ultrashort Fund 31417P866
Federated Hermes Municipal Ultrashort Fund 31417P858
Federated Hermes Ohio Municipal Income Fund 313923823
Federated Hermes Ohio Municipal Income Fund 313923609
Federated Hermes Pennsylvania Municipal Income Fund 313923708
Federated Hermes Pennsylvania Municipal Income Fund 313923807
Federated Hermes Premier Municipal Income Fund  31423P108
Federated Hermes Short-Intermediate Municipal Trust 313907305
Federated Hermes Short-Intermediate Municipal Fund 313907107
Federated Hermes Short-Intermediate Municipal Fund 313907206
Federated Hermes U.S. Treasury Cash Reserves 60934N682
Federated Hermes U.S. Treasury Cash Reserves 60934N674

 

 
 

 

 

 

[          ]

 

 

Exhibit 28 (j) under Form N-1A
Exhibit 23 under Item 601/Reg. S-K

 

 

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

 

We consent to the references to our firm under the captions “Financial Highlights” in the Prospectus and “Independent Registered Public Accounting Firm” in the Statement of Additional Information in Post-Effective Amendment Number 225 to the Registration Statement (Form N-1A, No. 33-3164) of Federated Hermes Income Securities Trust (formerly, Federated Income Securities Trust), and to the incorporation by reference of our report, dated December 23, 2020, on Federated Hermes Muni and Stock Advantage Fund (formerly, Federated Muni and Stock Advantage Fund) (one of the portfolios constituting Federated Hermes Income Securities Trust (formerly, Federated Income Securities Trust)) included in the Annual Shareholder Report for the fiscal year ended October 31, 2020.

 

 

/s/ ERNST & YOUNG LLP

 

 

 

Boston, Massachusetts

December 23, 2020

 

 

 

 

Exhibit 28 (n) under Form N-1A
Exhibit 99 under Item 601/Reg. S-K

 

MULTIPLE CLASS PLAN

 

Current as of December 1, 2020

 

 

This Multiple Class Plan (this "Plan") is adopted by the investment companies (the "Multiple Class Companies") identified in exhibits hereto (the "Class Exhibits") as offering separate classes of shares ("Classes").

 

1.       Purpose

 

This Plan is adopted pursuant to Rule 18f-3 under the Investment Company Act of 1940, as amended (the "Rule"), in connection with the issuance by the Multiple Class Companies and any series thereof (collectively the "Funds") of more than one Class of shares in reliance on the Rule. In documenting the exchange features for each Class, this plan describes the arrangements whereby shares of Funds may be exchanged for or from certain other investment companies which are not part of this Plan. In documenting the separate arrangement for distribution of each Class, this Plan also sets forth the schedules for variations in sales loads and contingent deferred sales charges required by Rules 22d-1 and 6c-10, respectively. Financial intermediary-specific front-end sales load and contingent deferred sales charge (“CDSC”) waivers, front-end sales load discounts and exchange features (collectively, “sales charge variations”) required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

 

2.       Separate Arrangements/Class Differences

 

The arrangements for shareholders services or the distribution of shares, or both, for each Class shall be set forth in the applicable Class Exhibit hereto.

 

3.       Expense Allocations

 

Each Class shall be allocated those shareholder service fees and fees and expenses payable under a Rule 12b-1 Plan specified in the Class Exhibit. In addition the following expenses may be specifically allocated to each Class to the extent that the Fund's officers determine that such expenses are actually incurred in a different amount by that Class, or that the Class receives services of a different kind or to a different degree than other Classes:

 

(a)       transfer agent fees;

 

(b) printing and postage expenses related to preparing and distributing materials such as shareholder reports, prospectuses, and proxies to current shareholders;

 

(c) blue sky registration fees;

 

(d) SEC registration fees;

 

(e) the expense of administrative personnel and services as required to support the shareholders;

 

(f) litigation or other legal expenses relating solely to one Class; or

 

(g) other expenses incurred on behalf of the Class or for events or activities pertaining exclusively to the Class.

 

4.       Conversion and Exchange Features

 

The conversion and exchange features for shares of each Class shall be as set forth in the applicable Class Exhibit hereto.

 

5.       Amendment

 

Any material amendment of this Plan or any Class Exhibit hereto by any Multiple Class Company is subject to the approval of a majority of the directors/trustees of the applicable Multiple Class Company and a majority of the directors/trustees of the Multiple Class Company who are not interested persons of the Multiple Class Company, pursuant to the Rule.

 

 
 

 

Class A Shares Exhibit

To

Multiple Class Plan

(Revised 12/1/20)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class A Shares will consist of sales and shareholder servicing by financial intermediaries in consideration of the payment of a portion of the applicable sales load (“dealer reallowance”)and a shareholder service fee. When indicated on the Schedule to this Exhibit, the principal underwriter and financial intermediaries may also receive payments for distribution and/or administrative services under a 12b-1 Plan. In connection with this basic arrangement, Class A Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class A Shares
Sales Load Up to 5.5% of the public offering price, as set forth in the attached Schedules
Contingent Deferred Sales Charge ("CDSC") 0.00%
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Redemption Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class A Shares as described in Section 3 of the Plan

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, Class A Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Class A Shares that are not subject to a contingent deferred sales charge (“CDSC”) based upon the redemption of a “Large Ticket” purchase made within 24 months may be converted to any other Share Class within the same Fund, provided that shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Class A Shares may be exchanged for Class A Shares of any other Fund  

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

 
 

3.       EXCEPTIONS TO BASIC ARRANGEMENTS

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales loads and contingent deferred sales charges are as follows:

 

(A)       BASIC SALES LOAD SCHEDULE

 

The basic schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Load as a Percentage of

Public Offering Price

Less than $50,000 5.50%
$50,000 but less than $100,000 4.50%
$100,000 but less than $250,000 3.75%
$250,000 but less than $500,000 2.50%
$500,000 but less than $1 million 2.00%
$1 million or greater 0.00%

 

(B)       FIXED INCOME SALES LOAD SCHEDULE

 

The schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Charge as a Percentage of

Public Offering Price

Less than $100,000 4.50%
$100,000 but less than $250,000 3.75%
$250,000 but less than $500,000 2.50%
$500,000 but less than $1 million 2.00%
$1 million or greater 0.00%

 

(C)       MODIFIED FIXED INCOME SALES LOAD SCHEDULE

 

The schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Charge as a Percentage of

Public Offering Price

Less than $100,000 1.00%
$100,000 or greater 0.00%

 

(D)       MONEY MARKET AND ULTRASHORT BOND LOAD SCHEDULE

 

The Schedule of sales loads for Class A Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Charge as a Percentage of

Public Offering Price

 
 
All purchases 0.00%  

 

 

(E)       "LARGE TICKET" PURCHASES

 

Unless otherwise indicated on the Schedule to this Exhibit, a financial intermediary that places an order to purchase $1,000,000 or more of Class A Shares shall receive from the principal underwriter an advance commission equal to 75 basis points (0.75%) of the public offering price. In such event, notwithstanding anything to the contrary in the Plan or this Exhibit, such Class A Shares shall be subject to a contingent deferred sales charge upon redemption within 24 months of purchase equal to 75 basis points (0.75%) of the lesser of (x) the purchase price of the Class A Shares or (y) the redemption price of the Class A Shares. Any contingent deferred sales charge received upon redemption of Class A Shares shall be paid to the principal underwriter in consideration of the advance commission.

 

(F)       REDUCING OR ELIMINATING THE SALES LOAD

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, in applying the exceptions set forth in this Section 3, the purchase amount shall take into account:

 

·                                   Discounts achieved by combining concurrent purchases of and/or current investment in Class A, Class B, Class C, Class F, and Class R Shares, made or held by (or on behalf of) the investor, the investor’s spouse, and the investor’s children under age 21 (regardless of whether the purchases or investments are made or held directly or through an investment professional or through a single-participant retirement account); provided that such purchases and investments can be linked using tax identification numbers (TINs), social security numbers (SSNs), or Broker Identification Numbers (BINs); and
·                                   Letters of intent to purchase a certain amount of Class A Shares within a thirteen month period.

 

(G)       waiver of sales load

 

Continent upon notification to the Fund’s Transfer Agent, no sales load shall be assessed on purchases of Class A Shares made:

 

·                                   within 120 days of redeeming shares of an equal or greater amount;
·                                   through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive a dealer reallowance on purchases under such program;
·                                   with reinvested dividends or capital gains;
·                                   or Class A Shares, issued in connection with the merger, consolidation, or acquisition of the assets of another fund.  Further, no sales load shall be assessed on purchases of Shares made by a shareholder that originally became a shareholder of a Federated Fund pursuant to the terms of an agreement and plan of reorganization which permits shareholders to acquire Shares at NAV provided that such Shares are held directly with the Fund’s transfer agent.  If the Shares are held through a financial intermediary the sales charge waiver will not apply;
·                                   by Federated Life Members (Federated shareholders who originally were issued shares through the “Liberty Account”, which was an account for the Liberty Family of Funds on February 28, 1987, or who invested through an affinity group prior to August 1, 1987, into the Liberty Account);
·                                   by Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pensions or profit-sharing plans for the above persons; and
·                                   pursuant to the exchange privilege.  However, this sales charge waiver may not apply to Class A Shares purchased pursuant to the exchange privilege if a shareholder did not previously pay a sales load upon its initial purchase of Class A Shares.

 

 
 

 

(H)       WAIVER OF CONTINGENT DEFFERED SALES CHARGE ON LARGE-TICKET PURCHASES

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions.

