Exhibit (h)(vi) under Form N-1A
Exhibit 10 under Item 601/ Reg. S-K
PRINCIPAL SHAREHOLDER SERVICER'S AGREEMENT
THIS AGREEMENT, is made as of the 24th day of October, 1997, by and between
those Investment Companies on behalf of the Portfolios (individually referred to
herein as a "Fund" and collectively as "Funds") and Classes of Shares
("Classes") listed on Schedule A to Exhibit 1, as may be amended from time to
time, having their principal office and place of business at Federated Investors
Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved this form of
Agreement and Federated Securities Corp. as the principal shareholder servicer
(the "Principal Servicer"). 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. The Investment Companies hereby appoint the Principal Servicer as their
agent to select, negotiate and contract for the performance of and arrange
for the rendition of personal services to shareholders and/or the
maintenance of accounts of shareholders of each Class of the Funds as to
which this Agreement is made applicable (The Principal Servicer's duties
hereunder are referred to as "Services"). The Principal Servicer hereby
accepts such appointment and agrees to perform or cause to be performed the
Services in respect of the Classes of the Funds to which this Agreement has
been made applicable by an Exhibit. The Principal Servicer agrees to cause
to be provided shareholder services which, in its best judgment (subject to
supervision and control of the Investment Companies' Boards of Trustees or
Directors, as applicable), are necessary or desirable for shareholders of
the Funds. The Principal Servicer further agrees to provide the Investment
Companies, upon request, a written description of the shareholder services
for which the Principal Servicer is arranging hereunder.
2. During the term of this Agreement, each Investment Company will pay the
Principal Servicer and the Principal Servicer agrees to accept as full
compensation for its services rendered hereunder a fee as set forth on the
Exhibit applicable to the Class of each Fund subject to this Agreement.
For the payment period in which this Agreement becomes effective or
terminates with respect to any Class of a Fund, there shall be an
appropriate proration of the monthly fee on the basis of the number of days
that this Agreement is in effect with respect to such Class of the Fund
during the month.
3. This Agreement is effective with respect to each Class of a Fund as of the
date of execution of the applicable Exhibit and shall continue in effect
for one year from the date of its execution, and thereafter for successive
periods of one year only if the form of this Agreement is approved at least
annually by the Board of each Investment Company, including a majority of
the members of the Board of the Investment Company who are not interested
persons of the Investment Company ("Independent Board Members") cast in
person at a meeting called for that purpose.
4. Notwithstanding paragraph 3, this Agreement may be terminated with regard
to a particular Class of a Fund as follows:
(a) at any time, without the payment of any penalty, by the vote of a
majority of the Independent Board Members of any Investment Company or by a
vote of a majority of the outstanding voting securities of any Fund as
defined in the Investment Company Act of 1940 on sixty (60) days' written
notice to the parties to this Agreement;
(b) automatically in the event of the Agreement's assignment as defined in
the Investment Company Act of 1940; and
5. The Principal Servicer agrees to arrange to obtain any taxpayer
identification number certification from each shareholder of the Funds to
which it provides Services that is required under Section 3406 of the
Internal Revenue Code, and any applicable Treasury regulations, and to
provide each Fund or its 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.
6. The Principal Servicer shall not be liable for any error of judgment or
mistake of law or for any loss suffered by any Investment Company in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on its
part in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. the Principal Servicer
shall be entitled to rely on and may act upon advice of counsel (who may be
counsel for such Investment Company) on all matters, and shall be without
liability for any action reasonably taken or omitted pursuant to such
advice. Any person, even though also an officer, trustee, partner, employee
or agent of the Principal Servicer, who may be or become a member of such
Investment Company's Board, officer, employee or agent of any Fund, shall
be deemed, when rendering services to such Fund or acting on any business
of such Fund (other than services or business in connection with the duties
of the Principal Servicer hereunder) to be rendering such services to or
acting solely for such Fund and not as an officer, trustee, partner,
employee or agent or one under the control or direction of the Principal
Servicer even though paid by the Principal Servicer.
This Section 6 shall survive termination of this Agreement.
7. No provision of this Agreement may be changed, waived, discharged or
terminated orally, but only by an instrument in writing signed by the party
against which an enforcement of the change, waiver, discharge or
termination is sought.
8. The Principal Servicer is expressly put on notice of the limitation of
liability as set forth in the Declaration of Trust of each Investment
Company that is a Massachusetts business trust and agrees that the
obligations assumed by each such Investment Company pursuant to this
Agreement shall be limited in any case to such Investment Company and its
assets and that the Principal Servicer shall not seek satisfaction of any
such obligations from the shareholders of such Investment Company, the
Trustees, Officers, Employees or Agents of such Investment Company, or any
of them.
