EXHIBIT (e)(3)
FORESIDE FUND SERVICES, LLC
MUTUAL FUND
SALES AND SERVICE AGREEMENT
DATED:________________
Dear Securities Dealer:
Foreside Fund Services, LLC ("we", "us" or "Distributor") invites you (the
"Dealer") to participate in the distribution of the shares of the registered
open-end investment companies or series thereof listed in Appendix A hereto
(the "Funds") for which we serve as principal underwriter, subject to the terms
of this Agreement. We will notify Dealer from time to time of the Funds which
are eligible for distribution under this Agreement.
1. LICENSING. Both parties represent that they are members in good standing
of the Financial Industry Regulatory Authority ("FINRA") and both parties agree
to abide by FINRA Conduct Rules. Both parties represent that they are qualified
to act as a broker-dealer in the states or other jurisdictions where they
transact business, and agree to maintain such registrations, qualifications and
membership in good standing in full force and effect throughout the term of
this Agreement. Dealer agrees that termination or suspension of such membership
with FINRA, or of its license to do business by any state or federal regulatory
agency, at any time, shall terminate or suspend this Agreement forthwith and
shall require Dealer to notify us in writing of such action. This Agreement is
in all respects subject to Rule 2830 of the Conduct Rules of FINRA which shall
control any provision to the contrary in this Agreement.
2. SALES OF FUND SHARES. Dealer may offer and sell shares of each Fund only
at the public offering price applicable to the shares in effect at the time of
each transaction. The procedures relating to all orders and the handling of
orders are subject to the terms of the then current prospectus and statement of
additional information ("SAI") of each Fund, the then current new account
application for each Fund, and our written instructions which may be issued
from time to time. This Agreement is not exclusive, and either party may enter
into similar agreements with third parties.
3. GENERAL DUTIES OF DEALER
Dealer agrees:
(a) To act as principal, or as agent on behalf of your customers, in all
transactions in shares of the Funds except as provided in Section 4 hereof.
Dealer shall not have any authority to act as agent for the issuer (the Funds),
for us, or for any other dealer in any respect, nor will Dealer represent to
any third party that Dealer has such authority or is acting in such capacity.
(b) To purchase shares of the Funds only from us or from your customers.
(c) To enter orders for the purchase of shares made through Dealer and to
furnish us with copies of such records on request.
(d) To purchase shares from us only for the purpose of covering purchase
orders already received or for your own bonafide investment.
(e) To maintain records of all sales and redemptions of shares made through
Dealer and to furnish us with copies of such records on request.
(f) To distribute prospectuses and reports to your customers in compliance
with applicable legal requirements, except to the extent that we expressly
undertake to do so on your behalf.
(g) That Dealer will not withhold placing customers' orders for shares so as
to profit itself as a result of such withholding or place orders for shares in
amounts just below the point at which sales charges are reduced so as to
benefit from a higher sales charge applicable to an amount below the breakpoint.
(h) That Dealer will not purchase any shares from its customers at prices
lower than the redemption or repurchase prices then quoted by a Fund. Dealer
shall, however, be permitted to sell shares for the account of its record
owners to a Fund at the repurchase prices currently established for such shares
and may charge the owner a fair commission for handling the transaction.
(i) [This section is purposely left blank].
(j) That if payment for the shares purchased is not received within the time
customary or the time required by law for such payment, the sale may be
canceled without any responsibility or liability on our part or on the part of
the Funds, or at our option, we may sell the shares which Dealer ordered back
to the Funds, in which latter case we may hold Dealer responsible for any loss
to the Funds or loss of profit suffered by us resulting from Dealer's failure
to make payment. We shall have no liability for any check or other item
returned unpaid to Dealer after Dealer has paid us on behalf of a purchaser. We
may refuse to liquidate the investment unless we receive the purchaser's signed
authorization for the liquidation.
