CLASS B, CLASS C AND CLASS L SHARES
DISTRIBUTION AGREEMENT
THIS AGREEMENT is made and entered into on this _____ day of _____, _____,
between STRONG __________, INC., a Wisconsin corporation (the "Corporation"),
and STRONG INVESTMENTS, INC., a Wisconsin corporation (the "Distributor"):
WITNESSETH:
WHEREAS, the Corporation is an open-end management investment company
registered under the Investment Company Act of 1940 (the "Investment Company
Act");
WHEREAS, the Corporation is authorized to create separate series, each
with its own separate investment portfolio, and the beneficial interest in each
such series will be represented by a separate series of shares;
WHEREAS, the Corporation is authorized to create separate classes of
beneficial interest within each series, each with its own expenses;
WHEREAS, the Corporation is authorized to issue shares of its $________
par value common stock (the "Shares") in separate series;
WHEREAS, the Distributor is a registered broker-dealer under state and
federal laws and regulations and is a member of the National Association of
Securities Dealers (the "NASD"); and
WHEREAS, the Corporation desires to retain Distributor as the
distributor of the Shares of each series on whose behalf this Agreement has been
executed.
NOW, THEREFORE, the Corporation and Distributor mutually agree and
promise as follows:
1. APPOINTMENT OF DISTRIBUTOR
The Corporation hereby appoints the Distributor as its agent for the
distribution of the Shares of each series of the Corporation listed on Schedule
A attached hereto (each series is hereinafter referred to as a "Fund"), as such
Schedule may be amended from time to time, in jurisdictions wherein the Shares
may legally be offered for sale; provided, however, that the Corporation may (a)
issue or sell Shares directly to holders of such Shares upon such terms and
conditions and for such consideration, if any, as it may determine, whether in
connection with the distribution of subscription or purchase rights, the payment
or reinvestment of dividends or distributions, or otherwise; or (b) issue or
sell Shares at net asset value to the shareholders of any other investment
company, as defined in the Investment Company Act, for which the Distributor
shall act as exclusive distributor, who wish to exchange all or a portion of
their investment in shares of such other investment company for Shares of the
Corporation.
2. ACCEPTANCE; SERVICES OF DISTRIBUTOR
The Distributor hereby accepts appointment as agent for the
distribution of the Shares and agrees that it will use its best efforts with
reasonable promptness to sell such part of the authorized Shares remaining
unissued as from time to time shall be effectively registered under the
Securities Act of 1933 (the "Securities Act"), at prices determined as
hereinafter provided and on terms hereinafter set forth, all subject to
applicable federal and state laws and regulations and the Articles of
Incorporation and By-Laws of the Corporation.
3. MANNER OF SALE; COMPLIANCE WITH SECURITIES LAWS AND REGULATIONS
a. The Distributor shall sell Shares to or through qualified dealers or
others in such manner, not inconsistent with the provisions hereof and the
Corporation's then effective Registration Statement under the Securities Act, as
the Distributor may determine from time to time, provided that no dealer or
other person shall be appointed or authorized to act as agent of the Corporation
without the prior consent of the Corporation. The Distributor shall cause
subscriptions for Shares to be transmitted in accordance with any subscription
agreement then in force for the purchase of Shares. Distributor and Corporation
shall cooperate in implementing procedures to ensure that the sales commission,
if any, payable on the purchase of Shares is paid to the Distributor in a timely
manner.
b. The Distributor, as agent of and for the account of the Corporation, may
repurchase Shares at such prices and upon such terms and conditions as shall be
specified in the Corporation's current prospectus relating to each Fund.
c. The Corporation will furnish to the Distributor from time to time such
information with respect to the Corporation, each Fund, and the Shares as the
Distributor may reasonably request for use in connection with the sale of the
Shares. The Distributor agrees that it will not use or distribute or authorize
the use, distribution or dissemination by its dealers or others, in connection
with the sale of such Shares, of any statements, other than those contained in
the Corporation's current prospectus relating to each Fund, except such
supplemental literature or advertising as shall be lawful under federal and
state securities laws and regulations, and that it will furnish the Corporation
with copies of all such material.