9. The execution and delivery of this Agreement have been authorized by the
Directors of the Principal Servicer and signed by an authorized officer of
the Principal Servicer, acting as such, and neither such authorization by
such Directors nor such execution and delivery by such officer shall be
deemed to have been made by any of them individually or to impose any
liability on any of them personally, and the obligations of this Agreement
are not binding upon any of the Directors or shareholders of the Principal
Servicer, but bind only the property of the Principal Servicer as provided
in the Articles of Incorporation of the Principal Servicer.
10. Notices of any kind to be given hereunder shall be in writing (including
facsimile communication) and shall be duly given if delivered to any
Investment Company at the following address: Federated Xxxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000-0000, Attention: President and if delivered to the
Principal Servicer at Federated Xxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000-0000,
Attention: President.
11. This Agreement constitutes the entire agreement between the parties hereto
and supersedes any prior agreement with respect to the subject hereof
whether oral or written. If any provision of this Agreement shall be held
or made invalid by a court or regulatory agency decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby.
Subject to the provisions of Sections 3 and 4, hereof, this Agreement shall
be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and shall be governed by Pennsylvania law;
provided, however, that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act of 1940 or any rule or
regulation promulgated by the Securities and Exchange Commission
thereunder.
12. This Agreement may be executed by different parties on separate
counterparts, each of which, when so executed and delivered, shall be an
original, and all such counterparts shall together constitute one and the
same instrument.
13. This Agreement shall not be assigned by any party without the prior written
consent of the Principal Servicer in the case of assignment by any
Investment Company, or of the Investment Companies in the case of
assignment by the Principal Servicer, except that any party may assign to a
successor all of or a substantial portion of its business to a party
controlling, controlled by, or under common control with such party.
Nothing in this Section 13 shall prevent the Principal Servicer from
delegating its responsibilities to another entity to the extent provided
herein.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their officers designated below as of the day and year first above
written.
Investment Companies (listed on Schedule A)
Attest: /s/ S. Xxxxxxx Xxxxx By: /s/ Xxxx X. XxXxxxxxx
Title: Assistant Secretary Title: Executive Vice President
Federated Securities Corp.
Attest:/s/ Xxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxxx
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Title: Assistant Secretary Title: Vice President
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Exhibit 1
to the
Principal Shareholder Servicer's Agreement
Related to Class B Shares of
the Funds
The following provisions are hereby incorporated and made part of the
Principal Shareholder Servicer's Agreement (the "Principal Shareholder
Servicer's Agreement") as of the 24th day of October, 1997, by and between
those Investment Companies on behalf of the Portfolios (individually referred
to herein as a "Fund" and collectively as "Funds") and Classes of Shares
("Classes") listed on Schedule A to Exhibit 1, as may be amended from time to
time, having their principal office and place of business at Federated
Investors Tower, Pittsburgh, Pennsylvania 15222-3779, and who have approved
this form of Agreement and Federated Securities Corp. as the principal
shareholder servicer (the "Principal Servicer"). 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 Exhibit and the terms of the
Principal Shareholder Servicer's Agreement, the terms of this Exhibit shall
govern.
1. Each Investment Company hereby appoints the Principal Servicer to
arrange for the rendition of the shareholder services in respect of
Class B Shares ("Class B Shares") of each Fund. Pursuant to this
appointment, the Principal Servicer is authorized to select various
companies including but not limited to Federated Shareholder
Services ("Companies or a Company ") to provide such services.
2. (a) In consideration of the Principal Servicer's Services under this
Agreement in respect of the Class B Shares each Fund agrees to pay the
Principal Servicer or at its direction its "Allocable Portion" (as
hereinafter defined) of a fee (the "Servicing Fee") equal to 0.25 of 1% per
annum of the average daily net asset value of the Class B Shares of the
Fund outstanding from time to time, provided however, that in the event the
Fund operates as a fund of funds (a "FOF Fund") by investing the proceeds
of the issuance of its Class B Shares in Class A Shares of another fund
(the "Other Fund") and the Principal Shareholder Servicer receives a
servicing fee in respect of the Class A Shares of the Other Fund so
acquired by the FOF Fund, the Servicing Fee payable in respect of such
Class B Shares of the FOF Fund will be reduced by the amount of the
servicing fee actually received by the Principal Shareholder Servicer or
its assign from the Other Fund in respect of the Class A Shares of the
Other Fund acquired with the proceeds of such Class B Shares of the FOF
Fund.
