FLAG INVESTORS FUNDS
FORM OF SUB-DISTRIBUTION AGREEMENT
____________, 2000
Ladies and Gentlemen:
ICC Distributors, Inc. ("ICC"), a Delaware corporation, serves as
Distributor (the "Distributor") of the Flag Investors Funds (collectively, the
"Funds", individually, a "Fund"). The Funds are open-end investment companies
(or series thereof) registered under the Investment Company Act of 1940, as
amended (the "Investment Company Act"). The Funds offer their shares ("Shares")
to the public in accordance with the terms and conditions contained in the
Prospectus of each Fund. The term "Prospectus" as used herein refers to each
prospectus on file with the Securities and Exchange Commission which is part of
the registration statement of each Fund under the Securities Act of 1933 (the
"Securities Act"). In connection with the foregoing you may serve as a
participating dealer (and, therefore, accept orders for the purchase or
redemption of Shares, respond to shareholder inquiries and perform other related
functions) on the following terms and conditions:
1. Participating Dealer. You are hereby designated a Participating
Dealer and as such are authorized (i) to accept orders for the purchase of
Shares and to transmit to the Funds such orders and the payment made therefore,
(ii) to accept orders for the redemption of Shares and to transmit to the Funds
such orders and all additional material, including any certificates for Shares,
as may be required to complete the redemption and (iii) to assist shareholders
with the foregoing and other matters relating to their investments in each Fund,
in each case subject to the terms and conditions set forth in the Prospectus of
each Fund. You are to review each Share purchase or redemption order submitted
through you or with your assistance for completeness and accuracy. You further
agree to undertake from time to time certain shareholder servicing activities
for customers of yours who have purchased Shares and who use your facilities to
communicate with the Funds or to effect redemptions or additional purchases of
the Shares.
2. Limitation of Authority. No person is authorized to make any
representations concerning the Funds or the Shares except those contained in the
Prospectus of each Fund and in such printed information as the Distributor may
subsequently prepare. No person is authorized to distribute any sales material
relating to any Fund without the prior written approval of the Distributor.
3. Compensation. As compensation for such services, you will look
solely to the Distributor, and you acknowledge that the Funds shall have no
direct responsibility for any compensation. In addition to any sales charge
payable to you by your customer pursuant to a Prospectus, the Distributor will
pay you no less often than annually a shareholder processing and service fee (as
we may determine from time to time in writing) computed as a percentage of the
average daily net assets maintained with each Fund during the preceding period
by shareholders who purchase their shares through you or with your assistance,
provided that said assets are at least $25,000 in the fund family for which you
are to be compensated, and provided that in all cases your name is transmitted
with each shareholder's purchase order.
4. Prospectus and Reports. You agree to comply with the provisions
contained in the Securities Act governing the distribution of prospectuses to
persons to whom you offer Shares. You further agree to deliver, upon our
request, copies of any amended Prospectus of the relevant Fund to purchasers
whose Shares you are holding as record owner and to deliver to such persons
copies of the annual and interim reports and proxy solicitation materials of the
Funds. We agree to furnish to you as many copies of each Prospectus, annual and
interim reports and proxy solicitation materials as you may reasonably request.
5. Qualification to Act. You represent that you are a member in good
standing of National Association of Securities Dealers, Inc. (the "NASD"). Your
expulsion or suspension from the NASD will automatically terminate this
Agreement on the effective date of such expulsion or suspension. You agree that
you will not offer Shares to persons in any jurisdiction in which you may not
lawfully make such offer due to the fact that you have not registered under, or
are not exempt from, the applicable registration or licensing requirements of
such jurisdiction. You agree that in performing the services under this
Agreement, you at all times, will comply with the Conduct Rules (formerly the
Rules of Fair Practice) of the NASD, including, without limitation, the
provisions of Rule 2830 (formerly Section 26) of such Rules. You agree that you
will not combine customer orders to reach breakpoints in commission for any
purposes whatsoever unless authorized by the then current Prospectus in respect
of a particular class of Shares or by us in writing. You also agree that you
will place orders immediately upon their receipt and will not withhold any order
so as to profit therefrom. In determining the amount payable to you hereunder,
we reserve the right to exclude any sales which we reasonably determine are not
made in accordance with the terms of the relevant prospectus and provisions of
the Agreement.