 

·                                   following the death of the last surviving shareholder on the account, or the post-purchase disability of all registered shareholder(s), as defined in Section 72(m)(7) of the Internal Revenue Code.
·                                   due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·                                   representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·                                   of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase;
·                                   of Shares that were reinvested within 120 days of a previous redemption;
·                                   of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·                                   of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·                                   of Shares purchased with reinvested dividends or capital gains;
·                                   imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and
·                                   of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

 

 

(I) SALES CHARGE WAIVERS FOR SHAREHOLDERS PURCHASING THROUGH CERTAIN FINANCIAL INTERMEDIARIES

 

Financial intermediary sales charge variations required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

 

 

4.       SPECIAL OFFER PROGRAM

 

[NOTE: The 30 month CDSC period connected with of this program expired in September of 2002]

During the Special Offer Program which took place in March, 2000, the sales load was waived on purchases of Class A Shares of Federated Aggressive Growth Fund, Federated Communications Technology Fund, Federated Large Cap Growth Fund, and Federated International Small Company Fund (the "Special Offer Funds"). Instead, the principal underwriter paid an advance commission of 2.00% of the offering price of the Special Offer Funds to intermediaries participating in the Special Offer Program. Class A Shares purchased through this Special Offer were subject to a CDSC of 2.00% on redemptions which occurred within 30 months after the purchase, which amount was to be paid to the principal underwriter in consideration for advancing the commission to intermediaries. Class A Shares of the Special Offer Funds purchased during the Special Offer Program could be exchanged with Class A Shares of other Special Offer Funds with no imposition of a sales load or CDSC fee. Class A Shares of the Special Offer Funds purchased during the Special Offer Program which were exchanged for Class A Shares of other Funds during the 30 month CDSC period incurred the CDSC fee upon redemption. However, no sales load was charged for such an exchange.

 

5.       REDEMPTION FEE

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class A Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

 

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class A Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class A Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class A Shares redeemed due to the death of the last surviving shareholder on the account.

 
 

Schedule of Funds
Offering Class A Shares

 

The Funds set forth on this Schedule each offer Class A Shares on the terms set forth in the Class A Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

1.       CLASS A SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Hermes Adviser Series    
Federated Hermes Emerging Markets Equity Fund 0.05% None
Federated Hermes Absolute Return Credit Fund 0.05% None
Federated Hermes Conservative Microshort Fund

0.25%

(15 bps Active;

10 bps Dormant)

None
Federated Hermes Conservative Municipal Microshort Fund

0.25%

(15 bps Active;

10 bps Dormant)

None
Federated Hermes Global Equity Fund 0.05% None
Federated Hermes Global Small Cap Fund 0.05% None
Federated Hermes International Equity Fund 0.05% None
Federated Hermes Unconstrained Credit Fund 0.05% None
Federated Hermes US SMID Fund 0.05% None
Federated Hermes SDG Engagement Equity Fund 0.05% None
Federated Hermes SDG Engagement High Yield Credit Fund 0.05% None
Federated Hermes International Developed Equity Fund 0.05% None
Federated Hermes International Growth Fund 0.05% None
Federated Hermes MDT Large Cap Value Fund 0.05% None
Federated Hermes Equity Funds    
Federated Hermes Clover Small Value Fund 0.05% None
Federated Hermes International Strategic Value Dividend Fund 0.05% None
Federated Hermes Kaufmann Fund 0.25% None
Federated Hermes Kaufmann Large Cap Fund 0.25% None
Federated Hermes Kaufmann Small Cap Fund 0.25% None
Federated Hermes MDT Mid Cap Growth Fund None None
Federated Hermes Prudent Bear Fund 0.05% None
Federated Hermes Strategic Value Dividend Fund 0.05% None
     
Federated Hermes Equity Income Fund, Inc. 0.05% None
     
Federated Hermes Global Allocation Fund None None
     
Federated Hermes High Yield Trust    
     
Federated Hermes Income Securities Trust    
Federated Hermes Capital Income Fund None None
Federated Hermes Muni and Stock Advantage Fund 0.05% None
Federated Hermes Real Return Bond Fund 0.05% None
     
Federated Hermes MDT Series    
Federated Hermes MDT All Cap Core Fund 0.05% None
Federated Hermes MDT Balanced Fund 0.05% None
Federated Hermes MDT Large Cap Growth Fund 0.05% None
Federated Hermes MDT Small Cap Core Fund 0.05% None
Federated Hermes MDT Small Cap Growth Fund 0.05% None

 

 

   
Federated Hermes World Investment Series, Inc.    
Federated Hermes International Leaders Fund 0.05% None
Federated Hermes International Small-Mid Company Fund 0.05% None

 

2. CLASS A SHARES SUBJECT TO THE FIXED INCOME LOAD SCHEDULE

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Hermes Fixed Income Securities, Inc.    
Federated Hermes Strategic Income Fund None None
     
Federated Hermes Government Income Securities, Inc. 0.05% None
     
Federated Hermes High Income Bond Fund, Inc. None 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Hermes High Yield Trust    
Federated Hermes Opportunistic High Yield Bond Fund 0.05% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Hermes Income Securities Trust    
Federated Hermes Fund for U.S. Government Securities None None
     
Federated Hermes International Series, Inc.    
Federated Hermes Global Total Return Bond Fund (formerly Federated International Bond Fund) 0.25% None
     
Federated Hermes Investment Series Funds, Inc.    
Federated Hermes Corporate Bond Fund 0.05% None
     
Federated Hermes Municipal Bond Fund, Inc. None None
     
Federated Hermes Municipal Securities Income Trust    
Federated Hermes Municipal High Yield Advantage Fund 0.05% None
Federated Hermes Ohio Municipal Income Fund 0.05% None
Federated Hermes Pennsylvania Municipal Income Fund 0.05% None
     
Federated Hermes Total Return Series, Inc.    
Federated Hermes Total Return Bond Fund 0.25% None
     
Federated Hermes World Investment Series, Inc.    
Federated Hermes Emerging Market Debt Fund None None

 

 
 

 

3. Class A Shares Subject to the MODIFIED FIXED INCOME Sales Load Schedule

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Hermes Income Securities Trust    
Federated Hermes Floating Rate Strategic Income Fund 0.05% None
Federated Hermes Short-Term Income Fund 0.05% None
     
Federated Hermes Institutional Trust    
Federated Hermes Short-Intermediate Total Return Bond Fund 0.05% None
     
Federated Hermes Short-Intermediate Municipal Fund 0.05% None

 

4. Class A Shares Subject to the Money Market AND ULTRASHORT BOND Load Schedule

 

Multiple Class Company

Series

12b-1

Fee

Redemption

Fee

     
Federated Hermes Fixed Income Securities, Inc.    
Federated Hermes Municipal Ultrashort Fund None None
     
Federated Hermes Institutional Trust    
Federated Hermes Government Ultrashort Fund None None
     
Federated Hermes Total Return Series, Inc.    
Federated Hermes Ultrashort Bond Fund None None
     
Federated Hermes Money Market Obligations Trust    
Federated Hermes Government Reserves Fund 0.45% None

 

5.       Class A Shares Not Participating in the Large Ticket Purchase Program

Multiple Class Company Series
Federated Hermes Fixed Income Securities, Inc. Federated Hermes Municipal Ultrashort Fund
Federated Hermes Income Securities Trust Federated Hermes Short-Term Income Fund
  Federated Hermes Floating Rate Strategic Income Fund
Federated Hermes Institutional Trust Federated Hermes Government Ultrashort Fund
Federated Hermes Short-Intermediate Duration Municipal Trust  
Federated Hermes Total Return Series, Inc. Federated Hermes Ultrashort Bond Fund
 
 

 

CLASS A1 SHARES EXHIBIT TO

MULTIPLE CLASS PLAN

9/1/20

 

1. SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

A1 Shares are available for shareholders investing through certain financial intermediaries that have entered into an agreement with the Funds’ distributor who has approved them for the sale of A1 Shares. A1 Shares may also be purchased directly from the Fund in certain circumstances. For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class A1 Shares will consist of sales and shareholder servicing by financial intermediaries in consideration of the payment of a portion of the applicable sales load (“dealer reallowance”) and a shareholder service fee. When indicated on the Schedule to this Exhibit, the principal underwriter and financial intermediaries may also receive payments for distribution and/or administrative services under a 12b-l Plan. In connection with this basic arrangement, Class A1 Shares will bear the following fees and expenses:

 

 

Fees and Expenses Maximum Amount Allocated Class A1 Shares
Sales Load Up to 2.00% of the public offering price
Contingent Deferred Sales Charge (“CDSC”) 0.00%
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-l Fee As set forth in the attached Schedule
Redemption Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class A1 Shares as described in Section 3 of the Plan

 

 

2. CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, Class A1 Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Class A1 Shares that are not subject to a contingent deferred sales charge (“CDSC”) based upon the redemption of a “Large Ticket” purchase made within 24 months may be converted to any other Share Class within the same Fund, provided that shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Class A1 Shares may be exchanged for Class A1 Shares of any other Fund

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

3. EXCEPTIONS TO BASIC ARRANGEMENTS

 

For purposes of Rules 22d-l and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales loads and contingent deferred sales charges are as follows:

 

(A) BASIC SALES LOAD SCHEDULE

 

The basic schedule of sales loads for Class A1 Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Purchase Amount

Sales Charge as a Percentage of

Public Offering Price

Less than $100,000 2.00%
$100,000 but less than $250,000 1.50%
$250,000 but less than $500,000 1.00%
$500,000 or greater 0.00%

 

(B) “LARGE TICKET” PURCHASES

 

Unless otherwise indicated on the Schedule to this Exhibit, a financial intermediary that places an order to purchase $1,000,000 or more of Class A1 Shares shall receive from the principal underwriter an advance commission equal to 75 basis points (0.75%) of the public offering price. In such event, notwithstanding anything to the contrary in the Plan or this Exhibit, such Class A1 Shares shall be subject to a contingent deferred sales charge upon redemption within 24 months of purchase equal to 75 basis points (0.75%) of the lesser of (x) the purchase price of the Class A1 Shares or (y) the redemption price of the Class A1 Shares. Any contingent deferred sales charge received upon redemption of Class A1 Shares shall be paid to the principal underwriter in consideration of the advance commission.

 

(C) REDUCING OR ELIMINATING THE SALES LOAD

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, in applying the exceptions set forth in this Section 3, the purchase amount shall take into account:

 

• Discounts achieved by combining concurrent purchases of and/or current investment in Class A, Class A1, Class B, Class C, Class F, and Class R Shares, made or held by (or on behalf of) the investor, the investor’s spouse, and the investor’s children under age 21 (regardless of whether the purchases or investments are made or held directly or through an investment professional or through a single- participant retirement account); provided that such purchases and investments can be linked using tax identification numbers (TINs), social security numbers (SSNs), or Broker Identification Numbers (BINs); and
• Letters of intent to purchase a certain amount of Class A1 Shares within a thirteen month period.