(k) That Dealer shall assume responsibility for any loss to the Funds caused
by a correction made subsequent to trade date, provided such correction was not
based on any error, omission or negligence on our part, and that Dealer will
immediately pay such loss to the Funds upon notification.
(l) That if on a redemption which Dealer has ordered, instructions in proper
form, including outstanding certificates, are not received within the time
customary or the time required by law, the redemption may be canceled without
any responsibility or liability on our part or on the part of any Fund, or at
our option, we may buy the shares redeemed on behalf of a Fund, in which latter
case we may hold Dealer responsible for any loss to the Fund or loss of profit
suffered by us resulting from Dealer's failure to settle the redemption.
(m) That Dealer has implemented and will maintain effective internal
procedures and controls with respect to the transmission and communication of
orders for Fund transactions that are reasonably designed to prevent or detect
on a timely basis your customer's orders received after the New York Stock
Exchange ("NYSE") market close from being aggregated with orders received
before the NYSE market close, and to minimize errors that could result in the
late transmission of orders to the Funds. Dealer separately represents that it
will comply with all rules and regulations of the Securities and Exchange
Commission ("SEC), FINRA and, if applicable, the National Securities Clearing
Corporation ("NSCC") with respect to the receipt and transmission of your
customer's orders.
4. DUTIES OF DEALER--RETIREMENT ACCOUNTS. In connection with orders for the
purchase of shares on behalf of an individual retirement account, self-employed
retirement plan or other retirement accounts, Dealer shall act as agent for the
custodian or trustee of such account or plan (solely with respect to the time
of receipt of the application and payments), and Dealer shall not place such an
order until Dealer has received from the account or plan payment for the
purchase and, if the purchase represents the initial contribution to the
account or plan, the completed documents necessary to establish the account or
plan. Dealer agrees to indemnify us, any Fund and the Fund's transfer agent, as
applicable, for any claim, loss, or liability resulting from incorrect
investment instructions received from Dealer with respect to any such account
or plan which cause a tax liability or other tax penalty.
5. CONDITIONAL ORDERS. We will not accept from Dealer any conditional orders
for shares of any Fund.
6. DEALER COMPENSATION. As compensation for the provision of the services
described herein, you will look solely to your customer, and you acknowledge
that no Fund or the Distributor shall have no direct responsibility for any
compensation due to you.
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7. REDEMPTIONS. Redemptions or repurchases of shares will be made at the net
asset value of such shares, less any applicable redemption charges, in
accordance with the applicable prospectus.
8. EXCHANGES. Telephone exchange orders will be effective only for shares in
plan balance (uncertificated shares) and may be subject to any fees or other
restrictions set forth in the applicable prospectuses. Dealer may charge the
shareholder a fair commission for handling an exchange transaction. Dealer
shall comply with any additional exchange policies described in each Fund's
prospectus.
9. TRANSACTION PROCESSING. All orders are subject to acceptance by us and by
a Fund or its transfer agent, and become effective only upon confirmation by
us. If required by law, each transaction shall be confirmed in writing on a
fully disclosed basis and if confirmed by us, a copy of each confirmation shall
be sent simultaneously to Dealer if Dealer so requests. All sales are made
subject to receipt of shares by us from the Funds. We reserve the right in our
discretion, without notice, to suspend the sale of shares or withdraw the
offering of shares entirely. Dealer shall ensure that any orders submitted by
you to a Fund for a particular trade date have been received by you prior to
such Fund's cut-off time for orders, in each case in accordance with the terms
and conditions sets forth in such Fund's prospectus and applicable provisions
of the Investment Company Act of 1940, as amended ("Investment Company Act"),
including Rule 22c-1 thereunder. In the event an order is received after such
cut-off time, you shall ensure that such order is submitted in such a manner so
that the order is priced in accordance with a Fund's prospectus and applicable
provisions of the Investment Company Act, including Rule 22c-1. All orders must
be paid by check or wire payable to the order of a Fund, which reserves the
right to delay issuance or transfer of shares until such payment is available
in investable Federal Funds. All orders must be drawn payable in U.S. dollars
on a U.S. bank, for the full amount of the investment.