6. Blue Sky. The Funds have registered an indefinite number of Shares
under the Securities Act. The Funds intend to make appropriate notice filings in
certain states where such filing is required. We will inform you as to the
states or other jurisdictions in which we believe the Shares are eligible for
sale under the respective securities laws of such states. You agree that you
will offer Shares to your customers only in those states where such Shares are
eligible to be sold. We assume no responsibility or obligation as to your right
to sell Shares in any jurisdiction.
7. Authority of Fund. Each Fund shall have full authority to take such
action as it deems advisable in respect of all matters pertaining to the
offering of its Shares, including the right not to accept any order for the
purchase of Shares.
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8. Record Keeping. You will (i) maintain all records required by law to
be kept by you relating to transactions in Shares and, upon request by any Fund,
promptly make such of these records available to the Fund as the Fund may
reasonably request in connection with its operations and (ii) promptly notify
the Fund if you experience any difficulty in maintaining the records described
in the foregoing clauses in an accurate and complete manner.
9. Liability. The Distributor shall be under no liability to you except
for lack of good faith and for obligations expressly assumed by it hereunder. In
carrying out your obligations, you agree to act in good faith and without
negligence. Nothing contained in this Agreement is intended to operate as a
waiver by the Distributor or you of compliance with any provisions of the
Investment Company Act, the Securities Act, the Securities Exchange Act of 1934,
as amended, or the rules and regulations promulgated by the Securities and
Exchange Commission thereunder.
10. Termination. This Agreement may be terminated by either party,
without penalty, upon ten days' notice to the other party and shall
automatically terminate in the event of its assignment. This Agreement may also
be terminated at any time for any particular Fund without penalty by the vote of
a majority of the members of the Board of Directors or Trustees of such Fund who
are not "interested persons" (as such phrase is defined in the Investment
Company Act) and who have no direct or indirect financial interest in the
operation of the Distribution Agreement between such Fund and the Distributor or
by the vote of a majority of the outstanding voting securities of the Fund.
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11. Communications. All communications other than this Agreement and
those pertaining to this agreement should be sent to the address listed below.
Any notice to you shall be duly given if mailed or telegraphed to you at the
address below.
Flag Investors Funds
000 Xxxx 0xx Xxxxxx, 0xx Xxxxx
Xxxxxx Xxxx, XX 00000
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us both copies of this Agreement to:
Flag Investors Funds
c/o ICC Distributors, Inc.
X.X. Xxx 0000
Xxxxxxxx, Xxxxx 00000
Attn: Dealer Services
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ICC Distributors, Inc.