 

(D) WAIVER OF SALES LOAD

 

Continent upon notification to the Fund’s Transfer Agent, no sales load shall be assessed on purchases of Class A1 Shares made:

 

• within 120 days of redeeming shares of an equal or greater amount;
• through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive a dealer reallowance on purchases under such program;
• with reinvested dividends or capital gains;
• or Class A1 Shares, issued in connection with the merger, consolidation, or acquisition of the assets of another fund. Further, no sales load shall be assessed on purchases of Shares made by a shareholder that originally became a shareholder of a Federated Fund pursuant to the terms of an agreement and plan of reorganization which permits shareholders to acquire Shares at NAV provided that such Shares are held directly with the Fund’ s transfer agent. If the Shares are held through a financial intermediary the sales charge waiver will not apply;
• by Federated Life Members (Federated shareholders who originally were issued shares through the “Liberty Account”, which was an account for the Liberty Family of Funds on February 28, 1987, or who invested through an affinity group prior to August 1, 1987, into the Liberty Account);
• by Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pensions or profit-sharing plans for the above persons; and
• pursuant to the exchange privilege.

 

(E) WAIVER OF CONTINGENT DEFERRED SALES CHARGE ON LARGE-TICKET PURCHASES

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions.

 

• following the death of the last surviving shareholder on the account, or the post-purchase disability of all registered shareholder(s), as defined in Section 72(m)(7) of the Internal Revenue Code.
• due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
• representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
• of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase;
• of Shares that were reinvested within 120 days of a previous redemption;
• of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
• of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
• of Shares purchased with reinvested dividends or capital gains;
• imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and
• of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

 

4. REDEMPTION FEE

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class A1 Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

 

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class A1 Shares held in retirement plans established under Section 40l(a) or 40l(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class A1 Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class A1 Shares redeemed due to the death of the last surviving shareholder on the account.

 
 

 

 

SCHEDULE OF FUNDS OFFERING CLASS A1 SHARES

 

The Funds set forth on this Schedule each offer Class A1 Shares on the terms set forth in the Class A1 Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

1. CLASS A1 SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

12b-l Fee Redemption Fee
     
Federated Hermes Income Securities Trust    
Federated Hermes Floating Rate Strategic Income Fund 0.05% None
     

 

 

 

 

 

 

 

 

 

 

 
 

 

Administrative Shares Exhibit

To

Multiple Class Plan

(Revised 6/29/ 2020)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Administrative (“ADM”) Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, ADM Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated ADM Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee As set forth in the attached Schedule
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of ADM Shares as described in Section 3 of the Plan
   

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, ADM Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, ADM Shares may be converted to any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: ADM Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of  Federated Hermes Institutional Money Market, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

An exchange will be treated as a redemption and a subsequent purchase, and will be a taxable transaction. Exchange privileges may be modified or terminated at any time. A conversion of classes should not result in a realization for tax purposes.

 
 

 

Schedule of Funds
Offering ADM Shares

 

The Funds set forth on this Schedule each offer ADM Shares on the terms set forth in the ADM Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

1.       ADM SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

12b-1 Fee Shareholder Service Fee
     
Federated Hermes Money Market Obligations Trust    
Federated Hermes Government Obligations Fund 0.25% Up to 0.25%, with 0.05% of the service fee being active upon the initial offering of the ADM Shares and 0.20% remaining dormant until approved by the Fund’s Board

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

ADVISoR Shares Exhibit

To

Multiple Class Plan

(6/29/20)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

Advisor (“AVR”) Shares are available exclusively for shareholders investing through certain financial intermediaries that have entered into an agreement with the Funds’ distributor who has approved them for the sale of AVR Shares. For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the AVR Shares will consist of sales and shareholder servicing by financial intermediaries. In connection with this basic arrangement, AVR Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated AVR Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of AVR Shares as described in Section 3 of the Plan
   

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, AVR Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: None.
Exchange Privilege: AVR Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

An exchange will be treated as a redemption and a subsequent purchase, and will be a taxable transaction. Exchange privileges may be modified or terminated at any time.

 

 
 

Schedule of Funds
Offering AVR Shares

 

The Funds set forth on this Schedule each offer AVR Shares on the terms set forth in the AVR Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

1.       AVR SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

12b-1 Fee
   
Federated Hermes Money Market Obligations Trust  
Federated Hermes Government Obligations Fund None
Federated Hermes Prime Cash Obligations Fund None
Federated Hermes Tax-Free Obligations Fund None

 

 
 

 

 

AUTOMATED Shares Exhibit

To

Multiple Class Plan

(revised 6/29/20)

 

1.       Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Automated Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Automated Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Automated Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 

None

Shareholder Service Fee

Recordkeeping Fee

Up to 25 basis points (0.25%) of the average daily net asset value

Up to 10 basis points (0.10%) of the average daily net asset value

12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Automated Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Automated Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Automated Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges shall be treated in the same manner as a redemption and purchase.

 

Schedule of Funds
Offering AUTOMATED Shares

 

The Funds set forth on this Schedule each offer Automated Shares on the terms set forth in the Automated Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

 
Federated Hermes Money Market Obligations Trust
  Federated Hermes Municipal Obligations Fund
  Federated Hermes Prime Cash Obligations Fund
  Federated Hermes Government Obligations Tax-Managed Fund
  Federated Hermes Treasury Obligations Fund

 

 

 

 

 

 
 

 

 

Class B Shares Exhibit

To

Multiple Class Plan

(Revised 6/29/20)

 

1.       Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class B Shares will consist of sales by financial intermediaries in consideration of the payment of an advance commission paid by the principal underwriter. Financial intermediaries may perform shareholder services and receive a shareholder service fee for their services. In consideration of advancing commissions and/or the provision of shareholder services, the principal underwriter may receive the contingent deferred sales charges paid upon redemption of Class B Shares, and/or shareholder service fees and/or fees under a 12b-1 plan. In connection with this basic arrangement, Class B Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Class B Shares
Sales Load None
Contingent Deferred Sales Charge (“CDSC”) Up to 5.5% of the share price at the time of purchase or redemption, whichever is lower
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee Up to 75 basis points (0.75%) of the average daily net asset value
Redemption Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class B Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

For purposes of Rule 18f-3, Class B Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: After Class B Shares have been held for eight years from the date of purchase, they will automatically convert into Class A Shares.
Exchange Privilege: Class B Shares may be exchanged for Class B Shares of any other fund.

In any conversion or exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 
 

3.       Exceptions to Basic Arrangements

For purposes of Rules 6c-10 and 22d-1 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in contingent deferred sales charges payable upon redemption are as follows:

(A)       BASIC CDSC SCHEDULE

Shares Held Up to: To: Have A CDSC Of:
1 year 5.50 %
2 years 4.75 %
3 years 4.00 %
4 years 3.00 %
5 years 2.00 %
6 years 1.00 %
7 years 0.00 %
8 years Convert to Class A Shares

 

(B)       WAIVER OF CDSC

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions:

·                       following the death of the last surviving shareholder or post-purchase disability, as defined in Section 72(m)(7) of the Internal Revenue Code of 1986;
·                       due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·                       representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·                       of Shares that were reinvested within 120 days of a previous redemption;
·                       of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·                       of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·                       of Shares purchased with reinvested dividends or capital gains;
·                       imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and
·                       of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

 

(C) SYSTEMATIC WITHDRAWAL PROGRAM

Contingent upon notification to the principal underwriter or the Fund’s transfer agent, no CDSC will be imposed on redemptions that are qualifying redemptions of Class B Shares under a Systematic Withdrawal Program as described in the applicable prospectus and statement of additional information.

(D) SALES CHARGE WAIVERS FOR SHAREHOLDERS PURCHASING THROUGH CERTAIN FINANCIAL INTERMEDIARIES

 

Financial intermediary sales charge variations required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

 

4.       Redemption Fee

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class B Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class B Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class B Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class B Shares redeemed due to the death of the last surviving shareholder on the account.

Schedule of Funds
Offering Class B Shares

The Funds set forth on this Schedule each offer Class B Shares on the terms set forth in the Class B Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

CLASS B SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company
Series 		12b-1 Fee Redemption Fee
     
Federated Hermes Adviser Series:    
Federated Hermes MDT Large Cap Value Fund 0.75% None
     
Federated Hermes Equity Funds:    
Federated Hermes Kaufmann Fund 0.75% None
Federated Hermes Kaufmann Small Cap Fund 0.75% None
     
     
Federated Hermes Equity Income Fund, Inc. 0.75% None
     
Federated Hermes Fixed Income Securities, Inc.:    
Federated Hermes Strategic Income Fund 0.75% None
     
Federated Hermes Global Allocation Fund 0.75% None
     
Federated Hermes High Income Bond Fund, Inc. 0.75% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Hermes Income Securities Trust:    
Federated Hermes Capital Income Fund 0.75% None
Federated Hermes Fund for U.S. Government Securities 0.75% None
Federated Hermes Muni and Stock Advantage Fund 0.75% None
     
Federated Hermes Investment Series Funds, Inc.:    
Federated Hermes Corporate Bond Fund 0.75% None
     
Federated Hermes MDT Series:    
Federated Hermes MDT Large Cap Growth Fund 0.75% None
     
Federated Hermes Municipal Bond Fund, Inc. 0.75% None
     
Federated Hermes Municipal Securities Income Trust:    
Federated Hermes Municipal High Yield Advantage Fund 0.75% None
     
     

CLASS B SHARES SUBJECT TO THE BASIC LOAD SCHEDULE (continued)

 

Multiple Class Company
Series 		12b-1 Fee Redemption Fee
     
Federated Hermes Total Return Series, Inc.:    
Federated Hermes Total Return Bond Fund 0.75% None
     
Federated Hermes World Investment Series, Inc.:    
Federated Hermes International Leaders Fund 0.75% None
     
