EXHIBIT (E)
SOUND SHORE FUND, INC.
DISTRIBUTION AGREEMENT
AGREEMENT made this 1st day of May, 1999, between Sound Shore Fund,
Inc. ("Sound Shore"), a corporation organized under the laws of the State of
Maryland with its principal place of business at 00 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, and Forum Fund Services, LLC (the "Distributor"), a Delaware limited
liability company with its principal place of business at Xxx Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxx 00000.
WHEREAS, Sound Shore is registered under the Investment Company Act of
1940, as amended (the "Act") as an open-end management investment company and
issues shares of common stock, par value $0.001, (the "Shares"); and
WHEREAS, Sound Shore desires that the Distributor, as principal
underwriter, offer the Shares of Sound Shore and Distributor is willing to act
as principal underwriter on the terms and conditions set forth in this
Agreement;
NOW THEREFORE, Sound Shore and Distributor agree as follows:
SECTION 1. APPOINTMENT
Sound Shore hereby appoints Distributor, and Distributor hereby agrees,
to act as distributor of the Shares for the period and on the terms set forth in
this Agreement. In connection therewith, Sound Shore has delivered to the
Distributor copies of its Articles of Incorporation and Bylaws, Registration
Statement and all amendments thereto filed pursuant to the Securities Act of
1933, as amended (the "Securities Act") or the Act (the "Registration
Statement") and the current Prospectus and Statement of Additional Information
of Sound Shore (collectively, as currently in effect and as amended or
supplemented, the "Prospectus") and, shall promptly furnish the Distributor with
all amendments of or supplements to the foregoing.
SECTION 2. DISTRIBUTION SERVICES
Subject to the direction and control of Sound Shore's Board of
Directors (the "Board"), the Distributor shall serve as distributor of the
Shares.
(a) As agent of and sole distributor for Sound Shore, Distributor shall
offer, and solicit offers to subscribe to, the unsold balance of Shares as shall
then be effectively registered under the Securities Act and applicable state
securities laws. All subscriptions for Shares obtained by Distributor shall be
directed to Sound Shore for acceptance and shall not be binding on Sound Shore
until accepted by it. Distributor shall have no authority to make binding
subscriptions on behalf of Sound Shore. Sound Shore reserves the right to sell
Shares directly to investors through subscriptions received by Sound Shore.
Distributor's rights hereunder shall not apply to Shares issued in connection
with (a) the merger or consolidation of Sound Shore or, if applicable, its
separate series or classes with any other investment company or series or class
thereof, (b) Sound Shore's acquisition by purchase or otherwise of all or
substantially all of the assets or stock of any other investment company, or (c)
the reinvestment in Shares by Sound Shore's shareholders of dividends or other
distributions or any other offering by Sound Shore of securities to its
shareholders.
(b) Distributor shall use its best efforts to obtain subscriptions to
Shares upon the terms and conditions contained herein and in the Prospectus,
including the offering price. Distributor shall send to Sound Shore promptly all
subscriptions placed with Distributor. Sound Shore shall advise Distributor in
its capacity as distributor of the approximate net asset value per Share at any
time requested by Distributor which is a net asset value determination time as
disclosed in the Prospectus and at such other times as it shall have been
determined. Sound Shore shall furnish Distributor from time to time, for use in
connection with the offering of Shares, such other information with respect to
Sound Shore and Shares as Distributor may reasonably request. Sound Shore shall
supply Distributor with such copies of the Prospectus as Distributor may
request. Distributor may use its employees, agents and other persons who need
not be its employees, at its cost and expense, to assist it in carrying out its
obligations hereunder, but no such employee, agent or other person shall be
deemed to be an agent of Sound Shore or have any rights under this Agreement.
(c) Sound Shore reserves the right to suspend the offering of Shares at
any time, in the absolute discretion of the Board, and upon notice of such
suspension Distributor shall cease to offer shares of Stock.