(b) (i) The Principal Servicer will be deemed to have fully earned its
Allocable Portion (computed as of any date) of the Servicing Fee
payable in respect of the Class B Shares of a Fund (and to have
satisfied its obligation to arrange for shareholder services in
respect of such Class B Shares) on the date it has arranged for
shareholder services to be performed by Federated Shareholder Services
by payment of the lump sum contemplated by Alternative A to Exhibit 1
to the Shareholder Services Agreement among the Principal Servicer,
Federated Shareholder Services and the Fund dated as of the date
hereof (the "Shareholder Services Agreement") to Federated Shareholder
Services (whose obligations are fully supported by its parent company)
in respect of each "Commission Share" (as defined in the Allocation
Schedule attached hereto in Schedule B) of the Fund, taken into
account in determining such Principal Servicer's Allocable Portion of
such Servicing Fees as of such date. The Principal Servicer shall not
be deemed to have any other duties in respect of the Shares and its
Allocable Portion of the Servicing Fees to which the preceding
sentence applies and such arrangements shall be deemed a separate and
distinct contractual arrangement from that described in clause (ii).
(ii) The Principal Servicer will be deemed to have fully earned any
Servicing Fees not included in its Allocable Portion (i.e., those
attributable to Shares in respect of which Alternative A under Exhibit
1 to the Shareholder Services Agreement is not applicable) as such
services are performed in respect of such Shares.
(c) Notwithstanding anything to the contrary set forth in this Exhibit, the
Principal Shareholder Agreement, or (to the extent waiver thereof is
permitted thereby) applicable law, each Investment Company's obligation to
pay the Principal Servicer's Allocable Portion of the Servicing 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 Principal
Shareholder Servicer's Agreement as it relates to the 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) in
respect of the Class B Shares of such Fund.
(d) Notwithstanding anything to the contrary in this Exhibit, the Principal
Shareholder Agreement, or (to the extent waiver thereof is permitted
thereby) applicable law, the Principal Servicer may assign, sell or pledge
(collectively, "Transfer") its rights to its Allocable Portion of the
Servicing Fees (but not its obligations to the Investment Companies under
this Principal Shareholder Servicer's Agreement) in respect of the Class B
Shares of a Fund to raise funds to make the expenditures related to the
Services and in connection therewith upon receipt of notice of such
Transfer, the Investment Company shall pay to the assignee, purchaser or
pledgee (collectively with their subsequent transferees, "Transferees")
such portion of the Principal Servicer's Allocable Portion of the Servicing
Fees 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 Principal Shareholder Agreement, or
(to the extent waiver thereof is permitted thereby) applicable law, to the
extent the Principal Servicer has Transferred its rights thereto to raise
funds as aforesaid, the Investment Companies' obligation to pay to the
Principal Servicer's Transferees the Principal Servicer's Allocable Portion
of the Servicing 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 Servicer, Federated Shareholder Services (or its parent) or
the failure of Federated Shareholder Services (or its parent) to perform
its Irrevocable Service Commitment (it being understood that such provision
is not a waiver of the Investment Companies' right to pursue such Principal
Servicer and enforce such claims against the assets of such Principal
Servicer other than the Principal Servicer's right to the Distribution
Fees, Servicing Fees and CDSCs in respect of the Class B Shares of the 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 (d) but only insofar as those provisions relate
to Servicing Fees transferred to such Transferee.
(e) For purposes of this Principal Shareholder Servicer's Agreement, the
term Allocable Portion of Servicing Fees payable in respect of the Class B
Shares of any Fund shall mean the portion of such Servicing Fees allocated
to such Principal Servicer in accordance with the Allocation Schedule
attached hereto as Schedule B.
(f) For purposes of this Principal Shareholder Servicer's Contract, the
term "Complete Termination" of shareholder servicing arrangements in
respect of Class B Shares of a Fund means a termination of shareholder
servicing arrangements involving the complete cessation of payments of
Servicing Fees in respect of all Class B Shares, and the complete cessation
of payments of servicing fees for every existing and future class of shares
of the Fund and any successor Fund or any Fund acquiring a substantial
portion of the assets of the Fund ,which has substantially similar
characteristics to the Class B Shares taking into account the manner and
amount of sales charge, servicing fee, contingent deferred sales charge or
other similar charge borne directly or indirectly by the holders of such
shares.
3. The Principal Servicer may enter into separate written agreements with
Companies to provide the services set forth in Paragraph 1 herein. The
schedules of fees to be paid such Companies and the basis upon which such
fees will be paid shall be determined from time to time by the Principal
Servicer in its sole discretion.
4. The Principal Servicer 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 Companies and the
purpose for such expenditures.
In consideration of the mutual covenants set forth in the Principal
Shareholder Servicer's Contract, the Principal Servicer and the Investment
Companies hereby execute and deliver this Exhibit with respect to the Class B
Shares of each 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
-------------------------- -----------------------------
Title: Assistant Secretary Title: Vice President
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