Federated Hermes Money Market Obligations Trust:    
Federated Hermes Government Reserves Fund 0.75% None

 

 

 

 
 

 

 

 

Class C Shares Exhibit

To

Multiple Class Plan

(revised 06/29/2020)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class C Shares will consist of sales by financial intermediaries in consideration of an advance commission of up to 1.00% of the public offering price, paid by the principal underwriter. Financial intermediaries may also provide shareholder services and may receive shareholder services fees therefor. Additionally, the principal underwriter and financial intermediaries may receive distribution and/or administrative service fees under the 12b-1 Plan. In cases where the principal underwriter has advanced a commission to the financial intermediary, such 12b-1 fees will be paid to the financial intermediary beginning in the thirteenth month after purchase. In consideration of advancing commissions, the principal underwriter will receive the contingent deferred sales charges paid upon redemption of Class C Shares and payments made under the 12b-1 Plan for twelve months following the purchase. In connection with this basic arrangement, Class C Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class C Shares
Contingent Deferred Sales Charge (“CDSC”) 1.00% of the share price at the time of purchase or redemption, whichever is lower if redeemed within twelve months following purchase
   
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
   
12b-1 Fee As set forth in the attached Schedule
   
Redemption Fee As set forth in the attached Schedule
   
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class C Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class C Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights:

At the election of the shareholder, Class C Shares that are not subject to a contingent deferred sales charge (“CDSC”) may be converted to any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable. For Class C Shares purchased through a financial intermediary after June 30, 2017, such shares may only be converted to another Share Class of the same Fund if: (i) the Class C Shares are no longer subject to a CDSC or the financial intermediary agrees to reimburse the Fund’s distributor the CDSC otherwise payable upon the sale of such Class C Shares; (ii) the shareholder meets the investment minimum and eligibility requirements for the Share Class into which the conversion is sought, as applicable; and (iii) (A) the conversion is made to facilitate the shareholder’s participation in a self-directed brokerage account for a fee-based advisory program offered by the intermediary, or (B) the conversion is part of a multiple-client transaction through a particular financial intermediary as pre-approved by the Fund’s Administrator.

After Class C Shares have been held for ten years from the date of purchase, they will automatically convert into Class A Shares on the next monthly conversion processing date, provided that the Fund or financial intermediary, record keeper, or platform has records confirming that the Class C Shares have been held for at least ten years and that Class A Shares are available for purchase. The financial intermediary, record keeper, or platform shall provide, upon the Fund’s request, representations that it has records confirming that the Class C Shares have been held for at least ten years and that Class A Shares are available for purchase. For Class C Shares acquired in an exchange from another Fund, the date of purchase will be based on the initial purchase of the Class C Shares of the prior Fund.”

Exchange Privileges: Class C Shares may be exchanged for Class C Shares of any other Fund.  

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       Exceptions to Basic Arrangements

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations contingent deferred sales charges are as follows:

 

(A)        WAIVER OF CDSC

 

·                       following the death of the last surviving shareholder on the account, or post-purchase disability of all registered shareholder(s), as defined in Section 72(m)(7) of the Internal Revenue Code;
·                       due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·                       representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·                       of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase;
·                       of Shares that were reinvested within 120 days of a previous redemption;
·                       of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·                       of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·                       of Shares purchased with reinvested dividends or capital gains;
·                       imposed by the Fund when it closes an account for not meeting the minimum balance requirements; and
·                       of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period.

 

(B) SALES CHARGE WAIVERS FOR SHAREHOLDERS PURCHASING THROUGH CERTAIN FINANCIAL INTERMEDIARIES

 

Financial intermediary sales charge variations required to be disclosed by Rule 22d-1 shall be as set forth in the prospectus of a Fund, as may be amended from time to time.

4.       Redemption Fee

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class C Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class C Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class C Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class C Shares redeemed due to the death of the last surviving shareholder on the account.

 

 
 

 

Schedule of Funds

Offering Class C Shares

 

The Funds set forth on this Schedule each offer Class C Shares on the terms set forth in the Class C Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

CLASS C SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

Multiple Class Company
Series 		12b-1 Fee Redemption Fee
Federated Hermes Adviser Series    
Federated Hermes Emerging Markets Equity Fund 0.75% None
Federated Hermes Absolute Return Credit Fund 0.75% None
Federated Hermes Global Equity Fund 0.75% None
Federated Hermes Global Small Cap Fund 0.75% None
Federated Hermes International Equity Fund 0.75% None
Federated Hermes SDG Engagement Equity Fund 0.75% None
Federated Hermes SDG Engagement High Yield Credit Fund 0.75% None
Federated Hermes Unconstrained Credit Fund 0.75% None
Federated Hermes US SMID Fund 0.75% None
Federated Hermes International Equity Fund 0.75% None
Federated Hermes International Growth Fund 0.75% None
Federated Hermes MDT Large Cap Value Fund 0.75% None
     
Federated Hermes Equity Funds:    
Federated Hermes Clover Small Value Fund 0.75% None
Federated Hermes International Strategic Value Dividend Fund 0.75% None
Federated Hermes Kaufmann Fund 0.75% None
Federated Hermes Kaufmann Large Cap Fund 0.75% None
Federated Hermes Kaufmann Small Cap Fund 0.75% None
Federated Hermes MDT Mid-Cap Growth Fund 0.75% None
Federated Hermes Prudent Bear Fund 0.75% None
Federated Hermes Strategic Value Dividend Fund 0.75% None
     
Federated Hermes Equity Income Fund, Inc. 0.75% None
     
Federated Hermes Fixed Income Securities, Inc.:    
Federated Hermes Strategic Income Fund 0.75% None
    None
Federated Hermes Global Allocation Fund 0.75% None
     
Federated Hermes Government Income Securities, Inc. 0.75% None
     
Federated Hermes High Income Bond Fund, Inc. 0.75% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Hermes High Yield Trust    
Federated Hermes Opportunistic High Yield Bond Fund 0.75% 2% on shares redeemed or exchanged within 90 days of purchase
     
Federated Hermes Income Securities Trust:    
Federated Hermes Capital Income Fund 0.75% None
Federated Hermes Floating Rate Strategic Income Fund 0.75% None
Federated Hermes Fund for U.S. Government Securities 0.75% None
Federated Hermes Muni and Stock Advantage Fund 0.75% None
Federated Hermes Real Return Bond Fund 0.75% None
     
       
 
 

CLASS C SHARES SUBJECT TO THE BASIC LOAD SCHEDULE (continued)

Multiple Class Company
Series 		12b-1 Fee Redemption Fee
Federated Hermes Index Trust    
Federated Hermes Max-Cap Index Fund 0.75% None
     
Federated Hermes International Series, Inc.:    
Federated Hermes Global Total Return Bond Fund 0.75% None
     
Federated Hermes Investment Series Funds, Inc.:    
Federated Hermes Corporate Bond Fund 0.75% None
     
Federated Hermes MDT Series:    
Federated Hermes MDT All Cap Core Fund 0.75% None
Federated Hermes MDT Balanced Fund 0.75% None
Federated Hermes MDT Large Cap Growth Fund 0.75% None
Federated Hermes MDT Small Cap Core Fund 0.75% None
Federated Hermes MDT Small Cap Growth Fund 0.75% None
     
Federated Hermes Municipal Bond Fund, Inc. 0.75% None
     
Federated Hermes Municipal Securities Income Trust:    
Federated Hermes Municipal High Yield Advantage Fund 0.75% None
     
Federated Hermes Total Return Series, Inc.:    
Federated Hermes Total Return Bond Fund 0.75% None
     
Federated Hermes World Investment Series, Inc.:    
Federated Hermes Emerging Market Debt Fund 0.75% None
Federated Hermes International Leaders Fund 0.75% None
Federated Hermes International Small-Mid Company Fund 0.75% None
     
Federated Hermes Money Market Obligations Trust:    
Federated Hermes Government Reserves Fund 0.75% None

 

 

 
 

 

 

Capital Shares Exhibit

To

Multiple Class Plan

(Revised 6/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Capital Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Capital Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Capital Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Capital Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Capital Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into   any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Capital Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes  Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of Funds

Offering Capital Shares

 

The Funds set forth on this Schedule each offer Capital Shares on the terms set forth in the Capital Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

 
Federated Hermes Money Market Obligations Trust
  Federated Hermes California Municipal Cash Trust
  Federated Hermes Government Obligations Fund
  Federated Hermes Institutional Money Market Management
  Federated Hermes Municipal Obligations Fund
  Federated Hermes Prime Cash Obligations Fund
  Federated Hermes Institutional Prime Obligations Fund
  Federated Hermes Institutional Prime Value Obligations Fund
  Federated Hermes Treasury Obligations Fund

 

 

 

 

 
 

 

 

CasH II Shares Exhibit

To

Multiple Class Plan
(revised 6/29/20)

1.       Separate Arrangement And Expense Allocation

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Cash II Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a 12b-1 Plan and financial intermediaries may also receive shareholder services fees for services provided. In connection with this basic arrangement, Cash II Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Cash II Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Cash II Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

For purposes of Rule 18f-3, Cash II Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Cash II Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 
 

 

Schedule of Funds
Offering Cash II Shares

The Funds set forth on this Schedule each offer Cash II Shares on the terms set forth in the Cash II Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

Multiple Class Company
Series 		12b-1 Fee
   
Federated Hermes Money Market Obligations Trust:  
Federated Hermes California Municipal Cash Trust 0.20%
Federated Hermes Government Obligations Fund 0.35%
Federated Hermes Municipal Obligations Fund 0.35%
Federated Hermes New York Municipal Cash Trust 0.25%
Federated Hermes Prime Cash Obligations Fund 0.35%
Federated Hermes Trust for U.S. Treasury Obligations 0.35%

 

 
 

 

 

Cash series Shares Exhibit

To

Multiple Class Plan

(Revised 12/1/2020)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Cash Series Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a 12b-1 Plan and financial intermediaries may receive a shareholder service fee for services provided. In connection with this basic arrangement, Cash Series Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Cash Series Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Cash Series Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Cash Series Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Cash Series Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of Funds

Offering Cash Series Shares

 

The Funds set forth on this Schedule each offer Cash Series Shares on the terms set forth in the Cash Series Shares Exhibit to Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company 12b-1 Fee
   