(d) Sound Shore and Distributor will cooperate with each other in
taking such action as may be necessary to qualify Shares for sale under the
securities laws of such states as Sound Shore may designate, provided, that
Distributor shall not be required to register as a broker-dealer or file a
consent to service of process in any such state. Sound Shore shall pay all fees
and expenses of registering Shares under the Securities Act and of registering
or qualifying Shares and Sound Shore's qualification under applicable state
securities laws. Distributor shall pay all expenses relating to its
broker-dealer qualification.
(e) Sound Shore represents that its Registration Statement and
Prospectus under the Securities Act have been or will be, as the case may be,
carefully prepared in conformity with the requirements of the Securities Act and
the rules and regulations of the Securities and Exchange Commission (the
"Commission") thereunder. Sound Shore represents and warrants that its
Registration Statement and Prospectus contain or will contain all statements
required to be stated therein in accordance with the Securities Act and the
rules and regulations of the Commission thereunder, and that all statements of
fact contained or to be contained therein are or will be true and correct at the
time indicated or on the effective date as the case may be; that Sound Shore's
Registration Statement and Prospectus, when they shall become effective or be
authorized for use, will not include an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of Shares. Sound Shore will
from time to time file such amendment or amendments to its Registration
Statement and Prospectus as, in the light of future developments, shall, in the
opinion of Sound Shore's counsel, be necessary in order to have such
Registration Statement and Prospectus at all times contain all material facts
required to be stated therein or necessary to make any statements therein not
misleading to a purchaser of Shares, but, if Sound Shore shall not file such
amendment or amendments within fifteen days after receipt of a written request
from Distributor to do so, Distributor may, at its option, terminate this
Agreement immediately. Sound Shore shall not file any amendment to its
Registration Statement and Prospectus without giving Distributor reasonable
notice thereof in advance; provided, however, that nothing in this Agreement
contained shall in any way limit Sound Shore's right to file at any time such
amendments to its Registration Statement and Prospectus, of whatever character,
as it deem advisable, such right being in all respects absolute and
unconditional. Sound Shore represents and warrants that any amendment to its
Registration Statement and Prospectus hereafter filed will, when it becomes
effective, contain all statements required to be stated therein in accordance
with the Securities Act and the rules and regulations of the Commission
thereunder, that all statements of fact contained therein will, when the same
shall become effective, be true and correct and that no such amendment, when it
becomes effective, will include an untrue statement of a material fact or will
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading to a purchaser of Shares.
(f) Sound Shore will indemnify, defend and hold Distributor, its
several officers and directors, and any person who controls Distributor within
the meaning of Section 15 of the Securities Act (collectively, the "Distributor
Indemnities"), free and harmless from and against any and all claims, demands,
liabilities and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which any Distributor Indemnity may incur, under the Securities Act,
or under common law or otherwise, arising out of or based upon any alleged
untrue statement of a material fact contained in Sound Shore's Registration
Statement and Prospectus under the Securities Act or arising out of or based
upon any alleged omission to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that in no event shall anything contained in this paragraph (f) be so construed
as to protect Distributor against any liability to Sound Shore or its security
holders to which Distributor would otherwise be subject by reason of willful
misfeasance, bad faith, or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations and duties under this
Section 2. This agreement to indemnify Distributor Indemnities is expressly
conditioned upon Sound Shore being notified of any action brought against any
Distributor Indemnity, such notification to be given by letter, facsimile
transmission or telegram to Sound Shore and referring to the person against whom
such action is brought within ten days after the summons or other first legal
process shall have been served on such person. The failure so to notify Sound
Shore of any such action shall not relieve Sound Shore from any liability which
it may have to any Distributor Indemnity otherwise than on account of the
indemnification provided for in this paragraph (f). Sound Shore will be entitled
to assume the defense of any suit brought to enforce any such claim, and to
