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j. FICAL shall provide the above recordkeeping services for fees as set forth in Schedule A. 2. FICAL may perform any of the services required of it under this Agreement directly or through one or more agents. FICAL shall not be responsible for the acts of its agents, except for FICAL's negligence in selecting any such agent. III. INVESTMENTS All FUNDS shall be invested and reinvested in accordance with the instructions of CLIENT or, if permitted by CLIENT, upon the instructions of participants. FICAL, in its Interstate 457 service, offers the CLIENT certain types of investments for the FUNDS, including, savings accounts, certificates of deposit and other investments which may be offered from time to time, for investment of the FUNDS, as more fully set forth below. FICAL does not provide investment advice with respect to PLAN assets. 2. The INTERSTATE 457 LIQUIDITY ACCOUNT is a savings account which will act as the vehicle through which all payroll deferrals are accepted and transfers and distributions are funded. FICAL reserves the right to require CLIENT to provide written notice of an intended withdrawal from the LIQUIDITY ACCOUNT not less than seven days before the withdrawal is made. The interest rate for the INTERSTATE 457 LIQUIDITY ACCOUNT shall be determined by the FICAL Deferred Compensation Rate Committee on the second to the last business day of each calendar quarter. FICAL shall adjust the investment interest rate effective on the first day of the following calendar quarter. The interest will compound quarterly and will be paid quarterly on an Actual/360 basis as provided by California Government Code Section 53645. 3. The INTERSTATE 457 DEFERRED COMPENSATION CERTIFICATES OF DEPOSIT ("CDs") are available with a minimum deposit of $1,000.00. The CDs are available with terms of one (1), two (2), three (3), four (4) and five (5) years. The interest rate for the CD investments shall be determined by the FICAL Deferred Compensation Rate Committee on the second to the last business day of each calendar quarter. FICAL shall adjust the interest rate effective on the first day of the following calendar quarter for any CDs opened during that calendar quarter. The interest will compound quarterly and will be paid quarterly on an Actual/360 basis as provided by California Government Code Section 53645. Certain restrictions apply to the investment in CDs: (a) A maximum of five (5) CDs per calendar year may by purchased for or by each participant. (b) A substantial penalty, as provided in the Interstate 457 "Participants Handbook" prepared by FICAL for distribution to participants, may apply to early liquidations of CDs, including liquidations fora "bona fide" distribution, such as retirement, and as defined by IRC §457, and as more fully defined in Section VI, paragraph 4 below. 3