Federated Hermes Money Market Obligations Trust:  
Federated Hermes California Municipal Cash Trust 0.60%
Federated Hermes Government Obligations Fund 0.60%
Federated Hermes Municipal Obligations Fund 0.60%
Federated Hermes New York Municipal Cash Trust 0.60%
Federated Hermes Prime Cash Obligations Fund 0.60%
Federated Hermes Trust for U.S. Treasury Obligations 0.60%

 

 
 

 

 

 

EAGLE Shares Exhibit

To

Multiple Class Plan

(Revised 06/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Eagle Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, Eagle Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Eagle Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Eagle Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Eagle Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Eagle Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of FundS

Offering EAGLE Shares

 

The Funds set forth on this Schedule each offer Eagle Shares on the terms set forth in the Eagle Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

Multiple Class Company
Series 		12b-1 Fee
   
   

Federated Hermes Money Market Obligations Trust:

Federated Hermes Institutional Money Market Management

 

None

 

 

 
 

 

 

Class F Shares Exhibit

To

Multiple Class Plan

(Revised 6/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class F Shares will consist of sales by financial intermediaries in consideration of the payment of the sales load (“dealer reallowance”). Financial intermediaries may also provide shareholder services and may receive shareholder service fees therefor. Additionally, the principal underwriter may pay up to 100 basis points (1.00%) of the public offering price to financial intermediaries as an advance commission on sales. In consideration of advancing this payment, the principal underwriter will receive any contingent deferred sales charges paid upon redemption of Class F Shares and distribution service fees under the 12b-1 Plan on an ongoing basis. In connection with this basic arrangement Class F Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class F Shares
Sales Load Up to 100 basis points (1.00%) of the public offering price
Contingent Deferred Sales Charge ("CDSC") Up to 100 basis points (1.00%) of the share price at the time of original purchase or redemption, whichever is lower
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class F Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class F Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Class F Shares that are not subject to a contingent deferred sales charge (“CDSC”) may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Class F Shares may be exchanged for Class F Shares of any other Fund.  

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated as a redemption and purchase.

 

3.       Exceptions to Basic Arrangements

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales load and contingent deferred sales charges are as follows:

 

(A)       BASIC SALES LOAD SCHEDULE *

 

 

Purchase Amount:

Sales Charge as Percentage of Offering Price Sales Charge as a Percentage of NAV
Less than $1 million 1.00% 1.01%
$1 million or greater 0.00% 0.00%

(B)       CDSC SCHEDULE

Unless otherwise indicated below, the Schedule of Contingent Deferred Sales Charges for each Fund is as follows:

 

 

Purchase Amount:

 

Shares Held:

Contingent Deferred Sales Charge:  
Under $2 million 4 years or less 1.00%
$2 million but less than $5 million 2 years or less 0.50%
$ 5 million or greater 1 year or less 0.25%

 

(C)       REDUCING OR ELIMINATING THE SALES LOAD

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, in applying the exceptions set forth in this Section 3, the purchase amount shall take into account:

 

  Discounts achieved by combining concurrent purchases of and/or current investment in Class A, Class B, Class C, Class F, and Class R Shares, made or held by (or on behalf of) the investor, the investor’s spouse, and the investor’s children under age 21 (regardless of whether the purchases or investments are made or held directly or through an investment professional or through a single-participant retirement account); provided that such purchases and investments can be linked using tax identification numbers (TINs), social security numbers (SSNs), or Broker Identification Numbers (BINs); and
  Letters of intent to purchase a certain amount of Class F Shares within a thirteen month period.

 

(D)       WAIVER OF SALES LOAD

 

Contingent upon notification to the Fund's principal underwriter or transfer agent, no sales load will be assessed on purchases of Class F Shares made:

 

·           within 120 days of redeeming Shares of an equal or greater amount;
·           through a financial intermediary that did not receive a dealer reallowance on the purchase;
  by shareholders who originally became shareholders of a Fund pursuant to the terms of an agreement and plan of reorganization which permits the shareholders to acquire shares at net asset value.  However, if the shareholder closes their account with the transfer agent, or if the shareholder transfers their account to another financial intermediary, the shareholder may no longer receive a sales charge waiver;
·           with reinvested dividends or capital gains;
·           by Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons; and
·           pursuant to the exchange privilege.

 

 
 

 

(E)       WAIVER OF CDSC

 

Contingent upon notification to the Fund’s principal underwriter or transfer agent, no CDSC will be imposed on redemptions:

 

·           following the death of the last surviving shareholder on the account,  or post-purchase disability of all registered shareholder(s), as defined in Section 72(m)(7) of the Internal Revenue Code;
·           due to the termination of a trust following the death of the trustor/grantor or beneficiary, provided that the trust document specifically states that the trust is terminated upon the death
·           representing minimum required distributions (“RMD”) from an Individual Retirement Account or other retirement plan as required under the Internal Revenue Code;
·           of Shares originally purchased through a financial intermediary that did not receive an advance commission on the purchase.
·           of Shares that were reinvested within 120 days of a previous redemption of an equal or lesser amount;
·           of Shares held by the Directors, Trustees, employees, former employees and sales representatives of the Fund, the Adviser, the principal underwriter and their affiliates, employees of any investment professional that sells Shares according to a sales agreement with the principal underwriter, by the immediate family members of the above persons, and by trusts, pension or profit-sharing plans for the above persons;
·           of Shares originally purchased through a program offered by a Financial Intermediary that provides for the purchase of Shares without imposition of a sales charge (for example, a wrap account, self-directed brokerage account, retirement, or other fee-based program offered by the Financial Intermediary) and where the Financial Intermediary has agreed with the principal underwriter not to receive an advanced commission on purchases under such program;
·           of Shares purchased with reinvested dividends or capital gains;
·           imposed by the Fund when it closes an account for not meeting the minimum balance requirements;
·           of Shares which were purchased pursuant to an exchange privilege if the Shares were held for the applicable CDSC holding period; and
·           representing a total or partial distribution from a qualified plan, which would not include account transfer, rollovers, or redemptions for the purpose of reinvestment.  For these purposes, qualified plans would not include an Individual Retirement Account, Keogh Plan or custodial account following retirement.

 

 
 

 

Schedule of Funds

Offering Class F Shares

 

The Funds set forth on this Schedule each offer Class F Shares on the terms set forth in the Class F Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

CLASS F SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

12b-1 Fee
   
Federated Hermes Equity Income Fund, Inc. 0.25%
   

Federated Hermes Fixed Income Securities, Inc.:

Federated Hermes Strategic Income Fund

 

0.05%

   
Federated Hermes Government Income Securities, Inc. None
   

Federated Hermes Income Securities Trust:

Federated Hermes Capital Income Fund

Federated Hermes Muni and Stock Advantage Fund

 

0.05%

None

   

Federated Hermes Investment Series Funds, Inc.:

Federated Hermes Corporate Bond Fund

 

None

   
Federated Hermes Municipal Bond Fund, Inc. None
   

Federated Hermes Municipal Securities Income Trust:

Federated Hermes Municipal High Yield Advantage Fund

Federated Hermes Ohio Municipal Income Fund

 

0.05%

0.40%

   

Federated Hermes Money Market Obligations Trust:

Federated Hermes Government Reserves Fund

 

0.45%

 

 
 

 

 

Institutional/WEALTH Shares Exhibit

To

Multiple Class Plan

(REVISED 12/1/2020)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Institutional and Wealth Shares will consist of

 

(i) with respect to money market funds, sales and shareholder servicing by financial intermediaries; and
   
(ii) with respect to fluctuating NAV funds, sales and shareholder servicing by financial intermediaries to the following categories of investors (“Eligible Investors”);

 

·           An investor participating in a no-load platform, network or other fee-based program offered by a financial intermediary, for example, a wrap-account or retirement platform, where Federated has entered into an agreement with the intermediary;
·           A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals, or a trust, pension or profit-sharing plan for these individuals;
·           An employer-sponsored retirement plan;
·           A trust institution investing on behalf of its trust customers;
·           A Federated Hermes Fund;
·           An investor, other than a natural person, purchasing Shares directly from the Fund;
·           An investor (including a natural person) who owned Shares as of December 31, 2008;
·           Without regard to the initial investment minimum, an investor who acquired Institutional and/or Wealth Shares pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such Shares; and
·           Without regard to the initial investment minimum, in connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated or its investment advisory subsidiaries, an investor (including a natural person) who (1) becomes a client of an investment advisory subsidiary of Federated or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.

 

 
 

The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, Institutional and Wealth Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Institutional and Wealth Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 

None

Shareholder Service Fee As set forth in the attached Schedule
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Institutional and/or Wealth Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Institutional and Wealth Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Institutional and/or Wealth Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       REDEMPTION FEE.

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Institutional and/or Wealth Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

 

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Institutional and/or Wealth Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Institutional and/or Wealth Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Institutional and/or Wealth Shares redeemed due to the death of the last surviving shareholder on the account.