10. MULTIPLE CLASSES. We may from time to time provide to Dealer written
compliance guidelines or standards relating to the sale or distribution of
Funds offering multiple classes of shares with distribution-related operating
expenses; see Appendix A. These guidelines or standards are deemed to be
written instructions as contemplated in Section 2. In addition, Dealer agrees
to be bound by any applicable rules or regulations of government agencies or
self-regulatory organizations generally affecting the sale or distribution of
Funds offering multiple classes of shares.
11. REGISTRATION OF SHARES AND BLUE SKY. Dealer will not offer or sell
shares except under circumstances that will result in compliance with the
applicable Federal and state securities laws and in connection with sales and
offers to sell shares Dealer will furnish to each person to whom any such sale
or offer is made, a copy of the applicable, then current prospectus. We shall
notify Dealer of the states or other jurisdictions in which each Fund's shares
are currently available for sale to the public as set forth in Appendix A. We
shall have no obligation to register or make available Fund shares in any state
or other jurisdiction.
Dealer shall track and maintain "blue sky" information and report that
information on a periodic basis to the designated agent of the Funds in a form
as agreed from time to time by Dealer and the Funds' agent in order for the
Funds to report required information to the various states and jurisdictions in
which a Fund's shares are registered.
We shall have no responsibility, under the laws regulating the sale of
securities in any U.S. or foreign jurisdiction, for the qualification or status
of persons selling Fund shares or for the manner of sale of Fund shares.
Nothing in this Agreement, however, shall be deemed to be a condition,
stipulation or provision binding any person acquiring any security to waive
compliance with any provision of the Securities Act of 1933, as amended (the
"Securities Act"), or of the rules and regulations of the Securities and
Exchange Commission, or to relieve the parties hereto from any liability
arising under the Securities Act.
12. FUND INFORMATION. No person is authorized to give any information or
make any representations concerning shares of any Fund except those contained
in the Fund's current prospectus, SAI or in materials issued by us as
information supplemental to such prospectus or SAI. We will supply
prospectuses, reasonable quantities of reports to shareholders, supplemental
sales literature, sales bulletins, and additional information as issued. Dealer
agrees not to use other advertising or sales material relating to the Funds
except that which (a) conforms to the requirements of any applicable laws or
regulations of any government or authorized agency in the U.S. or any other
country, having jurisdiction over the offering or sale of shares of the Funds,
and (b) is approved in writing by us in
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advance of such use. Such approval may be withdrawn by us in whole or in part
upon notice to Dealer, and Dealer shall, upon receipt of such notice,
immediately discontinue the use of such sales literature, sales material and
advertising. Dealer is not authorized to modify or translate any such materials
without our prior written consent. Any printed information furnished by us
other than the then current prospectus and SAI for each Fund, periodic reports
and proxy solicitation materials are our sole responsibility and not the
responsibility of the Funds, and Dealer agrees that the Funds shall have no
liability or responsibility to Dealer in these respects unless expressly
assumed in connection therewith.
13. INDEMNIFICATION.
(a) Dealer shall indemnify and hold harmless us, each Fund, the transfer
agents of the Funds, and their respective, officers, directors, agents and
employees, and control persons (as defined in section 15 of the Securities Act
or section 20 of the Securities Exchange Act of 1934, as amended (the "1934
Act") from all direct or indirect liabilities, losses or costs (including
attorneys fees) arising from, related to or otherwise connected with: (i) any
breach by Dealer of any provision of this Agreement; (ii) any violation of
Federal or State securities laws or the rules of any Self-Regulatory
Organization; or (iii) any actions or omissions by us, any Fund, the transfer
agent of the Funds, and their officers, directors, agents and employees and any
person who is or may be deemed to be a controlling person made 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 Dealer.
