Exhibit (e)(xi) under Form N-1A
Exhibit 1 under Item 601/Reg S-K
MUTUAL FUNDS
SALES AND SERVICE
AGREEMENT
This Agreement is entered into among the financial institution executing
this Agreement ("Financial Institution"), Federated Securities Corp. ("FSC"),
and Federated Shareholder Services Company ("FSSC"), with respect to those
investment companies listed in Exhibit A hereto (referred to individually as
the "Fund" and collectively as the "Funds") for whose shares of beneficial
interest or capital stock ("Shares") FSC serves as Distributor and for whom
FSSC provides or coordinates shareholder services.
A. Financial Institution.
1. Status of Financial Institution as "Bank" or Registered Broker-Dealer.
Financial Institution represents and warrants to FSC and FSSC:
(a)(i) that it is a broker or dealer as defined in Section
3(a)(4) or 3(a)(5) of the Securities Exchange Act of 1934
("Exchange Act"); that it is registered with the Securities
and Exchange Commission pursuant to Section 15 of the
Exchange Act; that it is a member of the National
Association of Securities Dealers, Inc.; that its
customers' accounts are insured by the Securities Investors
Protection Corporation ("SIPC"); and that, during the term
of this Agreement, it will abide by all of the rules and
regulations of the NASD including, without limitation, the
NASD Rules of Fair Practice. Financial Institution agrees
to notify FSC immediately in the event of (1) the
termination of its coverage by the SIPC; (2) its expulsion
or suspension from the NASD, or (3) its being found to have
violated any applicable federal or state law, rule or
regulation arising out of its activities as a broker-dealer
or in connection with this Agreement, or which may
otherwise affect in any material way its ability to act in
accordance with the terms of this Agreement. Financial
Institution's expulsion from the NASD will automatically
terminate this Agreement immediately without notice.
Suspension of Financial Institution from the NASD for
violation of any applicable federal or state law, rule or
regulation will terminate this Agreement effective
immediately upon FSC's written notice of termination to
Financial Institution; or
(a)(ii) that it is a "bank," as that term is defined in
Section 3(a)(6) of the Exchange Act and that, during the
term of this Agreement, it will abide by the rules and
regulations of those state and federal banking authorities
with appropriate jurisdiction over the Financial
Institution, especially those regulations dealing with the
activities of the Institution as described under this
Agreement. Financial Institution agrees to notify FSC or
FSSC immediately of any action by or communication from
state or federal banking authorities, state securities
authorities, the Securities and Exchange Commission, or any
other party which may affect its status as a bank, or which
may otherwise affect in any material way its ability to act
in accordance with the terms of this Agreement. Any action
or decision of any of the foregoing regulatory authorities
or any court of appropriate jurisdiction which affects
Financial Institution's ability to act in accordance with
the terms of this agreement, including the loss of its
exemption from registration as a broker or dealer, will
terminate this Agreement effective upon FSC's written
notice of termination to Financial Institution; and
(b) that Financial Institution is registered with the
appropriate securities authorities in all states in which
its activities make such registration necessary.
2. Financial Institution Acts as Agent for its Customers.
The parties agree that in each transaction in the Shares of any Fund and with
regard to any services rendered pursuant to this Agreement: (a) Financial
Institution is acting as agent for the customer; (b) each transaction is
initiated solely upon the order of the customer; (c) as between Financial
Institution and its customer, the customer will have full beneficial
ownership of all Shares of the Funds; (d) each transaction shall be for the
account of the customer and not for Financial Institution's account; and (e)
each transaction shall be without recourse to Financial Institution provided
that Financial Institution acts in accordance with the terms of this
Agreement. Financial Institution shall not have any authority in any
transaction to act as FSC's agent or as agent for the Funds.