retain counsel of good standing chosen by it and approved by Distributor. In the
event Sound Shore elects to assume the defense of any such suit and retain
counsel of good standing approved by Distributor, the defendants in such suit
shall bear the fees and expenses of any additional counsel retained by any of
them. In the event Sound Shore does not elect to assume the defense of any such
suit, or in case Distributor does not approve of counsel chosen by Sound Shore
or has been advised that it may have available defenses or claims which are not
available to or conflict with those available to Sound Shore, Sound Shore will
reimburse any Distributor Indemnity named as defendant in such suit for the fees
and expenses of any counsel retained by any such person. The indemnification
provisions contained in this paragraph (f) and Sound Shore's representations and
warranties in this Agreement shall remain operative and in full force and effect
regardless of any investigation made by or on behalf of any Distributor
Indemnity and shall survive the sale of any Shares made pursuant to
subscriptions obtained by Distributor. The indemnification provisions of this
paragraph (f) will inure exclusively to the benefit of the Distributor
Indemnities and their respective successors and assigns. Sound Shore agrees
promptly to notify Distributor of the commencement of any litigation or
proceeding against Sound Shore or any of its directors or officers in connection
with the issue or sale of Shares.
(g) Distributor agrees to indemnify, defend and hold Sound Shore, its
several officers and directors, and any person who controls Sound Shore within
the meaning of Section 15 of the Securities Act (collectively, the "Sound Shore
Indemnities"), free and harmless from and against any and all claims, demands,
liabilities, and expenses (including the cost of investigating or defending such
claims, demands or liabilities and any reasonable counsel fees incurred in
connection therewith) which any Sound Shore Indemnity may incur under the Act,
or under common law or otherwise, but only to the extent that such liability, or
expense incurred by Sound Shore Indemnities resulting from such claims or
demands shall arise out of or be based upon any alleged untrue statement of a
material fact contained in information furnished in writing by Distributor in
its capacity as distributor to Sound Shore for use in Sound Shore's Registration
Statement or Prospectus under the Securities Act, or shall arise out of or be
based upon any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or Prospectus or
necessary to make such information not misleading. Distributor's agreement to
indemnify Sound Shore Indemnities is expressly conditioned upon Distributor
being notified of any action brought against a Sound Shore Indemnity, such
notification to be given by letter, facsimile transmission or telegram addressed
and referring to the person against whom such action is brought within ten days
after the summons or other first legal process shall have been served on such
person. Distributor shall have a right to control the defense of such action,
with counsel of its own choosing, satisfactory to Sound Shore, if such action is
based solely upon such alleged misstatement or omission on Distributor's part,
and in any other event Distributor and Sound Shore Indemnities named shall each
have the right to participate in the defense or preparation of the defense of
any such action. The failure so to notify Distributor of any such action shall
not relieve Distributor from any liability which it may have to any Sound Shore
Indemnity otherwise than on account of the indemnification provisions in this
paragraph (g).
(h) Sound Shore shall advise Distributor immediately: (i) of any
request by the Commission for amendments to Sound Shore's Registration Statement
or Prospectus or for additional information; (ii) in the event of the issuance
by the Commission of any stop order suspending the effectiveness of Sound
Shore's Registration Statement or Prospectus or the initiation of any
proceedings for that purpose; (iii) of the happening of any material event which
makes untrue any statement made in Sound Shore's Registration Statement or
Prospectus or which requires the making of a change in either thereof in order
to make the statements therein not misleading; and (iv) of all action of the
Commission with respect to any amendments to Sound Shore's Registration
Statement or Prospectus which may from time to time be filed with Commission
under the Act or the Securities Act.
SECTION 3. STANDARD OF CARE
The Distributor shall give Sound Shore the benefit of its best judgment
and efforts in rendering its services to Sound Shore and shall not be liable for
error of judgment or mistake of law, for any loss arising out of any investment,
or in any event whatsoever, provided that nothing herein shall be deemed to
protect, or purport to protect, the Distributor against any liability to Sound
Shore or to the security holders of Sound Shore to which it would otherwise be
subject by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of reckless disregard of its
obligations and duties hereunder.
