Exhibit (e)(viii) under Form N-1A
Exhibit 1 under Item 601/ Reg. S-K
Exhibit 1
to the
Distributor's Contract
The following provisions are hereby incorporated and made part of the
Distributor's Contract (the "Distributor's Contract") dated October 24, 1997,
between the Investment Companies and Federated Securities Corp. as principal
distributor (the "Principal Distributor") with respect to the Class B Shares of
the portfolios (the "Funds") set forth on the attached Schedule A. References
herein to this Distributor's Contract refer to the Distributor's Contract as
supplemented hereby and made applicable hereby to the Class B Shares of the
Funds. In the event of any inconsistency between the terms of this Exhibit and
the terms of the Distributor's Contract, the terms of this Exhibit will govern.
Once effective in respect of the Class of Shares of any Fund set forth above,
the Distributors Contract as amended by this Exhibit shall be effective in
respect of all shares of such class outstanding whether issued prior to or after
such effectiveness.
1. The Investment Companies hereby appoints the Principal Distributor to
engage in activities principally intended to result in the sale of Class B
Shares ("Class B Shares") of each Fund. Pursuant to this appointment, the
Principal Distributor is authorized to select a group of financial
institutions ("Financial Institutions") to sell Class B Shares of a Fund at
the current offering price thereof as described and set forth in the
respective prospectuses of the Fund.
2. (a) In consideration of the Principal Distributor's services under this
Distributor's Contract in respect of each Fund the Investment Companies on
behalf of the Fund agree: (I) to pay the Principal Distributor or at its
direction its "Allocable Portion" (as hereinafter defined) of a fee (the
"Distribution Fee") equal to 0.75 of 1% per annum of the average daily net
asset value of the Class B Shares of the Fund outstanding from time to
time, and (II) to withhold from redemption proceeds in respect of Class B
Shares of the Fund such Principal Distributor's Allocable Portion of the
Contingent Deferred Sales Charges ("CDSCs") payable in respect of such
redemption as provided in the Prospectus for the Fund and to pay the same
over to such Principal Distributor or at its direction at the time the
redemption proceeds in respect of such redemption are payable to the holder
of the Class B Shares redeemed.
(b) The Principal Distributor will be deemed to have performed all services
required to be performed in order to be entitled to receive its Allocable
Portion of the Distribution Fee payable in respect of the Class B Shares of
a Fund upon the settlement of each sale of a "Commission Share" (as defined
in the Allocation Schedule attached hereto as Schedule B) of the Fund taken
into account in determining such Principal Distributor's Allocable Portion
of such Distribution Fees.
(c) Notwithstanding anything to the contrary set forth in this Exhibit, the
Distributor's Contract or (to the extent waiver thereof is permitted
thereby) applicable law, the Investment Companies' obligation to pay the
Principal Distributor's Allocable Portion of the Distribution Fees payable
in respect of the Class B Shares of a Fund shall not be terminated or
modified for any reason (including a termination of this Distributor's
Contract as it relates to Class B Shares of a Fund) except to the extent
required by a change in the Investment Company Act of 1940 (the "Act") or
the Conduct Rules of the National Association of Securities Dealers, Inc.,
in either case enacted or promulgated after May 1, 1997, or in connection
with a "Complete Termination" (as hereinafter defined) of the Distribution
Plan in respect of the Class B Shares of a Fund.
(d) The Investment Companies will not take any action to waive or change
any CDSC in respect of the Class B Shares of a Fund, except as provided in
the Investment Companies' prospectus or statement of additional information
as in effect as of the date hereof without the consent of the Principal
Distributor and the permitted assigns of all or any portion of its right to
its Allocable Portion of the CDSCs.
(e) Notwithstanding anything to the contrary set forth in this Exhibit, the
Distributor's Contract, or (to the extent waiver thereof is permitted
thereby) applicable law, neither the termination of the Principal
Distributor's role as principal distributor of the Class B Shares of a
Fund, nor the termination of this Distributor's Contract nor the
termination of the Distribution Plan will terminate such Principal
Distributor's right to its Allocable Portion of the CDSCs in respect of the
Class B Shares of a Fund.
