MUTUAL FUND DISTRIBUTION AND SHAREHOLDER SERVICES AGREEMENT
AGREEMENT made as of ______________ by and between Strong Investments,
Inc. ("Strong") and _________ ("Broker-Dealer").
WITNESSETH:
WHEREAS, Strong serves as principal underwriter to the open-end
investment companies listed on Schedule A (each, a "Fund" and collectively, the
"Funds"), each of which is registered under the Investment Company Act of 1940,
as amended (the "Investment Company Act"); and
WHEREAS, Shares of the Funds are registered with the Securities and
Exchange Commission ("SEC") under the Securities Act of 1933, as amended (the
"Securities Act") and offered to the public through a prospectus ("Prospectus")
and statement of additional information ("SAI"); and
WHEREAS, Strong desires to appoint Broker-Dealer, and Broker-Dealer
desires to serve, as Strong's agent in providing distribution assistance and
shareholder services pertaining to the Funds.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is hereby agreed by and between the parties hereto as follows:
SECTION 1 - CAPACITY IN WHICH SERVICES WILL BE PROVIDED
(a) Broker-Dealer agrees to act as Strong's agent in providing the
services under this Agreement. Broker-Dealer will not act in a principal
capacity or as a principal underwriter to the Funds as defined in the Investment
Company Act. In acting as Strong's agent, Broker-Dealer may rely solely and
conclusively on the representations contained in the Prospectus and SAI for each
Fund, as well as any other written marketing or other materials Strong provides
to Broker-Dealer and Broker-Dealer assumes no responsibility for the accuracy of
such materials.
(b) Services that Broker-Dealer may provide include the following:
(i) Assist Strong in marketing shares of the Funds to
Broker-Dealer's prospective and existing customers ("Customers");
(ii) Assist Strong in processing purchase, exchange and
redemption requests for Customers and in placing such orders with the
Funds;
(iii) Provide periodic information to Customers about their
holdings of Fund shares;
(iv) Arrange for bank wires or federal funds wires;
(v) Respond to Customer inquiries concerning their investments
in the Funds and the services performed by Broker-Dealer under this
Agreement;
(vi) Where required by law, forward Fund shareholder
communications (such as proxies, shareholder reports, financial
statements and dividend, distribution and tax notices) to Customers;
(vii) Assist Customers in changing dividend options, account
designations, and addresses; and
(viii) Provide such other similar services as Strong may
reasonably request to the extent permitted under applicable laws or
regulations.
SECTION 2 - PROCESSING OF CUSTOMER ORDERS
Orders for the purchase of Fund shares shall be executed at the then current
public offering price per share (i.e., the net asset value ("NAV") per share
plus any applicable sales charge) and all orders for the redemption of any Fund
shares shall be executed at the NAV per share less any applicable deferred sales
charge, redemption fee or similar charge or fee, if any. Specifically,
Broker-Dealer will accept purchase and redemption orders from Customers no later
than the time each business day (typically, 3:00 p.m. Central Time) that the
Fund calculates its NAV per share in accordance with the procedure(s) contained
in the Prospectus (the "Pricing Deadline"). Customer orders that are accepted by
Broker-Dealer each business day before the Pricing Deadline will be priced at
the Fund's NAV calculated as of the Pricing Deadline.
SECTION 3 - COMPENSATION
(a) In return for providing the services set forth in this Agreement,
Broker-Dealer shall be entitled to a reallowance equal in amount to the
percentage set forth in Schedule A to this Agreement. This reallowance may take
the form of a front-end, deferred or asset-based sales charge, as defined in
National Association of Securities Dealers Inc. ("NASD") Conduct Rule 2830(b).
The fee will be calculated and paid in the manner set forth in Schedule A.
(b) In addition to the reallowance set forth above in paragraph (a),
Broker-Dealer shall be entitled to receive an asset-based service fee for each
Fund equal in amount to the percentage set forth in the Prospectus of applicable
Fund. The fee will be calculated and paid in the manner set forth in Schedule A.
(c) In accordance with the terms in the Prospectus of the applicable
Fund, Broker-Dealer acknowledges that a reduced sales charge or no sales charge
may be available to Customers. Broker-Dealer agrees to advise Strong promptly at
its request as to amounts of any and all purchases of Fund shares made by
Broker-Dealer, as agent for its Customers, qualifying for a reduced sales charge
or no sales charge. If any shares sold with a sales charge are redeemed for the
account of the Fund or are tendered for redemption within seven (7) days after
the date of purchase: (i) Broker-Dealer will refund to Strong the full
reallowance received by Broker-Dealer on the sale; and (ii) Strong will pay to
the Fund its portion of the sales charge on the sale which had been retained by
Strong and shall also pay to the Fund the amount refunded by Broker-Dealer.