By: Xxxxxxxx X. Xxxxx
Vice-President
Confirmed and accepted:
Firm Name:
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By:
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Signature
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Printed Name and Title
Date:
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Address:
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Clears Through:
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Executing Number:
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Phone No.:
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FLAG INVESTORS FUNDS
Compensation Schedule
(effective January 18, 2000)
Class "A" Shares -- Sales Charges
International Fund Communications Fund Real Estate Securities Fund
Emerging Growth Fund Value Builder Fund Equity Partners Fund
Top 50 US Top 50 World Top 50 Europe
Top 50 Asia Japanese Equity Fund European Mid-Cap Fund
Amount of Purchase Sales Charge Dealer Retention
------------------ ------------ ----------------
Less than $50,000 5.50% 4.75%
$50,000 but less than $100,000 4.50% 3.75%
$100,000 but less than $250,000 3.50% 2.75%
$250,000 but less than $500,000 2.50% 2.00%
$500,000 but less than $1,000,000 2.00% 1.75%
$1,000,000 but less than $5,000,000 NONE* 1.00%
$5,000,000 and over NONE* .50%
Total Return U.S. Treasury Fund
Managed Municipal Fund
Amount of Purchase Sales Charge Dealer Retention
------------------ ------------ ----------------
Less than $50,000 4.50% 4.00%
$50,000 but less than $100,000 3.50% 3.00%
$100,000 but less than $250,000 2.50% 2.00%
$250,000 but less than $500,000 2.00% 1.50%
$500,000 but less than $1,000,000 1.50% 1.25%
$1,000,000 and over NONE** 0.50%
Short-Intermediate Income Fund
Amount of Purchase Sales Charge Dealer Retention
------------------ ------------ ----------------
Less than $100,000 1.50% 1.25%
$100,000 but less than $500,000 1.25% 1.00%
$500,000 but less than $1,000,000 1.00% 0.75%
$1,000,000 and over NONE** 0.50%
US Money Market Fund
Amount of Purchase Sales Charge Dealer Retention
------------------ ------------ ----------------
$1,000,000 but less than $5,000,000 NONE* 1.00%
$5,000,000 and over NONE* 0.50%
Notes
* On sales of $1 million or more, dealers will be paid a commission of
1% on the first $5 million of n.a.v. purchases and .50% on all n.a.v.
purchases over $5 million. Purchases may be subject to a contingent
deferred sales charge. ICC Distributors may make payments to dealers in
the amount of 1% of the Offering Price subject to reimbursement of
those amounts if Shares are redeemed within the first 12 months of
purchase and .50% of the Offering Price subject to reimbursement of
those amounts if Shares are redeemed within the second 12 months of
purchase.
** Purchases may be subject to a contingent deferred sales charge. ICC
Distributors may make payments to dealers in the amount of 0.50% of the
Offering Price subject to reimbursement of those amounts if Shares are
redeemed within 24 months of purchase.
1. Rights of Accumulation and Letter of Intent are available.
2. Free exchange between fund family members of the same class
and sales charge structure.
3. Bank trust departments acting in fiduciary or advisory
capacity for individual institutional or trust accounts may
buy at net asset value provided order is for at least $1
million.
4. Purchases may be made at net asset value if made in accordance
with the "net asset value sales" terms of the applicable
prospectus. Dealer will receive no discount, commission or
other concession with respect to any such sale at net asset
value, but will be entitled to receive any service fees and/or
distribution fees otherwise payable with respect thereto to
the extent provided from time to time in the applicable
prospectus.
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Class "B" Shares -- Sales Charges
Communications Fund Real Estate Securities Fund
Emerging Growth Fund Value Builder Fund
Equity Partners Fund International Fund
Top 50 Europe Top 50 Asia
Top 50 US Top 50 World
Japanese Equity Fund European Mid-Cap Fund
US Money Market Fund Cash Reserve Prime Shares
Sales Charge* Dealer Retention
------------- ----------------
0.00% 4.00%
* Redemption within the first six years are subject to a
Contingent Deferred Sales Charge according to the following
schedules:
Year of Redemption 1 2 3 4 5 6 7
-- -- -- -- -- -- --
CDSC 5% 4% 3% 3% 2% 1% 0%
Shares will be converted to Class "A" Shares after year 7.
Notes
1. Free exchange between fund family members of the same class and
sales charge structure.
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Class "C" Shares -- Sales Charges
Communication Funds Top 50 Europe
Equity Partners Fund Top 50 US
Value Builder Fund European Mid-Cap
International Fund Cash Reserve Prime Shares
Sales Charge* Dealer Retention
------------- ----------------
0.00% 1.00%
* Redemption within the first year is subject to a Contingent
Deferred Sales Charge according to the following schedules:
Year of Redemption 1
CDSC 1%
* 12b-1 fees in the amount of 1% per year will be paid
quarterly commencing in the thirteenth month.