B. Sales of Fund Shares.
3. Execution of Orders for Purchase and Redemption of Shares.
(a) All orders for the purchase of any Shares shall be executed at the
then-current public offering price per share (i.e., the net asset value
per share plus the applicable initial sales load, if any) and all orders
for the redemption of any Shares shall be executed at the net asset value
per share, in each case as described in the prospectus of the Fund. Any
applicable redemption fee or deferred sales charge will be deducted by
the Fund prior to the transmission of the redemption proceeds to
Financial Institution or its customer. FSC and the Funds reserve the
right to reject any purchase request in their sole discretion . If
required by law, each transaction shall be confirmed in writing on a
fully disclosed basis and, if confirmed by FSC, a copy of each
confirmation shall be sent simultaneously to Financial Institution if
Financial Institution so requests.
(b) The procedures relating to all orders will be subject to the terms of
the prospectus of each Fund and FSC's written instructions to Financial
Institution from time to time.
(c) Payments for Shares shall be made as specified in the applicable Fund
prospectus. If payment for any purchase order is not received in
accordance with the terms of the applicable Fund prospectus, FSC reserves
the right, without notice, to cancel the sale and to hold Financial
Institution responsible for any loss sustained as a result thereof.
4. Initial Sales Loads Payable to Financial Institution.
(a) On each order accepted by FSC, in exchange for the performance of
sales and/or distribution services, Financial Institution will be
entitled to receive the applicable percentage of the initial sales load,
if any, as established by FSC from the amount paid by Financial
Institution's customer . The initial sales loads for any Fund shall be
those set forth in its prospectus. The portion of the initial sales load
payable to Financial Institution may be changed at any time at FSC's sole
discretion upon written notice to Financial Institution.
(b) Transactions may be settled by Financial Institution: (1) by payment
of the full purchase price less an amount equal to Financial
Institution's applicable percentage of the initial sales load, or (2) by
payment of the full purchase price, in which case Financial Institution
shall receive, not less frequently than monthly, the aggregate fees due
it on orders received and settled.
(c) It shall be the obligation of the Financial Institution either: (i)
to provide FSC with all necessary information regarding the application
of the appropriate initial sales load to each transaction, or (ii) to
assess the appropriate initial sales load for each transaction and to
forward the public offering price, net of the amount of the initial sales
load to be reallocated to the Financial Institution, to the appropriate
Fund. Neither the Fund nor FSC shall have any responsibility to correct
the payment or assessment of an incorrect initial sales load due to the
failure of the Financial Institution to fulfill the foregoing obligation.
5. Advance Commissions Payable to Financial Institution.
Upon the purchase of certain Shares, as described in the applicable
prospectuses, FSC will pay Financial Institution an advance commission as set
forth in the Fund's current prospectus. This amount is not to be considered
an initial sales load and should not be deducted from the public offering
price of the Shares which shall be forwarded to the Fund. Generally, a
contingent deferred sales charge ("CDSC") will be assessed upon the
redemption of Shares with regard to which an advance commission is paid by
FSC; in the event that Financial Institution notifies FSC in writing that
Financial Institution elects to waive such advance commission, and if the
Fund's prospectus permits such a waiver, the CDSC will not be charged upon
the redemption of the relevant Shares. To receive advance commission from
FSC on Shares that are subject to a CDSC, Financial Institution must open
investor accounts with the Fund on a fully-disclosed basis or be able to
account for share ownership periods used in calculating the CDSC.
Furthermore, should the custody (or record ownership) of the shares of the
investor account(s) be transferred during the applicable CDSC holding period
(as described in the Fund prospectus) to a financial institution which does
not maintain investor accounts on a fully disclosed basis and does not
account for share ownership periods, the Financial Institution agrees to
reimburse FSC prior to such transfer for advance commissions paid to it by
FSC.
C. Distribution Services.
6. Agreement to Provide Distribution Services.
(a) With regard to those Funds which pay asset-based sales charges
(pursuant to Distribution Plans adopted under Investment Company Act Rule
12b-1), as noted in the Fund's current prospectus, FSC hereby appoints
Financial Institution to render or cause to be rendered distribution and
sales services to the Funds and their shareholders.
