Exhibit (h)(iii) 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
Title: Assistant Secretary Title: Vice President
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
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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
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
Schedule A to Exhibit 1
Liberty U.S. Government Money Market Trust - Class B Shares
