1
EXHIBIT 9(c)
Amended and Restated Distribution Agreement dated as of April 17,
1997 between the Registrant and Shay Financial Services Co.
2
AMENDED AND RESTATED DISTRIBUTION AGREEMENT
This Amended and Restated Distribution Agreement is made as of the
17th day of April, 1997 between M.S.B. FUND, INC., a New York corporation
(herein called the "Fund"), and SHAY FINANCIAL SERVICES CO., an Illinois
general partnership (herein called the "Distributor"), and amends and restates
the Distribution Agreement between the Fund and the Distributor dated as of May
19, 1995.
WHEREAS, the Fund is an open-end management investment company and is
so registered under the Investment Company Act of 1940; and
WHEREAS, the Fund desires to retain the Distributor as the distributor
for the Fund to provide for the distribution of shares of Class A stock of the
Fund, each such share having a par value of $.001 per share (herein
collectively called "Shares"), and is willing to render such services;
NOW THEREFORE, in consideration of the premises and mutual covenants
set forth herein the parties hereto agree as follows:
I. DELIVERY OF DOCUMENTS
The Fund has delivered to Distributor copies of each of the following
documents and will deliver to it all future amendments and supplements thereto,
if any:
(a) The Fund's Certificate of Incorporation and all
amendments thereto (such Certificate of Incorporation, as currently in effect
and as it shall from time to time be amended, herein called the "Fund's
Articles");
(b) The By-Laws of the Fund (such By-Laws, as currently
in effect and as it shall from time to time be amended, herein called the
"By-Laws");
(c) Resolutions of the Board of Directors of the Fund
authorizing the execution and delivery of this Agreement;
(d) The most recent amendment to the Fund's Registration
Statement under the Securities Act of 1933, as amended (the "1933 Act"), and
the Investment Company Act of 1940, as amended (the "1940 Act"), on Form N-1A
as filed with the Securities and Exchange Commission (the "Commission"), said
Registration Statement, as presently in effect and as amended or supplemented
from time to time, is herein called the "Registration Statement";
(e) Notification of Registration of the Fund under the
1940 Act on Form N-8A as filed with the Commission; and
3
(f) The current Prospectus and Statement of Additional
Information of the Fund (such prospectus and statement of additional
information, as filed with the Securities and Exchange Commission and as they
shall from time to time be amended and supplemented, herein called the
"Prospectus").
II. DISTRIBUTION
1. Appointment of Distributor. The Fund hereby appoints
Distributor to serve as the distributor of the Fund's Shares and Distributor
hereby accepts such appointment and agrees to render the services and duties
set forth in this Section II.
2. Services and Duties.
(a) Except as provided below, the Fund agrees to offer
for sale exclusively through Distributor as agent, from time to time during the
term of this Agreement, Shares of the Fund (whether authorized but unissued or
treasury shares, in the Fund's sole discretion) upon the terms and at the net
asset value as described in the Prospectus. Distributor will act only in its
own behalf as principal in making agreements with selected dealers or others
for the sale of Shares, and shall offer Shares only at the net asset value
thereof as set forth in the Prospectus. Distributor shall devote its best
efforts to effect sales of Shares of the Fund, but shall not be obligated to
sell any certain number of Shares. All subscriptions for Shares solicited by
the Distributor shall be directed to the Fund for acceptance in the ordinary
course of business following the procedures set forth in the Fund's Prospectus
as in effect from time to time. The Fund reserves the right to offer Shares
directly to investors, including offers in connection with (i) the merger or
consolidation of the Fund or its series or classes with any other investment
company or series or class thereof, (ii) the Fund's acquisition by purchase or
otherwise of all or substantially all of the assets or stock of any other
investment company or (iii) reinvestment in Shares by the Fund's stockholders
of dividends or other distributions or any other offering by the Fund of
securities to its stockholders.
(b) In all matters relating to the sale of Shares,
Distributor will act in conformity with the Fund's Articles, By-Laws, and
Prospectus and with the instructions and directions of the Board of Directors
of the Fund and will conform to and comply with the requirements of the 1933
Act, and the 1940 Act, the regulations of the National Association of
Securities Dealers, Inc. and all other applicable federal or state laws and
regulations. In connection with such sales, Distributor acknowledges and
agrees that it is not authorized to provide any information or make any
representations other than as contained in the Fund's Registration Statement
and Prospectus and any sales literature specifically approved by the Fund.