(b) The services to be provided under this Paragraph (a) may include, but
are not limited to, the following:
(i) reviewing the activity in Fund accounts;
(ii)providing training and supervision of its personnel;
(iii) maintaining and distributing current copies of prospectuses and
shareholder reports;
(iv)advertising the availability of its services and products;
(v) providing assistance and review in designing materials to send to
customers and potential customers and developing methods of making
such materials accessible to customers and potential customers; and
(vi)responding to customers' and potential customers' questions about
the Funds.
7. Asset-Based Sales Loads Payable to Financial Institution.
During the term of this Agreement, FSC will pay Financial Institution
asset-based sales charges (also known as "Rule 12b-1 Fees") for each Fund as
set forth in the Fund's current prospectus. For the payment period in which
this Agreement becomes effective or terminates, there shall be an appropriate
proration of the fee on the basis of the number of days that this Agreement
is in effect during the quarter.
D. Shareholder Services.
8. Agreement to Provide Shareholder and Account Maintenance Services.
With regard to those Funds which pay a Shareholder Services Fee to
Financial Institutions, as noted in the Fund's current prospectus, Financial
Institution agrees to render or cause to be rendered personal services to
shareholders of the Funds and/or the maintenance of accounts of shareholders
of the Funds ("Shareholder Services"). Financial Institution agrees to
provide Shareholder Services which, in its best judgment, are necessary or
desirable for its customers who are investors in the Funds. Financial
Institution further agrees to provide FSSC, upon request, a written
description of the Shareholder Services which Financial Institution is
providing hereunder.
9. Shareholder Service Fees Payable to Financial Institution.
During the term of this Agreement, FSSC will pay Financial Institution
Shareholder Service Fees as set forth in the Fund's current prospectus. For
the payment period in which this Agreement becomes effective or terminates,
there shall be an appropriate proration of the fee on the basis of the number
of days that this Agreement is in effect during the quarter.
E. Miscellaneous.
10. Delivery of Prospectuses to Customers.
Financial Institution will deliver or cause to be delivered to each
customer, at or prior to the time of any purchase of Shares, a copy of the
current prospectus of the Fund and, upon request by a customer or
shareholder, a copy of the Fund's current Statement of Additional
Information. Financial Institution shall not make any representations
concerning any Shares other than those contained in the prospectus or
Statement of Additional Information of the Fund or in any promotional
materials or sales literature furnished to Financial Institution by FSC or
the Fund.
11. ERISA Assets.
(a) Financial Institution understands that the Department of Labor views
ERISA as prohibiting fiduciaries of discretionary ERISA assets from
receiving administrative service fees or other compensation from funds in
which the fiduciary's discretionary ERISA assets are invested. To date,
the Department of Labor has not issued any exemptive order or advisory
opinion that would exempt fiduciaries from this interpretation. Without
specific authorization from the Department of Labor, fiduciaries should
carefully avoid investing discretionary assets in any fund pursuant to an
arrangement where the fiduciary is to be compensated by the fund for such
investment. Receipt of such compensation could violate ERISA provisions
against fiduciary self-dealing and conflict of interest and could subject
the fiduciary to substantial penalties.
(b) Financial Institution will not perform or provide any duties which
would cause it to be a fiduciary under Section 4975 of the Internal
Revenue Code, as amended. For purposes of that Section, Financial
Institution understands that any person who exercises any discretionary
authority or discretionary control with respect to any individual
retirement account or its assets, or who renders investment advice for a
fee, or has any authority or responsibility to do so, or has any
discretionary authority or discretionary responsibility in the
administration of such an account, is a fiduciary.
12. Indemnification.
(a) Financial Institution shall indemnify and hold harmless FSC, FSSC,
each Fund, the transfer agents of the Funds, and their respective
subsidiaries, affiliates, officers, directors, agents and employees from
all direct or indirect liabilities, losses or costs (including attorneys
fees) arising from, related to or otherwise connected with: (1) any
breach by Financial Institution of any provision of this Agreement; or
(2) any actions or omissions of FSC, FSSC, any Fund, the transfer agents
of the Funds, and their subsidiaries, affiliates, officers, directors,
agents and employees in reliance upon any oral, written or computer or
electronically transmitted instructions believed to be genuine and to
have been given by or on behalf of Financial Institution.