(b) We shall indemnify and hold harmless Dealer and its officers, directors,
agents and employees, and control persons (as defined in section 15 of the
Securities Act or section 20 of the 0000 Xxx) from and against any and all
direct or indirect liabilities, losses or costs (including attorneys fees)
arising from, related to or otherwise connected with: (i) any breach by us of
any provision of this Agreement; (ii) any violation of Federal or State
securities laws or the rules of any Self-Regulatory Organization; or (iii) any
alleged untrue statement of a material fact contained in any Fund's
Registration Statement, 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) The agreement of the parties in this Paragraph 13 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 (which approval shall not unreasonably be
withheld) shall conduct the defense of such claim or any litigation resulting
from it, 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 paragraph (c) 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.
(d) The provisions of Paragraphs 6, 12, 13 and 17 shall survive the
termination of this Agreement.
14. ANTI-MONEY LAUNDERING PROGRAM
(a) The Dealer has in place an anti-money laundering program ("AML Program")
that is reasonably designed to comply with applicable laws and regulations,
including the relevant provisions of the USA PATRIOT Act (Pub. L. No. 107-56
(2001)) and all implementing rules and regulations, as well as all related
governmental and self-regulatory organization rules and regulations. As part of
Dealer's AML Program, Dealer will take steps to identify customers for whom it
acts in its dealings with any Fund and will monitor customer transactions in
order to detect and, where appropriate, report suspicious activities.
(b) The Dealer further agrees to promptly notify us should it become aware
of any change in or inability to comply with the above representation and
warranty.
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(c) The Dealer further agrees that it is in compliance with all applicable
law.
In addition, we, on our own behalf and on behalf of the Funds, hereby
provide notice to the Dealer that we and/or the Funds reserve the right to make
inquiries of and request additional information from the Dealer regarding its
AML program.
15. RESTRICTIONS ON MARKET TIMERS.
(a) The Funds have policies and procedures regarding market timing or
excessive trading as set forth more fully in a Fund's then-current prospectus.
A Fund or the Distributor may refuse to accept a purchase or exchange order
from any person or entity if, in its sole discretion, it determines that the
trading practices of that person or entity are not consistent with the
long-term investment objectives of the Fund. Each Fund's policy on market
timing and excessive trading also applies to purchase and exchange orders
placed through intermediaries, including brokers, banks or other third parties.
Dealer will use its best efforts, and shall reasonably cooperate with a Fund,
to enforce stated policies in a Fund's currently effective prospectus or SAI
regarding transactions in Fund shares, including those related to market timing
and excessive trading. We retain the right to terminate the Agreement (in its
entirety or with respect to a Fund) without penalty if Distributor (after
consultation with the Fund) determines that Dealer is engaged in (or is being
used by Dealer's customer or agents to engage in) market timing or excessive
trading with respect to a Fund's shares.
16. DIRECTED BROKERAGE. A Fund, Dealer and Distributor shall prohibit the
use of Fund portfolio securities transactions or related remuneration to
satisfy any compensation obligations herein. No party has agreed to directly or
indirectly compensate Dealer in contravention of Rule 12b-1(h) under the
Investment Company Act.
17. PRIVACY. The parties each acknowledge that certain information made
available to the other party hereunder may be deemed nonpublic personal
information under the Xxxxx-Xxxxx-Xxxxxx Act, other federal or state privacy
laws (as amended) and the rules and regulations promulgated thereunder
(collectively, the "Privacy Laws"). The parties hereby agree (i) not to
disclose or use such information except as required to carry out their
respective duties under this Agreement or as otherwise permitted by law in
their ordinary course of business, (ii) to establish and maintain procedures
reasonably designed to assure the security and privacy of all such information
and (iii) to cooperate with each other and provide reasonable assistance in
ensuring compliance with such Privacy Laws to the extent applicable to either
or both of the parties. This provision shall survive termination of the
Agreement.