(c) Distributor will bear the cost of (i) printing and
distributing the Prospectus and Statement of Additional Information (including
any supplement thereto) to persons who are not either shareholders of, or
counsel, independent accountants or other persons providing similar services
to, the Fund, and (ii) preparing, printing and distributing any literature,
advertisement or material which is primarily intended to result in the sale of
the Shares; provided, however, that Distributor shall not be obligated to bear
the expenses incurred by the Fund in connection with
4
the preparation and printing of any amendment to any Registration Statement or
Prospectus necessary for the continued effective registration of the Shares
under the 1933 Act.
(d) All Shares of the Fund offered for sale by
Distributor shall be offered for sale to the public at the net asset value
(determined in the manner set forth in the Fund's Articles and then current
Prospectus). No broker-dealer or other person who enters into a selling
agreement with Distributor shall be authorized to act as agent for the Fund in
connection with the offering or sale of its Shares to the public or otherwise.
3. Sales of Shares.
(a) The Fund shall pay all costs and expenses in
connection with the registration of the Shares under the 1933 Act, and all
expenses in connection with maintaining facilities for the issue and transfer
of the Shares and for supplying information, prices and other data to be
furnished by the Fund hereunder, and all expenses in connection with preparing,
printing and distributing the Prospectus except as set forth in subsection 2(c)
of Section II hereof.
(b) The Fund shall execute all documents, furnish all
information and otherwise take all actions which may be reasonably necessary in
the discretion of the Fund's officers in connection with the qualification of
the Shares for sale in such states as Distributor may designate to the Fund and
the Fund may approve, and the Fund shall pay all filing fees which may be
incurred in connection with such qualification. Distributor shall pay all
expenses connected with its qualification as a dealer under state or federal
laws and, except as otherwise specifically provided in this Agreement, all
other expenses incurred by Distributor in connection with the sale of the
Shares as contemplated in this Agreement.
(c) The Fund shall have the right to suspend the offering
and sale of Shares of the Fund at any time in the absolute discretion of the
Fund in response to conditions in the securities markets or otherwise, and to
suspend the redemption of Shares of the Fund at any time permitted by the 1940
Act or the rules of the commission ("Rules"). Upon notice of any such
suspension of the offering and sale of Shares, the Distributor shall cease to
offer Shares. The Distributor shall not make or cause to be made any offers of
Shares in any state or other jurisdiction where such Shares are not then
qualified for offer or sale or exempt from such qualification.
(d) All orders for the Fund's Shares shall be transmitted
promptly to the Fund's transfer agent, unless otherwise directed by the Fund.
(c) The Fund reserves the right to reject any order for
Shares.
IIA. COMPENSATION
The Distributor shall be entitled to no compensation or reimbursement
of expenses for the distribution and service activities provided by the
Distributor pursuant to this Agreement. Notwithstanding anything in this
Agreement to the contrary, affiliated persons of the Distributor
5
may receive compensation or reimbursement from the Fund with respect to the
provision of management services or service as a director or officer of the
Fund.
III. LIMITATION OF LIABILITY
Distributor shall not be liable for any error of judgment or mistake
of law or for any loss suffered by the Fund 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.
IV. CONFIDENTIALITY
Distributor will treat confidentially and as proprietary information
of the Fund all records and other information relative to the Fund, to the
Fund's prior or present shareholders and to those persons or entities who
respond to Distributor inquiries concerning investment in the Fund, and, except
as provided below, will not use such records and information for any purpose
other than the performance of its responsibilities and duties hereunder or the
performance of its responsibilities and duties with regard to sales of the
shares of any fund which may be added to the Fund in the future. Any other use
by Distributor of the information and records referred to above may be made
only after prior notification to and approval in writing by the Fund. Such
approval shall not be unreasonably withheld and may not be withheld where (i)
Distributor may be exposed to civil or criminal contempt proceedings for
failure to divulge such information; (ii) Distributor is requested to divulge
such information by duly constituted authorities; or (iii) Distributor is so
requested by the Fund.
V. INDEMNIFICATION
1. Fund Representations. The Fund represents and warrants to
Distributor that at all times the Registration Statement and Prospectus will,
in all material respects, conform to the applicable requirements of the 1933
Act and the rules thereunder, that the Registration Statement did not contain
at the time it became effective and will not contain at the time any subsequent
amendment thereto becomes effective any untrue statement of material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements contained therein not misleading and that the Prospectus
does not contain and will not contain at any time when it is authorized for use
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
that no representation or warranty in this subsection shall apply to statements
or omissions made in reliance upon and in conformity with written information
furnished to the Fund by or on behalf of or otherwise approved by and with
respect to Distributor or its affiliates expressly for use in the Registration
Statement or Prospectus.