 
 

Schedule of Funds
Offering institutional Shares

 

The Funds set forth on this Schedule each offer Institutional Shares on the terms set forth in the Institutional/-Wealth Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

12b-1 Fee

Shareholder

Service Fee

Redemption Fee
       
Federated Hermes Adjustable Rate Securities Trust None None None
       
Federated Hermes Adviser Series      
Federated Hermes Emerging Markets Equity Fund 0.00% 0.25% None
Federated Hermes Absolute Return Credit Fund 0.00% 0.00% None
Federated Hermes Conservative Microshort Fund None None None
Federated Hermes Conservative Municipal Microshort Fund None None None
Federated Hermes Global Equity Fund None 0.00% None
Federated Hermes Global Small Cap Fund None 0.00% None
Federated Hermes International Developed Equity Fund None 0.25% None
Federated Hermes SDG Engagement Equity Fund 0.00% 0.00% None
Federated Hermes SDG Engagement High Yield Credit Fund 0.00% 0.25% None
Federated Hermes Unconstrained Credit Fund None 0.00% None
Federated Hermes US SMID Fund None None None
Federated Hermes International Equity Fund 0.00% 0.25% None
Federated Hermes International Growth Fund 0.00% 0.25% None
Federated Hermes MDT Large Cap Value Fund 0.00% 0.25% None
       
Federated Hermes Equity Funds:      
Federated Hermes Absolute Return Credit Fund None None None
Federated Hermes Clover Small Value Fund None None None
Federated Hermes International Strategic Value Dividend Fund None None None
Federated Hermes Kaufmann Fund None None None
Federated Hermes Kaufmann Large Cap Fund None None None
Federated Hermes Kaufmann Small Cap Fund None None None
Federated Hermes MDT Mid Cap Growth Fund None None None
Federated Hermes Prudent Bear Fund None None None
Federated Hermes Strategic Value Dividend Fund None None None
       
Federated Hermes Equity Income Fund, Inc. None None None
       
Federated Hermes Fixed Income Securities, Inc.:      
Federated Hermes Municipal Ultrashort Fund None None None
Federated Hermes Strategic Income Fund None None None
       
Federated Hermes Global Allocation Fund None None None
       
Federated Hermes Government Income Trust None 0.25% None
Federated Hermes Government Income Securities, Inc. None None None
Federated Hermes High Income Bond Fund None None None
       
Federated Hermes High Yield Trust      
Federated Hermes Opportunistic High Yield Bond Fund None None None
       

Multiple Class Company

Series

12b-1 Fee

Shareholder

Service Fee

Redemption Fee
Federated Hermes Income Securities Trust:      
Federated Hermes Capital Income Fund None None None
Federated Hermes Floating Rate Strategic Income Fund None None None
Federated Hermes Fund for U.S. Government Securities None None None
Federated Hermes Intermediate Corporate Bond Fund None 0.25% None
Federated Hermes Muni and Stock Advantage Fund None None None
Federated Hermes Real Return Bond Fund None 0.25% None
Federated Hermes Short-Term Income Fund None None None
       
Federated Hermes Index Trust:      
Federated Hermes Max-Cap Index Fund None 0.25% None
Federated Hermes Mid-Cap Index Fund None None None
       
Federated Hermes Institutional Trust:      
Federated Hermes Government Ultrashort Fund None None None
Federated Hermes Short-Intermediate Total Return Bond Fund None None None
       
Federated Hermes International Series, Inc.      
Federated Hermes Global Total Return Bond Fund (formerly Federated International Bond Fund) None None None
       
Federated Hermes Investment Series Fund, Inc.      
Federated Hermes Corporate Bond Fund None None None
       
Federated Hermes MDT Series:      
Federated Hermes MDT All Cap Core Fund None None None
Federated Hermes MDT Balanced Fund None None None
Federated Hermes MDT Large Cap Growth Fund None None None
Federated Hermes MDT Small Cap Core Fund None None None
Federated Hermes MDT Small Cap Growth Fund None None None
       
Federated Hermes Municipal Bond Fund, Inc. None None None
       
Federated Hermes Municipal Securities Income Trust      
Federated Hermes Michigan Intermediate Municipal Trust None None None
Federated Hermes Municipal High Yield Advantage Fund None None None
Federated Hermes Ohio Municipal Income Fund None None None
Federated Hermes Pennsylvania Municipal Income Fund None None None
       
Federated Hermes Short-Intermediate Municipal Fund None 0.25% None
       
Federated Hermes Total Return Government Bond Fund None None None

 

 

 

     
Federated Hermes Total Return Series, Inc.:      

 

Federated Hermes Select Total Return Bond Fund (formerly Federated Mortgage Fund)

None 0.25% None
Federated Hermes Total Return Bond Fund None None None
Federated Hermes Ultrashort Bond Fund None 0.25% None
       
Federated Hermes Short-Term Government Fund None 0.25% None
       
Federated Hermes Short-Intermediate Government Fund None 0.25% None

Multiple Class Company

Series

12b-1 Fee

Shareholder

Service Fee

Redemption Fee
       
Federated Hermes World Investment Series, Inc.      
Federated Hermes Emerging Market Debt Fund None None None
Federated Hermes International Leaders Fund None None None
Federated Hermes International Small-Mid Company Fund None None None
       
Federated Hermes Intermediate Municipal Trust:      
Federated Hermes Intermediate Municipal Fund None 0.25% None
       
Federated Hermes Money Market Obligations Trust:      
Federated Hermes Government Obligations Fund None 0.25% None
Federated Hermes Government Obligations Tax-Managed Fund None 0.25% None
Federated Hermes Institutional Money Market Management None 0.25% None
Federated Hermes Institutional Prime Obligations Fund None 0.25% None
Federated Hermes Institutional Tax-Free Cash Trust None 0.25% None
Federated Hermes Treasury Obligations Fund None 0.25% None
Federated Hermes Trust for U.S. Treasury Obligations None None None
Federated Hermes U.S. Treasury Cash Reserves None 0.25% None

 

 
 

 

Schedule of Funds
Offering WEALTH Shares

 

The Retail Money Market Funds set forth on this Schedule each offer Wealth Shares on the terms set forth in the Institutional/Wealth Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

12b-1 Fee

Shareholder

Service Fee

Redemption Fee
       
Federated Hermes Money Market Obligations Trust:      
Federated Hermes California Municipal Cash Trust None 0.25% None
Federated Hermes Municipal Obligations Fund None 0.25% None
Federated Hermes New York Municipal Cash Trust None 0.25% None
Federated Hermes Prime Cash Obligations Fund None 0.25% None
Federated Hermes Tax-Free Obligations Fund None 0.25% None

 

 
 

 

 

investment Shares Exhibit

To

Multiple Class Plan
(Revised 06/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Investment Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Investment Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Investment Shares
Sales Load None
Contingent Deferred Sales Charge (“CDSC”) None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Investment Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Investment Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Rights: Investment Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of Funds

Offering Investment Shares

 

The Funds set forth on this Schedule each offer Investment Shares on the terms set forth in the Investment Shares Exhibit to the Multiple Class Plan.

 

 

 

Multiple Class Company

Series

12b-1 Fee
   
Federated Hermes Money Market Obligations Trust:  
Federated Hermes Municipal Obligations Fund 0.25%

 

 

 
 

 

CLASS P Shares Exhibit

To

Multiple Class Plan

(revised 6/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class P Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Automated Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class P Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

 

None

Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
Recordkeeping Fee Up to 10 basis points (0.10%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class P Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class P Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: None.
Exchange Privileges: Class P Shares may only be exchanged into Federated Hermes Capital Reserves Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges shall be treated in the same manner as a redemption and purchase.

 

 
 

Schedule of Funds
Offering Class P Shares

 

The Funds set forth on this Schedule each offer Class P Shares on the terms set forth in the Class P Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

 
Federated Hermes Money Market Obligations Trust
  Federated Hermes Government Reserves Fund

 

 
 

 

 

PREMIER Shares Exhibit

To

Multiple Class Plan

(Revised as of 6/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Premier Shares will consist of sales and shareholder servicing by financial intermediaries. The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided. In connection with this basic arrangement, Premier Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Premier Shares
Sales Load None

Contingent Deferred

Sales Charge ("CDSC")

None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Premier Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Premier Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Premier Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

An exchange will be treated as a redemption and a subsequent purchase, and will be a taxable transaction. Exchange privileges may be modified or terminated at any time.

 

Schedule of Funds

Offering PREMIER Shares

 

The Funds set forth on this Schedule each offer Premier Shares on the terms set forth in the Premier Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

12b-1 Fee
   

Federated Hermes Money Market Obligations Trust:

Federated Hermes Government Obligations Fund

 

None

Federated Hermes Institutional Tax-Free Cash Trust None

 

 
 

 

 

Primary Shares Exhibit

To

Multiple Class Plan

(REVISED 6/29/2020)

 

1.       Separate Arrangement And Expense Allocation

 

Primary Shares are available exclusively as an investment vehicle for separate accounts of participating life insurance companies offering variable life insurance policies and variable annuity contracts. For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Primary Shares will consist of institutional sales to insurance companies for Primary Share inclusion in those variable life and variable annuity product separate accounts. The insurance company distributor, underwriter or affiliated entity may provide shareholder services and receive a shareholder service fee for their services. In connection with this basic arrangement, Primary Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Primary Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Primary Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Primary Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: None.

 

 
 

 

 

Schedule of Funds

Offering Primary Shares

 

The Funds set forth on this Schedule each offer Primary Shares on the terms set forth in the Primary Shares Exhibit to the Multiple Class Plan.

 

Multiple Class Company

Series

12b-1 Fee
   
Federated Hermes Insurance Series:  
Federated Hermes Managed Volatility Fund II 0.25%
Federated Hermes High Income Bond Fund II None
Federated  Hermes Kaufmann Fund II 0.25%
Federated Hermes Government Money Fund II 0.25%
Federated Hermes Quality Bond Fund II 0.25%

 

 

 
 

 

Class R Shares Exhibit

To

Multiple Class Plan

(revised 09/01/20)

 

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class R Shares will consist of:

 

(i)       Excepting Federated Hermes Kaufmann Fund, sales by financial intermediaries to retirement plans, with shareholder services provided by the retirement plan record keepers; and

 

(ii)  with respect to the Federated Hermes Kaufmann Fund, (a) sales by financial intermediaries to retirement plans; (b) the issuance of Class R Shares as provided in the Plan of Reorganization between the Federated Hermes Kaufmann Fund and the Kaufmann Fund; (c) additional investments by former Kaufmann Fund shareholders and related persons; and (d) shareholder services provided by financial intermediaries..

 

Financial intermediaries and the principal underwriter may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan, in addition, financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Class R Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class R Shares
Sales Load None

Contingent Deferred Sales

Charge ("CDSC")

None
Redemption Fee As set forth in the attached Schedule.
Shareholder Service Fee As set forth in the attached Schedule
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class R Shares as described in Section 3 of the Multiple Class Plan

 

 
 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class R Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: Excepting Federated Hermes Kaufmann Fund, at the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege:

With respect to the Federated Hermes Kaufmann Fund, shareholders who are former shareholders of the Federated Hermes Kaufmann Fund, Inc. and their immediate family members or shareholders who have purchased shares through the financial intermediary relationships that existed for the Kaufmann Fund may exchange their Class R Shares for Class A Shares of any other fund. Investors who are eligible to purchase Class R Shares (e.g. 401(k) plans, 457 plans, employer sponsored 403(b) plans, profit sharing and money purchase pension plans, defined benefit plans, non-qualified deferred compensation plans and IRA rollovers from such plans, directly or through financial intermediaries as well as IRAs and investment – only 403(b) plans held through financial intermediaries may exchange their Class R Shares into Class R Shares of any other Fund. A Grandfathered Shareholder may exchange into Class R Shares of another Fund only if such shareholder is an eligible investor in the Class R Shares of that Fund.