18. SHAREHOLDER INFORMATION
(a) AGREEMENT TO PROVIDE INFORMATION. Dealer agrees to provide the Fund,
upon request, the taxpayer identification number ("TIN"), if known, of
any or all Shareholder(s) of the account and the amount, date, name or
other identifier of any investment professional(s) associated with the
Shareholder(s) or account (if known), and transaction type (purchase,
redemption, transfer, or exchange) of every purchase, redemption,
transfer, or exchange of Shares held through an account maintained by
the Dealer during the period covered by the request.
i PERIOD COVERED BY REQUEST. Requests must set forth a specific
period, not to exceed 90 days from the date of the request, for
which transaction information is sought. The Fund may request
transaction information older than 90 days from the date of the
request as it deems necessary to investigate compliance with
policies established by the Fund for the purpose of eliminating or
reducing any dilution of the value of the outstanding shares
issued by the Fund.
ii. FORM AND TIMING OF RESPONSE. Dealer agrees to transmit the
requested information that is on its books and records to the Fund
or its designee promptly, but in any event not later than five
business days, after receipt of a request. If requested by the
Fund, Dealer agrees to use best efforts to promptly determine
whether any specific person about whom Dealer has received
information, is itself a financial intermediary, and upon further
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request of the Fund promptly: (x) provide or arrange to provide to
the Fund the requested information from shareholders who hold an
account with an indirect intermediary; or (y) restrict or prohibit
further purchases or exchanges of Fund Shares from shareholders
holding accounts with such indirect intermediary. In such
instance, Dealer agrees to inform the Fund whether it plans to
perform (x) or (y). Responses required by this paragraph must be
communicated in writing and in a format mutually agreed upon by
the parties. To the extent practicable, the format for any
transaction information provided to the Fund should be consistent
with the NSCC Standardized Data Reporting Format. For purposes of
this provision, an "indirect intermediary" has the same meaning as
in SEC Rule 22c-2 under the Investment Company Act.
iii.LIMITATIONS ON USE OF INFORMATION. The Fund agrees not to use the
information received for marketing or any other similar purpose
without the prior written consent of the Dealer.
(b) AGREEMENT TO RESTRICT TRADING. Dealer agrees to execute written
instructions from the Fund to restrict or prohibit further purchases
or exchanges of Fund shares by a Shareholder who has been identified
by the Fund as having engaged in transactions of the Fund's Shares
(directly or indirectly through the Dealer's account) that violate
policies established by the Fund for the purpose of eliminating or
reducing any dilution of the value of the outstanding Shares issued by
the Fund.
i. FORM OF INSTRUCTIONS. Instructions must include the TIN, if known,
and the specific restriction(s) to be executed. If the TIN is not
known, the instructions must include an equivalent identifying
number of the Shareholder(s) or account(s) or other agreed upon
information to which the instruction relates.
ii. TIMING OF RESPONSE. Dealer agrees to execute instructions as soon
as reasonably practicable, but not later than five business days
after receipt of the instructions by the Dealer.
iii.CONFIRMATION BY DEALER. Dealer must provide written confirmation
to the Fund that instructions have been executed. Dealer agrees to
provide confirmation as soon as reasonably practicable, but not
later than ten business days after the instructions have been
executed.
(c) DEFINITIONS. For purposes of this paragraph 18:
i. The term "Fund" includes the fund's investment adviser, principal
underwriter and transfer agent. The term does not include any
"excepted funds" as defined in SEC Rule 22c-2(b) under the
Investment Company Act of 1940./1/
ii. The term "Shares" means the interests of Shareholders
corresponding to the redeemable securities of record issued by the
Fund under the Investment Company Act of 1940 that are held by the
Dealer.
iii.The term "Shareholder" means the beneficial owner of Shares,
whether the Shares are held directly or by the Dealer in nominee
name or, alternatively, for use with retirement plan
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/1/ As defined in SEC Rule 22c-2(b), the term "excepted fund" means any:
(1) money market fund; (2) fund that issues securities that are listed on
a national exchange; and (3) fund that affirmatively permits short-term
trading of its securities, if its prospectus clearly and prominently
discloses that the fund permits short-term trading of its securities and
that such trading may result in additional costs for the fund.
