Exhibit (e)(vii) under Form N-1A
Exhibit 1 under Item 601/ Reg. S-K
DISTRIBUTOR'S CONTRACT
AGREEMENT made this 24th day of October, 1997, by and between those
Investment Companies on behalf of the Portfolios and Classes of Shares listed on
Schedule A to Exhibit 1, as may be amended from time to time, having their
principal place of business at Federated Investors Tower, Pittsburgh,
Pennsylvania 15222-3779, and who have approved this form of Agreement, and
FEDERATED SECURITIES CORP. ("FSC"), a Pennsylvania Corporation. Each of the
Exhibits hereto is incorporated herein in its entirety and made a part hereof.
In the event of any inconsistency between the terms of this Agreement and the
terms of any applicable Exhibit, the terms of the applicable Exhibit shall
govern.
In consideration of the mutual covenants hereinafter contained, it is
hereby agreed by and between the parties hereto as follows:
1. Each of the Investment Companies hereby appoint FSC as agent to sell and
distribute shares of the Investment Companies which may be offered in one
or more series (the "Funds") consisting of one or more classes (the
"Classes") of shares (the "Shares"), as described and set forth on one or
more exhibits to this Agreement, at the current offering price thereof as
described and set forth in the current Prospectuses of the Funds. FSC
hereby accepts such appointment and agrees to provide such other services
for the Investment Companies, if any, and accept such compensation from the
Investment Companies, if any, as set forth in the applicable exhibits to
this Agreement.
2. The sale of any Shares may be suspended without prior notice whenever in
the judgment of the applicable Investment Company it is in its best
interest to do so.
3. Neither FSC nor any other person is authorized by the Investment Companies
to give any information or to make any representation relative to any
Shares other than those contained in the Registration Statement,
Prospectuses, or Statements of Additional Information ("SAIs") filed with
the Securities and Exchange Commission, as the same may be amended from
time to time, or in any supplemental information to said Prospectuses or
SAIs approved by the Investment Companies. FSC agrees that any other
information or representations other than those specified above which it or
any dealer or other person who purchases Shares through FSC may make in
connection with the offer or sale of Shares, shall be made entirely without
liability on the part of the Investment Companies. No person or dealer,
other than FSC, is authorized to act as agent for the Investment Companies
for any purpose. FSC agrees that in offering or selling Shares as agent of
the Investment Companies, it will, in all respects, duly conform to all
applicable state and federal laws and the rules and regulations of the
National Association of Securities Dealers, Inc., including its Rules of
Fair Practice. FSC will submit to the Investment Companies copies of all
sales literature before using the same and will not use such sales
literature if disapproved by the Investment Companies.
4. This Agreement is effective with respect to each Class as of the date of
execution of the applicable exhibit and shall continue in effect with
respect to each Class presently set forth on an exhibit and any subsequent
Classes added pursuant to an exhibit during the initial term of this
Agreement for one year from the date set forth above, and thereafter for
successive periods of one year if such continuance is approved at least
annually by the Trustees/Directors of the Investment Companies including a
majority of the members of the Board of Trustees/Directors of the
Investment Companies who are not interested persons of the Investment
Companies and have no direct or indirect financial interest in the
operation of any Distribution Plan relating to the Investment Companies or
in any related documents to such Plan ("Disinterested Trustees/Directors")
cast in person at a meeting called for that purpose. If a Class is added
after the first annual approval by the Trustees/Directors as described
above, this Agreement will be effective as to that Class upon execution of
the applicable exhibit and will continue in effect until the next annual
approval of this Agreement by the Trustees/Directors and thereafter for
successive periods of one year, subject to approval as described above.
5. This Agreement may be terminated with regard to a particular Fund or Class
at any time, without the payment of any penalty, by the vote of a majority
of the Disinterested Trustees/Directors or by a majority of the outstanding
voting securities of the particular Fund or Class on not more than sixty
(60) days' written notice to any other party to this Agreement.
6. This Agreement may not be assigned by FSC and shall automatically terminate
in the event of an assignment by FSC as defined in the Investment Company
Act of 1940, as amended, provided, however, that FSC may employ such other
person, persons, corporation or corporations as it shall determine in order
to assist it in carrying out its duties under this Agreement.
7. FSC shall not be liable to the Investment Companies 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 by
this Agreement.
8. This Agreement may be amended at any time by mutual agreement in writing of
all the parties hereto, provided that such amendment is approved by the
Trustees/Directors of the Investment Companies including a majority of the
Disinterested Trustees/Directors of the Investment Companies cast in person
at a meeting called for that purpose.