With respect to the other funds, Class R Shares may be exchanged for Class R Shares, including the Kaufmann Fund.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

3.       Redemption Fee

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class R Shares will be applied to fees incurred or amounts expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

A Fund shall waive any redemption fee with respect to Class R Shares redeemed or exchange by employer-sponsored retirement plans.

 
 

Schedule of Funds

Offering Class R Shares

 

The Funds set forth on this Schedule each offer Class R Shares on the terms set forth in the Class R Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company
Series 		12b-1 Fee Shareholder Services Fee Redemption Fee
       
Federated Hermes Adviser Series      
Federated Hermes MDT Large Cap Value Fund 0.50% None None
       
Federated Hermes Equity Funds:      
Federated Hermes Kaufmann Fund 0.50% 0.25% None
Federated Hermes Kaufmann Small Cap Fund 0.50% None None
       
Federated Hermes Equity Income Fund, Inc. 0.50% None None
       
Federated Hermes Income Securities Trust      
Federated Hermes Capital Income Fund 0.50% None None
       
Federated Hermes Index Trust:      
Federated Hermes Max-Cap Index Fund 0.50% None None
       
Federated Hermes Short-Intermediate Government Fund 0.50% None None
       
Federated Hermes Money Market Obligations Trust:      
Federated Hermes Prime Cash Obligations Fund 0.50% 0.25% None
       
Federated Hermes World Investment Series, Inc.      
Federated Hermes International Leaders Fund 0.50% None None
       

 

 
 

 

CLASS R6 Shares Exhibit

To

Multiple Class Plan

(revised as of 12/1/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class R6 Shares will consist of:

 

(i) sales and shareholder servicing by financial intermediaries to the following categories of investors (“Eligible Investors”):

 

·                                                           An investor participating in a no-load platform, network or other fee-based program offered by a financial intermediary, for example, a wrap account or retirement platform, where Federated has entered into an agreement with the intermediary;
·                                                           A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals, or a trust, pension or profit-sharing plan for these individuals;
·                                                           An employer-sponsored retirement plan;
·                                                           A trust institution investing on behalf of its trust customers;
·                                                           An investor, other than a natural person, purchasing Shares directly from the Fund;
·                                                           A Federated Fund;
·                                                           An investor (including a natural person) who acquired R6 Shares pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such Shares; and
·                                                           In connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated or its investment advisory subsidiaries, an investor (including a natural person) who (1) becomes a client of an investment advisory subsidiary of Federated or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.

 

In connection with this arrangement, Class R6 Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated R6 Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee None
Redemption Fee None
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class R6 Shares.

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class R6 Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges: Class R6 Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, after the payment of any redemption fees to the Fund. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 

 

 

 

 

 

(schedule of funds listed on next page)

 

 
 

 

Schedule of Funds

Offering CLASS R6 Shares

 

The Funds set forth on this Schedule each offer Class R6 Shares on the terms set forth in the Class R6 Shares Exhibit to the Multiple Class Plan.

 

 

Multiple Class Company

Series

   
  Federated Hermes Adviser Series
Federated Hermes Emerging Markets Equity Fund
Federated Hermes Absolute Return Credit Fund
Federated Hermes Global Equity Fund
Federated Hermes Global Small Cap Fund
Federated Hermes International Developed Equity Fund
Federated Hermes SDG Engagement Equity Fund
Federated Hermes SDG Engagement High Yield Credit Fund
Federate Hermes Unconstrained Credit Fund
Federated Hermes US SMID Fund
Federated Hermes International Equity Fund
Federated Hermes International Growth Fund
Federated Hermes MDT Large Cap Value Fund
 
  Federated Hermes Equity Funds
    Federated Hermes Clover Small Value Fund
    Federated Hermes International Strategic Value Dividend Fund
    Federated Hermes Kaufmann Large Cap Fund
    Federated Hermes Kaufmann Small Cap Fund
    Federated Hermes MDT Mid Cap Growth Fund
    Federated Hermes Strategic Value Dividend Fund
   
  Federated Hermes Fixed Income Securities, Inc.
    Federated Hermes Municipal Ultrashort Fund
    Federated Hermes Strategic Income Fund
   
  Federated Hermes Global Allocation Fund
   
  Federated Hermes High Income Bond Fund, Inc.
   
  Federated Hermes High Yield Trust
  Federated Hermes Opportunistic High Yield Bond Fund
   
  Federated Hermes Income Securities Trust
  Federated Hermes Floating Rate Strategic Income Fund
  Federated Hermes Short-Term Income Fund
   
  Federated Hermes Index Trust
  Federated Hermes Mid-Cap Index Fund
   
  Federated Hermes Institutional Trust
  Federated Hermes Government Ultrashort Fund
  Federated Hermes Institutional High Yield Bond Fund
  Federated Hermes Short-Intermediate Total Return Bond Fund
   
  Federated Hermes Investment Series Funds, Inc.
  Federated Hermes Corporate Bond Fund
   
  Federated Hermes MDT Series
  Federated Hermes MDT Small Cap Core Fund
  Federated Hermes MDT Small Cap Growth Fund
  Federated Hermes MDT All Cap Core Fund
  Federated Hermes MDT Balanced Fund
   
  Federated Hermes Total Return Government Bond Fund
   
  Federated Hermes Total Return Series, Inc.
    Federated Hermes Total Return Bond Fund
    Federated Hermes Ultrashort Bond Fund
   
  Federated Hermes World Investment Series, Inc.
    Federated Hermes International Leaders Fund
   

 

 

 

 

 

 

 

 

 
 

 

retirement Shares Exhibit

To

Multiple Class Plan

(Revised 6/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Retirement Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive a shareholder service fee for services provided. In connection with this basic arrangement, Retirement Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Retirement Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Retirement Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Retirement Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: ·                                                         Retirement Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange..

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of Funds

Offering retirement Shares

 

The Funds set forth on this Schedule each offer Retirement Shares on the terms set forth in the Retirement Shares Exhibit to the Multiple Class Plan:

 

Multiple Class Company Series
   
None  

 

 
 

 

SELECT Shares Exhibit

To

Multiple Class Plan

(Revised 06/29/2020)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Select Shares will consist of sales and shareholder servicing by financial intermediaries. Financial intermediaries may receive shareholder service fees for services provided. In connection with this basic arrangement, Select Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Select Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Select Shares as described in Section 3 of the Plan

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, Select Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Select Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchase (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other fund or class shall be treated in the same manner as a redemption and purchase.

 

 

SCHEDULE OF FUNDS

OFFERING SELECT SHARES

 

Multiple Class Company

Series

 
Federated Hermes Money Market Obligations Trust
     Federated Hermes Government Obligations Fund

 

 

 

 

 

 

 

 

 

 
 

 

 

Service Shares Exhibit

To

Multiple Class Plan
(revised 6/29/2020)

 

1.       Separate Arrangement And Expense Allocation

 

With respect to Funds other than portfolios of Federated Insurance Series, for purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Service Shares will consist of

 

(i) with respect to money market funds, sales and shareholder servicing by financial intermediaries; and
   
(ii) with respect to fluctuating NAV funds, sales and shareholder servicing by financial intermediaries to the following categories of investors (“Eligible Investors”);

 

·                                                           An investor participating in a wrap program or other fee-based program sponsored by a financial intermediary;
·                                                           An investor participating in a no-load network or platform sponsored by a financial intermediary where Federated has entered into an agreement with the intermediary;
·                                                           A trustee/director, employee or former employee of the Fund, the Adviser, the Distributor and their affiliates; an immediate family member of these individuals, or a trust, pension or profit-sharing plan for these individuals;
·                                                           An employer-sponsored retirement plan;
·                                                           A trust institution investing on behalf of its trust customers;
·                                                           A Federated Fund;
·                                                           An investor, other than a natural person, purchasing Shares directly from the Fund;
·                                                           An investor (including a natural person) who owned Shares as of December 31, 2008;
·                                                           Without regard to the initial investment minimum, an investor who acquired Service Shares pursuant to the terms of an agreement and plan of reorganization which permits the investor to acquire such Shares; and
·                                                           Without regard to the initial investment minimum, in connection with an acquisition of an investment management or advisory business, or related investment services, products or assets, by Federated or its investment advisory subsidiaries, an investor (including a natural person) who (1) becomes a client of an investment advisory subsidiary of Federated or (2) is a shareholder or interest holder of a pooled investment vehicle or product that becomes advised or subadvised by a Federated investment advisory subsidiary as a result of such an acquisition other than as a result of a fund reorganization transaction pursuant to an agreement and plan of reorganization.

 

The principal underwriter and financial intermediaries may receive payments for distribution and/or administrative services under a Rule 12b-1 Plan and financial intermediaries may also receive shareholder service fees for services provided.

 

With respect to portfolios of Federated Hermes Insurance Series, Service Shares are available exclusively as an investment vehicle for separate accounts of participating life insurance companies offering variable life insurance policies and variable annuity contracts. For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of Service Shares will consist of institutional sales to insurance companies for Service Share inclusion in those variable life insurance and annuity product separate accounts. The insurance company distributor, underwriter or other affiliated entity may provide shareholder services and receive a shareholder service fee for their services and when indicated on the Schedule to this Exhibit, may also receive payments for distribution and/or administrative services under a 12b-1 Plan.