SECTION 4 - REPRESENTATIONS
(a) Strong represents and warrants as of the date hereof and throughout
the term of this Agreement that:
(i) Strong is a broker-dealer registered with the SEC under
the Securities Exchange Act of 1934, as amended, a member of the NASD
and qualified to conduct business as a broker-dealer in each of the
states in which the Funds may be sold;
(ii) Strong serves as "principal underwriter" to the Funds
within the meaning of the Investment Company Act under one or more
written agreements that are validly executed, comply fully with
applicable provisions of the Investment Company Act and other
applicable laws and regulations, and will remain in full force and
effect throughout the term of this Agreement;
(iii) The amount and form of compensation payable to
Broker-Dealer under Section 3 of this Agreement as well as any other
cash and non-cash compensation payable to Broker-Dealer complies fully
with applicable provisions of the NASD Conduct Rules, including without
limitation NASD Conduct Rules 2820 and 2830, as well as other
applicable laws and regulations and such compensation is accurately and
adequately disclosed in compliance with all applicable laws and
regulations;
(iv) All asset-based fees payable to Broker-Dealer under this
Agreement for providing distribution-related services will: (i) comply
fully with the terms and conditions of Rule 12b-1 under the Investment
Company Act; (ii) be paid out of Strong's own legitimate profits and be
outside the scope of that rule; or (iii) otherwise comply with
applicable laws and regulations;
(v) The Prospectus and SAI for each Fund and any additional
written materials that Strong supplies to Customers comply in all
material respects with applicable regulatory and disclosure
requirements;
(vi) Strong and the Funds are duly organized and validly
existing under the laws of the jurisdiction in which Strong and the
Funds were organized;
(vii) All authorizations (if any) required for Strong's lawful
execution of this Agreement and Strong's performance hereunder have
been obtained;
(viii) The shares of the Funds are registered under the
Securities Act of 1933 and have been qualified for sale under, or are
exempt from the requirements of the respective securities laws of
applicable states and jurisdictions and Strong will notify
Broker-Dealer promptly in the event shares of the Funds cease to be
qualified for sale under, or cease to qualify for an exemption from the
requirements of the respective securities laws of applicable states and
jurisdiction; and
(ix) Strong agrees to provide Broker-Dealer with sufficient
quantities of Fund Prospectuses, proxy materials and other shareholder
communications to send to Customers at no cost to Broker-Dealer. Strong
also agrees to reimburse Broker-Dealer for any reasonable out-of-pocket
expenses, including the cost of any mailing agent, that Broker-Dealer
may incur in mailing such materials.
(b) Broker-Dealer represents and warrants that:
(i) Broker-Dealer is a broker-dealer registered with the SEC
under the Securities Exchange Act of 1934, as amended, a member of the
NASD and qualified to conduct business as a broker-dealer in each of
the states in which the Funds may be sold;
(ii) Broker-Dealer is duly organized and validly existing
under the laws of the jurisdiction in which Broker-Dealer was
organized;
(iii) All authorizations required for Broker-Dealer's lawful
execution of this Agreement and Broker-Dealer's performance hereunder
have been obtained;
(iv) Any information Broker-Dealer provides to Customers
concerning the Funds will be based on information contained in the
Prospectus, or SAI for the Funds, or on promotional materials or sales
literature that Strong furnishes to the public;
(v) Broker-Dealer will distribute Fund Prospectuses, proxy
materials and other shareholder communications to Customers in
accordance with applicable regulatory requirements, except to the
extent Strong expressly undertakes in writing to do so;
(vi) Broker-Dealer will not effect any transactions
(including, without limitation, any purchases, exchanges and
redemptions) in any Fund shares, registered in the name of, or
beneficially owned by, any Customer, unless to Broker-Dealer's
knowledge, such Customer has granted to Broker-Dealer full right, power
and authority to effect such transactions on such Customer's behalf;
and
(vii) Broker-Dealer will obtain from each Customer for whom it
acts as agent for the purchase of Fund shares any taxpayer
identification number certification and such other information as may
be required from time to time under the Internal Revenue Code of 1986,
as amended (the "Code"), and the regulations thereunder, and provide
Strong or its designee with timely written notice of any failure to
obtain such taxpayer identification number certification or other
information in order to enable the implementation of any required
withholding.