(b) FSC shall indemnify and hold harmless Financial Institution and its
subsidiaries, affiliates, officers, directors, agents and employees from
and against any and all direct or indirect liabilities, losses or costs
(including attorneys fees) arising from, related to or otherwise
connected with: (1) any breach by FSC of any provision of this Agreement;
or (2) any alleged untrue statement of a material fact contained in any
Fund's Registration Statement or Prospectus, or as a result of or based
upon any alleged omission to state a material fact required to be stated
therein or necessary to make the statements contained therein not
misleading.
(c) FSSC shall indemnify and hold harmless Financial Institution and its
subsidiaries, affiliates, officers, directors, agents and employees from
and against any and all direct or indirect liabilities, losses or costs
(including attorneys fees) arising from, related to or otherwise
connected with any breach by FSSC of any provision of this Agreement.
(d) The agreement of the parties in this Paragraph to indemnify each
other is conditioned upon the party entitled to indemnification
(Indemnified Party) giving notice to the party required to provide
indemnification (Indemnifying Party) promptly after the summons or other
first legal process for any claim as to which indemnity may be sought is
served on the Indemnified Party. The Indemnified Party shall permit the
Indemnifying Party to assume the defense of any such claim or any
litigation resulting from it, provided that counsel for the Indemnifying
Party who shall conduct the defense of such claim or litigation shall be
approved by the Indemnified Party (which approval shall not unreasonably
be withheld), and that the Indemnified Party may participate in such
defense at its expense. The failure of the Indemnified Party to give
notice as provided in this subparagraph (d) shall not relieve the
Indemnifying Party from any liability other than its indemnity obligation
under this Paragraph. No Indemnifying Party, in the defense of any such
claim or litigation, shall, without the consent of the Indemnified Party,
consent to entry of any judgment or enter into any settlement that does
not include as an unconditional term the giving by the claimant or
plaintiff to the Indemnified Party of a release from all liability in
respect to such claim or litigation.
(e) The provisions of this Paragraph 13 shall survive the termination of
this Agreement.
13. Customer Names Proprietary to Financial Institution.
(a) The names of Financial Institution's customers are and shall remain
Financial Institution's sole property and shall not be used by FSC, FSSC,
or their affiliates for any purpose except the performance of their
respective duties and responsibilities under this Agreement and except
for servicing and informational mailings relating to the Funds.
Notwithstanding the foregoing, this Paragraph 14 shall not prohibit FSC,
FSSC, or any of their affiliates from utilizing the names of Financial
Institution's customers for any purpose if the names are obtained in any
manner other than from Financial Institution pursuant to this Agreement.
(b) Neither party shall use the name of the other party in any manner
without the other party's written consent, except as required by any
applicable federal or state law, rule or regulation, and except pursuant
to any mutually agreed upon promotional programs.
(c) The provisions of this Paragraph 14 shall survive the termination of
this Agreement.
14. Security Against Unauthorized Use of Funds' Recordkeeping Systems.
Financial Institution agrees to provide such security as is necessary to
prevent any unauthorized use of the Funds' recordkeeping system, accessed via
any computer hardware or software provided to Financial Institution by FSC or
FSSC.
15. Solicitation of Proxies.
Financial Institution agrees not to solicit or cause to be solicited
directly, or indirectly, at any time in the future, any proxies from the
shareholders of any or all of the Funds in opposition to proxies solicited by
management of the Fund or Funds, unless a court of competent jurisdiction
shall have determined that the conduct of a majority of the Board of
Directors or Trustees of the Fund or Funds constitutes willful misfeasance,
bad faith, gross negligence or reckless disregard of their duties. This
Paragraph 16 will survive the termination of this Agreement.
16. Certification of Customers' Taxpayer Identification Numbers.
Financial Institution agrees to obtain any taxpayer identification number
certification from its customers required under Section 3406 of the Internal
Revenue Code, and any applicable Treasury regulations, and to provide FSC,
FSSC, or their respective designee with timely written notice of any failure
to obtain such taxpayer identification number certification in order to
enable the implementation of any required backup withholding.