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recordkeepers, the term means the Plan participant notwithstanding
that the Plan may be deemed to be the beneficial owner of Shares.
iv. The term "written" includes electronic writings and facsimile
transmissions.
v. The term "Dealer" shall mean a "financial intermediary" as defined
in SEC Rule 22c-2.
19. EFFECTIVENESS, AMENDMENT, DURATION, TERMINATION AND ASSIGNMENT
(a) This Agreement may be amended by us at any time by written notice to
Dealer and your placing of an order or acceptance of payments of any kind after
the effective date and receipt of notice of any such amendment shall constitute
your acceptance of such amendment.
(b) This Agreement shall continue in effect until terminated.
(c) This Agreement may be terminated by either party, without penalty, upon
ten days' written notice to the other party. This Agreement shall inure to the
benefit of the successors and assigns of either party hereto, provided,
however, that Dealer may not assign this Agreement without our prior written
consent. This Agreement shall terminate immediately upon the appointment of a
trustee under the Securities Investor Protection Act or immediately upon any
other act of insolvency by Dealer. 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 or by the vote of a
majority of the outstanding voting securities of the Fund. The termination of
this Agreement shall have no effect upon transactions entered into prior to the
effective date of termination. A trade placed by Dealer subsequent to your
voluntary termination of this Agreement will not serve to reinstate this
Agreement. Reinstatement will only be effective upon written notification by us.
20. DISPUTE RESOLUTION. In the event of a dispute concerning any provision
of this Agreement, either party may require the dispute to be submitted to
binding arbitration under the commercial arbitration rules of FINRA or the
American Arbitration Association. Judgment upon any arbitration award may be
entered by any state or federal court having jurisdiction.
21. MISCELLANEOUS
(a) This Agreement shall be governed by, and the provisions of this
Agreement shall be construed and interpreted under and in accordance with, the
laws of the State of Delaware without reference to conflicts of law principles.
(b) Neither party to this Agreement shall be liable to the other party for
consequential, special or indirect damages under any provision of this
Agreement.
(c) All written communications to us must be sent to the following address:
Foreside Fund Services, LLC
Two Xxxxxxxx Xxxxxx, 0/xx/ Xxxxx
Xxxxxxxx, Xxxxx 00000
Attention: Chief Compliance Officer
All written communications to Dealer will be sent to your address listed below.
(d) This Agreement is cumulative and supersedes any agreement previously
in effect. It shall be binding upon the parties hereto when signed by
us and accepted to Dealer.
(e) Dealer has the full power and authority to enter into and perform this
Agreement, and Dealer's execution and performance of the Agreement
will not violate any law.
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(f) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall
constitute one and the same agreement.
(g) If any provision of this Agreement is deemed in violation of law or is
unenforceable, the remainder of this Agreement with such provision
omitted will remain in full force and effect.
BALANCE OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf by and through their duly
authorized officers, as of the day and year first above written.
FORESIDE FUND SERVICES, LLC
By: -----------------------------
Xxxxxxx X. Xxxxx
Chief Compliance Officer
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DEALER NAME
By: ----------------------------------------------------------------
(Signature)
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Name and Title
-----------------------------------------------------------------------------------------------
Address
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Operations Contact
Telephone: ----------------------------------------------------------------
E-Mail: ----------------------------------------------------------------
Fax: ----------------------------------------------------------------
Clears Through (if applicable): ----------------------------------------------------------------
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FORESIDE FUND SERVICES, LLC
MUTUAL FUND
SALES AND SERVICES AGREEMENT
APPENDIX A
Sound Shore Fund, Inc.
Blue Sky Schedule: Sound Shore Fund, Inc. is registered in all 50 states,
District of Columbia and US Virgin Islands
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