SECTION 5 - MARKETING MATERIALS
Strong represents that all written and electronic advertisements and sales
materials pertaining to the Funds that Strong provides to Broker-Dealer, its
affiliates, and their employees, agents and representatives are Strong's
responsibility and will be accurate and up-to-date as of the time they are
provided to Broker-Dealer. In addition, Strong represents, warrants and
covenants that all advertisements and sales literature as defined in NASD
Conduct Rule 2210(a) will comply with all applicable NASD requirements and other
applicable laws, rules and regulations and that Strong will take all reasonable
actions to prevent the distribution to Broker-Dealer personnel of any materials
that are inconsistent with these representations.
SECTION 6 - INDEMNIFICATION
(a) Strong will indemnify and hold harmless Broker-Dealer, each
director, officer, employee, and agent of Broker-Dealer, and each person who is
or may be deemed to be controlling, controlled by or under common control with
Broker-Dealer from and against any and all direct and indirect claims, damages,
losses, liabilities, or expenses (including the reasonable costs of
investigation and reasonable attorney's and other legal fees) resulting from:
(i) the willful misconduct or negligence, as measured by industry standards, of
Strong, its agents and employees, in the performance of, or failure to perform,
Strong's obligations under this Agreement; PROVIDED, HOWEVER, that Strong will
not be liable for indemnification under this subparagraph to the extent that any
claim, damage, loss, liability, or expense results from the willful misconduct
or negligence, as measured by industry standards, of Broker-Dealer or its
affiliates; (ii) any violation of any law, rule, or regulation relating to the
registration or qualification of shares of a Fund, except to the extent such
violation results from the willful misconduct or negligence, as measured by
industry standards, of Broker-Dealer; (iii) any untrue statement, or alleged
untrue statement, of a material fact contained in any Fund's registration
statement or any offering documents, sales literature, or marketing materials
that Strong, a Fund or any affiliates provide to Broker-Dealer, or any omission,
or alleged omission, to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (iv) any breach or
violation of the representations, warranties, or covenants set forth in this
Agreement. Such right of indemnification will survive the termination of this
Agreement.
(b) Broker-Dealer will indemnify and hold harmless Strong and each of
its directors, officers, employees, and agents and each person who is or may be
deemed to be controlling, controlled by or under common control with Strong,
from and against any and all direct and indirect claims, damages, losses,
liabilities, or expenses (including the reasonable costs of investigation and
reasonable attorney's and other legal fees) resulting from (i) the willful
misconduct or negligence, as measured by industry standards, of Broker-Dealer,
its agents and employees, in the performance of, or failure to perform, its
obligations under this Agreement; or (ii) any untrue statement, or alleged
untrue statement, of a material fact contained in offering documents, sales
literature, or marketing materials that Broker-Dealer or any of its affiliates
produces and provides to Customers who are Fund shareholders, or any omission,
or alleged omission, to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, PROVIDED, HOWEVER, that
Broker-Dealer will not be liable for indemnification hereunder to the extent
that any claim, damage, loss, liability, or expense results from the willful
misconduct or negligence, as measured by industry standards, of Strong or
Strong's affiliates. This right of indemnification will survive the termination
of this Agreement.
(c) In no case shall the indemnification provided in this Section 6 be
available to protect any person against any liability to which any such person
would otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its or his/her obligations or duties hereunder,
or by reason of its or his/her reckless disregard of its or his/her obligations
and duties hereunder.
SECTION 7 - ARBITRATION
In the event of a dispute with respect to this Agreement that the parties are
unable to resolve themselves, such dispute will be settled by arbitration in
accordance with the then existing NASD Code of Arbitration Procedure ("NASD
Code"). The arbitrators will act by majority decision and their award may
allocate attorneys fees and arbitration costs between the parties. Their award
will be final and binding between the parties, and such award may be entered as
a judgment in any court of competent jurisdiction. The parties agree that, to
the extent permitted by the NASD Code, the arbitrators will be selected from the
securities industry.
SECTION 8 - CONFIDENTIALITY OF CUSTOMER INFORMATION
The names, addresses and other information concerning Customers are and shall
remain the sole property of Broker-Dealer. Neither Strong, its affiliates, nor
their officers, directors, employees or agents, or any control person of the
foregoing persons shall use such names, addresses or other information for any
purpose except (a) in connection with the performance of Strong's duties and
responsibilities hereunder and except for shareholder servicing and
informational mailings relating to the Funds; or (b) as otherwise permitted or
required by applicable law. Notwithstanding the foregoing, this Section 8 shall
not prohibit Strong or any of its affiliates from utilizing for any purpose the
names, addresses or other information concerning any of Broker-Dealer's
Customers if such names, addresses or other information are obtained in any
manner other than from Broker-Dealer pursuant to this Agreement. The provisions
of this Section 8 shall survive the termination of this Agreement.