(f) Notwithstanding anything to the contrary in this Exhibit, the
Distributor's Contract, or (to the extent waiver thereof is permitted
thereby) applicable law, the Principal Distributor may assign, sell or
pledge (collectively, a "Transfer") its rights to its Allocable Portion of
the Distribution Fees and CDSCs earned by it (but not its obligations to
the Investment Companies under this Distributor's Contract) in respect of
the Class B Shares of a Fund to raise funds to make the expenditures
related to the distribution of Class B Shares of the Fund and in connection
therewith upon receipt of notice of such Transfer, the Investment Companies
shall pay, or cause to be paid to the assignee, purchaser or pledgee
(collectively with their subsequent transferees, "Transferees") such
portion of the Principal Distributor's Allocable Portion of the
Distribution Fees and CDSCs in respect of the Class B Shares of the Fund so
Transferred. Except as provided in (c) above and notwithstanding anything
to the contrary set forth elsewhere in this Exhibit, the Distributor's
Contract, or (to the extent waiver thereof is permitted thereby) applicable
law, to the extent the Principal Distributor has Transferred its rights
thereto to raise funds as aforesaid, the Investment Companies' obligation
to pay to the Principal Distributor's Transferees the Principal
Distributor's Allocable Portion of the Distribution Fees payable in respect
of the Class B Shares of each Fund shall be absolute and unconditional and
shall not be subject to dispute, offset, counterclaim or any defense
whatsoever, including without limitation, any of the foregoing based on the
insolvency or bankruptcy of the Principal Distributor (it being understood
that such provision is not a waiver of the Investment Companies' right to
pursue such Principal Distributor and enforce such claims against the
assets of such Principal Distributor other than the Distributor's right to
the Distribution Fees, CDSCs and servicing fees, in respect of the Class B
Shares of any Fund which have been so transferred in connection with such
Transfer). The Fund agrees that each such Transferee is a third party
beneficiary of the provisions of this clause (f) but only insofar as those
provisions relate to Distribution Fees and CDSCs transferred to such
Transferee.
(g) For purposes of this Distributor's Contract, the term Allocable Portion
of Distribution Fees payable in respect of the Class B Shares of any Fund
shall mean the portion of such Distribution Fees allocated to such
Principal Distributor in accordance with the Allocation Schedule attached
hereto as Schedule B.
(h) For purposes of this Distributor's Contract, the term "Complete
Termination" of the Plan in respect of any Fund means a termination of the
Plan involving the complete cessation of the payment of Distribution Fees
in respect of all Class B Shares of such Fund, and the termination of the
distribution plans and the complete cessation of the payment of
distribution fees pursuant to every other Distribution Plan pursuant to
rule 12b-1 of the Investment Companies in respect of such Fund and any
successor Fund or any Fund acquiring a substantial portion of the assets of
such Fund and for every future class of shares which has substantially
similar characteristics to the Class B Shares of such Fund including the
manner of payment and amount of sales charge, contingent deferred sales
charge or other similar charges borne directly or indirectly by the holders
of such shares.
3. The Principal Distributor may enter into separate written agreements with
various firms to provide certain of the services set forth in Paragraph 1
herein. The Principal Distributor, in its sole discretion, may pay
Financial Institutions a lump sum fee on the settlement date for the sale
of each Class B Share of the Fund to their clients or customers for
distribution of such share. The schedules of fees to be paid such firms or
Financial Institutions and the basis upon which such fees will be paid
shall be determined from time to time by the Principal Distributor in its
sole discretion.
4. The Principal Distributor will prepare reports to the Board of
Trustees/Directors of the Investment Companies on a quarterly basis showing
amounts expended hereunder including amounts paid to Financial Institutions
and the purpose for such expenditures.
In consideration of the mutual covenants set forth in the Distributor's
Contract between the Investment Companies and the Principal Distributor, the
Principal Distributor and the Investment Companies hereby execute and deliver
this Exhibit with respect to the Class B Shares of the Fund.
Witness the due execution hereof this 24th day of October, 1997.
ATTEST: INVESTMENT COMPANIES (listed on Schedule A)
By: /s/ X. Xxxxxxx Xxxxx By: /s/ Xxxx X. XxXxxxxxx
-------------------------- -----------------------------
Title: Assistant Secretary` Title: Executive Vice President
----------------------- --------------------------
ATTEST: FEDERATED SECURITIES CORP.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
-------------------------- -----------------------------
Title: Assistant Secretary Title: Vice President
----------------------- --------------------------