In connection with these basic arrangements, Service Shares will bear the following fees and expenses:

Fees and Expenses Maximum Amount Allocated Service Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Service Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

For purposes of Rule 18f-3, Service Shares have the following conversion rights and exchange privileges at the election of the shareholder:

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privileges:

For Funds other than portfolios of Federated Hermes Insurance Series, Service Shares may be exchanged for exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange. Service Shares may also be exchanged for shares of Investment Companies that are not subject to this Plan, as provided in the "Proprietary Fund Schedule" attached hereto.

With respect to portfolios of Federated Hermes Insurance Series: None

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered, unless Class A Shares or Class F Shares which are subject to a CDSC are being exchanged, in which case the CDSC fee will be imposed as if the Class A Shares or Class F Shares had been redeemed. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of Funds
Offering Service Shares

 

The Funds set forth on this Schedule each offer Service Shares on the terms set forth in the Service Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

Multiple Class Company
Series 		12b-1 Fee
   
Federated Hermes Adjustable Rate Securities Fund None
   
Federated Hermes Adviser Series  
Federated Hermes MDT Large Cap Value Fund None
   
   
Federated Hermes High Yield Trust None
   
Federated Hermes Government Income Fund 0.05%
   
Federated Hermes Income Securities Trust:  
Federated Hermes Intermediate Corporate Bond Fund 0.25%
Federated Hermes Short-Term Income Fund None
   
Federated Hermes Index Trust  
Federated Hermes Max-Cap Index Fund 0.30%
Federated Hermes Mid-Cap Index Fund None
   
Federated Hermes Institutional Trust:  
Federated Hermes Government Ultrashort Fund 0.05%
Federated Hermes Short-Intermediate Total Return Bond Fund 0.00%
   
Federated Hermes Insurance Series:  
Federated Hermes Managed Volatility Fund II 0.25%
Federated Hermes High Income Bond Fund II 0.25%
Federated Hermes Kaufmann Fund II 0.25%
Federated Hermes Quality Bond Fund II 0.25%
Federated Hermes Government Money Fund II None
   
Federated Short-Intermediate Municipal Fund None
   
Federated Hermes Total Return Government Bond Fund 0.25%
   
Federated Hermes Total Return Series, Inc.:  
Federated Hermes Select Total Return Bond Fund 0.25%
Federated Hermes Total Return Bond Fund 0.25%
Federated Hermes Ultrashort Bond Fund None
   
Federated Hermes Intermediate Municipal Trust  
Federated Hermes Intermediate Municipal Fund None
   
Multiple Class Company
Series 		12b-1 Fee
   
Federated Hermes Short-Term Government Fund 0.25%
   
Federated Hermes Short-Intermediate Government Fund 0.05%
   
Federated Hermes Money Market Obligations Trust:  
Federated Hermes California Municipal Cash Trust None
Federated Hermes Government Obligations Fund None
Federated Hermes Government Obligations Tax-Managed Fund None
Federated Hermes Institutional Money Market Management None
 Federated Hermes Institutional Prime Obligations Fund None
Federated Hermes Institutional Prime Value Obligations Fund None
Federated Hermes Municipal Obligations Fund None
Federated Hermes New York Municipal Cash Trust 0.25%
Federated Hermes Prime Cash Obligations Fund None
Federated Hermes Tax-Free Obligations Fund None
Federated Hermes Treasury Obligations Fund None
Federated Hermes U.S. Treasury Cash Reserves 0.25%

 

 

 
 

Proprietary fund schedule -
service shares

 

Shares issued by investment companies that are not party to this Plan but that are listed on this Proprietary Fund Schedule ("Non-Plan Investment Companies") may be exchanged for Service Shares of the Funds indicated opposite their names. Such Service Shares may also be exchanged back into shares of the original Non-Plan Investment Company. In addition, indicated Service Shares purchased from a dealer party to a Dealer Agreement to sell the indicated Non-Plan Investment Company Shares may be exchanged for Shares of such Non-Plan Investment Company. In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges into any class of shares of a Non-Plan Investment Company not shown on this schedule shall be treated in the same manner as a redemption and purchase.

Multiple Class Series/Company Non-Plan Investment Companies
   

 

 

Class T Shares Exhibit

To

Multiple Class Plan

(Revised (12/1/20)

 

1.       SEPARATE ARRANGEMENT AND EXPENSE ALLOCATION

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement of the Class T Shares will consist of sales and shareholder servicing by financial intermediaries in consideration of the payment of the applicable sales load (“dealer reallowance”) and a shareholder service fee. In connection with this basic arrangement, Class T Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class T Shares
Sales Load Up to 2.50% of the public offering price
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee None
Redemption Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class T Shares as described in Section 3 of the Plan

 

2.       CONVERSION AND EXCHANGE PRIVILEGES

 

For purposes of Rule 18f-3, Class T Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable, and that no CDSC on the original shares purchased is owed.
Exchange Privilege: None  

 

3.       EXCEPTIONS TO BASIC ARRANGEMENTS

 

For purposes of Rules 22d-1 and 6c-10 under the Act, unless otherwise specified on the Schedule to this Exhibit, the scheduled variations in sales loads and contingent deferred sales charges are as follows:

 

(A)       BASIC SALES LOAD SCHEDULE

 

The basic schedule of sales loads for Class T Shares of Funds so designated on the Schedule to this Exhibit is as follows:

 

Transaction Amount

Sales Load as a Percentage of

Public Offering Price

Less than $250,000 2.50%
$250,000 but less than $500,000 2.00%
$500,000 but less than $1 million 1.50%
$1 million or greater 1.00%

 

4.       REDEMPTION FEE

 

For purposes of Rule 11a-3 under the Act, any redemption fee received upon the redemption or exchange of Class T Shares will be applied to fees incurred or amount expended in connection with such redemption or exchange. The balance of any redemption fees shall be paid to the Fund.

 

A Fund shall waive any redemption fee with respect to (i) non-participant directed redemptions or exchanges involving Class T Shares held in retirement plans established under Section 401(a) or 401(k) of the Internal Revenue Code (the “Code”), custodial plan accounts established under Section 493(b)(7) of the Code, or deferred compensation plans established under Section 457 of the Code; (ii) redemptions or exchanges involving Class T Shares held in plans administered as college savings programs under Section 529 of the Code; and (iii) Class T Shares redeemed due to the death of the last surviving shareholder on the account.

 
 

Schedule of Funds
Offering Class T Shares

 

The Funds set forth on this Schedule each offer Class T Shares on the terms set forth in the Class T Shares Exhibit to the Multiple Class Plan, in each case as indicated below. Actual amounts accrued may be less.

 

1.       CLASS A SHARES SUBJECT TO THE BASIC LOAD SCHEDULE

 

Multiple Class Company

Series

Redemption

Fee

   

 

 

Class T Shares were discontinued on 11-30-20.

 

 

 

 

 
 

 

 

trust Shares Exhibit

To

Multiple Class Plan

(Revised 06/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution arrangement for the Trust Shares will consist of sales by financial intermediaries, who, along with the principal underwriter, may receive payments for distribution and/or administrative services under a 12b-1 Plan. In connection with this basic arrangement, Trust Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Trust Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee Up to 25 basis points (0.25%) of the average daily net asset value
12b-1 Fee As set forth in the attached Schedule
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Trust  Shares as described in Section 3 of the Multiple Class Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Trust Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege: Trust Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Hermes Institutional Money Market Management, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

Schedule of FundS

Offering Trust Shares

 

The Funds set forth on this Schedule each offer Trust Shares on the terms set forth in the Trust Shares Exhibit to the Multiple Class Plan, in each case as indicated below. The 12b-1 fees indicated are the maximum amounts authorized based on the average daily net asset value. Actual amounts accrued may be less.

 

Multiple Class Company

Series

12b-1 Fee
   
Federated Hermes Money Market Obligations Trust:  
Federated Hermes Government Obligations Fund 0.25%
Federated Hermes Prime Cash Obligations Fund 0.25%
Federated Hermes Treasury Obligations Fund 0.25%

 

 

 
 

 

 

Class Y Shares Exhibit

To

Multiple Class Plan

(rEVISED 06/29/20)

 

1.       Separate Arrangement And Expense Allocation

 

For purposes of Rule 18f-3 under the Act, the basic distribution and shareholder servicing arrangement for the Class Y Shares will consist of sales to institutional purchasers requiring less distribution support activity and less shareholder services, who are also seeking low expense ratios. In connection with this basic arrangement, Class Y Shares will bear the following fees and expenses:

 

Fees and Expenses Maximum Amount Allocated Class Y Shares
Sales Load None
Contingent Deferred Sales Charge ("CDSC") None
Shareholder Service Fee None
12b-1 Fee None
Other Expenses Itemized expenses incurred by the Fund with respect to holders of Class Y Shares as described in Section 3 of the Plan

 

2.       Conversion and Exchange Privileges

 

For purposes of Rule 18f-3, Class Y Shares have the following conversion rights and exchange privileges at the election of the shareholder:

 

Conversion Rights: At the election of the shareholder, Shares may be converted into any other Share Class of the same Fund, provided that the shareholder meets the eligibility requirements for the Share Class into which the conversion is sought, as applicable.
Exchange Privilege:

Class Y Shares may be exchanged into any Federated Hermes fund or share class that does not have a stated sales charge or contingent deferred sales charge, except Shares of Federated Institutional Money Market Management, Federated Hermes Institutional Prime Obligations Fund, Federated Hermes Institutional Tax-Free Cash Trust, Federated Hermes Institutional Prime Value Obligations Fund, Class A Shares of Federated Hermes Government Reserves Fund and Class R Shares of any Fund, provided that the shareholder meets any shareholder eligibility and minimum initial investment requirements for the Shares to be purchased, (if applicable), both accounts have identical registrations, and the shareholder receives a prospectus for the fund in which the shareholder wishes to exchange.

 

In any exchange, the shareholder shall receive shares having the same aggregate net asset value as the shares surrendered. Exchanges to any other Class shall be treated in the same manner as a redemption and purchase.

 
 

Schedule of Funds

Offering class Y Shares

 

The Funds set forth on this Schedule each offer Class Y Shares on the terms set forth in the Class Y Shares Exhibit to the Multiple Class Plan, in each case as indicated below:

 

Multiple Class Company Series
   
Federated Hermes Short-Term Government Fund