17. Notices.
Except as otherwise specifically provided in this Agreement, all notices
required or permitted to be given pursuant to this Agreement 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 facsimile or similar electronic
means of delivery (with a confirming copy by mail as provided herein).
Unless otherwise notified in writing, all notices to FSC or FSSC shall be
given or sent to FSC or FSSC at their offices located at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, and all notices to Financial
Institution shall be given or sent to it at its address shown below.
18. Termination and Amendment.
(a) This Agreement shall become effective in this form as of the date set
forth below or as of the first date thereafter upon which Financial
Institution executes any transaction, performs any service, or receives
any payment pursuant hereto. This Agreement supersedes any prior sales,
distribution, shareholder service, or administrative service agreements
between the parties.
(b) With respect to each Fund, this Agreement shall continue in effect
for one year from the date of its execution, and thereafter for
successive periods of one year if the form of this Agreement is approved
at least annually by the Directors or Trustees of the Fund, including a
majority of the members of the Board of Directors or Trustees of the Fund
who are not interested persons of the Fund and have no direct or indirect
financial interest in the operation of the Fund's Distribution Plan or in
any related documents to such Plan ("Independent Directors or Trustees")
cast in person at a meeting called for that purpose.
(c) This Agreement, including Exhibit A hereto, may be amended by FSC
and/or FSSC from time to time by the following procedure. FSC or FSSC
will mail a copy of the amendment to Financial Institution's address, as
shown below. If Financial Institution does not object to the amendment
within thirty (30) days after its receipt, the amendment will become part
of the Agreement. Financial Institution's objection must be in writing
and be received by FSC or FSSC within such thirty days.
(d) Notwithstanding subparagraph 19(b) and in addition to subparagraph
1(a), this Agreement may be terminated as follows:
(i) at any time, without the payment of any penalty, by the vote of a
majority of the Independent Directors or Trustees of the Fund or by a
vote of a majority of the outstanding voting securities of the Fund
as defined in the Investment Company Act of 1940 on not more than
sixty (60) days' written notice to the parties to this Agreement;
(ii) automatically in the event of the Agreement's assignment as defined
in the Investment Company Act of 1940, upon the termination of the
"Distributor's Contract" between the Fund and FSC, upon termination
of the "Shareholder Services Agreement" between the Fund and FSSC, or
upon the termination of the Distribution Plan to which this Agreement
is related; and
(iii) by any party to the Agreement without cause by giving the other
party at least sixty (60) days' written notice of its intention to
terminate.
(e) The termination of this Agreement with respect to any one Fund will
not cause the Agreement's termination with respect to any other Fund.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
19. Governing Law.
This Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania.
FEDERATED SECURITIES CORP.
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By:
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
FEDERATED SHAREHOLDER SERVICES COMPANY
Federated Investors Tower
Pittsburgh, Pennsylvania 15222-3779
By:
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
_______________________________________
Financial Institution Name
(Please Print or Type)
_______________________________________
Address
_______________________________________
City State Zip Code
By:______________________________
Authorized Signature
_______________________________________
Title
_______________________________________
Print Name or Type Name
Dated:_____________________
Exhibit A
to Mutual Funds Sales and Service Agreement
Regions Xxxxxx Xxxxxx Select Funds
Regions Xxxxxx Xxxxxx Select Aggressive Growth Fund
Regions Xxxxxx Xxxxxx Select Balanced Fund
Regions Xxxxxx Xxxxxx Select Fixed Income Fund
Regions Xxxxxx Xxxxxx Select Government Money Market Fund
Regions Xxxxxx Xxxxxx Select Growth Fund
Regions Xxxxxx Xxxxxx Select Limited Maturity Government Fund
Regions Xxxxxx Xxxxxx Select Strategic Equity Fund
Regions Xxxxxx Xxxxxx Select Treasury Money Market Fund
Regions Xxxxxx Xxxxxx Select Value Fund
Revised: December 1, 2002