d. In selling or reacquiring Shares for the account of the Corporation, the
Distributor will in all respects conform to the requirements of all state and
federal laws and the Conduct Rules of the NASD, relating to such sale or
reacquisition, as the case may be, and will indemnify and save harmless the
Corporation, each Fund, each person who has been, is or may hereafter be a
director or officer of the Corporation or any Fund from any damage or expense on
account of any wrongful act by the Distributor or any employee, representative
or agent of the Distributor. The Distributor will observe and be bound by all
the provisions of the Articles of Incorporation of the Corporation (and of any
fundamental policies adopted by the Corporation and/or each Fund pursuant to the
Investment Company Act, notice of which shall have been given to the
Distributor) which at the time in any way require, limit, restrict or prohibit
or otherwise regulate any action on the part of the Distributor.
e. The Distributor will require each dealer to conform to the provisions
hereof and the Registration Statement (and related prospectus or prospectuses)
at the time in effect under the Securities Act with respect to the public
offering price of the Shares.
4. PRICE OF SHARES; FEES
a. Shares offered for sale or sold by the Distributor for the account of
the Corporation shall be so offered or sold at a price per Share determined in
accordance with the then current prospectus relating to the sale of such Shares
except as departure from such prices shall be permitted by the rules and
regulations of the Securities and Exchange Commission (the "SEC").
b. The Distributor shall be entitled to receive a sales commission on the
sale or redemption, as appropriate, of each series and class of each Fund's
Shares in the amount of any initial, deferred or contingent deferred sales
charge as set forth in the then effective prospectus. The Distributor shall also
be entitled to compensation for its services as provided in any Distribution
Plan adopted as to any series and class of any Fund's Shares pursuant to Rule
12b-1 under the Investment Company Act. Any fee payable to the Distributor under
a Distribution Plan or as a deferred or contingent deferred sales charge
(together, "Distribution Fees") shall be payable without offset, defense or
counterclaim (it being understood by the parties hereto that nothing in this
sentence shall be deemed a waiver by any Fund of any claim that a Fund may have
against the Distributor). The services rendered by the Distributor for which the
Distributor is entitled to receive Distribution Fees shall be deemed to have
been completed at the time of the initial purchase of the Shares taken into
account in computing the Distribution Fees. Notwithstanding anything to the
contrary herein, the Distributor shall be paid the Distribution Fees with
respect to Shares of a Fund sold while the Distributor served as principal
underwriter of the Fund regardless of the Distributor's subsequent termination
as principal underwriter of the Shares of the Fund, or any termination of the
distribution agreement other than a termination of the Distribution Plan.
c. Without limiting the generality of the foregoing provisions of this
Section 4 and notwithstanding anything to the contrary set forth elsewhere in
this Agreement, insofar as this Agreement relates to the Class B shares of any
Fund, the provisions of Section 1(e) of the Amended and Restated Rule 12B-1
Distribution Plan of such Fund dated as of ____________ __, 2001, are
incorporated herein with the same force and effect as if those provisions were
set forth herein in their entirety. So long as the Distributor is the only
Distributor of Class B shares of each Fund it shall be deemed entitled to all of
the Earned Distribution Fees, CDSCs and Earned Service Fees arising in respect
of such Fund. Upon the termination of the Distributor's role as Distributor of
the Class B shares of any Fund, the Distributor's share of the total
Distribution Fees, CDSCs and Service Fees thereafter accruing shall be
determined in accordance with the Allocation Procedures attached hereto as
Exhibit A.(1)
5. REGISTRATION OF SHARES AND DISTRIBUTOR
a. The Corporation agrees that it will use its best efforts to keep
effectively registered under the Securities Act for sale as herein contemplated
such Shares as the Distributor shall reasonably request and as the SEC shall
permit to be so registered.
_____________________
(1) These procedures for allocating between successive Distributors shall be
based upon the Allocation Procedures used to allocate between successive
financiers which are to be attached as Schedule II to the Master Agreement.
b. The Corporation on behalf of each Fund will execute any and all
documents and furnish any and all information which may be reasonably necessary
in connection with the qualification of its Shares for sale (including the
qualification of the Corporation or a Fund as a dealer where necessary or
advisable) in such states as the Distributor may reasonably request (it being
understood that the Corporation shall not be required without its consent to
comply with any requirement which in its opinion is unduly burdensome). The
Distributor, at its own expense, will effect all required qualifications of the
Distributor as a dealer or broker or otherwise under all applicable state or
federal laws in order that the Shares may be sold in as broad a territory as is
reasonably practicable.
c. Notwithstanding any other provision hereof, the Corporation on behalf of
a Fund may terminate, suspend or withdraw the offering of its Shares whenever,
in its sole discretion, the Corporation deems such action to be desirable.