2. Distributor Representations. Distributor represents and
warrants to the Fund that it is duly formed as an Illinois general partnership
and is and at all times will remain duly authorized and licensed to carry out
its services as contemplated herein.
6
3. Fund Indemnification. The Fund will indemnify, defend and
hold harmless Distributor, its several officers and general partners, and any
person who controls Distributor within the meaning of Section 15 of the 1933
Act, from and against any losses, claims, damages or liabilities, joint or
several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prospectus or in any application or other document
executed by or on behalf of the Fund, or arise out of, or are based upon,
information furnished by or on behalf of the Fund filed in any state in order
to qualify the Shares under the securities or blue sky laws thereof ("Blue Sky
Application"), or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and will reimburse
Distributor, its several officers and general partners, and any person who
controls Distributor within the meaning of Section 15 of the 1933 Act, for any
legal or other expenses reasonably incurred by any of them in investigating,
defending or preparing to defend any such action, proceeding or claim;
provided, however, that the Fund shall not be liable in any case to the extent
that such loss, claim, damage or liability arises out of, or is based upon, any
untrue statement, alleged untrue statement, or omission or alleged omission
made in the Registration Statement, the Prospectus, any Blue Sky Application or
any application or other document executed by or on behalf of the Fund in
reliance upon and in conformity with written information furnished to the Fund
by or on behalf of or otherwise approved by and with respect to Distributor or
its affiliates specifically for inclusion therein.
The Fund shall not indemnify any person pursuant to this subsection 3
unless the court or other body before which the proceeding was brought has
rendered a final decision on the merits that such person was not liable by
reason of his willful misfeasance, bad faith or gross negligence in the
performance of his duties, or his reckless disregard of obligations and duties,
under this Agreement ("disabling conduct") or, in the absence of such a
decision, a reasonable determination (based upon a review of the facts) that
such person was not liable by reason of disabling conduct has been made by the
vote of a majority of a quorum of directors of the Fund who are neither
"interested persons" of the Fund (as defined in the 0000 Xxx) nor parties to
the proceeding, or by an independent legal counsel in a written opinion.
The Fund shall advance attorneys' fees and other expenses incurred by
any person in defending any claim, demand, action or suit which is the subject
of a claim for indemnification pursuant to this subsection 3, so long as: (i)
such person shall undertake to repay all such advances unless it is ultimately
determined that he is entitled to indemnification hereunder; and (ii) such
person shall provide security for such undertaking, or the Fund shall be
insured against losses arising by reason of any lawful advances, or a majority
of a quorum of the disinterested, non-party directors of the Fund (or an
independent legal counsel in a written opinion) shall determine based on a
review of readily available facts (as opposed to a full trial-type inquiry)
that there is a reasonable likelihood that such person ultimately will be found
entitled to indemnification hereunder.
7
4. Distributor Indemnification. Distributor will indemnify,
defend and hold harmless the Fund, the Fund's several officers and directors
and any person who controls the Fund within the meaning of Section 15 of the
1933 Act, from and against any losses, claims, damages or liabilities joint or
several, to which any of them may become subject under the 1933 Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect hereof) arise out of, or are based upon, any breach
of its representations and warranties in subsection 2 of this Section V or its
agreements in subsection 2 or 3 of Section II hereof, or which arise out of, or
are based upon, any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Prospectus, any Blue Sky
Application or any application or other document executed by or on behalf of
the Fund, or the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, which statement or omission was made in reliance upon or in
conformity with information furnished in writing to the Fund or any of its
several officers and directors by or on behalf of or otherwise approved by and
with respect to Distributor specifically for inclusion therein, and will
reimburse the Fund, the Fund's several officers and directors, and any person
who controls the Fund or any Fund within the meaning of Section 15 of the 1933
Act, for any legal or other expenses reasonably incurred by any of them in
investigating, defending or preparing to defend any such action, proceeding or
claim.
The Distributor shall advance attorneys' fees and other expenses
incurred by any person in defending any claim, demand, action or suit which is
the subject of a claim for indemnification pursuant to this subsection 4, so
long as: (i) such person shall undertake to repay all such advances unless it
is ultimately determined that he is entitled to indemnification hereunder; and
(ii) such person shall provide security for such undertaking, or the Fund shall
be insured against losses arising by reason of any lawful advances, or a
majority of a quorum of the disinterested, non-party directors of the Fund (or
an independent legal counsel in a written opinion) shall determine based on a
review of readily available facts (as opposed to a full trial-type inquiry)
that there is a reasonable likelihood that such person ultimately will be found
entitled to indemnification hereunder.
5. General Indemnity Provisions. No indemnifying party shall be
liable under its indemnity agreement contained in subsection 3 or 4 hereof with
respect to any claim made against such indemnifying party unless the
indemnified party shall have notified the indemnifying party in writing within
twenty (20) days after the summons or other first legal process giving
information of the nature of the claim shall have been served upon the
indemnified party (or after the indemnified party shall have received notice of
such service on any designated agent), but failure to notify the indemnifying
party of any such claim shall not relieve it from any liability which it may
otherwise have to the indemnified party. The indemnifying party will be
entitled to participate at its own expense in the defense or, if it so elects,
to assume the defense of any suit brought to enforce any such liability, and if
the indemnifying party elects to assume the defense, such defense shall be
conducted by counsel chosen by it and reasonably satisfactory to the
indemnified party. In the event the indemnifying party elects to assume the
defense of any such suit and retain such counsel, the indemnified party shall
bear the fees and expenses of any additional counsel retained by the
indemnified party.
8
VI. DURATION AND TERMINATION
This Agreement shall become effective as of the date first above
written, and, unless sooner terminated as provided herein, shall remain in
effect until October 1, 1997. Thereafter, if not terminated, this Agreement
shall continue automatically for successive terms of one year expiring on
September 30 of each year, provided that such continuance is specifically
approved at least annually (a) by a majority of those members of the Board of
Directors of the Fund who are not "interested persons" of the Fund and who have
no direct or indirect financial interest in the operation of this Distribution
Agreement (the "Disinterested Directors"), pursuant to a vote cast in person at
a meeting called for the purpose of voting on such approval, and (b) by the
Board of Directors of the Fund or by vote of a majority of the outstanding
voting securities of the Fund; provided, however, that this Agreement shall
automatically terminate in the event of its assignment and may be terminated by
the Fund at any time, without the payment of any penalty, by vote of a majority
of the Disinterested Directors or by a vote of a majority of the outstanding
voting securities on 60 days' written notice to, or by the Distributor at any
time, without the payment of any penalty, on 60 days' written notice to the
Fund. The terms "assignment" and "vote of a majority of the outstanding voting
securities" shall have the meanings set forth in the 1940 Act and the rules and
regulations thereunder.
VII. AMENDMENT OF THIS AGREEMENT
No provision of this Agreement may be changed, waived, discharged or
terminated except by an instrument in writing signed by the party against which
an enforcement of the change, waiver, discharge or termination is sought.
VIII. NOTICES
Notice of any kind to be given to the Distributor by the Fund shall be
in writing and shall be duly given if mailed or delivered to the Distributor at
000 Xxxx Xxxxxx Xx., Xxxxxxx, XX 00000, Attention: Executive Vice President, or
at such other address or to such other individual as shall be specified by the
Distributor to the Fund in accordance with this Section VIII. Notices of any
kind to be given to the Fund by the Distributor shall be in writing and shall
be duly given if mailed or delivered to the Fund at its address set forth in
the then- current Prospectus, Attention: President, or at such other address
or to such other individual as shall be specified by the Fund to the
Distributor in accordance with this Section, with copies to each of the Fund's
Directors at their respective addresses set forth in the Fund's Registration
Statement and to the legal counsel to the Fund.
IX. CONSTRUCTION; GOVERNING LAW
The captions in this Agreement are included for convenience of
reference only and in no way define or delimit any of the provisions hereof or
otherwise affect their construction or effect. 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.
Subject to the provisions of Section VI 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 New York
9
law; provided, however, that nothing herein shall be construed in a manner
inconsistent with the 1940 Act or any rule or regulation of the Commission
thereunder.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to
be executed by their officers designated below as of the day and year first
above written.
M.S.B. FUND, INC.
By /s/ XXXXXX X. XXXXXXXX
Xxxxxx X. Xxxxxxxx
Attest: /s/ XXXXXX X. XXXXXXX, XX. President
Secretary
SHAY FINANCIAL SERVICES CO.
By: /s/ XXXXXX X. XXXX
Xxxxxx X. Xxxx
President,
Attest: /s/ XXXXXX X. XXXXXXX Shay Financial Services, Inc.,
Secretary Managing Partner