Notes
1. Free exchange between fund family members of the same class
and sales charge structure.
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Class "I" Shares - Sales Charges
Emerging Growth Fund Real Estate Securities Fund
Equity Partners Fund Value Builder Fund
Communications Fund Short-Intermediate Income Fund
NO SALES CHARGE
Payout Structure
Emerging Growth Fund Real Estate Securities Fund
Equity Partners Fund Value Builder Fund
Communications Fund
16Bp annually on average assets. Paid quarterly.
Short-Intermediate Income Fund
8Bp annually on average assets. Paid quarterly.
Notes
1. Free exchange between fund family members of the same class.
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Distribution Payments
Class "A" Shares
All funds have a 12b-1 fee of 0.25% per year. The entire fee is paid to
sub-distributors on a calendar quarterly basis provided the
sub-distributor has at least $25,000 in assets in the fund family.
Class "B" Shares
All funds have a 12b-1 fee of 0.75% per year and a shareholder
servicing fee of 0.25% per year. Sub-distributors are paid at the rate
of 0.25% per year on a calendar quarterly basis provided the
sub-distributor has at least $25,000 in assets in the fund family.
After year 7 in the fund, all Class "B" shares will convert to Class
"A" shares.
Class "C" Shares
All funds have a 12b-1 fee of 0.75% per year and a shareholder
servicing fee of 0.25% per year. Sub-distributors are paid at the rate
of 1% per year on a calendar quarterly basis provided the
sub-distributor has at least $25,000 in assets in the fund family.
12b-1 fees in the amount of 1% per year will be paid quarterly
commencing in the thirteenth month.
Class "I" Shares
"I" shares do not have a 12b-1 fee. See page 5 for dealer payout.
Notes
1. Payment is made only upon receipt by the Distributor of Rule 12b-1
payments from the applicable fund.
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FLAG INVESTORS FUNDS
Contacts
Marketing -- 0-000-000-0000
Flag Investors Marketing
0 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Director of Marketing
Xxxxx Xxxxxxxx
Broker/Dealer Services -- 0-000-000-0000
Flag Investors Broker/Dealer Services
X.X. Xxx 000
Xxxxxxxxx, XX 00000
Broker/Dealer Services Coordinator
Xx Xxxxxx
Transfer Agent
Investment Company Capital Corp.
XX Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
0-000-000-0000
Federated Shareholder Services Company
Federated Investors Tower
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
0-000-000-0000
Distributor -- 0-000-000-0000
ICC Distributors, Inc.
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Dealer Documentation
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FLAG INVESTORS FUNDS
Blue Sky Information
Eligible
Fund Name Classes States
--------- ------- --------
Flag Investors Communications Fund, Inc. A, B, C & I Shares All
Flag Investors International Fund, Inc. A, B, C Shares All
Flag Investors Emerging Growth Fund, Inc. A, B, & I Shares All
Flag Investors Total Return U.S. Treasury Fund, Inc. A Shares All
Flag Investors Cash Reserve Prime Shares A, B, & C Shares All
Flag Investors Managed Municipal Fund A Shares All
Flag Investors Short-Intermediate Income Fund, Inc. A & I Shares All
Flag Investors Value Builder Fund, Inc. A, B, C & I Shares All
Flag Investors Real Estate Securities Fund, Inc. A, B, & I Shares All
Flag Investors Equity Partners Fund, Inc. A, B, C & I Shares All
Flag Investors Top 50 World A & B Shares All
Flag Investors Top 50 US A, B, & C Shares All
Flag Investors Top 50 Europe A, B, & C Shares All
Flag Investors Top 50 Asia A & B Shares All
Flag Investors Japanese Equity A & B Shares All
Flag Investors European Mid-Cap A, B, & C Shares All
Flag Investors U.S. Money Market Fund A & B Shares All
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