9. This Agreement shall be construed in accordance with and governed by the
laws of the Commonwealth of Pennsylvania.
10. (a) Subject to the conditions set forth below, the Investment Companies
agree to indemnify and hold harmless FSC and each person, if any, who
controls FSC within the meaning of Section 15 of the Securities Act of 1933
and Section 20 of the Securities Act of 1934, as amended, against any and
all loss, liability, claim, damage and expense whatsoever (including but
not limited to any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, any Prospectuses or SAIs (as from time to
time amended and 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 Companies about FSC by or on behalf
of FSC expressly for use in the Registration Statement, any Prospectuses
and SAIs or any amendment or supplement thereof.
If any action is brought against FSC or any controlling person thereof with
respect to which indemnity may be sought against any Investment Company
pursuant to the foregoing paragraph, FSC shall promptly notify the
Investment Company in writing of the institution of such action and the
Investment Company shall assume the defense of such action, including the
employment of counsel selected by the Investment Company and payment of
expenses. FSC or any such controlling person thereof shall have the right
to employ separate counsel in any such case, but the fees and expenses of
such counsel shall be at the expense of FSC or such controlling person
unless the employment of such counsel shall have been authorized in writing
by the Investment Company in connection with the defense of such action or
the Investment Company shall not have employed counsel to have charge of
the defense of such action, in any of which events such fees and expenses
shall be borne by the Investment Company. Anything in this paragraph to the
contrary notwithstanding, the Investment Companies shall not be liable for
any settlement of any such claim of action effected without their written
consent. The Investment Companies agree promptly to notify FSC of the
commencement of any litigation or proceedings against the Investment
Companies or any of their officers or Trustees/Directors or controlling
persons in connection with the issue and sale of Shares or in connection
with the Registration Statement, Prospectuses, or SAIs.
(b) FSC agrees to indemnify and hold harmless the Investment Companies,
each of its Trustees/Directors, each of its officers who have signed the
Registration Statement and each other person, if any, who controls the
Investment Companies within the meaning of Section 15 of the Securities Act
of 1933, but only with respect to statements or omissions, if any, made in
the Registration Statement or any Prospectus, SAI, or any amendment or
supplement thereof in reliance upon, and in conformity with, information
furnished to the Investment Companies about FSC by or on behalf of FSC
expressly for use in the Registration Statement or any Prospectus, SAI, or
any amendment or supplement thereof. In case any action shall be brought
against any Investment Company or any other person so indemnified based on
the Registration Statement or any Prospectus, SAI, or any amendment or
supplement thereof, and with respect to which indemnity may be sought
against FSC, FSC shall have the rights and duties given to the Investment
Companies, and the Investment Companies and each other person so
indemnified shall have the rights and duties given to FSC by the provisions
of subsection (a) above.
(c) Nothing herein contained shall be deemed to protect any person against
liability to the Investment Companies or their shareholders to which such
person would otherwise be subject by reason of willful misfeasance, bad
faith or gross negligence in the performance of the duties of such person
or by reason of the reckless disregard by such person of the obligations
and duties of such person under this Agreement.
(d) Insofar as indemnification for liabilities may be permitted pursuant to
Section 17 of the Investment Company Act of 1940, as amended, for
Trustees/Directors, officers, FSC and controlling persons of the Investment
Companies by the Trustees/Directors pursuant to this Agreement, the
Investment Companies are aware of the position of the Securities and
Exchange Commission as set forth in the Investment Company Act Release No.
IC-11330. Therefore, the Investment Companies undertakes that in addition
to complying with the applicable provisions of this Agreement, 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 Disinterested Trustees/Directors, 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 Investment Companies 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, Trustees/Directors, FSC
or controlling person of the Investment Companies 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 Investment
Companies is insured against losses arising by reason of any lawful
advances; or (iii) a majority of a quorum of non-party Disinterested
Trustees/Directors 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.
11. If at any time the Shares of any Fund are offered in two or more Classes,
FSC agrees to adopt compliance standards as to when a class of shares may
be sold to particular investors.
12. This Agreement will become binding on the parties hereto upon the execution
of the attached exhibits to the Agreement.
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/ S. Xxxxxxx Xxxxx By: /s/ Xxxx X. XxXxxxxxx
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Title: Assistant Secretary` Title: Executive Vice President
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ATTEST: FEDERATED SECURITIES CORP.
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
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Title: Assistant Secretary Title: Vice President
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