6. EXPENSES
a. The Corporation or respective Fund will pay or cause to be paid the
expenses (including the fees and disbursements of its own counsel) of any
registration of the Shares under the Securities Act, expenses of qualifying or
continuing the qualification of the Shares for sale, and in connection
therewith, of qualifying or continuing the qualification of the Corporation or
respective Fund as a dealer or broker under the laws of such states as may be
designated by the Distributor under the conditions herein specified, and
expenses incident to the issuance of Shares, such as the cost of share
certificates, issue taxes and fees of the transfer agent.
b. The Distributor will pay all other expenses (other than expenses which
one or more dealers may bear pursuant to any agreement with the Distributor)
incident to the sale and distribution of the Shares issued or sold hereunder,
including, without limiting the generality of the foregoing, all (a) expenses of
printing and distributing or disseminating any other literature, advertising and
selling aids in connection with such offering of the Shares for sale (except
that such expenses shall not include expenses incurred by the Corporation or any
Fund in connection with the preparation, printing and distribution of any report
or other communication to holders of Shares in their capacity as such); and (b)
expenses of advertising in connection with such offering.
c. No transfer taxes, if any, which may be payable in connection with the
issue or delivery of Shares sold as herein contemplated or of the certificates
for such Shares shall be borne by the Corporation or any Fund, and the
Distributor will indemnify and hold harmless the Corporation and each Fund
against liability for all such transfer taxes.
7. DURATION AND TERMINATION
a. This Agreement shall become effective as of the date hereof and shall
continue in effect until _______, _____, and from year to year thereafter, but
only so long as such continuance is specifically approved each year by either
(i) the Board of Directors of the Corporation, or (ii) the affirmative vote of a
majority of the relevant Fund's respective outstanding voting securities. In
addition to the foregoing, each renewal of this Agreement must be approved by
the vote of a majority of the Corporation's directors who are not parties to
this Agreement or interested persons of any such party, cast in person at a
meeting called for the purpose of voting on such approval. Prior to voting on
the renewal of this Agreement, the Board of Directors of the Corporation shall
request and evaluate, and the Distributor shall furnish, such information as may
reasonably be necessary to enable the Corporation's Board of Directors to
evaluate the terms of this Agreement.
b. Notwithstanding whatever may be provided herein to the contrary, this
Agreement may be terminated at any time, without payment of any penalty, by vote
of a majority of the Board of Directors of the Corporation, or by vote of a
majority of the outstanding voting securities of the relevant Fund, or by the
Distributor, in each case, on not more than sixty (60) days' written notice to
the other party and shall terminate automatically in the event of its assignment
as set forth in paragraph 9 of this Agreement.
8. NOTICE
Any notice under this Agreement shall be in writing, addressed and
delivered or mailed, postage prepaid, to the other party at such address as such
other party may from time to time designate for the receipt of such notice.
9. ASSIGNMENT
This Agreement shall neither be assignable nor subject to pledge or
hypothecation and in the event of assignment, pledge or hypothecation shall
automatically terminate. For purposes of determining whether an "assignment" has
occurred, the definition of "assignment" in Section 2(a)(4) of the Investment
Company Act shall control.
10. MISCELLANEOUS
a. This Agreement shall be construed in accordance with the laws of the
State of Wisconsin, provided that nothing herein shall be construed in a manner
inconsistent with the Investment Company Act, the Securities Act, the Securities
Exchange Act of 1934 or any rule or order of the SEC under such Acts or any rule
of the NASD.
b. The captions of this Agreement are included for convenience only and in
no way define or delimit any of the provisions hereof or otherwise affect their
construction or effect.
c. If any provision of this Agreement shall be held or made invalid by a
court decision, statute, rule or otherwise, the remainder of this Agreement
shall not be affected thereby and, to this extent, the provisions of this
Agreement shall be deemed to be severable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the day and year first stated above.
Attest: STRONG INVESTMENTS, INC.
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[Name] [Name, Title]
Attest: STRONG __________, INC.
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[Name] [Name, Title]
SCHEDULE A
The Fund(s) of the Corporation currently subject to this Agreement are as
follows:
Date of Addition
FUND(S) Class TO THIS AGREEMENT
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Attest: STRONG INVESTMENTS, INC.
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[Name] [Name, Title]
Attest: STRONG __________, INC.
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[Name] [Name, Title]