SECTION 9 - NON-EXCLUSIVITY OF AGREEMENT
Neither this Agreement nor the performance of the services of the respective
parties hereunder shall be considered to constitute an exclusive arrangement, or
to create a partnership, association or joint venture between Strong and
Broker-Dealer. Except to the extent set forth in Section 1 of this Agreement,
neither party hereto shall be, act as, or represent itself as, the agent or
representative of the other, nor shall either party have the right or authority
to assume, create or incur any liability or any obligation of any kind, express
or implied, against or in the name of, or on behalf of, the other party. This
Agreement is not intended to, and shall not, create any rights against either
party hereto by any third party solely on account of this Agreement. Neither
party hereto shall use the name of the other party in any manner without the
other party's prior written consent, except: (a) as required by any applicable
federal or state law, rule, regulation or requirement; (b) pursuant to any
promotional programs mutually agreed upon in writing by the parties hereto; and
(c) that Broker-Dealer may supply its Customers with a list of Funds available
under this Agreement.
SECTION 10 - NOTICES
Unless otherwise agreed to by both parties, all notices under this Agreement
will be given in writing and delivered by personal delivery or by postage
prepaid, registered or certified United States first-class mail, return receipt
requested, or by facsimile, telecopier, telex, telegram or similar means of same
day delivery (with a confirming copy by mail as provided herein). Unless
otherwise notified in writing, all notices to Strong shall be given or sent to
Strong at its offices, located at:
Strong Investments, Inc.
000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxx 00000
Attn.: General Counsel
and all notices to Broker-Dealer shall be given or sent to Broker-Dealer at
Broker-Dealer's address shown below.
SECTION 11 - TERM AND TERMINATION OF AGREEMENT
This Agreement shall become effective only when accepted and signed by both
Strong and Broker-Dealer, and may be terminated at any time by either party
hereto upon 30 days' prior written notice to the other party. After the date of
termination of this Agreement (the "Termination Date"), the compensation
described in Section 3 hereof will continue to be due with respect to any shares
held by Broker-Dealer clients on the Termination Date for so long as such shares
are held in an account with Broker-Dealer and Broker-Dealer continues to provide
the services described in this Agreement. Broker-Dealer agrees that in the event
of termination of the Agreement as provided in this Section 11, it shall provide
Strong with such reports and certificates as Strong may reasonably request as
necessary to determine that the continued payment of compensation has been
calculated in accordance with this Agreement.
SECTION 12 - ASSIGNABILITY
This Agreement is not assignable within the meaning of the Investment Company
Act by either party without the other party's prior written consent, and any
attempted assignment in contravention hereof shall be null and void.
SECTION 13 - SCHEDULES; ENTIRE AGREEMENT
All Schedules to this Agreement, as they may be amended from time to time, are
by this reference incorporated into and made a part of this Agreement. This
Agreement (including the Schedules hereto) constitutes the entire Agreement
between the parties as to the subject matter hereof and supersedes any and all
agreements, representations and warranties, written or oral, regarding such
subject matter made prior to the time at which this Agreement has been executed
and delivered by Broker-Dealer.
SECTION 14 - AMENDMENT
This Agreement may be amended only by a writing executed by each party, except
that Schedule A may be amended by Strong on 30 days' written notice to
Broker-Dealer or such earlier time as shall be agreed to by the parties.
SECTION 15 - CUSTODY
Broker-Dealer acknowledges that Fund shares maintained by Broker-Dealer
hereunder are held in custody for the exclusive benefit of Customers and shall
be held free of any right, charge, security interest, lien or claim against
Broker-Dealer in favor of Strong.
SECTION 16 - GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
internal laws of the state of Wisconsin, without giving effect to principles of
conflicts of laws.
IN WITNESS WHEREOF the parties hereto have caused the Agreement to be
duly executed as of the date first written above.
STRONG INVESTMENTS, INC.
By___________________________________________
Name:
Title :
[NAME OF BROKER-DEALER]
By
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Name:
Title:
Address:
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NOTE: Please sign and return duplicate originals of this Agreement to Strong.
Upon acceptance one countersigned original will be returned to you for your
files.
SCHEDULE A
LIST OF FUNDS SUBJECT TO THIS AGREEMENT