SECTION 4. EXPENSES
Subject to any expense reimbursement arrangements between the
Distributor or others and Sound Shore, Sound Shore shall be responsible and
assumes the obligation for payment of all its expenses.
SECTION 5. COMPENSATION
(a) The Distributor shall be entitled to no compensation or
reimbursement of expenses for the distribution services provided by the
Distributor pursuant to this Agreement.
(b) Notwithstanding anything in this Agreement to the contrary, the
Distributor and its affiliated persons may receive compensation or reimbursement
from Sound Shore with respect to (i) the provision of distribution services on
behalf of Sound Shore in accordance with any distribution plan adopted by Sound
Shore pursuant to Rule 12b-1 under the Act, (ii) the provision of shareholder
support or other services, (iii) the provision of management services or (iv)
service as a director or officer of Sound Shore.
SECTION 6. EFFECTIVENESS, DURATION AND TERMINATION
(a) This Agreement shall become effective on the date hereof. Upon the
effectiveness of this Agreement, it shall supersede all previous agreements
between Sound Shore and the Distributor covering the subject matter hereof.
(b) This Agreement shall continue in effect for twelve months and,
thereafter, shall continue in effect for successive twelve-month periods,
provided that such continuance is specifically approved at least annually (i) by
the Board or by a vote of a majority of the outstanding voting securities of
Sound Shore and (ii) by a vote of a majority of directors of Sound Shore 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. If the
continuation of this Agreement is not approved, the Distributor may continue to
render the services described herein in the manner and to the extent permitted
by the Act.
(c) This Agreement may be terminated at any time, without the payment
of any penalty, (i) by the Board or by a vote of a majority of the outstanding
voting securities of Sound Shore on 60 days' written notice to the Distributor
(ii) by the Distributor on 60 days' written notice to Sound Shore. This
Agreement shall automatically terminate in the event of its assignment.
SECTION 8. ACTIVITIES OF DISTRIBUTOR
Except to the extent necessary to perform its obligations under this
Agreement, nothing herein shall be deemed to limit or restrict the Distributor's
right, or the right of any of its officers, directors or employees (whether or
not they are a director, officer, employee or other affiliated person of Sound
Shore) to engage in any other business or to devote time and attention to the
management or other aspects of any other business, whether of a similar or
dissimilar nature, or to render services of any kind to any other corporation,
trust, firm, individual or association.
SECTION 9. MISCELLANEOUS
(a) Except for the Schedules, no provisions of this Agreement may be
amended or modified in any manner except by a written agreement properly
authorized and executed by both parties hereto and, if required by the Act, by a
vote of a majority of the outstanding voting securities of Sound Shore.
(b) If any part, term or provision of this Agreement is held to be
illegal, in conflict with any law or otherwise invalid, the remaining portion or
portions shall be considered severable and not be affected, and the rights and
obligations of the parties shall be construed and enforced as if the Agreement
did no contain the particular part, term or provision held to be illegal or
invalid.
(c) Section headings in this Agreement are included for convenience
only and are not to be used to construe or interpret this Agreement.
(d) Notices, requests, instructions and communications received by the
parties at their respective principal places of business, or at such other
address as a party may have designated in writing, shall be deemed to have been
properly given.
(e) This Agreement shall be governed by and shall be construed in
accordance with the laws of the State of New York.
(f) The terms "vote of a majority of the outstanding voting
securities," "interested person," "affiliated person" and "assignment" shall
have the meanings ascribed thereto in the Act.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed all as of the day and year first above written.
SOUND SHORE FUND, INC.
By:________________________
Name:
Office:
FORUM FUND SERVICES, LLC
By:________________________
Name:
Office:
